This document discusses the future of retail and how service design can help address challenges facing the industry. New technologies like mobile, social media, and location-based services are driving changes in customer behaviors such as showrooming and buying/trying products anywhere. Retail stores are struggling with a 4% sales decrease while online sales are increasing. Both online and offline channels have advantages and disadvantages. The solution is seen as an omnichannel approach that combines the best of both worlds through seamless customer journeys. Service design can help create integrated physical and digital experiences like those demonstrated by case studies of Kate Spade, Nike, Bonobos, and Burberry. The retail experience needs to be rethought beyond online vs offline models
9. Future of Shopping
1. Retail is struggling to face
the challenges of digitalization
2. New business models threaten old ones
3. People adopt to new technologies
with new behaviours
STAT U S Q U O :
10. Some Numbers
Increase of online sales in fashion retail
2007: 4,9%
2012: 16,8%
Increase of mobile sales
> 1.000.000 mobile transactions in Q1/Q2 2012
= 152% more than 2011
!
Increase of mobile devices:
T H AT H AV E I N C R E A S E D :
11.
12. New Technologies
Mobile Social Communities:
Twitter, Facebook, Instagramm
Location Based Services:
Foursquare, FB Places, Google Places
Physical World Connectors:
NFC, RFID, QR, iBeacon
Mobile Payment:
Square, SumUp, Google Wallet
T H AT D R I V E M O B I L E CO M M E R C E :
17. New Behaviours
Shop everything everywhere anytime
Use whatever device is there
!
Get instant social feedback
!
Buy & Try > Return
!
Showrooming: choose offline/order online
T H AT D R I V E T H E C H A N G E :
18.
19. Retail Store Sales in Germany, 2012
H O W B A D I S I T ?
$
Quelle:
BrandEins
04/13
- 4 %
- 3.000.000.000€€
21. Physical Store
P R O : CO N T R A :
Costumer
!
Experience fashion
!
Immediate Take-Away
Costumer
!
Limited Selection
!
No time to decide
!
!
!
!
Company
Higher conversion rates
!
Lower return rates
Company
!
Showrooming
!
High fix costs/
Hard to “scale“
22. If the average online customer spends
100€ per order
!
and the retailer has
!
18.000 orders a year:
How much profit will they make?
$
Price Question
W I N S O M E M O N E Y
23. Price Question
W I N S O M E M O N E Y
Costs Minus Rest
Average Basket Size 100,00 €
Returning 40 % -40,00 € 60,00 €
Cost of Product 40 % -24,00 € 36,00 €
Discounts 10 % -6,00 € 30,00 €
Cost of Advertising 10 % of ABS -10,00 € 20,00 €
Shipping 4,90 -4,90 10,93
Callcenter/Fulfillment 13,5 -8,10 2,83
Shop Setup 40.000 € -2,22 € 17,78 €
Product Shooting 35.000 1,95 15,83
Cost of IT 5 -3 -0,17
Result -60,16 -0,16
18.000 = -2880€
Quelle:
BrandEins
04/13
$
24. eCommerce
P R O : CO N T R A :
Costumer
!
“Unlimited” products
Research & Compare
Costumer
!
Cannot touch and try
!
Waiting for delivery
!
!
!
Company
Tracking of
customer behavior
!
Instant improvement
Company
!
High return rate
!
!
No “customer contact”
and insights
!
25. So what?
”eCommerce and stores both got their pro’s and
con’s. If you know what you want, web shop is the
place to go.
For some products it’s nice to actually experience
them and talk to somebody.
!
The perfect shopping experience in my opinion
would be the
combination of on- and offline regarding
Information, Ordering, Delivery, Returning and
Service
in a seamless process - at a reasonable price.“
!
Werner Reinartz
Professor for Commerce and Customer Management at the
„Wirtschafts- und Sozialwissenschaftlichen Fakultät“ of Cologne University
T H E S O LU T I O N I S
28. Omnichannel
A N E W CO N C E P T ?
“Channel’ means nothing to the consumer –
they think in terms of what they’re buying,
not how they’re buying it.”
Quelle:
h5p://www.harvardbusinessmanager.de/he=/ar>kel/a-‐816329.html
47. Inspiration Selecting Purchasing Wearing Returning
Home
on the go
Store
Case „Burberry“
P H YS I C A L D I G I TA L M E LT D O W N :
48. Case „Burberry“
P H YS I C A L D I G I TA L M E LT D O W N :
”Then, there was the back end: one of our key strategies from day one was operational excellence. We
wanted to be as admired and as respected for the back end of our business as for the front end. When I
started, we had just embarked on a business-wide rollout of SAP.“
!
Angela Ahrens, CEO of Burberry
49. Retail needs to be rethought:
beyond online/offline as
new integrative business/service models
providing the best customer experience!