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2018: The Year Of Brick-and-Click

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Retail is undoubtedly reverting to “under construction”. Customer’s expectations are changing, malls and shops are closing down, others are opening up and doing better than ever. Many brands are investing in customer experience, shaping them into something unforgettable for their store visitors.

How should stores navigate all the trends? How can they ensure customer’s come back for more?

This Snapshot explores the current state of retail, where it is going, customers’ expectations and best practices along the customer journey followed by implications for retailers.

Published in: Retail
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2018: The Year Of Brick-and-Click

  1. 1. UNDERSTAND TODAY. SHAPE TOMORROW. WHAT TO DO TO WIN CUSTOMERS IN RETAIL 2018: THE YEAR OF BRICK & CLICK 1 the latest installment of our: Snapshot Series LHBS // 2018: THE YEAR OF BRICK & CLICK
  2. 2. ABOUT. At LHBS, we believe in continuously observing and learning from what’s happing in the market. We’ve created our Snapshot Series to provide insights on platforms, industries and companies. Using best practice examples, we explore, analyze and share how businesses are adapting to new trends. Moving from insightful data to best practices to inspiring thought starters for brands, Snapshots can be a guide to bring meaningful innovations to life in different areas of business. This issue explores retail trends and customer’s expectations along the customer journey, followed by best practices for each step. We hope you enjoy this deck and find inspiration for your innovation process. UNDERSTAND TODAY. SHAPE TOMORROW. 2 Discover Define Develop Deliver UNDERSTAND TODAY. SHAPE TOMORROW. LHBS // 2018: THE YEAR OF BRICK & CLICK
  3. 3. UNDERSTAND TODAY. SHAPE TOMORROW. INTRODU CTION. Retail is undoubtedly reverting to “under construction”. Customer’s expectations are changing, malls and shops are closing down, others are opening up and doing better than ever. Many brands are investing in customer experience, shaping them into something unforgettable for their store visitors. How should stores navigate all the trends? How can they ensure customer’s come back for more? This Snapshot explores the current state of retail, where it is going, customers’ expectations and best practices along the customer journey followed by implications for retailers. LHBS is a marketing & innovation firm with offices in Berlin and Copenhagen. We help clients to understand today's emerging customer expectations and to shape their business offerings for tomorrow. http://www.lhbs.com Fabiola Lewandowska Strategy Consultant at LHBS lhbs.com | fl@lhbs.com INTRODUCTION 3 LHBS // 2018: THE YEAR OF BRICK & CLICK
  4. 4. CONTENT. UNDERSTAND TODAY. SHAPE TOMORROW. Chapter 2 WHAT IS HAPPENING IN RETAIL? Chapter 3 HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING? Chapter 1 CONTENT 4 LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT SHOULD RETAILERS DO ABOUT IT?
  5. 5. CHAPTER ONE UNDERSTAND TODAY. SHAPE TOMORROW. 5 WHAT IS HAPPENING IN RETAIL? LHBS // 2018: THE YEAR OF BRICK & CLICK
  6. 6. UNDERSTAND TODAY. SHAPE TOMORROW. 6 WHAT EVERYBODY THINKS IS HAPPENING WITH RETAIL… LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL
  7. 7. By 2022, analysts estimate, that…  LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 7Source: Time 1 out of 4 malls in the U.S. could be out of business
  8. 8. “Young customers look at classic malls in an antiquated way. They see it as: that was my parents’ thing, and it’s not my thing.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 8Source: Time
  9. 9. Just a few brands who closed most of their US shops in 2017 LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 9Source: USA TODAY
  10. 10.  The internet has taken away many of consumers’ reasons for visiting physical stores in the first place. LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 10
  11. 11. UNDERSTAND TODAY. SHAPE TOMORROW. 11 WHAT DOES IT MEAN? IS RETAIL A THING OF THE PAST? LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL
  12. 12. UNDERSTAND TODAY. SHAPE TOMORROW. 12 …OF COURSE NOT, NOW LET’S TAKE A CLOSER LOOK AT WHAT’S REALLY HAPPENING LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL
  13. 13. RETAIL IS “UNDER CONSTRUCTION” “The retail industry will change more in the next 10 years than they have over the past 40.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 13Source: Accenture
  14. 14. “Online-first businesses such as Shoes of Prey, Warby Parker, Birchbox and Amazon have opened physical locations for the majority of customers who like to touch, feel and try on products before proceeding with a purchase.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 14Source: Entrepreneur
  15. 15. “Online retailer Bonobos has a chain of 21 ‘Guideshops’ that don’t carry inventory for purchase. Instead, customers can walk in or make a fitting appointment, then have their merchandise delivered to their home or office.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 15Source: Entrepreneur
  16. 16. “The National Retail Federation reported a 3,6% growth in retail sales in 2016 and they were expecting more growth in 2017. Most successful retailers: ZARA, T.J. MAXX, Dollar General, Sephora, Walmart.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 16Source: Time
  17. 17. “Digital wave is underway that could bring a cumulative US$2.95 trillion in value by 2025 for the retail industry.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 17Source: Accenture
  18. 18. UNDERSTAND TODAY. SHAPE TOMORROW. 18 WHAT ARE RETAILERS DOING NOW TO BE AHEAD OF THE GAME? LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL
  19. 19. UNDERSTAND TODAY. SHAPE TOMORROW. 19 LHBS // 2018: THE YEAR OF BRICK & CLICK Source: Accenture Using digital to understand and connect with consumers Rapidly adopting game changing technologies Testing new business models Getting to know the three must-have capabilities to thrive over the next decade Mastering the traditional levers: • Cost • Choice • Convenience • Internet of Things • Autonomous Vehicles/Drones • AI & Machine Learning • Robotics • Digital Traceability • 3D printing • AR & VR • Blockchain • Sharing Economy - the next generation rental market • Personalization economy - “surprise me” subscriptions • Replenishment Economy - automated replenishment • Services Economy - “do it for me” • The partnership mindset • Last mile delivery • Advanced data sciences WHAT IS HAPPENING WITH RETAIL
  20. 20. UNDERSTAND TODAY. SHAPE TOMORROW. 20 HOW ARE STORES OF THE FUTURE GOING TO LOOK LIKE? LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL
  21. 21. “We actually don’t call them ‘stores’ anymore—we call them ‘town squares.’ In these 'town squares,’ aisles will be ‘avenues’ and trees will provide customers shade from overhead fluorescents. The company dreams its flagship stores will become ‘gathering places,’ complete with classes on coding, music, and photography.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 21Source: The Atlantic - Apple executive speaking about their store of the future -
  22. 22. "Retailers are, very consciously, promoting in-store ‘experiences.’ It’s a reaction to the fact that buying is now something that can be done anywhere, and that reaction can be detected in a linguistic shift.” LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 22Source: The Atlantic
  23. 23. Shopping malls are now becoming lifestyle spaces offering: LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL UNDERSTAND TODAY. SHAPE TOMORROW. 23 Concerts & Events Learning Courses Dining Experiences Walkable Hang-out Spaces for Urban Feeling Working and Living Spaces
  24. 24. UNDERSTAND TODAY. SHAPE TOMORROW. 24 WITH THE CHANGING NATURE OF RETAIL, THE RETAIL CUSTOMER JOURNEY IS EVOLVING AS WELL LHBS // 2018: THE YEAR OF BRICK & CLICK WHAT IS HAPPENING WITH RETAIL
  25. 25. CHAPTER TWO UNDERSTAND TODAY. SHAPE TOMORROW. 25 HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING? LHBS // 2018: THE YEAR OF BRICK & CLICK
  26. 26. The retail customer journey LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 26 AWARENESS CHOOSING TRANSACTION DELIVERY AFTER SALES
  27. 27. UNDERSTAND TODAY. SHAPE TOMORROW. 27 -1- AWARENESS Now, the Internet is the place to get to know products HOW IS THE RETAIL CUSTOMER JOURNEY CHANGINGLHBS // 2018: THE YEAR OF BRICK & CLICK
  28. 28. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: of consumers say digital makes browsing in- store easier LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 28 55 % 45 % 45% Source: Navigating the new digital divide - Deloitte Digital , Capegemini of electronic product shoppers said the internet is important during the ‘awareness’ phase 21 % 79 % 79% What do retail customers expect?
  29. 29. (ONLY) LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 29Source: Capegemini 41% of shoppers want to be identified through digital devices (such as their mobile phones) when entering a physical store
  30. 30. UNDERSTAND TODAY. SHAPE TOMORROW.Source: HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING SK-II is Using WeChat to Get Customers to Their Stores By sending out promotions and invitations to special events directly to their customers on WeChat, skincare brand SK-II is driving customers to their physical locations. Explore the Sign SK-II is trying to increase sales by pushing its customers offline and into stores. To achieve their goal they’ve begun hosting in-store events such as free “perfect PITERA” treatments where customers can get skin tests and beauty consultations. By sending out invites to their events directly on WeChat to their many followers, SK-II hopes to convert their sizeable online presence into sales. 30 LHBS // 2018: THE YEAR OF BRICK & CLICK
  31. 31. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING The Holiday Mall-Bot This holiday season sees a new Mall of America chatbot being offered to shoppers for an easier day out at the mall. Explore the Sign The Mall of America’s newest chatbot aims to make people’s holiday trip to the shops easier, smoother and more personalized. The chatbot has been made available on the Mall’s website, mobile app, Facebook page and on Amazon Alexa as a skill (developed with Satisfi Labs), and enables users to ask questions before they arrive. It can be used whilst in the store for directions, specific offers at stores, gift ideas and event information. 31
  32. 32. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Nike’s Flagship Store Of The Future Nike’s newly planned flagship store for NYC will be all about innovations for products and services, and data-driven assortments. Explore the Sign The sports retailer is planning a new flagship store in New York City. The flagship will host Hyperlive, Nike’s small-format retail concept. It is the concept behind the curated local assortment, inspired by the sporting trends of the city. New services include speed lockers for pick-up and returns and a sneaker bar offering style advice. The last floor will be exclusive to NikePlus members. It includes a personal shopping appointment with a Nike Expert who advises on the products that best meet the athlete’s training goals. 32
  33. 33. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Zalando's Gift Shopping Voice Assistant Zalando have launched their trial solution to buying clothes as gifts with a voice assistant from Google. Explore the Sign Clothing retailer Zalando teamed up with Google to develop a gift finder which is controlled by voice. It begins with more broad questions, and then asks clarifying questions. Suggestions can then be delivered directly to the customer’s device. The speaker is to be placed in store, which reflects their acknowledgment that they “must be where the customer is” - Nicolas Borg, Head of strategic development at Zalando. This is being treated as a trial, and so they can observe how customers interact with this technology. 33
  34. 34. UNDERSTAND TODAY. SHAPE TOMORROW. 34 -2- CHOOSING Customers pay attention to price and product specs, and often come prepared to the store from online research They don’t mind using digital in-store, so long as its beneficial for them HOW IS THE RETAIL CUSTOMER JOURNEY CHANGINGLHBS // 2018: THE YEAR OF BRICK & CLICK
  35. 35. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: Shoppers who frequently research products online, then purchase in store (68% vice versa) HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 35 9 % 91 % 91% Source: InReality LHBS // 2018: THE YEAR OF BRICK & CLICK
  36. 36. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: of shoppers would be willing to share their online shopping carts with in-store employees HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 36 41 % 59 % 59% Source: TimeTrade / Entrepreneur LHBS // 2018: THE YEAR OF BRICK & CLICK
  37. 37. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: In-store displays that go unnoticed by shoppers HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 37 12 % 88 % 88% Source: POPAI LHBS // 2018: THE YEAR OF BRICK & CLICK
  38. 38. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: of shoppers would like to use a mobile app to support in-store shopping HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 38 56 % 44 % 44% Source: Capegemini LHBS // 2018: THE YEAR OF BRICK & CLICK
  39. 39. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING IKEA In-Store Shopping Companion The home furnishings retailer built in-store app to ensure that digitally savvy customers can bring along their tablet or mobile devices while shopping for inventory in its bricks-and-mortar locations. Explore the Sign IKEA Canada is improving the shopping experience by helping its customers to create lists, check off collected items and find product locations from their mobile devices. It caters towards the time-strapped consumers that demand efficiency and an easy way to access current offers, in-store maps, item locations and stock availability. “The new IKEA Store App will bring IKEA’s retail space alive,” said Tanya Bevington, corporate communications manager at IKEA Canada. 39
  40. 40. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Target’s In-Store Tech Upgrades In time for the holiday season, Target have introduced a new app for store staff, quicker self- checkouts, faster WiFi and bug-fixing back-end bots. Explore the Sign Target’s investments in their in-store technology is all with the goal to make the customer shopping experience seamless. They introduced a new app to help customers find and buy products online that they can’t find in- store, on the spot on their portable devices called “myCheckout.” They also upgraded the systems of their self- service checkouts and doubled the speed of their in-store WiFi for customers. 40
  41. 41. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Tech-Enabled Fashion Store Reformation, a fashion brand, is redesigning its store inspired by brands from Silicon Valley like Apple and Tesla.  Explore the Sign The new Reformation store will offer its customers an efficient experience by digitalizing the shopping atmosphere with touchscreen monitors and smart dressing rooms. The best-selling pieces are installed in the front and center of the store while touchscreens let customers explore the looks they like and select them to be delivered to a dressing room. In the room customers can request additional sizes, colors and styles and choose the lighting and music to their own taste.  41
  42. 42. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Nordstrom’s New Store Has No Merchandise This new retail concept by Nordstrom stocks no merchandise, instead offering services and experiences. Explore the Sign Named the “Nordstrom Local,” the store’s new concept is to offer only services, advice and experiences rather than aiming to sell products. This includes nail beauty counters, tailoring, style advice and even a bar. Visitors are able to try items on, but can only order them online. They are able to pick up deliveries later the same day at the location, but no merchandise will be stocked on the premises. Employees at the “Nordstrom Local” also help customers discover their style by creating personalized, digital boards of recommendations. 42
  43. 43. UNDERSTAND TODAY. SHAPE TOMORROW. 43 -3- TRANSACTION In-store technology can make a difference HOW IS THE RETAIL CUSTOMER JOURNEY CHANGINGLHBS // 2018: THE YEAR OF BRICK & CLICK
  44. 44. LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 44Source: Capegemini OPPORTUNITY: Many shoppers browse and search online but decide on buying the products only after seeing or trying them on
  45. 45. ‘Shoppers want in-store technology that can help them find products, track spending and pay for products.’ LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 45
  46. 46. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: Shoppers that want to use a mobile application to pay for in-store products rather than a register LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 46 57 % 43 % 43% Source: Capegemini
  47. 47. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: of consumers say e- commerce apps help them save time at the store LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 47 46 % 54 % 54% Source: BI Intelligence BUT 49 % 51 % 51% they make only half of their purchases in apps
  48. 48. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING A Pop-Up Of Co- Creation And Tech Calvin Klein partner with Amazon Fashion for a series of pop-up shops with technology and customization at the core. Explore the Sign For a next level shopping experience, Calvin Klein teamed up with Amazon Fashion to set up tech- enabled pop-up stores. Visitors are able to either purchase items in the store or simply scan the item bar codes using the Amazon App to have them delivered to their homes. Within the stores, there are also customization stations where customers are able to have products embroidered with personalized designs. They also have spaces for content creation encouraging shoppers to create their own social media clips. 48
  49. 49. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Facial Recognition Payment Café Alibaba opened a concept café where customers can pay by facial recognition, meaning no queuing for the cashier. Explore the Sign When a customer requests their order at Alibaba’s new café, instead of then queuing to pay, their face is simply scanned by the screen at the counter or as they walk through a one-meter long scanner, and the price of their purchase is instantly deducted from their Alipay account. Clerks still prepare the food and drinks, but payment is done completed digitally. Other features of the store include a screen where visitors can select products, and they appear immediately on their mobile in virtual “baskets.” 49
  50. 50. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Lush Now Accept Bitcoin Cosmetics retailer Lush have begun accepting Bitcoin payments to enable global growth and fairness to customers in all countries. Explore the Sign Lush, a cosmetics retailer begun accepting bitcoin as a form of payment in their online store. Bitcoin is unaffected by global foreign exchange fluctuations, and so everyone ends up paying the exact same amount for their products, no matter which country they’re in. They also hope the use of a decentralized, global currency will open up more opportunities, for example, reaching a global market, connecting with global suppliers and collaborating with rural charity groups in need of support. 50
  51. 51. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING China’s Store Of The Future A startup in China has beaten Amazon to the punch and premiered a staffless convenience store. Explore the Sign Bingobox is a Chinese startup who has recently opened their second staffless convenience store. After a few months of testing in a smaller city, their new store is located in Shanghai and is causing a stir. The store works by partnering with WeChat to identify customers as they enter and helping them pay directly on the app on the way out. 51
  52. 52. UNDERSTAND TODAY. SHAPE TOMORROW. 52 -3- DELIVERY Customers want to have flexibility with the delivery method and full access to the progress of the delivery HOW IS THE RETAIL CUSTOMER JOURNEY CHANGINGLHBS // 2018: THE YEAR OF BRICK & CLICK
  53. 53. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: Shoppers who think smartphones are important to follow product delivery LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 53 58 % 42 % 42% Source: Capegemini
  54. 54. “Shoppers have grown fond of having the city at their fingertips.” LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 54Source: McKinsey
  55. 55. “ As same-day delivery stands to outgrow instant delivery by ten to one, it could unlock an opportunity worth more than $200 billion for retailers in Europe and North America over the next decade.” LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 55Source: McKinsey
  56. 56. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING #UniqloToGo Uniqlo clothing brand is launching vending machine concepts across airports and malls. Explore the Sign Uniqlo has unveiled the first Uniqlo To Go vending machine in Oakland airport with plans to roll them out across other airports and malls in the US. The vending machines are designed to offer customers an "on-demand experience" of Uniqlo's basics clothing line.  56
  57. 57. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Walmart Installs Giant Vending Machine Walmart installed a giant vending machine to make it easier for customers to pick up online grocery orders. Explore the Sign Walmart is testing the self-service kiosk in the parking lot of a shopping centre. Customers purchase and pay for the groceries online, Walmart employees store the order in bins in the kiosk for customers to pick up without interacting with employees. To receive the order, customers need to type in a code and the groceries appear within a minute. The service entails no fees but minimum oder lies at $30. 57
  58. 58. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Target Test A Drive- Thru Store Picking up orders in Minneapolis just got easier with Target’s “Drive Up” store. Explore the Sign For those who dislike walking around a store just for the convenience of not having to wait for purchases to be delivered, Target’s new store could be the answer. They’re testing a new store in Minneapolis where online shoppers can select and buy what they want after selecting the “Drive Up” option within the Target app, and then hit the “I’m on My Way” button. Store employees will then get the order together ready for collection and customers can simply drive through the store to pick up their order. No waiting times and no leaving the car. 58
  59. 59. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Drone Delivery For Rural China JD.com, one of China’s biggest online retailers, will build 185 drone airports to ensure e-commerce delivery to rural areas. Explore the Sign The drone deliveries will work two ways. They will bring products to rural southwest China as well as help distribute rural products, hoping to deliver agricultural products from Sichuan to anywhere in China within 24 hours, cutting some costs by 70%. The new airports are the retailer’s push into the huge rural Chinese market which is twice the size of the United States. 59
  60. 60. UNDERSTAND TODAY. SHAPE TOMORROW. 60 -3- AFTER SALES Customers expect multi-channel availability of support with whatever query they might need answered HOW IS THE RETAIL CUSTOMER JOURNEY CHANGINGLHBS // 2018: THE YEAR OF BRICK & CLICK
  61. 61. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: Shoppers who want to be able to easily return products using digital channels regardless of where the product is purchased LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 61 50 % 50 % 50% Source: Capegemini
  62. 62. LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 62Source: Capegemini The majority of shoppers said that the website is very important for the after sales care
  63. 63. 55 % 45 % UNDERSTAND TODAY. SHAPE TOMORROW.Source: Customers who would take their business to a competitor within a week of experiencing poor customer service LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING 63 21 % 79 % 79% Source: Access
  64. 64. “In a KPMG survey, half of the loyalty customers polled said they would do ‘almost anything’ to earn more rewards in at least one program.” LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 64Source: KMPG
  65. 65. “The average Amazon Prime member spends nearly 5x more than a non-Prime member.” LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING UNDERSTAND TODAY. SHAPE TOMORROW. 65Source: Business Insider
  66. 66. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Zalando Introduces Loyalty Program Zalando Zet Zalando is launching an Amazon Prime-like paid membership program named as Zalando Zet. Explore the Sign The program Zalando Zet will be run by invite-only. “Customer will get benefits along the customer journey such as early access to sales, and can contact stylists and experts via telephone or Facebook chat to answer fashion related questions,” Zalando said in a press release. “Members further benefit from faster delivery, including same-day, dedicated customer service, and the new return- on-demand service, which enables customers to have their returns picked up within two hours at a time and location of their convenience.” 66
  67. 67. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Sephora’s New Community Forum Cosmetics brand Sephora has launched the Beauty Insider Community forums for chatting about all things beauty. Explore the Sign Sephora have recently launched what people are calling their own Reddit, it’s a platform of forums for “Beauty Insiders” (who they call subscribers to their loyalty program) to connect and discuss everything related to hair, make-up and fashion. There’s also a gallery page, where customers can post photos of their favorite beauty looks with step by steps of how others can recreate the look. They also include links to the products available to buy at Sephora, with reviews, and other users can leave comments and questions. 67
  68. 68. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Estée Lauder’s CRM Services Accessible Via WeChat Estée Lauder made it easy for fans to engage with the brand by offering various customer-centered services via WeChat. Explore the Sign Estée Lauder offered various services via their WeChat channel, such as easy enrollment to their loyalty program, receiving personalized beauty solutions and even a system for scheduling in- store appointments to integrate the customer’s experience. There is also an interactive game which gives users the opportunity to win brand products. WeChat gave Estée Lauder the possibility to communicate individually with customers with personalized content. 68
  69. 69. UNDERSTAND TODAY. SHAPE TOMORROW.Source: LHBS // 2018: THE YEAR OF BRICK & CLICK HOW IS THE RETAIL CUSTOMER JOURNEY CHANGING Return Items Happily Happy Returns is the new business making returns of online purchases easier, and has set up shop in Los Angeles. Explore the Sign Happy Returns is a network of return locations for items people have purchased online, and who don’t wish to travel to a post office to post them back. They simply drop off the items at the “Happy Bars” with the workers here, named the “Returnistas,” and go about their day. The Happy Bars accept items from participating retailers, and are in convenient locations such as malls. The process is very consumer-friendly, and the Returnistas have a dedicated app with which they can connect to the backend of the participating retailer, pull up the customer’s previous orders and receive all necessary information. 69
  70. 70. CHAPTER THREE UNDERSTAND TODAY. SHAPE TOMORROW. 70 WHAT SHOULD RETAILERS DO ABOUT IT? LHBS // 2018: THE YEAR OF BRICK & CLICK
  71. 71. UNDERSTAND TODAY. SHAPE TOMORROW. 71 ONE Customers today are very well informed and savvy - always ready to utilize multiple resources to find better products, options and prices. Consistency across channels is key. Retailers should continuously make sure that they are presenting themselves and their products and prices consistently across channels, not to leave their customers with a need to search further or create opportunities for them to leave. WHAT SHOULD RETAILERS DO ABOUT ITLHBS // 2018: THE YEAR OF BRICK & CLICK
  72. 72. UNDERSTAND TODAY. SHAPE TOMORROW. 72 TWO Customers today are likely to buy from the store if they’ve had the chance to use digital when browsing and looking for things. In-store shopping should have digital at it’s core. With customers having unlimited shopping options now, retailers should make their shops more experiential. Offering the entire end-to-end journey together with ‘sampling’ opportunities of products creates an unforgettable brand experience. WHAT SHOULD RETAILERS DO ABOUT ITLHBS // 2018: THE YEAR OF BRICK & CLICK
  73. 73. UNDERSTAND TODAY. SHAPE TOMORROW. 73 THREE Mobile shopping may soon have the greatest impact on retail experiences. Embrace mobile shopping as part of the retail experience in store. Retailers should come up with ways of how to use mobile shopping for their benefit. They should utilize it to tap into the shopping journey at critical purchase decision points, capturing every opportunity to offer options best fitting to the individual, ultimately increasing profits through a better customer experience. WHAT SHOULD RETAILERS DO ABOUT ITLHBS // 2018: THE YEAR OF BRICK & CLICK
  74. 74. UNDERSTAND TODAY. SHAPE TOMORROW. 74 FOUR Most customers still enjoy touching, experiencing and trying on products before deciding to buy them. Re-model shopping to a full and immersive experience that will keep your customers entertained and curious for more. Retailers should focus on what e-commerce cannot give to the buyers and turn it into something spectacular; for example human interaction with knowledgable and dedicated staff as well as other shoppers. Take care not to leave customers feeling guilty when they choose not to buy. WHAT SHOULD RETAILERS DO ABOUT ITLHBS // 2018: THE YEAR OF BRICK & CLICK
  75. 75. UNDERSTAND TODAY. SHAPE TOMORROW. 75 FIVE Customers expect easy and reachable after-sales channels with qualified and knowledgable staff. The journey does not stop at transaction. After-care is now one of the key steps in the customer journey. Retailers should invest their efforts into providing a great experience even after the sale is done. Having any subsequent issues or queries dealt with by a knowledgable and dependable contact will enhance your credibility and trustworthiness, ensuring customers will return for more. WHAT SHOULD RETAILERS DO ABOUT ITLHBS // 2018: THE YEAR OF BRICK & CLICK
  76. 76. UNDERSTAND TODAY. SHAPE TOMORROW. 76 SIX Retailers understanding and anticipating their customer’s needs and also having a clear view on their own business vision, purpose and capabilities can create great experiences for the customers. Know your customer and know yourself. The great customer experience is made at the intersection of what retailers know about their customers and what is their true competence.
  77. 77. UNDERSTAND TODAY. SHAPE TOMORROW. Discover ABOUT. Define Develop Deliver LHBS is a marketing & innovation firm with offices in Berlin & Copenhagen. We work with legacy organizations to adapt their customer value proposition to meet emerging customer expectations. Together with our clients we discover business opportunities and deliver integrated customer offers for products, services, experiences and communication. http://www.lhbs.com ABOUT UNDERSTAND TODAY. SHAPE TOMORROW. 77 DISCOVER DEFINE DEVELOP DELIVER UNDERSTAND TODAY. SHAPE TOMORROW. LHBS // 2018: THE YEAR OF BRICK & CLICK
  78. 78. LHBS Put the Title of the Report here HUB. UNDERSTAND TODAY. SHAPE TOMORROW. This report has been created with the help of signmesh. signmesh innovation hub is a tailored dashboard of curated insights and business cases to keep your company ahead of the learning curve and inspire ongoing innovation. signmesh.com SIGNMESH 78 REQUEST A DEMO. LHBS // 2018: THE YEAR OF BRICK & CLICK
  79. 79. Die in dieser Präsentation dokumentierten Gedanken und Vorschläge sind geistiges Eigentum der 
 LHBS Consulting Berlin GmbH und unterliegen den geltenden Urhebergesetzen. Die unauthorisierte Nutzung, 
 die ganze oder teilweise Vervielfältigung sowie jede Weitergabe an Dritte ist nicht gestattet. LHBS Consulting Berlin GmbH Köpenicker Straße 154  10997 Berlin Germany   IMPRINT UNDERSTAND TODAY. SHAPE TOMORROW. www.lhbs.com THANK YOU 79 LHBS // 2018: THE YEAR OF BRICK & CLICK

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