#GLF18 | Maud Bailly: "Can a company that was not born digital become digital?"

"The question that brings me here with you today is simple: can a company that was not born digital become digital? Quite simply. I want to tell you, as a first answer: yes and it better, otherwise it will die. All sectors of our economy are impacted by what is called the digital revolution. Moreover, the boundaries between what is digital and what is not, have become increasingly blurred, tenuous and difficult to understand.

If we take the example of hospitality, I think it is a perfect illustration of this link, this difficult balance between digital and non-digital. Hospitality? AccorHotels, a very beautiful house, has just celebrated its 50th anniversary as a major player in hospitality. An industry that is brick and mortar, physical, concrete. And it’s a paradox for me that perfectly illustrates the subtlety of digital transformation.

You could never completely dematerialize the hospitality experience. You will always need to jump on a train, a plane, take the car, or cross a hotel lobby. Enjoy the decoration of the place, the atmosphere of the lobby, your room or scrambled eggs in the morning for breakfast. The hospitality industry will always involve a physical experience.

Nevertheless, hospitality is one of the most disruptive sectors in the world today. Almost 40% of transactions are already made online and this is only the beginning. This sector, which is very dear to all of us, faces two-fold competition. Traditional competition from well-known hospitality actors, competing companies and friends. And then new, digital, intermediate competition: collaborative platforms, sharing economy players, online agencies. All its new digital players are also trying to conquer the value chain on the BtoC segment like the BtoB segment.

So the question is not: can a company that was not born digital become digital? The question is rather: does a company that was not digital from the beginning have the means to become digital and how?

At Accor, digital transformation began in 2014 with the visionary launch by Sébastien Bazin of the digital plan. He did this for two reasons: the first was to reinvent the customer experience by making our tools more digital, and the second  was to help strengthen our IT architecture. Why? Because for a company that was not born digital, the fact of digitizing itself implies reinforcing its infrastructure, its IT architecture, in an exponential way.

I'll share an indicator with you. Between 2007 and 2017, the look to book ratio, i.e. the number of requests via our IT architecture to finalize an online reservation, rose from an average of less than 20 requests to more than 1,000 in 2017. Behind the scenes are magazine sites, comparison sites and other websites that request an inventory of Accor's internal IT architecture.

So within the framework of the digital plan, we needed to invest massively to have robust IT that allows us to follow this exponential dynamic online. And it's not going to stop. Online consumption will continue to grow and people will increasingly use their mobile phones for their daily activities.

Digitalization at AccorHotels is also synonymous with diversification, what we call increased hospitality. From a rather midscale core identity, we have grown from 12 to 26 brands. A unique portfolio. Digitalization also means technological diversification with technological acquisitions. Because digital transformation is a race, another relationship to time, and it forces us to go fast and capture the digital transformations of tomorrow.

Digitalization also means expanding the service offered a client within this increased hospitality. This is the hotel experience and that is why we also have pure players: conciergerie, an online private sales platform and an online restaurant booking platform.

Thus, digitalization means anticipating to help a company become more and more technological and it also means diversifying to enrich the possibilities for our guests.

The strategy that I have created with all my teams and my peers at the trade level is called IMPACT and it could be summarized in five key words that are five deep convictions.

The first is that digital is first and foremost fluidity. In the Digital Age, everything must go fast, everything must be simple: fewer clicks, reduced page download time, simplify the online booking process. Our tools, our services, all interaction with customers, whether they are BtoB or BtoC, must be simple. Digital is the age of fluidity, simplicity and UX culture (user experience) and so we are working massively to invest in UX design.

This leads me to a second conviction that for me is key in terms of all that is digital, it’s usage. When I worked for the government, I was in charge of the conflict between Uber and the taxis. What struck me about Uber was the triumph of habit. Use stronger than the law, stronger than any regulation. Why? Because digital quickly fulfills the unsatisfied customer need. Digital pushes us to be constantly customer-oriented and to be attentive to catch potentially unsatisfied needs. Because if we don't, competing players will step in and develop a business that meets this unmet expectation. That's why we at Accor have developed two basic, but sensible, indicators: 1. Is this service used? 2. Is it popular? If a service is neither used nor popular, we stop it.

Accor is a very international company and cannot enter different hospitality markets in the same way: one size does not fit all. In China, we focus on the use of both in-bound and out-bound Chinese tourism. Email is rather secondary and payment solutions are different. The social networks that are crucial to the lives of Chinese tourists, of Chinese consumers, must be fully integrated into our technological strategy.

The third conviction is anticipation. Digital is a race. It's going very fast technologically, but that’s not all. It is important to keep in mind: when you are digital and when you join a digital company, always ask yourself what will happen tomorrow.

A recent study states that by 2020: 75% of American households will be equipped with a voice assistant. Whether you like it or not, you will have more and more personal data about yourself. At Accor, we are developing a chatbot, which aims to become a personal assistant.

How will this change the way we conceive of a travel experience in terms of how we present our offers and our hotels? We won't be able to answer that simply. We will have to be able to make a proactive offer. Digital is the ability to anticipate by keeping up with changing behavior and technology.

The fourth point is personalization. I am convinced that in this new era, personalization will be a differentiating feature. Responsible personalization, respectful of people's data, and in this respect the general data protection regulation is rather fortunate. This assurance will allow us to say that we do not sell data, that we do not make any commercial use of data, that they are hosted in France and that we respect our customers' data.

In 2018, we are developing a connected base between all our hotels to share customer preferences. Our customers often tell us: what I like best about AccorHotels is being known and recognized. So digital is never an end but always a means to anchor and push this personalization, which creates a real lasting preference.

Finally, the last point, the fifth. It has nothing to do with technology, it has nothing to do with digital. Nonetheless, in response to: how can a company that is not digital become digital? I think it is a key word and the keystone of any technological transformation ambition. It's culture. Cultural change.

If you wish to produce a real technological transformation and digital has not made it the panache or exclusivity of some digital troublemakers, then I say that digital transformation is like tea, it only works if it infuses and diffuses.

We therefore need matrix actors who are aware of their role in acculturation and appropriation and capable of disseminating information at all operational levels. At Accor, this challenge of redesigning the hospitality business model in the Digital Age is happening alongside a cultural transformation, with a new mindset in our teams, a new way of working, shorter decision circuits, the right to stop, sprints, MVPs, teams working together, from start to finish, around products, the right to make mistakes... That's why I say that digital, of course it's possible. It's a no brainer and it's also a managerial responsibility that's absolutely exciting."