1. Zappos : the future of Retail is
Digital…and we haven’t seen
anything yet!
25 septembre 2013

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DOMINIQUE PIOTET
Digital strategy and innovation for large organizations
EUROPE CONSEIL
Manager of e-business team
L’ATELIER BNP
President and CEO
REBELLION LAB
Founder and Chief Rebel
ZEN FACTORY
Founder
LA POSTE
“35 hours” manager
Head of Internet strategy
BNP PARIBAS
Director of Internet and
Intranet strategy
PARIS

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Introduction: Web vs. Store?
1 – Zappos
2 – Zappos’ efforts in Las Vegas
3 – Future of retail…is digital
3.1 – Concepts and trends
3.2 – The store of the present
3.3 – The store of the future
3.4 – The four big challenges of the store of the future
Keynote Conclusion
AGENDA

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INTRODUCTION: WEB VS. STORE?
In 2012 :
Online
commerce
+ 19 %
In-store
commerce
- 2 %
Reasons why
consumers prefer
online commerce :
1 – Price
2 – Gain of time
3 – Avoid moving
4 – Good deals
5 – Shop whenever and
wherever wanted
Reasons why
consumers prefer
instore commerce :
1 – See the product
2 – Get it right away
3 – Touch and feel the
product
4 – Avoid delivery fees
5 – Try the product
BVA-Mappy, 2013

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INTRODUCTION: WEB VS. STORE?
Four new consumer behaviors:
FULL STORE SHOWROOMER ROPO
(Research Online,
Purchase Offline)
FULL DIGITAL
88 %78 %41 %63 %
BVA-Mappy, 2013

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INTRODUCTION: WEB VS. STORE?
BEFORE
WEB VS. STORE
NOW
WEB-TO-STORE
! Consumer are not exclusive to a single profile.
! There is a necessity to make the bridge
between in-store commerce and methods of
online commerce.
! With the need of enhanced consumer
experience, Web and Store cannot stay
competitors…they must become
complementary.
à
BVA-Mappy, 2013

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1 – BUSINESS CASE: ZAPPOS

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KEY FIGURES
! Founded in 1999 in San Francisco with the
vision of becoming the online shoe store with
the best selection and the best service.
! Moved the headquarters to Las Vegas in 2004.
! Turned profitable for the first time in 2007:
topped $100 million in monthly merchandise
sales in December, ending the year with
revenue of $840 million.
! Bought by Amazon in 2009 for $1.2 billion.
! US Leader for Shoes Online.
! 1,300 employees.
! Revenue of $2.2 billion in 2011, 20% average
Growth y/y.

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STRATEGY
! “We are a Service Company that happen to sell
clothes”.
! The 3C:
– Clothing
– Customer Service
– Culture
! Almost No Marketing Expenses:
– Customer Service is The New Marketing: free
shipping and free return, 365-day return policy, 24/7
call center + Upgrades & Surprises
– Word of Mouth
– Loyalty
! Focus only on the United States
! No Outsourcing for Logistics & Customer Service

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CULTURE IS EVERYTHING
– Deliver WOW Through Service
– Embrace and Drive Change
– Create Fun and A Little Weirdness
– Be Adventurous, Creative, and Open-Minded
– Pursue Growth and Learning
– Build Open and Honest Relationships With
Communication
– Build a Positive Team and Family Spirit
– Do More With Less
– Be Passionate and Determined
– Be Humble
! The company lives by 10 core values from which are developed the culture,
the brand and the business strategies.

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CULTURE IS EVERYTHING
– In 2005, Zappos came up with the idea of
the “Culture Book”.
– Collage of submissions from employees
sharing what the Zappos culture means to
them.
– Submissions are unedited.
– New book each year.
! “How can we sustain this culture? How can we remember it while
simultaneously inspiring ourselves for the next year?”

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AND ZAPPOS CREATED…ZAPPOS COUTURE
! In 2004, Couture was created as the line for high-end shoes and clothes.
! Value proposition : accessing the latest and greatest items from the best
international fashion houses online…while enjoying the same best-of-class
customer service experienced with Zappos.com.
! 10% of Zappos revenues are now made by Zappos Couture.

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2 – ZAPPOS’ EFFORTS IN LAS VEGAS

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MOVE OF THE HEADQUARTERS…
NEW HQ
DOWNTOWN LAS VEGAS
• Former City Hall Building
• Opened on September
9th 2013
• $60 million invested in
renovation and
transformation
FORMER HQ
HENDERSON

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…AS THE FIRST STEP OF THE
! THE BET: transform Downtown Las Vegas into the most community-focused
large city in the world.
ARTS, MUSIC, CULTURE
COMMUNITY AND COWORKING
EDUCATION
ENTREPRENEURSHIP
TECHNOLOGY
URBAN DEVELOPMENT
THE PILLARS OF THE PROJECT ROI
Return On Investment
Maximizing short-term
ROC
Return On Community
Maximizing long-term

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: HOW?
$200 million in residential
and real estate
+ $50 million in small
businesses
+ $50 million in education
+ $50 million in tech startups
= $350 million investment
for the revitalization of
Downtown Las Vegas…
…invested by Zappos CEO Tony
Hsieh who has initiated the
project and leads it.

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: SITE EXAMPLE
Container Park is
set to be the new
heart of Downtown
Las Vegas with a
mix of cafes,
boutiques, bars,
galleries,
community space,
an outdoor theater,
children’s play area,
and Catalyst Dome.

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STORE
In the city of the future, will come the Store of the Future with :
: STAY TUNED!

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Why in Las Vegas ?
Because Shopping IS Vegas: luxury brands, demographic, number of
visitors….Our audience is in the City.
WHAT STORE OF THE FUTURE FOR DOWNTOWN?

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3 – FUTURE OF RETAIL…IS DIGITAL

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3.1 – CONCEPTS AND TRENDS
At the intersection of Retail and Digital, what are the
concepts to understand?
What are the upcoming trends?

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SHOPPERS ARE MORE FUN AND SOCIAL!

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DIGITAL IS “MELTING” IN RETAIL

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NO MATTER WHAT YOU DO…PEOPLE ARE
BRINGING DIGITAL IN

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MOBILE SHOWS A FAST-PACED MOMENTUM
1.5B smartphone users in 2013 in the world, 31% of growth compared to 2012.
5B mobile users in 2013 in the world.
Users turn to their phones about 150 times a day.
Part of mobile traffic within
global internet traffic is
multiplying by 1.5 every year
...
and is likely to maintain or
accelerate the pace.
2013 Internet trends report
Mary Meeker Liang Wu, KPCB

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MOBILE IS NOT ONLY ABOUT PHONES
Ipad growth has been about 3 times faster than Iphone growth as one compares first 12
quarters cumulative unit shipments for the two devices.
Tablet shipments surpassed desktop
PCs and notebook PCs shipments for
the first time in Q4 2012
...
less than 3 years from introduction on
the market.
Mobile will soon include wearable technologies
(glasses, watches, apparel). 2013 Internet trends report
Mary Meeker Liang Wu, KPCB

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SOLOMO: CONTEXT MATTERS
SO CIAL LO CAL MO BILE
The platform you use to engage with your
target audience and promote your message.
Your area(s) of
concentration or relevant
proximity.
The medium of communication between
your brand and your customers.
94% of smartphone users have
searched for local information.
60% of mobile wi-fi hotspot users
tag their social statuses, photo
uploads or other posts with their
location.
79% of smartphone owners are
smartphone shoppers ... and
84% of them use their phones
to help shop while in store.
15 minutes is the average time
of smartphone use in-store.
64% of smartphone users use their
devices to visit social networks at
least once per day.
In fact, smartphone users spend an
average of 7.4 hours per month on
Facebook alone.

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STORES OF THE FUTURE ARE STILL “GEEKY
DRIVEN” …
Microsoft Retail Center
Intel Magic Mirror

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OR FASHION AND CONCEPT STORE DRIVEN
Karl’s Pop-Up Store with
NAP
Burberry's new Flagship

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MOST RETAILER DON’T HAVE A 360° SEAMLESS CUSTOMER
EXPERIENCE IN MIND. ESPECIALLY IN LUXURY.

31. Hotel
Concierge
Online Offline
Customer Journeys
are Consistent in
Experience and
Quality
Google
Glasses
IPAD
Barcode to
download
APP
Valet
Parking
Outside
Recreational
Area
Window
Displays
Magazines
Hotel
TV
Online
Personal
Shopper
Browsing
Fitting Rooms
Electronic
Revolver
Self Checkout
All Clerks are
points of sale
(POS)
Mobile Payment
Automatic Inventory
Levels
Item scanning
In-store purchase
activity
Bar
Spa
1-Day Shipping
Customer
Satisfaction
Survey
VIP Loyalty
Programs
Gallery
Billboard
Digital Fitting
Room
Awareness Consideration Purchase Payment Service Post Purchase
STORE OF THE FUTURE CUSTOMER JOURNEY MAP – TOURIST SCENARIO
FIRST VISIT
Technology
Hotspots
Store Features/
Experience
Marketing
Channels

32. Technology
Hotspots
Hotel
Concierge
Google
Glasses
IPAD
Store Features/
Experience
Marketing
Channels
Valet
Parking
Outside
Recreational
Area
Window
Displays
Magazines
Hotel
TV
Online
Personal
Shopper
Browsing
Fitting Rooms
Electronic
Revolver
Self Checkout
All Clerks are
points of sale
(POS)
Mobile Payment
Personalization of
Experience
Item scanning
In-store purchase
activity
Bar
Spa
1-Day Shipping
Customer
Satisfaction
Survey
VIP Loyalty
Programs
Gallery
Billboard
Digital Fitting
Room
Trigger/Incentive Consideration Purchase Payment Service Post Purchase
RFID
Customer
Recognition
Zappos
C. App
Customer is triggered to visit the
store again because of various
influencers:
• Second Visit to Vegas
• Marketing Channel Triggers
• Use Loyalty Rewards/Points
Note:
Marketing ads will
contain triggers for
second visit repeat
customers such as
long-tail online
recommendation
strategy
Recommendation of
items based on
purchase history
Customer is recognized via RFID
and incentivized to use previously
untried features such as personal
shopper
Specific brands are recommended to the customer
based on the purchase history in store and via
online account app.
Customer is informed on post-purchase perks,
upcoming Brand releases and available services
such as Bar/Café Spa
• 85% of customers stated they would be willing to
pay up to 25% more to ensure a superior
customer experience.
• 55% became a customer of a company because
of their reputation for great customer service.
• 55% are willing to recommend a company due to
outstanding service, more so than product or
price.
• 66% of customers cited customer service as the
biggest driver for encouraging greater spending.
*
* Harris Interactive Customer Experience Impact Report
STORE OF THE FUTURE CUSTOMER JOURNEY MAP – TOURIST SCENARIO
SECOND VISIT

33. Hotel Concierge
VIP Rock stars
enjoy a tailored,
exclusive and
customized
experience
throughout their visit
Google
Glasses
IPAD
Barcode to
download
APP
Valet
Parking
Outside
Recreational
Area
Window
Displays
Hotel
Social
Network
Personal
Shopper
Browsing
Exclusive Fitting
Rooms
Exclusive Point
of sale (POS)
Mobile Payment
Item scanning
Bar
Spa
Same Day
Shipping
VIP Programs
Gallery
Digital Fitting
Room
Store Promotion Consideration Exclusivity in Browsing/Purchase Service Post Purchase
Store is promoted to the
customer during his stay in
Vegas via various channels
Customer is automatically opted in
for personal shopper and exclusive
parking/valet service
Customer enjoys a range of exclusive brands that
are personalized and customized to his/her taste.
Brands and products preference are
communicated to the store management before
the visit
Customer is automatically opted in for an exclusive
session at the spa, and have the option of private
seating at Bar/Cafe
Agent
Special Event/
Invitation
Customized
Brands/
Products
STORE OF THE FUTURE CUSTOMER JOURNEY MAP –
VIP/ROCKSTAR SCENARIO
Technology
Hotspots
Store Features/
Experience
Marketing
Channels

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BIG DATA FOR OPTIMUM RETAIL
V olume V ariety V elocity
V iability
V alue
Strong increase in retailers’ operating margins possible if consumer big data used to
its fullest potential. Which functions? Which levers?
MARKETING
• Cross-selling
• Location-based marketing
• In-store behavorial analysis
• Customer micro-segmentation
• Sentiment analysis
• Multi-channel experience
MERCHANDISING
• Assortment optimization
• Pricing optimization
• Placement and design
optimization
SUPPLY CHAIN
• Inventory Management
• Distribution and logistics
optimization
+10% to
+30%
+10% to
+40%
+5% to
+35%

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We are entering Wave III
1. Consumer centric
2. “Experiential Superiority”
3. Distributional Superiority
4. Superior Value-Chain Control
And also:
• “Pop-Up” stores and other preemptive distribution
opportunities will become proactive strategies as
opposed to marketing opportunities
• Small, rapidly cycled niche brands will trump mega-
brands.
• Digital world is an “unstoppable catalyst”.
DISRUPTION HAS NOT HAPPENED YET

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What is it?
• A luxury concept store of the
Future (from the window to the
operation)
• A bar of the Future
• Offline Online
• A constant work in Progress
WHAT STORE OF THE FUTURE FOR DOWNTOWN?

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What is the concept?
• Curation Luxury
• Design
• Technology
• Seamless 360
Customer Experience
(offline and online)
• To create an amazing
customer experience
WHAT STORE OF THE FUTURE FOR DOWNTOWN?

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3.2 - THE STORE OF THE PRESENT
What has been done with digital so far? Not much…
Has digital been used as an enabler? Not really yet…

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3.3 - THE STORE OF THE FUTURE
How Digital will impact the Store of the Future?
With which technologies?
Digital will take place all along the Customer
Journey…
Awareness Consideration Purchase
…outside the store, at the store window, in the store
and finally in front of the product.

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OUTSIDE THE STORE
GPS
Wifi
connection
Geolocation
Personalized
signage

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EXAMPLES: GEOLOCATION

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AT THE STORE WINDOW
Facial
recognition
Rich
media
(QR)
Interactive
window display
Social
shopping Personalized
signage
Geofencing

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IN-STORE ENVIRONMENT
Mannequin
holograms
Personalized
sound and light
ambiance
App / Game /
Map
Interactive
dressing room
Interactive
mirror
Wifi
access Crowd-sourced
hotspots
Check-in and
Personalized
feed

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EXAMPLE: MARKS SPENCER

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EXAMPLE: GUCCI, MILAN

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THE “PRODUCT” STORY
Augmented
reality
Real-time
data
Rich media
(QR)
Dynamic
signage
Interactive
features
Ratings and
reviews
Ratings and
reviews
Rich media
panel
Showrooming 3D printing Mobile
checkout

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EXAMPLE: 3D PRINTERS AT UPS SAN DIEGO
Pilot program, August 2013

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3.4 – THE FOUR BIG CHALLENGES OF THE
STORE OF THE FUTURE
TECHNOLOGY
FUNCTIONALITIES
INTEGRATION
ON/OFF
PAYMENT
HUMAN

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KEYNOTE CONCLUSION
Digital screens
that display
dynamic
information
where user’s
role is more
passive.
InteractiveTerminal Integrated Everywhere
Digital presence
invites the visitor
to participate:
interactivity can
incite curiosity,
entertainment,
etc.
Digital activities are
integrated between
devices and platforms,
between offline and
online and between
people and machines.
Commerce
happens when,
where and how the
customer wants it:
bricks and clicks
form a single
ecosystem.
In the evolution of digital integration within the physical store, 4 stages:
The store of the future will be the stage where the integration
physical space/digital space will be fully accomplished.

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KEYNOTE CONCLUSION
Store of the future: commerce everywhere.

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THANK YOU FOR YOUR ATTENTION!
QUESTIONS?
Contact:
Dominique Piotet
dominique@rebellionlab.com