Summary of our successful case of a retail chain:
- Industry & Background of Enterprise
- Business Challenges and Challenge Statement of Project
- Project Scope
- Transformation Strategies and Business Results
Industry:
Retail
Background of client:
One of the largest retail store chains in Hong Kong
Design Thinking Double Diamond Innovation Framework
The project is guided by the Design Thinking Double Diamond Model, a structured innovation framework that emphasizes both divergent and convergent thinking. The process begins by clearly determining and identifying key challenges, followed by deep discovery and definition of user needs. It then progresses to developing and delivering innovative solutions that create meaningful, measurable impact.
Business Challenges:
In today’s eCommerce-driven market, customers increasingly prefer online purchases over physical stores, especially for fast-moving consumer goods (FMCG). This shift has caused significant customer attrition, particularly among millennials, and led to declining profits. Over 10,000 retail stores have closed globally in recent years due to these challenges.
Similarly, a direct-operated convenience chain group in Hong Kong faced a similar dilemma. Its product offerings were nearly identical to those of competitors, resulting in intense price wars and shrinking profit margins. The challenge was to evolve beyond the price-driven competition and meet diverse customer needs.
Challenge Statement of the Transformation Project:
How to build a highly engaged and irreplaceable community for targeted customers while overcoming the limitations of price-driven competition.
Types of Transformations:
Business Model Transformation and Digital Transformation
Duration of Project:
12 months
Strategies for Transforming Business & Resolving Challenges
Using design thinking, the convenience chain conducted in-depth research into its store locations across different areas, such as business districts, shopping malls, and residential neighborhoods. Insights revealed that customers in residential areas sought more than just shopping—they desired social interactions and lifestyle experiences (Social and Experiential Needs).
To address these diverse needs, the company transitioned from a retail-based business to an Online-to-Offline (O2O) platform, structured around three interconnected “circles”:
- Living Circle: Focused on creating a sense of home and community, offering lifestyle-related services and products that resonate with local customers.
- Social Circle: Designed to foster human-centered interactions and emotional connections through events, gatherings, and social activities.
- Shopping Circle: We enhanced the convenience store’s core offerings with curated products and experiences tailored to each location’s unique needs.
This O2O ecosystem improved customer engagement by creating a strong sense of belonging, driving emotional bonds, and encouraging customers to spend more time in the store.
Key Performance Indicator(s) of the Project:
- Customer satisfaction rate
- Revenue
Breakthrough Business Results
The innovative transformation helped the convenience store chain successfully move beyond price competition by creating a unique, engaging, and irreplaceable community experience. As a result:
- Customer Satisfaction Rate increased by 30%, demonstrating the success of the human-centered approach.
- Sales efficiency and revenue significantly improved, with more residents attracted to the stores due to the enhanced social, lifestyle, and shopping experiences.
This transformation not only boosted the brand’s profitability but also strengthened its position as a community-centric business, offering a distinctive edge over competitors.
Our Proven Track Record in other Sectors
To maximize the ROI of transformations, we have helped enterprises to innovate their business models, products, and services to generate breakthrough results, including revenue, profit, market share, customer acquisition & retention, and employee engagement. To enhance the success rate of transformations, we have developed the best practices of Design Thinking and innovation management for 8 aspects: aviation, banking, hotel, insurance, retail, public transport, manufacturing, and community development.
