Companies with convergent capabilities are reaping the benefits of combining physical, digital, and services in extraordinary ways to create entirely new formats and reinvigorate old ones. Retail is one of the industries that has been disrupted through Convergent Transformation Design. Companies such as Amazon and Alibaba converge digital and physical to create entirely new service experiences for customers.
In the last 15 years, retail went through a transformation that was as unexpected as radical. Early in the digital era, e-commerce began to challenge brick-and-mortar retail. Some industries did better than others. Still, the two channels – physical and digital retail – could only ever be at odds, one taking from the other in a zero-sum competition.
Alibaba has been a pioneer with its Hema supermarkets in China, representing a blending of physical and digital shopping experiences. You can order your groceries online and have them delivered. You can visit the store in person to handpick and check the quality and authenticity of your items. Then pick up some fresh seafood, have it cooked right there, and finally have it all delivered to your home. Even better, you don’t need to bring anything to Hema except your smartphone. All product information, personalized recommendations, and payment is powered entirely by their Alipay smartphone app. And of course, all of it is supported behind the scenes by Alibaba’s big data and logistics to ensure your order’s delivery within just 30 minutes.
Convergent Transformation can drive completely new experiences and formats, and more importantly, reinvigorate industries left behind in the digital era.
But this is only the first generation of something new; what comes next is bound to be more sophisticated and more deeply convergent. As digital feeds back into the physical retail experience, ever more innovative formats are appearing. From humble QR codes to cutting-edge facial recognition and tracking, a suite of technologies enables radical changes to conventional businesses. Amazon Go is Amazon’s experimental grocery store that uses, among other things, AI image recognition and sensors to allow shoppers to bypass the checkout process entirely. In addition to Amazon, several startups venture into the business of unstaffed convenience stores. The Swedish supermarket startup Lifvs has opened 19 such stores across Sweden. Moby is another autonomous mobile store that can drive itself to where customers are or are most likely to be.
Retail is setting the pace, but other Convergent Transformation experiments also create new formats and experiences in different categories: entertainment, Mini K’s new convenience karaoke format, or fitness Supermonkey’s small, on-demand gyms.
Convergent Transformation can drive completely new experiences and formats, and more importantly, reinvigorate industries left behind in the digital era.
HENRIK JENSFELT is a passionate, committed, value-oriented design leader with 20+ years of experience in the Mobile, Connected, On-body, Professional & Consumer Electronics industry. He helps clients unleash the value of design to create the future of product and business.
