Service Innovation in Retail

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Slide deck of a presentation I gave at Service Design Drinks on the potential for innovation in (fashion) retail in April 2014.

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Service Innovation in Retail

  1. 1. Service Design Drinks FJ O R D / A P R I L 2 3 , 2 0 1 4 Service Innovation in Retail
  2. 2. Martin User Experience, Nokia Katrin PhD Candidate, University of Potsdam Who are we? Olga Business Consultant, 
 FuxBlau Manuel Service Designer, Fuxblau
  3. 3. Where we are today
  4. 4. Where we are today
  5. 5. Who is talking today? Johannes Wrubel Founder of ///
  6. 6. “The Times, They Are a-Changing!” — B O B DY L A N , 1 9 6 4
  7. 7. smaller type Retail is broken! Service Design can fix it.
  8. 8. /
  9. 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. 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. 11. 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 :
  12. 12. Treiber: Social Media
  13. 13. Treiber: SoLoMo
  14. 14. Treiber: Digital-Physical-Convergence
  15. 15. 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 :
  16. 16. 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€€
  17. 17. Retail Sales H O W B A D I S I T ?
  18. 18. 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“
  19. 19. 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
  20. 20. 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 $
  21. 21. 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 !
  22. 22. 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
  23. 23. //
  24. 24. A N E W CO N C E P T ?
  25. 25. 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
  26. 26. Omnichannel S C E N A R I O S
  27. 27. Omnichannel 1. Store to Web ! 2. Web to Store
 3. Check and Reserve ! 4. Same Day Delivery
 5. Pick-Up Return S C E N A R I O S :
  28. 28. Omnichannel Complex customer journeys ! Multiple touchpoints
 Seamless switch between devices ! Blending of offline/online
 Best of both worlds
 24/7 – EVERYWHERE C H A L L E N G E S :
  29. 29. Returning Inspiration Selecting Wearing Omnichannel C H A L L E N G E S : CO M P L EX C U STO M E R J O U R N E YS Purchasing $
  30. 30. Service Design H O W I T C A N H E L P :
  31. 31. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Service Design H O W I T C A N H E L P :
  32. 32. ///
  33. 33. Case „Kate Spade“ STO R E TO W E B / S A M E DAY D E L I V E RY:
  34. 34. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case „Kate Spade“ STO R E TO W E B / S A M E DAY D E L I V E RY:
  35. 35. Case „NIKE“ F R O M P R O D U C T TO EX P E R I E N C E : D I G I TA L P H YS I C A L
  36. 36. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case „NIKE“ F R O M P R O D U C T TO EX P E R I E N C E :
  37. 37. Enabler „Go Try It On“ I N STA N T S O C I A L F E E D B AC K :
  38. 38. Inspiration Selecting Purchasing Wearing Returning Home on the go Store I N STA N T S O C I A L F E E D B AC K : Enabler „Go Try It On“
  39. 39. Case „BONOBOS“ W E B TO STO R E : Text
  40. 40. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case „BONOBOS“ W E B TO STO R E :
  41. 41. Enabler „UPCLOAD“ P E R F E C T F I T T I N G O N L I N E :
  42. 42. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Enabler „UPCLOAD“ P E R F E C T F I T T I N G O N L I N E :
  43. 43. Case „Burberry“ P H YS I C A L D I G I TA L M E LT D O W N :
  44. 44. 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 :
  45. 45. 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
  46. 46. Retail needs to be rethought: beyond online/offline as new integrative business/service models providing the best customer experience!
  47. 47. /// Skalitzer Straße 86C 10997 Berlin ! jj@iii-agency.net 0151 191 21 889
  48. 48. Exercise Plan the perfect retail experience for a persona
  49. 49. Retail experience map
  50. 50. Service Experience Camp 2014 Sept 13 & 14
  51. 51. Thank you! servicedesignberlin.de @SD_Berlin fb.com/servicedesignberlin
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