Digital Changes Everything about Everything

Digital changes everything about everything. That might sound like a grandeous statement that is both obvious and lacks specifics. But as the doors close on CES for the 49th consecutive year I was reminded this week that many (read: most) of us still drastically underestimate the impact digitization is having and will have in the future.

When an environment is digitized it changes all aspects of that environment. Take e-commerce for example. When we began digitizing commerce we didn’t just change that you could buy things through an online channel, we ultimately and fundamentally changed every aspect of commerce. We didn’t just change the digital aspects but also every physical aspect. Being able to buy online and pick-up in store changed the physical make-up of stores. We’ve witnessed retailers consider and address these changes over the last decade as retail sales shift online. How products are merchandised. What products are merchandised. Customer service. Loyalty programs. Marketing and advertising. The physical layout of the store.

Everything changes.

Digitization of commerce also impacts elements that are adjacent to shopping and buying. The logistical elements of commerce — things like packaging and package sizes — undergo change. How products are paid for change as a result of digitization.

That digitization changes everything about everything plays out in every segment of every industry. Consider the automotive industry. Autonomous vehicles will usher in a world of digitized, ‘sensor’ized, and connected vehicles. And once these environments are completely digitized everything can change. Fully autonomous vehicles won’t require steering wheels for example. In fact, the entire interior of the vehicle can change. We won’t have to sit forward. We won’t even have to sit in seats. We could replace the vehicle’s interior with beds or couches. We could put in an infinity pool or a hot tub. The roads as we know them today could change. The entire infrastructure could and will change. Materials will change.

Some of the changes from digitization have occurred quickly. But most haven’t and won’t. In fact, most of these changes will take decades to come to fruition. Our thinking has to change. It took decades for electrification to change the physical layout and construction of factories and the same will hold true for digitization.

Digitization of our homes through smarthome technologies will change the layout of homes. It will change the operations within homes. It will fundamentally shift family dynamics and forever change the structure of family units. But these changes will take time.

Social dynamics are more robust and fluid and will therefore change more quickly. Structural and physical changes will take time. Structures are long-lived assets that have life spans of upwards of 50 years or more so it will take some time to replace the existing stock of capital with “reformatted” capital. But the changes are coming.

Digitization is before us. Having already engulfed some sectors, it rolls on and will eventually engulf all that we know — forever changing all that we take as given today.

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