Insights

The convergence of brand, service & commerce

Strategy Director, Valtech NL
Valtech

August 31, 2016

Most senior executives recognise the need for digital transformation. Transformation aims to create new business models or redefine existing business dynamics. To create real transformation convergence of the dimensions brand, service, and commerce is required. The convergence creates new experiences and gives brands distinctive power. This post shares the findings of ‘convergence research’ conducted among top 500 Dutch companies. Insight is provided into the challenges that must be overcome and the choices that need to be made to successfully integrate brand, service, and commerce.

Forward thinking is essential in a digital world. And when we think ahead, we see that digital transformation goes beyond simply ‘doing business more digitally’. Integration is crucial in helping businesses stand out. Disruptive Digital leaders, such as Uber (Taxis), HelloFresh (Food), AirBnB (travel) deliver product and services as a integrated total experience. For companies rooted in the pre-digital age in particular, this reality offers both opportunities and significant challenges in achieving ‘convergence’. A key choice is if you are going to give your existing business an upgrade or if are you are redefining your playground and business model.

Where are we in terms of Convergence in the Netherlands?

Valtech conducted research among 20 ‘digital ambassadors’ working at leading companies in the Netherlands. Think FMCG, utilities, finance, fashion and B2B. The research provided some interesting insights:

  • First of all, convergence lives! It’s either high on the agenda or at least on the radar. The integration of brand, service and commerce is a topic within many different industries.
  • 55% see a threat from start-ups that take a fresh approach to brand, service, and commerce. These new players offer a more customer-focused approach and deliver a total experience.
  • The top priority is to integrate service and commerce, and this is also seen as the most complex challenge. It requires the development of new services and business models, such as integrated brand utilities and subscription models.
  • Most companies see themselves as followers when it comes to integrating various brand, service and commerce touchpoints.

Interested in the Convergence Research?

What are the convergence tactics?

The digital winners don’t view brand, service and commerce as separate entities but as something that is integrated. The continual reinforcement of brand, commerce and service are central to the customer experience. Digital Disruptors use all three elements to create a platform. Ecosystems of products and services are integrated which ensure a total, distinctive and a reinforcing experience.

Non-digital companies that go in search of the holy grail of total integration place an almost crippling burden of ambition on the organisation. Establishing strategic priorities around digital integration helps to ensure you don’t drown in a flood of initiatives. The various steps on the road to integration can be designed and rolled out thematically and incrementally. Each digital interface in the convergence paradigm has its own characteristics, opportunities and challenges. The accompanying slides with inspiring examples explore a various set of convergence tactics. These tactics need to be implemented in phases and prioritized based on expected business and customer value. Step by step, an experience platform emerges.

How to accelerate convergence?

The adoption of convergence requires new skills, organisational structures, and technology. Many organisations, for example, abandon the process-focused hierarchical management structure. They replace it with a structure that is built around agile working and product ownership focused on a customer experience in which brand, service and commerce come together.
For anyone wanting to create integrated experiences, a service-design mind-set is a core competence. The primary goal of service design is to ensure that every step the customer takes feels logical, natural and enjoyable. The art is to take an integral approach to designing customer experiences as they cross touchpoints and follow journeys.

Finally, next to a flexible organisational structure and a good design mind-set, achieving integration requires a operating system in which products and services reinforce each other. A platform made up of various touchpoints and tools that together form a functional and technical whole. This demands a behind-the-scenes investment in data and architecture plus the right technical experts that understand the convergence ambitions.