Investments in digital initiatives for 2014 are frequently substantial, as the chart below shows. The per-respondent mean amounts to $113 million, while the median is $11 million. (Exhibit ll-8.) And respondents expect spending to remain at roughly the same level through 2017. (See Exhibit ll-9)
Exhibit ll-8: Overall, Companies are Spending Big Today …
Exhibit ll-9:… And They’re Planning to Keep Spending Big
Given the pace at which the business environment is changing, companies can’t afford to underspend. Four percent of respondents plan to invest at least $1 billion each on their digital initiatives this year; another 4% plan to do the same by 2017. Respondents expect the level of spending to remain fairly consistent through 2017.
Stories of big spenders abound, such as:
- A global financial services fi rm expects $150 million in annual digital platform spending to double or quadruple once it develops a differentiated digital strategy. The company told us it spends about $150 million annually across all units for digital platforms. That includes headcount, cloud infrastructure providers, digital insights and tools, and media. A group of 25 spends 30% of its time on digital initiatives; 10 people are in a digital solutions center. The company expects the $150 million in platform spending to increase by two to four times when the firm implements its new digital strategy.
- The Walt Disney Company has spent more than $1 billion since 2011 on a major digital initiative at Walt Disney World in Orlando, FL, alone, according to estimates by Wall Street analysts. The initiative calls for visitors to dump paper tickets and start wearing electronic wrist bands called Magic Bands. The rubber bracelets, equipped with computer chips, admit wearers to rides and hotel rooms, serve as credit or debit cards – and help park management track their movement in order to adjust park staffing levels, product inventory (e.g., souvenirs) and so on. For now at least, using these is optional.13
- Gap Inc., the apparel giant, says it will spend more than $300 million over three years on digital initiatives to marry mobile and the store experience. In the last five years, online sales have doubled to reach $2.3 billion.14