Digital Leaders by Industry Sector

Identifying UK companies that show the attributes of great digital leadership by industry sector.

My last post on whether an MIT researched theory on digital leadership could be reverse engineered gained a lot of response. The feedback was on the whole very positive, although three specific request came:

  1. Breakdown the leaders by sector
  2. Include some international companies (particularly big US digital players)
  3. Improve the clarity of the chart axes

I also noted that I’d missed some companies off the original extract. It turned out that Stockopedia’s screening tool only returned a maximum of 200 stocks. Still a great tool though!

So here we are several new charts showing the digital leaders by industry:

Retail Digital Leaders

Retail digital leader matrix

Some big surprises on this chart.

First Amazon appears as a Beginner. Yes that’s right Amazon, the company that brought the world ecommerce and mainstream cloud computing. What’s interesting for me is that although they are trailblazing digitally, they have yet to reap the expected rewards of digital transformation – increased profitability and improved revenue efficiency.

Next are Netflix and ASOS who are both in Fashionista column. Digital for these businesses is helping them be efficient at revenue generation. However in both cases they lack the business maturity to generate strong profits. Perhaps as these companies improve their ability to transform and control what is happening they will find greater profits.

There are then a cluster of companies entering the Digirati segment such as Laura Ashley, Ted Baker, Sports Direct and WH Smith. Not so much a surprise but perhaps an indication of retailers who are sensibly implementing digital strategies with the right level of management control.

Finance Digital Leaders

Finances Digital Leaders

The finance sector is an interesting one as some players manage to enjoy high revenue efficiency based on their book investments.

Possible Digitrati in this sector include:

  • Lancashire Holdings
  • Provident Financial
  • Beazley
  • eSure
  • Hiscox
  • Amlin
  • Catlin

All are worth further investigation although from a quick scan of Lancashire Holdings annual report it doesn’t appear that technology superiority is one of their things. They just have a good re-insurance business that generates results similar to a Digital leader.

Supermarkets and Food Retail Digital Leaders

Supermarkets and Food Retail Digital Leaders

A sector much in need of transformation and improvement (perhaps complete disruption). Low relative profitability and poor revenue efficiency place the majority of these companies into the Beginner segment.

Hotels and Entertainments Digital Leaders

Digital leadership matrix of Hotels and Entertainment companies

What I like about this chart is that there are some Digirati listed with large physical assets and a physical product that have great profitability and revenue efficiency. Domino’s Pizza for instance have over 858 outlets producing pizza, chicken strips and other delights yet they feature as a digital leader. Perhaps this is due to their grasp of Omnichannel (something I’ve written about before: Dominos and the integrated customer experience).

Telco Digital Leaders

Telcos

I expanded this grouping to include international telco players such as Orange and T-Mobile. Quite a smattering on the matrix.

KCOM (Kingston Communications) are an interesting digirati as they are also offering digital transformation services (and happen to be a supplier to former listed Digirati Domino’s).

Food and Tobacco Manufacturers Digital Leaders

Digital leadership matrix of food and tobacco manufacturers

Two tobacco manufacturers have made it on to the list. Not quite sure why as yet given that from my non-expert view this an industry under pressure from e-cigarettes and legislation. However from talking with my peers in digital consulting I know that British America Tobacco has been undergoing some digital transformation.

Home Builders Digital Leaders

Digital leadership matrix of Home Builders

Home builders are tightly clustered in the Digirati section. From my own experience of this sector it surprises me that they’re here. I suspect its another case of profitable, well-run businesses with a good asset base showing the same outcomes as a digital leader.

This case shows that the MIT model of Digital and Transformation Intensity can’t always be reversed to find potential leaders.

However what I would say is that those profit and revenue efficiency leaders in the top segment could go much further through digital transformation. There’s also an opportunity for one of the house builders to really pull away from the pack through the smart digitisation of the customer experience and operations.

Media and Publishing Digital Leaders

Digital leadership matrix of Media and Publishing companies

This chart shows a striking difference between Facebook and Twitter. One is enjoying revenue efficiency and profitability whilst the other lags behind. This isn’t just a question of digital excellence, it’s about the business model. Based on this view Facebook is winning.

UK based digital winners include ITV and Sky. Both have created digital channels such as Sky Go and ITV Player to allow consumption of their content on the move.

Daily Mail have also put in a strong performance. They along with their subsidiary Euromoney have found their way into the Digirati segment.

Consumer Products Digital Leaders

Digital leadership matrix of consumer products brands

Reckitt Benckiser has pulled away from the pack on this chart and this could be in part down to their “digital at heart” strategy. This has affected everything from recruitment strategy, advertising and also use of data.

Software and IT Digital Leaders

Digital leadership matrix of software and IT providers

Apple, Google and Microsoft hold the top corner of this chart and are followed closely by MoneySupermarket.com. Much maligned insurance technology provider Quindell is also in the
Digirati segment but given their recent shenanigans I’d doubt some of their numbers.

For the brands in the beginner segment, I think there is some naval staring required to work out if the business model is right for the market. Particularly for the likes of Ocado and SDL who have very relevant product/service offerings for digital.

LinkedIn was the unexpected company in this bottom quadrant. Possibly they are still transforming and trying to find the business model that’s right for their sustained growth and audience.

All Digital Leaders (click for big image)

Matrix of all digital leaders

Feel free to share and use this in your work. However please be kind enough to link back to storm81.com.

Conclusions on Achieving Digital Leadership

  1. Digital leaders are bringing together all channels as part of an integrated customer experience – see Burberry and Domino’s are two strong candidates
  2. Digital leadership is also focussed on improving employee efficacy through the digitisation of core business processes and the use of analytics
  3. Digital can’t replace a bad business model

If you work in a leadership role at any of the organisation in the article, please get in touch to tell me about what you’re doing digitally.

Further Reading

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David Sealey is a trusted adviser to senior executives on getting the most from their investment in digital and data. David created Storm81 as a place to share his passion for business, digital technologies, multichannel marketing and everything else around these topics.

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