In tracking the digital transformation of the world’s biggest and most influential economies, we find that one thing leads to another, one could say, and that’s how the connected economy propagates itself, making steady (if sometimes slow) progress in the world’s digital evolution.
The latest study in the ConnectedEconomy™ series, How The World Does Digital: The Impact Of Payments On Digital Transformation noted that overall engagement across connected activities rose 1.2% in the second quarter — a small but significant step toward full digital potential.
We see it in findings that consumers who increased their use of digital tools to book travel or communicate digitally also engaged more with online retail, restaurant and grocery activities, for example, showing knock-on effects that start happening when digital is the doorway.
There was ample evidence of this kind of activity in Q2, from the uptick in mobile wallet use to the increase in the use of travel apps and websites in that timeframe.
While overall engagement across all 11 economies rose 1.2% — which doesn’t sound big — it’s the scale of it is substantial and revealing as you drill into areas where gains are pronounced.
Looking at how engaging in digital travel booking triggers a cascade effect, for example, we observed a 16% rise “in the digital transformation of consumers across all 11 countries in booking airfare and accommodations online, including the use of home sharing platforms such as Airbnb and Homestay, in Q2.”
The act of booking travel via digital means lights up important adjacencies, demonstrating the punch that transformation packs. For example, digital bookers “use a variety of local transportation and mobility apps, where we noted a 15% increase in the use of apps to book and pay for train, bus and taxi rides and a 12% increase in the use of apps to book micro mobility rides.”
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Transformation Ripples
These effects are vividly displayed when comparing the performance of economies in different geographies. On the upside, there’s Brazil — a kind of poster nation for digital transformation whose smartphone-centric population is an ideal case study for how one digital activity tends to activate others, lessening friction and improving experiences as it goes.
For example, the study stated that “when travelers, foreign and domestic, booked their travel for [Rio’s annual] Carnival they also increased their use of digital methods to make purchases online, for which we observed a 14% increase in digital engagement.”
“Online ordering at restaurants increased 11% over that same period, as did the use of digital methods to connect to social media channels and content platforms for information essential to planning their experiences (6.3%) while there,” the study added.
That’s how the connected economy works, as the study noted “the lesson from the period is that digital behavior is a rising tide that lifts all boats, with the extent of these interconnections growing stronger as the digital infrastructure extends to more activities.”
But digital transformation of an economy depends on the participation and engagement of most or all consumers in those markets to reach its full potential.
Along with success stories like Brazil we also see some stagnation among the 11 nations tracked by the CE Index. Japan’s transformation fell back 11% from quarter to quarter and Italy’s lost 5.2% of its digital ground.
Per the study, “the digital transformations of countries like the U.K., Australia, the Netherlands and Germany remained largely stagnant between Q1 and Q2, by comparison. The CE Index scores of all these countries varied less than 1% quarter over quarter. This goes to show that getting more consumers online is only half the journey to realizing the full digital potential of the global economy. The second leg of that journey is about convincing these casual browsers to transact.”
See also: How to Catch the Next Wave of Digital Transformation
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