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DIGISHIFT2020
- how the digital channels shape the future of shopping
Report from Steen & StrømTrendlab 2011
DIGISHIFT 2020
2
3report from steen & strøm trendlab
Steen&StrømTrendlabiswheretheemployees,retailersandotherexpertsmeettoshare
thoughts and knowledge on future consumers, retail and shopping centres. Each Trendlab
project produces a visionary report, but for the participants the process itself is also very
valuable. It creates new strategic insights and learning.
Steen&StrømistheleadingshoppingcentrecompanyinScandinaviaandwantstoexpress
that by being perceived as the expert on retail and shopping centres. Trendlab is one of
manyeffortstoachievethatambitiousgoal.Wewanttobethecompanyourpartnerswant
to join in creating future meeting places.
When we do our trend research we start with already existing megatrends, trends and
phenomena.Wetrytofindoutwhichofthemwillremainstrongandwhichofthephenomena
are strong enough to become a future trend. History tells us that many of the elements of
the near future are things we already know. The challenge is to judge their future strength
and duration. Sometimes a phenomena is strong enough alone, but most of the time it is
depending on the growth of a number of other trends and phenomena, to become a trend
by itself.
Looking at a possible future is always holding a degree of uncertainty. But at Steen &
Strøm we think we are better prepared by listening to the qualified assumption of leading
experts in the field. In certain areas it can make us create the future, rather than being
caught by surprise.
This is the fourth Steen & Strøm Trendlab. The first three have been building on the
findings of the earlier Trendlabs, like this one as well. With this fourth book we believe
the foundations gets stronger and touch upon new areas which are important to better
understand our common society and business environment of the future.
This time we have had a closer look on how the digital channels that will shape the future
retailandfutureshoppingcentres.Theimpactofthee-shiftisobvious.Wecanseechanges
in the way we communicate in new channels.We see how e-trade gradually reshapes retail.
But how will the future look for retail and shopping places? Steen & Strøm Trendlab has
involved a number of internal and external experts to help predict the future development.
Have a good read!
Foreword
DIGISHIFT 2020
4
© Copyright Steen & Strøm 2011
Graphic Design:TIBE Drammen
Photo: Steen & Strøm, Kairos Future, istock.com
5report from steen & strøm trendlab
Contents
CHAPTER 1
Introduction	7
Background and context for the theme of Trendlab 4
CHAPTER 2
from pastto present	 25
The Digishift Timeline
CHAPTER 3
Trends & phenomena	 39
The Trends and the Phenomena prioritized shaping
the digitization of Retail.
CHAPTER 4
the experts view on the future	 89
CHAPTER 5
the likely future	 113
Looking into the year 2020
CHAPTER 6
scenarios for the future	 129
Multichannel • Showroom • Smartmart • Experience
DIGISHIFT 2020
6
Most experts point out that the coming ten to twenty years will be the
most dramatic years ever in history of mankind. The well-known futurist
Theodore Modis states that five days in 2025 will be as ”event rich” as the
whole 20th century. Even if you are not that dramtic it is important to be
aware of many of the driving forces and shifts that is under way in a higher
speed than ever.
In Kairos Futures international research on how the most successful
companies excel in turbulent times, we find that it is the companies ability
to systematically scan for future trends and changes in their business
environment and their intense efforts on making insights of the foresights
that creates what we call Future Sense in the management team. Their
understanding of different scenarios makes them innovative and prepared
for increasing turbulence and more comlex business environments.
7report from steen & strøm trendlab
introduction
chapter 1
Background and context for the theme of Trendlab 4
DIGISHIFT 2020
8
Tomorrow
belongs to
the people
who prepare
for it today.
African Proverb
9report from steen & strøm trendlab
This is the 4th research paper from Steen & Strøms TrendLab – a future workshop where
we gather leading experts within different disciplines in order to collectively improve the
possibilities to meet future challenges.
The first report focused on consumer tendencies and shopping behaviour. The second
report was trying to cover the most important shifts that will have big impact of shopping
places in the future. We identified 10 major shifts that was further explored in the third
TrendLab report which was called the Future of the moment of truth.The shifts has served
as a strategic map for Steen & Strøm and are presented here below:
•	 The Power Shift – from producer to distributor, to the consumer power. Increasing
flow of information in an ongoing explosion of mediachannels makes traditional
marketing less effective and the critical and advertising-weary consumers are arming
themselves with new technology. With blogs, social networks and mobile phones they
are acquiring greater power as they take over a number of media and sales channels
•	 Anti-Age shift – from ages to life cycles. In a population that is growing older the
conceptanddefinitionochyouthisslowlychanging.Seniorcitizenstodayareredefining
the life ladder while experiencing a second period of freedom with time and money to
spend.Youthhasgonefrombeingrelatedtoacertainageandbecomesastateofmind
•	 Value shift – from indiviualism to dividualism (multiple and temporary identities).
Postmaterialistic values and individual strife for life maximalization in a economy
that is shifting from needs to desires, leads to a hectic hunt for experiences
and satisfaction. A complete norm collaps in the society makes people focus
on inventing their identity-projects. In our hectic world, more people develop
mental agility. Life offers fewer stable relations, but a growing array of temporary
acquaintances and encounters. This mental agility leads to a serious play with
more identities and roles than ever before. The future belongs to the dividualists.
•	 Convenience shift – from “what?” and “how much?” to “where?” and “When?”
(Superconvinience and Just-in time living). Increased prosperity and a perceived
lack of time for a growing number of consumers in combination with increased lack of
energy creates a desire for superconvinience retail – that can help me live a no friction
life.
•	 Form shift – from function to form (Democratization of design and luxury and
emergence of mass-clusivity). More aesthetics, appearance and finish will become
increasingly important for the shopping culture of the future as consumers search
for a more designed existence, devoting more energy to choosing attributes that can
work as extensions of their selves.
A series of research papers since 2007
DIGISHIFT 2020
10
•	 E-shift – from physical limitation to multichannel opportunity (E-tailing, Mixed
reality and immersive shopping experiences). E-commerce is growing stronger
than ever. In most fields e-commerce is making inroads in relation to more traditional
methods. E-tailing concepts becomes part of multichannelstrategies to create better
relationships with consumers where ever they are, creating problems knowing what
actually is sold and what is not in ordinary shops and shopping places.
•	 Concept shift –from products to store and marketplace concepts. In the past the
products themselves accounted for a large part of the brand and the concept. As
quality convergence and globalization increase, the products become less important
and the packaging of the product and the surrounding shopping experience becomes
more in focus. Format is playing a larger role as stores attempt to differentiate and
renew themselves in a faster and faster pace.
•	 Metropolitan shift – from countryside vs urban challenge to metropolitan growth
and Urbanity as the way for the future. The city previously viewed as a dirty problem
is now seen as an engine for growth. Development of sustainable metropolitan areas
is increasingly part of the solution and the search for new forms to unite classic citiy’s
integration of work, home and shop with the new demands for accessibility, healthy
environment and effective land use. Shopping places will be more integrated with the
city and receive a far more versatile content than the previously discussed “boxes out
on a field”.
•	 Environment shift – from Eco-luxury and Eco-Chic to Survival (Sustainability rules,
Small Scale and Local Heroes, Eco-smart shopping). We will se a peek of everything
in not so far distant future. Energy, food, water and raw-materials are becoming
scarcities for a growing global population. Consumers will be ever more critical of
businesses and brands that behave irresponsible. Sustainability will be the driving
force and focus in the efforts to create eco-smart production and consumption.
•	 Class Shift – from Stable Socio-economic classes to Division of Multidimensional
classes (Downward mobility, the minorities on the rise and creation of a new class
society). Over the past few decades we have seen income differences increase as a
new form of class society takes over where the class markers such as education and
networking are becoming more multifaceted. Once again, the wealthy are becoming
wealthier. Inequality today is not just a matter of money, but of a number of variables
such as education, language skills, connections, access to media and networks. The
most vulnerable today are unemployed young people and many immigrant groups.
The continous work and updates of the trendshifts on a regular basis has given further
understanding of what the future may bring. For the past years it has also been recognized
that the strongest signals for change in retail and shopping places is coming from a wider
perspective of the E-shift, digitization in general.
11report from steen & strøm trendlab
“Bits, the DNA of
information, are
rapidly replacing
atoms as the
basic commodity
of the human
interactiony.”
Nicholas Negroponte
DIGISHIFT 2020
12
–The purpose of for this year’s report isto explore how
the digital channels will shapethe future of shopping.
Nicholas Negroponte, who gave the statement in his book Being Digital in 1995, referred
to a belief that every object or product which can be digitized will become digitized in the
future.
During the 15 years that has passed since he wrote this, we have witnessed a total
information- and communication revolution in society that still only is in its beginning.
RichardNormann,afamousSwedishmanagementthinkerandwriterstatedinhislastbook
that because of the digitization, the carriers of value in almost every business will become
de-materialized in the future. Symbols, brands, information, knowledge, relationships
are all examples of value that now are becoming digitized and fluid. The new mobility and
connectivityreshapes,re-formandrestructuresbusinesses,branchesandsocieties. Look
at what is happening in the middle east right now. The new connectivity and the fact that
more an more products have been transformed to bits rather than atoms, creates a new
type of density in the market where everything is reachable from the palm of your hands,
from your computer, your mobile, your car, your Nintendo or Flatscreen. You’re closer to
your co-workers or customers through Skype. You’re friends and family are almost always
with you via Facebook, Twitter, Go-Walla or Foursquare, Your records and every record
ever produced is near you through Spotify or Itunes. Even your money and savings are in
the reach every second of the day.
“If one believes in the digitization thesis than we have to realize that many of the prod-
ucts in physical shops will be digitized during the coming ten year period. If more and
more people will have a 3-D printer at home which is printing out the productbase then
Ingvar Kamprad will be happy to skip the flat boxes. We will buy bits, ones and zeros, that
represents the reading lamp Emma instead of the real thing. Ikea has the CAD-drawings
already so they could start creating a shop that would sell in this new way in order to pre-
vent ending up where the record companies did with free illegal down loading, or in this
case, a Pirate bay of things.”
Martin Törnqvist (Expert panel) trend analyst Media Evolution.
The Digishift
“Bits, the DNA of information, are rapidly replacing atoms as the basic commodity of the
human interactiony.”
Nicholas Negroponte
13report from steen & strøm trendlab
Whether we believe in the thesis of total digitization or not, we can agree on one thing, it
is a much bigger transformation, a total redefinition of traditional business logic that is
going on. Several experts that we talked to thinks that the ongoing digishift is the biggest
transformation of the retail landscape since the invention of the supermarket, within the
coming ten-twenty years.What do you think?
Much of the change is driven by maturing technology and if you compare with the visions
and promises of the nineties and the start-ups in the new economy, the e-shopping
infrastructure now has started to function in an effective way. Traditional retailers have
started moving from single channel to multichannel propositions. More empowered
consumers are interested in shopping in new ways. Equipped with digital devices like lap-
tops, I-pads and smartphones and increasingly more intelligent location based search
tools, the consumers are gradually becoming masters of the shopping process. And they
want to use their power in retail space, perhaps in order to cut price or individualize their
shopping experience involving their social network friends in the process.
This change is of growing concern for more retailers all over the world. How can the
retailers prepare for and meet these more sophisticated consumers and make them want
to stay longer in the store? In an international poll retailers were asked what they thought
was the biggest challenge facing retailers today? A majority said: To find new methods of
consumer interaction Jim Caroll, futurist).
Richard Normann stated that the carriers
of value in almost every business will
become de-materialized in the future. The
new mobility and connectivity reshapes,
re-form and restructures businesses,
branches and societies.
De-materialization
reformation
density
componentizationmobility
DIGISHIFT 2020
14
Cross-selling, F-shopping (Facebook), App-tailing, M-shopping (mobile), Blog-tailing, Flash
sales, invincible pop-up retail, preview shopping, Crowd shopping are all relatively new
terms that we find in a more experimental retail scene. In this report we will explore how
the digital channels will change and form the future of shopping places and there are many
interesting questions to ask:
•	 Which are the most important trends within the digital field, e-shopping,
m-shopping and multichannel that will have an impact on the shopping process?
•	 What are the consequences for retail and shopping places?
•	 How will physical and net-shopping cooperate and compete in the future?
•	 Which and how integrated are the platforms that consumers will shop from in the
future?
•	 What retail categories will suffer much because of the ongoing Digishift? Which
categories will disappear from the physical shopping arena?
•	 Will E-shopping create a development of smaller or shrinking physical stores in
shopping places?
•	 How will shopping places of the future change in order to utilize the new mixed
reality, the new hybrids of physical and virtual word?
These are some of the questions that we had in mind while doing this project and we have
tried to have a holistic view in the search for the future of shopping experience across the
retail landscape.
15report from steen & strøm trendlab
”Plan for the future because
that’s where you are going to
spend the rest of your life.”
MarkTwain
DIGISHIFT 2020
16
Howwasthe information forthis report gathered?
To try to catch the future is a guess work and you need some tools to qualify the guessing
as much as possible. The project has been runned by Kairos Future and a small analyst
group from Steen & Strøms Scandinavian offices with the following participants:
•	 Harald Nilsen, Research manager
•	 Annemette Wørmer, Marketing manager
•	 Kajsa Rahlén, Research manager
Together we have used four interlinked methods to create a possible scenario for the
future.
•	 International Trendwatch-study
•	 Indepth-interviews
•	 Delphi study with a panel of experts
•	 Future Hearing Day
InternationalTrendWatch-study
During this phase Kairos Future consultants and its international research partners
carried out an international trendscanning. The model below illustrates different search
areas that was covered.
In order to find contextual and structural drivers and changes we used a framework called
E P I S T E L + M, which stands for Economics, Politics, Institutional changes, Social,
Technological, Ecological and Media/Market changes. Further more we searched after
trends related to a demand and supply-based structure and finally we tried to cover the
specifics related to a changing shopping process. There the changes can appear in how
consumer behave before, during and after the shopping activity takes place. This work
resultedinaround100trendsondifferentlevelsandwithdifferentperspectiveandscope.
17report from steen & strøm trendlab
Society
(Context & structure)
e pist e l + m
demand
(consumers)
supply
(actors)
beforeafter
during
shopping-
process
the general framework for analyzing
the future of shopping places
DIGISHIFT 2020
In-depth interviews
The following experts where interviewed:
•	 Rune Glasø, innovator, Gyro
•	 Johan Ronnestam, consultant, advisor and writer about digital media and future
branding. Runs a famous blog; www.ronnestam.com
•	 Ole Petter Nyhaug. speaker and blogger on consumer trends, marketing innovations,
Partner and managing director, OnLive Research
•	 Lars Tong Strömberg, Head of Internet at Aller Media. Writing a blog about strategy,
marketing and all things digital in between
•	 MartinTörnqvist,Trend analyst, Media Evolution
•	 Ola Stavhammar, Sales & Sponsoring, Svenska E-sportföreningen
•	 Michael Cronholm, Research Specialist at Inter Ikea Centre Group
•	 David Jansson, Journalist at the nordic magazine Market
•	 Moon-Suck Song, expert in mobile commerce, Managing Director Panagora Room AB
•	 Mikaela Dyhlén,Trend analyst, BlikTrends & Insigts
•	 Dan Ouchterlony, Investment Manager, SchibstedTillväxtmedier
report from steen & strøm trendlab
Delphi-study
The Delphi method is widely spread and structured communication technique, originally
developed as a systematic, interactive forecasting method which relies on a panel of
experts. Delphi is based on the principle that forecasts from a structured group of indi-
viduals,skcollectiveintelligence,aremoreaccuratethanthosefromunstructuredgroups.
The Delphi method gives us a broader sense of how the digital channels will develop in the
near future and it gives us a structured idea of how the new marketplace will evolve.
Kairos Futures research team carried out a webbased questionnaire with future state-
ments that each expert had to answer. In total we had 40 international experts answering
what they thought about the digitization and the future of shopping places. The results
were revised and analysed together with Steen & Strøm analyst team.
You can read more
about the results
on page 94 to 102
click here!
DIGISHIFT 2020
Future Hearing Day
The Future Hearing day was a one day meeting with internal key persons and experts from
Steen & Strøm. During the hearing we presented the trends and Delphi-results. In this
workshop we prioritized the most important trends for the future. We created a base sce-
nario 2020 and based on the facts, trends and forecasts we created so called Future Snap
shots of possible retail landscapes 2020.
The following participants took part in the Future Hearing Day:
•	 Karl Fredrik Lund
•	 Tove Lise Foss
•	 Charlotte Christensen
•	 Lise Gård
•	 KatrineVelter
•	 ClausTüchsen
•	 Søren Soelberg
•	 Mark Rendbæk
•	 Anders Bojer Nielsen
•	 Charles Larsson
•	 Anna Christenson Åberg
•	 Kenneth Jävervall
•	 The analyst team
21report from steen & strøm trendlab
DIGISHIFT 2020
22
Authors
The report is produced in a collaboration between Kairos Future and Steen & Strøm ana-
lyst team. The thoughts, ideas and suggestions that the analyst team and both internal
and external experts drew up were added to, explored further and analysed in more depth
by Kairos Future. The final shape that the material takes in this book is essentially based
on the results of this process. The following futurists were involved in the writing of this
report:
Magnus Kempe, Director of Retail and Finance
Magnus has written several books and reports about the consumers of the future, as well
as retail and financial markets. He wrote a well recognized report “after the credit party”
about the coming loan crisis in USA already in 2006, two years before the actual finan-
cial collaps. He has been the project manager for several of Kairos Futures major studies
includingThe Ridderheims report and Urban families food lifestyles.
Jörgen Jedbratt, Senior Partner, strategic advisor and writer
Hehaswrittenaserieofmanagementbooksovertheyears,mainlyaboutmarketing,media
and consumer behavior.Together with Magnus he has mastered many of Kairos consumer
reports such as the Ridderheims report and Tomorrows Advertising market and Beyond
Mobile. Already in 1994 together with Per Florén and Peter Gustafsson he wrote a book
about how Internet would revolutionize the business world.
Kajsa Ahlgren, market manager USA
Located in New York she provides Kairos Future with an American perspective in global
research projects. Her focus is innovation, especially sustainable social- and business
development. Recent projects were within foodtrends, innovation and design.
Jorge López Quinones, researcher.
Jorge focuses on international research and trendscanning within a wide area of knowl-
edge areas. His specializes in future technology and consumer behavior.
Jonas Thulin, researcher and analyst
JonasThulin works as an analyst at Kairos Future. He has two Master’s degrees in in politi-
calscienceandineconomics,includingstatistics.Jonashasaspecialinterestinphilosophy
and in history of ideas.
2
64 % according to Jim Carrol, Location is the New Intelligence: Customer interaction in the Era of pervasive mobile
The best way to predict the
future is to create it.
Peter Drucker
DIGISHIFT 2020
24
The longer you
look back, the
farther you can
look forward.
Winston Churchill
25report from steen & strøm trendlab
From past
chapter 2
to present
The Digishift Timeline
DIGISHIFT 2020
26
1990
2000
FROM PASTTO PRESENT
SOCIETY
(structure)
Telephone bank
Dot.com Crash
GenerationC - digital natives
E-Mail
Amazon
Ericsson Hotline
Yahoo
Windows based mobile phone + PC
ShoppingC w/local service plus some ”add on”
Homozappiens
– from individual to dividual consumer
Bulletin boards
Increased focus on convinience
Become your own bank or travelagency
Self customization
Price comparison
DIY& self service society
NewEconomy
Tradera
Tweenfactor
Netscape
From cash to card
Y2K & IT-Heroes
Media channel explosion –--
Laptop PC
Communities: Lunnarstorm, Netby, Arto
Google
WWW
Boo.com
Let’s Buy it
Nokia
Increased shopping volymes in physical retail
From Need to Desire oriented shopping
Internetbank/online
payment
SUPPLY
(shopping-
environement)
DEMAND
(costumer)
1990
Telephone bank
NewEconomy
Telephone bank
27REPORT FROM STEEN & STRØM TRENDLAB
2001
2011
THE DIGISHIFTTIMELINE
E-shopping focus on E-shoppertainment
Willingness to pay for avoiding advertising
Increased consumer power
Time & energy poor consumers
Shopping becomes a lifestyle E-shopping for smart living
Hedonistic time gaps Collaborative consumptionn
Situation based shopping
Generation Free
------> Fragmentation
Globalization
Ebay buysTradera
3G
Pirate Bay
Web 2.0
Wikipedia Second Life
Wireless internet
Freemium
Salesfinder
To-muchness leads to demand for structure and smart solutions
iTunes
Swedish Post Office and other
shops disappears due to the Net
iPhone
US election Obama
via social media
4G
World ofWarcraft
Facebook Twitter App-explosion
Web 3.0
Gamification
Personal integrity issueBloggosphere
iPad, handheld screens
Economical & Structural
volatility
Always onlineDigital chips everywhere
Cars, creditcards mm
iPod
E-shopping rise again
Bubbelrom e-retailer of the year
Multichannelstrategies in
apparell, shoes, fashion, sports
POP-up & Show rooms
Digital dev. in retail but not ShoppingC
Groupon, Guilt
E-shopping influencing and challenging
Fast moving consumer goods sector
Spotify + Facebook
Increased consumer power
Generation Free
Always onlineGlobalization
DIGISHIFT 2020
28
history and driving forces
A brief history of e-commerce
1990 - 2000The sky is the limit –the mental platform
The 1990s was for many the time with the most inspiring thoughts of what the Internet
might bring to the world. Traditional individuals did not last long either on stage or in re-
cruiting. The world had discovered a new sphere: the virtual world with which one had to
engage to be part of the future.
To some extent both the problem and the blessing was that they were mostly ideas. While
many of the notions of what the Internet might bring were discussed, they weren’t imple-
mented. Apple launched the Newton, the new reading device, in 1993 and it did not imme-
diatelybecomeagreatsuccess.ThePalmwasthefutureofcalendars,butafterawhilethe
growth in use started to decline. Fewer individuals were seen writing with that small pen,
which had been said to be the future. By the end of the decade the amazing mobile phones
with Internet connection came on the market. It was said that the WAP, the new standard
for the mobile Internet would prove extraordinary. Electrolux and Ericsson launched the
project E2 a flagship project for how appliances, and the entire food distribution would be
used in the future. Specially built flats, which were adapted to this new form of distribu-
tion, were built.
Some of today’s giants were founded during that decade including Amazon, eBay and by
the end of it, Google. For the most part, however, most ideas cost a lot of money and hope
withlittleresultinbusinessvalue.Thisperiodneverthelessprovedveryvaluableforestab-
lishing people’s mindset. In some sense, both the mental and the physical infrastructures
benefited from the hype and the visionary thinking. The buildup of 3G networks and fiber
cables underground benefited greatly from the money flowing into the industry.
More importantly, people and businesses started to imagine the world when it finally hap-
pened and what the new business models might look like. Today’s superstars the iPhone,
Facebook and the iPad were created mentally back then. In both Norway and Sweden so-
cial networks such as Lunarstorm experienced tremendous success. In 2001, the site had
600 000 members; a fairly large number given that mostly young people were using the
site.
Sites like the cluetrain manifesto actually outlined the main thoughts of the future.We got
toknowtheconceptvirtualrealityevenifweneverexperiencedit.However,forthoseofus
who had the chance to create a visionary future for banking, payments, virtual reality, new
intermediaries or experiences it had a purpose beyond being fun.
29report from steen & strøm trendlab
2000-2010The crash ofthe hype andthe rise ofthe periphery
While the crash made mainstream media, consultants and managers consider more down
to earth issues, some of the entrepreneurs continued to play on the Internet. Interestingly,
their success didn’t make society change its perception fundamentally until recently. At
least not in Europe, whose online retail and mobile phone usage lagged the development in
the USA, Japan and South Korea.The 2008,TrendLab book described the doughnut-based
theory of electronic commerce from 2004. According to most people, e-commerce only
applied to goods on the periphery. After the hype, people began saying that e-commerce
was of interest to
…books, only financial services, only travel and tickets, only CDs, music
and video, only business to business, only price comparisons, only home electronics,
only mail order customers, only Christmas shopping…
But “only” very soon covered everything, leaving no periphery – just like
doughnuts, which surround an empty hole, the periphery that e-commerce
appears to eat into soon covers all segments. No sector is left untouched.
At that point in time the “only” syndrome continued it included
… only shopping before major holidays
… only the basics (while people “top up” on perishables locally)
… only non-basics that people can’t find elsewhere (the long tail)
… only busy families with children in metropolitan areas
… only people in rural areas with no local stores
… only heavy goods that can’t be carried home
… only low-risk inexpensive goods
… only high value items with a greater benefit of lower price
… only a special type of customer who, just like the mail order customer, is a small part
of the market, which eventually stops growing.
Actually,wehavecomeacrossthistypeofargumentsinthisstudytoo.E-commerceisonly
forshoemanufacturerswhocanmaintainacertainsizefortheend-user(sotheydon’thave
to try it). E-commerce works only or primarily when stores are not open.
As the core segments of FMCG and apparel have had a rather slow start people have con-
tinued to believe that while e-commerce will grow the main retail categories will remain
much the same for at least a decade.
DIGISHIFT 2020
30
Surprisingly, during the past decade e-commerce has not experienced a large change. The
sites look mostly the same. ” I agree. Isn’t it really boring?” Michalea Dyhlén pointed out.
While innovation in social media has been intense with the launch of new sites like netby
in Norway, Playahead in Sweden, Twitter, LinkedIn, FaceBook, Flickr etc. e-commerce has
seen almost no innovation.
For the past decade, e-commerce has proliferated primarily in niche areas on which most
businesses other than the media sector did not focus. Even a digital sector like financial
services has remained largely unaffected: while the big players remain the same, their way
of operating has changed to allow consumers do more of the job on the Internet.There are
no dominant Internet only companies, except for in particular niches.
Markets are
conversations.
First thesis of
the Cluetrain manifesto
31report from steen & strøm trendlab
2011 - looking intothe future
“Online growth would be bigger if the incumbents started.”
Moon-Suck Song Managing Director Panagora
Now, we see something different. Big global players such asWal-Mart,Tesco, Metro, H&M,
Zara are investing heavily in e-commerce. Online retail growth is currently generated from
the bricks and mortar companies rather than from the Internet-only players. The Internet
economy is returning to the boardrooms and the catwalks. According to Forrester, food is
now the largest e-commerce segment in UK in terms of value; in France it is apparel. Cat-
egories which were said to be difficult or very slow growing on the Internet are finding a
growing number of viable business models. Sometimes, they remain niche segments but
niches in terms of everything, payment method, delivery options, target customers, sales
channel, product size etc.
Social media, user interfaces, word of mouth, customer driven innovation, location based
services, smart phones, NFC, and self checkouts are now part of the incumbents’ core
strategies.
This new area also includes retail categories for which online retail had the greatest influ-
enceinthepastdecade.Musicretailisacategoryinwhichmostinvestorswouldavoidput-
tingtheirmoney.TheheadofUniversalMusicrecentlygaveaspeechaboutthedepressing
times: about cutting staff and losing revenue during the past ten years. In October 2008,
however, Spotify launched their first payment solution to their music streaming service.
This year 55% of sales by Universal Music are expected to come from digital channels,
80% of which comes from Spotify alone. In less than three years a whole new distribution
method and customer is projected to account for 50% of revenue. Sony has now launched
Music Unlimited in many countries; it competes with Spotify and offers a majority of all
music available today. In the US, there are many services for streaming video as well.
Lesson learned: change will come, but if embraced, it may become a rather attractive fu-
ture.
Or as Paco Underhill put it in the Trendlab book of 2008:
“I think the concept of convergence and the cross between the online world, the mobile
world and the bricks and mortar world are going to be very, very, very much a part of our
future. Consequently, just as we engineer cost out of the supply chain, we’re also going to
be engineering cost out of the distribution network. That means stores are going to get
smaller rather than bigger. We’ll see a very radical shift in terms of what our shopping fu-
ture is. Stores will change more over the next twelve years than they have over the past
fifty years.”
DIGISHIFT 2020
32
This report focuses on digitization’s impact on retail.The context within which this impact
plays a role is of course greater. Some of the fundamental changes in society and in the
marketplace in general establish a context within which digitization is a crucial part and
for which it has consequences.The macroeconomic drivers are normally rather stable and
have remained constant for a long time. At this point, we have to acknowledge that few in-
dividuals, including us, feel certain about this. Society’s current main drivers may be some-
whatdifferentthanthoseofthepast40years.Thefollowingsectionoffersafewthoughts
on the fundamentals in society of the coming decade.
Financial burden
Europe’sfinancialdifficultieswillcontinuetodrivedevelopmentsintheretailsectorandin
society as a whole. One banker, who is frequently quoted in the Nordic countries, recently
claimed that the positive scenario was that a few countries wrote off some of their debt
and that many banks failed, possibly including his own.
Whether or not this actually happens, we may certainly conclude that the debt of many
Western countries will either take long to pay off or be written off in a shorter time with a
greater loss to banks and pension assets and a likely crisis as a result.
Paying back the debt at 2% of GDP annually will take long: 45 years, in cases in which the
debt ratio is 90% of GDP. Luckily, this applies only if the GDP remains flat. At a moderate
growth rate of 2%, it may take only 30 years. In addition, all debt might not need to be
paid to be under control, which may reduce the number to 15 years. In any case, losses
in pensions in the form of low returns and high inflation or write downs will be difficult to
avoid. In addition, the demographic situation makes the situation worse. Pensions will be
either smaller, later or both. Many people are now expecting ”turbulent teens”: a decade of
uncertainty and turbulence.
Uncertainty and questioning of institutions
As a result of the uncertainty regarding the economic environment, key megatrends like
post-modern values, globalization, multiple choice, and distributed power are less certain.
Analyzing the surrounding world requires an open mindset.To some extent, this applies to
society as well. We tend to question things like never before in the last 50 years including
central banks, capitalism, democracy (at least in some countries), human rights (in the UK
after the riots), EU, journalism, artists. In reality, most of society’s institutions are ques-
tioned, but unlike the 1970s there are few demonstrations.While today, people know that
something has gone wrong, they don’t know what they want instead. We have things to
demonstrate against but don’t know what to demonstrate for.
Drivers in society
33report from steen & strøm trendlab
Cycles coming back
Much of the development may be understood in the context of cycles combined with
trends. Some key developments in society are now changing.
The report, Allt går igen – och ändå inte (History Repeats Itself – But not quite), provides
an interesting model. It was partially inspired by Howe & Strauss who described the values
of generations in four different phases.
According to the model, we live in a cyclical world in which each generation fulfills its mis-
sion to change the world in the best direction according to the values of the current period
of time.What is considered best, however, varies considerably.
Each era leaves an imprint on the following generation. Its birth year and most common
names are located in the innermost circle, surrounded by society in general. The belief in
the future by the long economic spring (right side of the figure) influence self-confident
moralidealists(Prophets)whostronglywanttochangesociety,teardownrigidinstitutions
andsavetheworld. Theiractionsinfluencethefollowingperiod.TheintegratingDiplomats
who control society are caught up; the project of building the society is brought to comple-
tion which involves expanding responsibilities. For example, the modern welfare state was
The perfection
quite
diplomats
constructive
pragmatics
Cynical culture Cynical
nomades
The re-take
Autumn
Short-term
The Entrepeneur
The Marked Buildup
Action Winter Practical culture
CHANGE
The strong leader
1945
2020
2005
1985 1965
Long-term
Distributed Power
Strong individual
“Anything goes”
Power concentration
Strong society
Strong opinions
The EngineerSpring
Summer
The Social Worker Passionate culture
The building of society
confident
prophets
we are here
DIGISHIFT 2020
34
built in Scandinavia during this period in time. Meanwhile, the economic growth stagnates.
Inflation rises, and the economic times worsen. A new, less protected, generation of root-
less Nomads is born into a passionate culture of laissez-faire, in which the importance of
the family as a societal institution is reduced.
The cynicism of the Nomads influences not only the youth culture, but society at large,
when the generation of Pragmatics is born. Economic growth has stagnated and the capi-
tal, which has been accumulated during the long period of growth, needs financial returns.
The price of real estate, art and other areas of financial speculation increases. Hopes of
a new economy attract capital to the next wave of technology which has already begun,
but does not yet have sufficient power to support society, which is confirmed by the com-
pletion of deregulation. The deregulation of markets, sale of government monopolies,
free trade and new financial instruments provide new opportunities for large returns. The
searchforthenewproducesnewheroes:theentrepreneurandthespeculator.Newheroes
areborn.Withintheframeworkforthenextwave,companiesgrowfromnothingtostarsat
the stock exchange. Examples from the 1920s include companies such as GM which made
purchases throughout Europe and Australia after it was bailed out after the automobile
crisis of the 1920s. Companies such as Microsoft, Intel and Nokia are additional examples
from the 1990s.
AgenerationofconstructivePragmaticsgrowsupduringthisperiod.Theyknowthatnoth-
ing is free; individuals can become anything they want as long as they want to and work
hard. Nothing, however, is free. Unlike the Prophets, they know that the individual’s peace
of mind is not the most important issue facing society, but the world around them. While
there are challenges, the innovations that are created during summer and fall and which
will generate the next wave, require support in the form of long-term investments with un-
certain returns. Long-term rules are required to encourage private investment.
Von Rosén’s attempt to build a privately financed network of railroads came to an abrupt
endinthebeginningofthe1850safterBritishrailroadspeculatorswithdrewasaresultof
thefinancialcrisis.Apublicrailroadfinancedbythestatewasthesolution.Theautomotive
industry required the same government assistance to succeed in the form of investments
in infrastructure.
Getting from fall to a new spring thus requires an effort which removes old, obstructive
structures while new ones have to be built. Winter thus becomes a period of anxiety and
strong leaders; political radicalism and simple solutions. During this period, new visions
are born, a new consensus is founded, and the new heroes are the strong leaders who are
to bring the people from the darkness into the light.
Longing for structure
We are now in a phase which longs for strong opinions and leaders. Young people are more
likely to demand strong leaders who do not care about elections surveys say. We want an
authority who can provide structure when our environment is less transparent and chang-
35report from steen & strøm trendlab
es too rapidly.
Somebody somewhere will hold a speech, which in the case of Sweden, corresponds to Per
Albin’sWelfare state speech of 1928 or Roosevelt’s New Deal of 1932. Until we know the
content of the speech – and we might not know until afterwards- we remain in a turbulent
and probing time during which we question everything.
TheTrendLab book,The Future of Shopping Places, discussed the emerging neo tradition-
alism among the youth, which may now be confirmed by more data. Studies like the World
Values Survey, Kairos Future’s Drömsamhället and other studies and examples confirm
these tendencies. In the Western world, individuals born after 1980 – 1985 depending
on the researcher and the country are more conservative than previous generations. The
tendency of an increasing number of post-modern values has come to an end or has been
declining for some time.
The longing for structure may also be found in the marketplace. Choice is a less sought
after value, as the importance of tradition and authenticity grows. We used to say that we
want to decide when to choose, and when not to. While this ambition still holds we opt not
to choose in a growing number of situations. We ask for other people’s opinion and advice.
While we don’t trust the authorities, we want more authorities than only ourselves. The
most successful mobile phone company Nokia launched almost 60 models of phones in
2008. Giving consumers options was a key success factor. Today, Apple has become the
highest valued company by launching one model per year. We give away credit card num-
Generation
x & y
1965-84
own products
Use products &
service
saving for
security
generation
order/millenials
1985-04
veterans
1925-44
boomers & jones
1945-64
borrowing for
opportunity
An example of generations’ views of money
and consumption, which follow a cycle rath-
er then a trend, only. From the Kairos future
Club reports ”After the credit party 2006
and a report on Money and value 2011.
DIGISHIFT 2020
36
bers and join the Apple eco-system because we prefer order and simplicity over choice.
Theproliferationoffood-bagswouldprobablynothavebeenpossibleadecadeago.Allow-
ing someone else to decide the recipes and ingredients with which we are to cook is only
acceptable now that we are overwhelmed with choices, and ask to be freed from making
them.
Internetwith borders
The most open and accessible years may already be behind the Internet. Google is now
adapting their searches to previous ones and Amazon is targeting its offers to the needs
of the individual.The same information is not given to everyone; we are instead actively
directed to groups to which individuals may feel they belong and which confirm their
previous standpoints and preferences.The open Internet is now increasingly locked into
systems and structures like Apple, which for better and worse, also try to create bounda-
ries to other systems.
Even the entire Internet may not be as accessible to everyone in the future. In America a
flat rate has been a driver behind smart phone sales.Telecom operators now seem to re-
duce the focus on this payment model.The emergence of streaming video has increased
traffic on the Internet substantially and capacity may be a limit. Operators are now asking
TV-channels which create a lot of traffic to pay.They want the content providers to pay
for providing information through their channels.While the Internet and the new technol-
ogy will be more dominant parts of the future, they may not be only focus on openness
and equality.
Technologywith a humantouch
In the book Megatrends from 1982, John Naisbitt explained the HighTech HighTouch
symbiosis. As technology becomes more common in society people ask for more human
touches.Technology is now moving into an era of expanding human development. Instead
of technical focus there is more focus on human interaction with technology. Individuals
are becoming more tech-savvy and tolerant.
37report from steen & strøm trendlab
Shiftinthe Environment
While many of the developments described previously apply to theWestern countries
they may not be true for developing countries. On a global level the economic situation is
moving in a positive direction for most people.The accelerating speed of change creates
a drive to control the “small world” of friends, family and community as well.The search
for authority and structure may, however, not be the same.The demands of the grow-
ing economies known as BRIC, N11 etc. will have a great impact on society and global
consumption.The use or resources and environmental impact of our way of living today
will be constrained.This is another reason for believing that choice is going to be less of a
driver in society.
Conclusions
•	 Megatrends can no longer be taken for granted in society.
•	 Financial pressure will remain substantial in the Western world for the coming
decade.
•	 The increased turbulence in society leaves people searching more for authenticity,
authorities and structure.
•	 While the old people of the coming decade are the youngest since ever, the young
are the oldest since many decades.
•	 While information technology will be more dominant in society as a whole, consum-
ers will also be asking for more high touch
•	 Distrust in society’s dominating institutions leaves room for new ones to take their
place. The formerly good may not be good and the formerly bad may not be bad.
Business enterprises may be taking social responsibility to a new level.
•	 The demand from the developing countries will put pressure on global resource
use for the coming decades
”I can’t think of anything
less trendy, than being
trendy.”
Focus group participant
in Kairos Future youth study
trends
chapter 3
and Phenomena
The Trends and the Phenomena prioritized
shaping the digitization of Retail.
In this chapter we describe a number of external changes within the area of
digitization that will mean something for retail trade and shopping places. Our
international researchers have identified trends and phenomena in Scandinavia
as well as in the rest of the world in order to pick up signals that could mean
something for the future. The material was then structured by the analyst
group and presented to a bigger group of key persons at a Future Hearing Day
in September. Here the material was prioritized and narrowed down to the
19 trends and phenomena in the list below. Each of these changes is full of
interesting and important challenges and opportunities for the retail sector in
the coming decade.
Our suggestion is that you and your colleagues goes through the presentation
trend by trend and after each trend you ask your self what it could mean in
terms of possibilities and threats to your business. We can guarantee that you
will have a rewarding discussion. And perhaps you want to share your findings in
discussions with Steen & Strøm.
trends
”When you do this for five years
in a row, its no longer luck.
It’s a trend line.”
Hugh Grant
1. VALUE CHAIN BLUR
2. Superlocal
3. ALTERNATIVE PAYMENTS
4. MOBILITY COMMERCE
5. NETIZEN CONSUMERS
6.TEMPORARITY
7. ME-TAILING CUSTOMIZATION
8. PURE PLAYTO BRICKS’N CLICK
9. DELIVERY REINVENTED
10. SOCIAL COMMERCE
DIGISHIFT 2020
44
VALUE CHAIN BLUR
The first shift in the TrendLab book of 2008 was the powershift. The power had shifted
fromstrongmanufacturerbrandstodistributors.Theproductabundancewasnotmatched
by a similar abundance of distribution alternatives. Consumers tended to become more
and more unplanned and more influenced by the retail environment in their selection of
goods and services. At that point there was signs, however, that the power shift was con-
tinuing downstream in the value chain all the way to the consumers. The digitization cer-
tainly makes this shift more and more relevant.The distribution alternatives are becoming
plentifold and the power in the value chain more unclear.There is a value chain blur.
Like the head of Nokia retail Cliff Crosby was saying :
Now this is also happening. Some retail chains are sending their suppliers invoices to com-
pensate for the rebates they are giving in-store to these consumers. Empowered with
new technology and alternative distribution, negotiations are coming back to the western
world.
An early example of the value chain blur was the flagship stores. The big brands were
starting flagship stores to get hold of some of the power which had been transferred to
distribution. A retail presence also gave control over how the brand was presented and a
possibilitytoshowtheentirerange.WiththeInternetthiscompetitionwiththecustomers
is becoming even more appealing, but sometimes also more questioned. Now even the big-
gest brands are starting to compete on this arena. Nestlé are with nespresso cafées and
Internet distribution moving strongly in to retail. Unilever are selling direct to consumer
in more and more developing markets partly under the name Shakti. In some developed
countries Dove products are sold direct to consumers.
supplier distributor consumer
“You’ll have really empowered shoppers coming into your store in the future. .... As a retail-
er, you’d better be up on what’s happening here because you‘re going to have to negotiate
in the retail space.”
45report from steen & strøm trendlab
1
When brands are selling direct to consumers it has been said that warehouses and middle-
men are going to be cut out of the value chain. On the other hand there are also agents and
wholesalers who can become retailers on their own. In some markets there are plans to go
directly to consumers by wholesalers. Some Internet retailers are also behaving a little bit
likewholesalerswithamainstorageunitwherepeoplecanpickupitemsiftheyliketosave
some Euros relative to home delivery.
Mediacompanieswhichusedtowriteaboutthingsarenowengagedinsellingthemaswell.
“You can buy everything on the front page” is now the message. Interior design magazine
Elle has partnered with the interior design brand Linum to sell an Elle-branded collection in
11countries.AlsoshoppingcenterslikeWestfieldarebecomingretailersand sellingtheir
retailers and products to consumers.
All in all who is the customer and who is the competitor may not be very clear anymore.
More and more businesses seem to be heading towards the consumers.
DIGISHIFT 2020
46
Superlocal
New technology like positioning and gyros makes peoples location and attention possible
to track and adapt to. Consumers are increasingly well informed, making them experts and
curators of products and services that they use.Their knowledge and feedback is valuable
information for both stores and other consumers. As more people carry around online ac-
cess on mobile devices, they demand the right information at the right time. In return they
are willing to contribute with their expertise on a specific product or service.
Making the information as local as possible is one way of providing “the right information”.
An emerging trend is location-based services. By checking in and sharing their location on
amobileapp,customersarerewardedorgivenlocation-basedinformationaboutproducts
and services. Local companies join to reach potential customers in an untraditional way.
Foursquare is an app through which users check in to get discounts in stores. As soon
as they check in, their location is posted on Facebook for friends to see, and perhaps be
temped to visit the same store or restaurant. According to its CEO, the future of Four-
square is to focus on what the consumers are going to do in the near future, instead of
what they are doing. Using collected data on consumer’s real-time movements, Four-
square’s Explore tab recommends consumers where to go next. By asking what they are
looking for - be it a restaurant, movie theatre or store – the app will help the consumer find
the closest alternative.
Even brands are benefitting from the real-time customer access that mobile devices pro-
vide. Using location-based services they can interact with consumers when they are close
to or inside a store. GAP in Japan sends digital coupons to customers that are nearby. It
is an effective way for marketers and retailers to reach the consumer at the right time,
andinreturncustomersreceivegreatdealsandasenseofengagementfromtheirfavorite
brands.
Another example of location-based services is the app Checkpoint. Its users are rewarded
with points for checking in at a store, scanning product barcodes, or recommending some-
thingonFacebookorTwitter.Thepointscanbeexchangedforgiftcards,Facebookcredits,
or gadgets.
One way for stores to get closer to consumers is to be located where consumers are. Big-
boxretailers,suchasBestBuy,PetSmart andToys ‘R’ Ushavetraditionallybeeninterested
in power and community centers. To get closer to the consumer, and benefit from the mall
traffic, they are now seeking spaces enclosed to malls. Wal-Mart has taken an initiative to
open smaller “neighborhood market” stores, as part of their strategy to enter the urban
market and be closer to the consumer.The Chinese giant and home appliances brand Haier
has taken the store to its customers by touring around the US with a truck showcasing
products and their functionalities.
2
People demand the
right information at
the right time.
In return they are
willing to contribute
with their expertise
on a specific product
or service.
DIGISHIFT 2020
48
ALTERNATIVE PAYMENts
One emerging trend is the increasing number of payment alternatives that are available
to consumers. Advances in mobile technologies, the ubiquity of smartphones, digitization
of society and consumers’ search for convenience are the driving forces behind this trend.
To some extent this is a trend of increased digitization where new technologies enable
NFC or near field communication payments but it also involves new types of money. Vir-
tual money has emerged in the digital world. A bookstore within eBay ”Qugelmatic” is ac-
cepting Bitcoins (a virtual currency created by a company) as a form of payment. Another
well-known online player, Facebook, allows users to pay for their virtual products and ser-
vices using their own virtual currency or Facebook credits. The old-school loyalty points
likeEurobonusarebeingchallengedbymoreandmoredigitalalternatives.ForScandinavi-
ans may find it strange that people would want to use other currencies than those of their
central banks. However, the trust in central banks is very low in countries that have been
hit by the crisis.
The impact of PayPal and other micropayment solutions may also be misinterpreted in
Scandinavian countries. In Denmark, Norway and Sweden these payments represent 3%,
10% and 4% respectively of total e-commerce payments. In the UK, Spain, and Germany,
thesefiguresare23%,22%and26%1
.Theemergenceofmicropaymentsolutionsalsoal-
lows new business models to come up. Companies creating games and other services now
pop-up out of nowhere and make a lot of money. The Finnish company that started Angry
bird, now valued in billions, and the person behind Wordfeud (the online copy of Scrabble)
are two examples. This creates a new business landscape where new companies and ser-
vices are created –which were not possible before micropayments, and certainly not prior
to digitization.
The availability of alternative payment options is not exclusive to the digital world but
it can also be seen on popular high street stores. Many retailers have implemented pay-
ment terminals that transform smartphones into mobile wallets. In their effort to reduce
in-store queues and to speed up the check-out process, retailers are accepting mobile al-
ternatives. Starbucks has installed approximatelly 6,800 mobile payment systems at its
stores across the US. Customers only need to download the Starbucks mobile app and
hold the smartphone against the barcode scanner to complete their transactions. Similar-
ly,McDonald´sinJapanhasinstalledcontactlessmobilewalletterminalsinapproximately
400 stores.
49report from steen & strøm trendlab
3
Banks are also jumping onto the trend and are developing services that simplify consum-
ers’ shopping process. New NFC-solutions are arriving at stores. Fulfilling consumers’
search for convenience and secure payment options, The Danske Bank has launched a
service that allows its customers to pay their bills by taking a picture. Insteadofcompro-
misingcreditcardinformationwhenpayingwiththeirsmartphones,itscustomerscanfeel
safe when using their mobile banking option. Another company providing payments via
pictures is an online American start-up company called Jumio. The company has released
”Netswipe” which is a technology claiming to turn a webcam into a secure credit card
reader. Users can make purchases by holding their credit cards in front of a webcam which
uses video streaming technology to verify account details.
Alternative payments may also include subscriptions such as Amazon´s delivery sevice
called ”Subscribe & Save”, available in the US, UK and Germany. The service allows users
to streamline their shopping baskets. Food and cleaning supplies that are always a part
of the shopping basket may be automatically re-ordered and delivered. Targeting busy
customersinsearchforconvenience,Amazonhasdevelopeddiffferentsubscriptionpack-
ages allowing customers to sign up for monthly, bi-monthly, or quarterly deliveries.
1
DIBS e-handelsindex 2010
”26% of German online
payments are made with
micropayments”
DIBS
DIGISHIFT 2020
50
MOBILITY COMMERce
In these changing times many players try to define the world, but it is also an ever chang-
ing maketplace. Forrester, Verdict, Posten Norden all define the e-commerce market dif-
ferently. IMRG Capgemini deliberately states that it includes sales completed in-store as
long as they are made using any interactive channel. It is important to stress that while
m-commerce is a trend in which the device (usually a smartphone) is crucial, a key aspect is
that the purchase is made while on-the-go from any location. Mobility commerce might be
more common from smaller laptops, tablets or bigger phones. The trend might of course
be called something different in a few years. We may end up talking about s-commerce as
one type of retailing just like the oldTVchanged its name to Flat-TV.
The combination of improvements in near-field-communication technologies and mobile
tags together with the ubiquity of mobile apps and smartphones are driving the mobile
commerce trend. In addition, increased consumer mobility is prompting companies to de-
velop services that offer consumers the possibility of buying products and services while
on-the-go.
The rising number of purchases done via mobile devices during the past years seem to
indicate that consumers are finally becoming more comfortable using their smartphones
to make transactions. In the US, Pay Pal has experienced a rapid growth in the volume
of mobile payments between 2008 and 2010. The company reported a volume of $750
million in 2010 up from $25 million in 2008 and expects to reach a volume of $7.5 bil-
lion by 2013. PayPal´s numbers are a testimony that mobile devices and applications
are becoming an important sales channel. In fact, buying products and services via mobile
applications has been called app-tailing. The following are examples of recently launched
mobileapplicationthatallowconsumerstotransformtheirmobiledevicesintoalternative
retail channels:
Since March 2011, The Wall Street Journal is selling daily digital issues through its up-
dated iPad app. Until then, digital versions were only available to subscribers and daily
issues were not available for purchase. The mobile app ”Pago” is a new app launched in
August 2011 in California that allows users to shop goods directly from their smart-
phones. Regardless of their location, users can remotely (via the app) search for, make
orders and pay for products at over 50 participant stores. The mobility commerce trend
M-commerce is a stupid name
- are we going to call it TV-commerce,
iPad-commerce too?
Expert inteview
51report from steen & strøm trendlab
4
is not exclusive to buyers, however, as mobile solutions such as ”Square” and ”Intuit” al-
low merchants to do their business while on the go. By installing the solutions and their
correspondingappsintheirsmartphones,merchantscanprocesspaymentsanywhereand
anytime
Retail chains are becoming involved in the mobility commerce trend by launching mo-
bile applications that enable customers to search for information and shop directly from
their mobile devices. Best Buy in Canada has launched a mobile app that empowers cus-
tomers beyond scanning barcodes to get additional product information while in-stores.
The app allows Best Buy customers to check for product inventory at a particular store
and place orders to be picked up at any location. Since July 2011, online retailer eBay
has decided to capitalize on the trend by launching its ”eBay Fashion” and ”Fashion Vault”
apps. The apps allow users to have access to designer clothes at low prices while allowing
brands to reach consumers directly.
Besides buying via mobile apps, consumers are also making purchases by scanning tags
or barcodes or by taking pictures. Thanks to embedded NFC and barcode technologies,
smartphones are being transformed into mobile wallets enabling users to make purchases
by a single tap. In South Korea, the national telecommunications company SK opened a
high-tech retail outlet in Seoul where consumers can buy almost every product via their
smartphones. Barcodes placed on product’s price tags are scanned every time a consum-
ers wants to place an order. To encourage consumers to use their smartphones, stores
provide a 10% to 40% discount and offer home delivery.
IOn the European market, British consumers have also been able to use their smartphones
aswalletssinceMay2011.”QuickTap”,UK’sfirstcontactlessmobilepaymentsservicehas
been implemented in a total of 50,000 stores in a collaborative effort between Orange
and Barclaycard.ac Popular chains allowing Briton to use their mobile wallets are: Subway,
McDonalds and Wilkinsons. One major event in the mobile commerce field is the recently
launch of Googles own version of the mobile wallet in the US. Since September 2011,
consumers in New york and San Francisco are able to pay with their Google Nexus S ena-
bled devices. The only requirements are to load a credit card onto the wallet app and to
have a Sprint wireless account. The entrance of a major Internet player into the mobile
commerce market highlights the importance of this trend.
1
Internet Retailer May 20, 2011
DIGISHIFT 2020
52
THE COMING ERA OF
THE NETIZEN CONSUMER
In the 1960’s, Marshall McLuhan, a well-known media theorist, presented new insights
into the way in which cultures were formed and reformed by media techniques that were
developed and introduced into society. He coined the well-known phrase: “The medium is
the message”. By this he meant that a medium affects the society in which it plays a role
not by the content delivered over the medium but by the characteristics of the medium
itself. When the electronic screens on television sets and later on the computers entered
the society, Marshall McLuhan identified an important shift from “light on” media to “light
through” media. He believed that the TV made consumers that the world came to them.
The world became a global village within our reach. Today we experience that the quote in
the beginning of this text is about to become real. Social media, smartphones, new mixed
reality techniques, 3D- screens, holographic projections etc. make us experience a shift
which allows us to interact with the world and media in new ways. We slowly move from a
culture characterized by “light through” media to a culture where people partly or totally
“live through” media. Media and the web in particular, are becoming extensions of our bod-
ies and minds in a constant digital flow of information.
Among young Europeans, 52% say that they feel disconnected from the world without
their mobile phones. 91 % of all mobile users always have their mobile phone within reach
regardless of whether they are awake or asleep.
Eight out of ten use Google to find answers to questions about health and medicine. Half
of all Swedes are members in social networks. For young people the big leap was between
2005 och 2007. For somewhat older individuals, the interest in taking part in social net-
works has increased over the last years. The increase was dramatic among individuals
above 45 years. The share of individuals who visited social networks last year has more
than doubled. 1.5 million individuals comment on what others have written online and just
as many update their status. A half million Swedes upload pictures online every week .The
pattern is similar in all of Scandinavia.
1.
Olle Findahl, Svenskarna och Internet 2010
“In this electronic age we see ourselves being translated more and more
into the form of information, moving toward the technological extension
of consciousness.”
Marshall McLuhan
DIGISHIFT 2020
53report from steen & strøm trendlab
The share of internet users in different age groups, Sweden
5
The graph is from the report: Svenskarna och Internet 2010
As the statistics and the graph above show, the digital maturity among the Scandinavian
population has grown during the last ten years.We are gradually becoming Netizens.While
the psychographic definition of Netizens may seem very wide, it is interesting to consider
it as a new approach to defining a group of people. This approach leaves room to include
people of all ages who are digitally inclined.
People born between 1982 and 1996 have been immersed in the Internet from a very
early age. They have grown up with the network culture and global online games. People
bornbetween1997and2006werebornintothedigitalage,theworldofcomputergames
and seamless communication 24/7. In the EU, 12-17 year-olds spend 11.7 hours a week
on computer games and 9.1 hours a week surfing online. In Sweden, 99 % of 15 – 24 year
olds play computer games.
These groups are the first true native Netizen consumers and stay connected online most
of the time, mastering a mix of real world and virtual world data through their digital de-
vices. From a commercial perspective, the Netizens have the ability and the interest to
get involved in the commercial process and will change the logic of product development,
marketing and sales. Netizens not only see themselves as individual consumers, but also
sometimes as navigators, media producers, researchers, resellers or marketers repre-
senting their intelligent social swarm.When interested in a brand or a product they expect
to get invited to the brand as co-creative partners. They demand creative space and when
it comes to marketing they are searching for a new type of brand democracy, which means
a new equal balance between the brand and the consumer.
2000 2005 2010
50 %
0%
100 %
35-44 år
45-54 år
35-44 år
19-24 år
55-64 år
65-74 år
+75 år
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“If I tell my Facebook friends about your brand it’s not because I like your brand, but rather
because I like my Friends”.
So in fact it is a new power relationship where the consumers are realizing the commercial
value of spreading the word or taking part in the buzz. Status among the Netizens is more
about stories than products. Netizens who supply their swarm with the most interesting
information win. It is a trade of stories in which I can tell my story including the brand if the
brand will tell mine.
The Netizens are developing a netnocentric worldview which means that their digital iden-
tity becomes more important for whom they are but that a majority of the activities online
are used for a constant search for ways to create togetherness, real meaning and experi-
ences offline. The economy of presence is very important and The Netizens “use online to
facilitate offline interaction. Their preferred method of communication is face-to-face…
They will take mobile with them all the time but their goal is face time with friends…”1
.
This is a significant insight for developers of physical meetings and shopping places to un-
derstand. It shows how important it is to create social spaces and to develop social shop-
ping both online and IRL (In Real Life).
“Shops are meeting places. It becomes more important to help people choose the right
place to visit and to facilitate friends to come to the same store at the same time and
to create togetherness – a uniqe shopping experience together. The meeting probably
starts online where they discuss lifestyles and the look of the products and ends in the
shop, where they can test and try the real things.”
MartinTörnkvist, Media Evolution
1.
Graham Brown et al, Youth Marketing Handbook
DIGISHIFT 2020
“If I tell my Facebook
friends about your brand
it’s not because I like your
brand, but rather because
I like my Friends”
Mike Arauz, Advertising Lab
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56
TEMPORARITY
In search for experiences, consumers are drawn to what is new and cool. The novelty of
new concepts no longer lasts for long, and an increased competition for attention forces
retailers to constantly change in order to stand out. Companies like GAP, Zara and H&M
have recognized that the turnover of the inventory is strongly correlated with the number
of visits per consumer of the inventory is strongly correlated with the number of visits per
consumer. A store which changes the inventory 20 times a year gets the customers in to
thestore20timesayear.Ase-tailersenterthemarketplaceofferagreaterchallenge.One
way to stick out is to offer a concept, product or service for a limited period of time. Vari-
oustemporaryofferscreatebuzz,attractcustomers,andprovidetheexcitingexperiences
they are looking for.
A growing number of brands use pop-up stores to follow consumer crowdsThe in-creased
mobility of people, combined with their lack of time, requires stores to be where consum-
ers are. All types of retailers, from clothing brands and bookstores to shoe manufacturers,
want to be part of the pop-up mania. With a fresh feel and surprise aspect, pop-up stores
have proved appealing to consumers. Bigger, better and more extreme pop-up stores
come at the order of the day.
In May 2011, Tommy Hilfiger opened its preppy World Pop-up store, which was designed
to look like an authentic East Coast beach cabin. Planning to travel across the world, the
store appeals to the preppy and style-conscious consumer. In London, shipping containers
are used to create a pop-up mall. Made of no less than 60 shipping containers, Boxpark
opened summer 2011 and will be “invitation only”. Hand-selected small and independent
brands will be open for sale.
Swedish appliance manufacturer, Electrolux, has launched a pop-up restaurant in collabo-
rationwithItalianarchitectsParkAssociati.TheCubewilltravelacrossEuropethroughout
2011, staying three months at each location.
Thepop-uptrendhasalsoshoweduponline.InAugust2010,thebrandRachelRoylaunched
a pop-up store on Facebook. During three days, fans were given early access to Roy’s new
jewelry line.The brand’s fan base had boosted by 100% by the end of the campaign.
“Flash sales” is another form of temporary offer on the rise. Groupon was among the first
companies to provide daily deals online. Once a day a “group coupon” from a local store
or restaurant is sent to Groupon followers by email. If enough people sign up, the deal is
on. One Kings Lane is a site with good deals on furniture, interior design, clothes etc., but
only for a very limited period of time. The site Jasmere handpicks lesser-known specialty
retailers to feature, and offers its visitors exclusive discounts. The more people that buy,
the lower the price.
DIGISHIFT 2020
57report from steen & strøm trendlab
Temporary offers of various
kinds create buzz, attract
customers and provide the
exciting experiences they
are looking for.
6
A marketplace in constant change also leads to temporary pricing in general. Online auc-
tions, price comparing sites and flash sales have made consumers aware that prices are
not fixed, and new business models keep evolving accordingly.
The highly successful retailer Gina Tricot may, however, have taken this a bit to far promis-
ing “New fashion every day” on its posters. At some point in time consumers may be over-
whelmed and not come at all.
report from steen & strøm trendlab
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58
ME-TAILING CUSTOMIZATION
Our time is characterized by more demanding, knowledgeable, and individually oriented
consumers. Feeling like experts they no longer want to be passive, accepting products and
services for what they are.They want to personalize things, because they can and because
it is part of building a personal style. For retailers to attract customers it is essential to
make them feel involved, engaged and able to influence.
The trend to customize products and services, me-tailing, is part of a socioeconomic
change. In their book “The experience economy”, Pine and James talk about the transfor-
mation economy as the stage following the experience economy.We can now see that con-
sumersseekconsumptionbeyondexperience.Whenbuyingaproductorservicetheywant
to develop as a person, they want the purchase to transform them. By allowing consumers
to be part of product development, production and even sales, they get to use their own
skills as well as develop new ones; they transform themselves.
Mackmyra was one of the first to allow customers to be part of the production of whisky.
When ordering a bottle, they got to determine storage time and label of the whisky. At the
Waterhead Hotel, located in the English Lake District, visitors get to customize their stay.
Invariousways,gueststailortheroomtoreflecttheirowntasteandstyle.Choiceofarrival
drink, room artwork, fruit plate selection and toiletries are some of the things that make
the atmosphere more individual.
Blogs and social networks have contributed to a larger acceptance of, and willingness to
express yourself and your personal style online. Threadless and Zazzle are two examples
of websites that engage consumers to be part of the creation of new products. Within the
threadless community, members submit and score T-shirt and sweater designs, that later
become available for purchase if popular. Zazzle.com is a website for consumers to give
their own personal touch on products such as clothing, office supplies, accessories, gadg-
ets etc.
One driving force behind customization is of course to individualize products and services;
another is to be recognized for creative abilities. Forums, communities and blogs shine
light on those creators whose contributions are sold, read or viewed. All to boost their
egos, and keep the dream of being recognized alive among the rest.
Weather online or in-store, creating a dynamic environment in shopping malls and stores,
where consumer can interact, get involved and influence will be crucial to attract people in
the future.
59report from steen & strøm trendlab
7
Buying furniture at IKEA, is an example of consumers being part of the produc-tion, since
they do the last part of assembling the furniture. On the website bemz.com, consumers
can involve in product development. By choosing a new fabric to the slipcover of couches,
cushions, armchairs etc., they rejuvenate and personalize old IKEA furniture.
Part of the attraction for retailers and manufacturers is also that consumers start doing
more of the job. Assembling, transporting, making the transactions on Internet sites for
travel agents and financial services firms lower the cost. Sometimes doing more of the job
is part of the satisfaction. Sometimes chopping wood, running a Marathon or painting the
wall is life satisfaction – or at least sometimes afterwards.
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60
FROM PURE PLAY
TO BRICKS’N CLICK RETAIL
The digitization of society, the rise of online sales and consumer expectations to access
anything, anytime and anywhere have been driving a trend among retailers whereby they
arestartingtosellproductsandservicesovermultiplechannels.Thepastdecadehasbeen
the klondyke of players in the periphery. Companies like eBay, Skype, FaceBook and Goog-
le have not primarily taken market shares away from big Fortune 500 companies, but have
rather created new markets on the periphery. Now the big traditional players are entering
the field one by one with ambitious take-overs and establishments.
The need to sell products and services across multiple channels (physical and digital) has
been recognized by well-known traditional brick and mortar and pure-play retailers.
Although the following retailers have different strategies, they are all becoming ”brick and
clicks”.
Well-known traditional brick and mortar apparel retail chains such as GAP Inc., H&M and
Zara began launching their first online shops in 2010 in order to capture a share of the
total online sales within their product categories. They recognized the need for a digital
sales channel after seeing a decline in their in-store sales and a rise in online sales.
In the ”Do-It-Yourself ” product category, retailers of building materials begun selling on-
line since the beginning of 2011. Swedish Byggmax and German Bauhaus launched their
online stores to serve the internet-savvy consumers in Sweden and other Nordic coun-
tries. Lagerhaus isanotherretailchainservingtheNordiccountriesthatdecidedtolaunch
an online store althought not until June 2011. The retailer started its digital journey by
selling its products over a blog but after noticing consumers positive responses it de-
cided to launch its own online store.
“Best Buy finds that multichannel customers spend 95 percent more than single-channel
shoppers and generate 80 percent more profit margin.
Target reports that its multichannel customers spend $1,000 per year, versus $551 per
year for its store-only shoppers and $94 for online-only customers. In general, most re-
tailersfindthattheirmultichannelcustomersaremoreprofitablethananysingle-channel
shoppers, as they are comfortable crossing channels and often end up with larger baskets
that tend to be higher-margin.”
Anne Zybowski Retail Insights Director at Kantar Retail.
Source: ICSC Shopping CentersToday June 2011
61report from steen & strøm trendlab
8
To differentiate from competititors, certain multi-channel retailers offer consumers the
chance to order online and pick up the items at the nearest brick and mortar store. ”Click
and collect” helps consumers to avoid waiting at home for product deliveries and provides
retailers with the opportunity to drive traffic into their physical stores. Retailers such as
Best Buy and Nordstrom in the US, Media Market in Spain and Tesco, Asda and Sainsbury
in the UK are leveraging on the digital and physical channels to provide customers with
click and collect services.
Brickandmortarretailersarenotaloneintheirmulti-channeltransformation.Pure-playre-
tailers are slowly venturing into the physical arena capitalizing on their brand recognition,
low prices and diverse inventories. PowerTools Direct and Figleaves are two pure-play re-
tailers that ventured into physical stores in 2010 as a response to consumers’ demand to
feel and touch their products. In the US, Power Tools Direct decided to open a traditional
brick & mortar store right next to its competitors: Home Depot, Sears and Lowes. Using
a consession inside Allder’s Croydon department store, the UK lingerie retailer Figleaves
decided to test the market before further expansion.
Finally, other pure-play retailers could be soon entering partnerships with brick and mor-
tars in order to leverage on each other´s unique capabilities. Internet-based retailer Ama-
zon has recently launched a pilot locker system in Seattle in cooperation with 7-eleven.
Amazon is allowing customers to pick up packages from Amazon lockers installed at the
convenience stores. Customers can select to have their packages dropped off at a nearby
locker at a 7-eleven which may be opened via a confirmation barcode received by email. If
the service proves to be successful in the US, it might be re-launched in the UK; it might
thus be Amazon’s first steps into becoming a multichannel retailer.
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62
DELIVERY REINVENTED
Traditional retail was a merger between consumers and products. Consumers got the
products from the retail environment.With mail-ordering the delivery was separated from
the purchase location. Today, as the purchasing process is impacted by digitization, deliv-
ery has become a crucial part for further innovation. As multichannel retailing evolves, a
variety of customer-convenient delivery options develop. Delivery is being reinvented.
Online order + home delivery has been around for a while. Increasing competition, howev-
er, has forced retailers to lower shipping prices or even ship products for free. Fresh direct
is an online-only supermarket, with free home delivery. As online shopping becomes user
friendlier, detailed purchases such as groceries, can be made online. Trunk Club, an online
retailer for men’s clothing, accepts orders online or over the phone. The clothes are deliv-
ered for free to wherever it may seem convenient: at the office, at home, at a girlfriend’s
place etc. If you don’t like the products you send them back with the trunk. In our Delphi
study, some experts claimed that the solution to the touch and feel part of retail was al-
ready in place as customers can return the products for free; they can try products and
send them back if they don’t like them.
The American chain J.Crew is a successful multichannel retailer. Online purchases are de-
livered at home and can be returned in-store, to avoid extra shipping costs. They also of-
fer in-store purchases for home delivery. Department stores like Saks Fifth Avenue and
Bloomingdales collaborate with UBS or FedEx to offer home delivery for customers that
don’t want to carry their shopping bags home. Whole Foods, a chain of food stores, offers
home delivery of in-store purchased groceries for a very low price.
Homedeliveryisinconvenientforsomecustomers,assomeonehastobeathomeataspe-
cific time. Order online + pick up in-store has proven successful in the UK. Retailers such
as Tesco, Asda, and Sainsbury offer so-called collection services to their customers. An
onlineorderisputtogetherbyin-storestaff,tobereadyforcustomerpick-upatanagreed
upon time. The Pago app recently launched in California, allows users browse, order and
pay for goods and services before collecting them in local stores. Currently, 50 companies
have partnered and users can locate dry cleaners, flower shops, coffee shops and restau-
rants. The practice of car manufacturers to use the same logistic providers to create dis-
tribution efficiencies has now spread into retail. The last mile problem is increasingly the
focus of logistics. In the coming decade, we will likely see many more alternative solutions
to the distribution part of the retail value chain.
Home delivery of food bags is successful in Sweden and its growing in Denmark. Getting
five dishes for four people to the door is now comme il faut among Swedish urban parents.
While compromising with choice, parents get recipes and food delivered to their door. If a
large share of the population is willing to give up choosing their meals, food distribution
will certainly be cheaper overall.
DIGISHIFT 2020
Some experts claimed that
solving the touch and feel part
of online retail was already
handled – since you can return
the products for free
9
DIGISHIFT 2020
64
SOCIAL COMMERCE
Today’sconsumersarewellinformedandhaveknowledgeabouttheproductsandservices
they purchase. Retailers, brands and store merchants are no longer the experts they ask
for advice. Instead, they turn to friends and people sharing the same taste and interest, to
get their point of view on the product they are thinking about buying. The problem is that
potential consumers are not always with their friends when shopping, in-store or online.
Social networks sites are one place where friends are always together. As ecommerce
evolves, retailers are tapping into the opportunities of selling their products and services
directly on social networks. Companies are present where consumers and their friends
are. Social commerce lets consumers browse, recommend, get opinions, and buy without
leaving the social network website.
With its 600 million users, Facebook is an important “social market”. Most companies al-
ready have a Facebook page that fans can follow, like and share with friends. However, the
developmentindicatesFacebookwillbemuchmorethananetworkconnectingpeopleand
companies. F-commerce has become the name for ecommerce on Facebook.
Besides the benefit of having many consumers at the same place, there are two other
factors behind this development. By introducing its own currency, Facebook credits, the
Facebook team clearly shows where they want to take the platform. Secondly, tech-com-
panies have started to develop social commerce software and applications supporting
F-commerce. By using applications like Payvment, companies can easily set up small to
medium sized stores. The free software allows retailers to create a Facebook storefront
that accepts payments via credit cards or PayPal.
Forbiggercompanies,itisimportanttoteamupwithane-retailsoftwareproviderthatcan
bring the business to social network sites. About a year ago, retailer Ulla Popken decided
to team up with MarketLive when building a better e-commerce site. Today, consumers
can make purchases directly on the retailer’s Facebook page, by using MarketLive’s Social
Store software. By collaborating with software companies, Facebook is introducing fol-
lowers to pressing the “buy button” instead of the “like button”.
Service retailers are also grasping the opportunities of F-commerce. Mark Pincus has be-
come one of the seven “Facebook billionaires” thanks to his Zynga, the company behind
Facebook games like FarmVille, CityVille and ZyngaPoker. Attractive to people’s search
for play and fun, as well as a way to relax, these games have become amazingly popular. So
popular, users are willing to spend money inside the virtual world of the games.
Another example is Delta Airlines, that in September 2010 launched a ticket window on
its Facebook page, allowing visitors to buy tickets without leaving the website. Second
Porch is a Facebook service app letting users list and rent vacation homes. After the 30-
day free trial it costs $10/month to be part of the community.
65report from steen & strøm trendlab
10
However, social commerce is not limited to storefronts on Facebook. Several brands are
linking their websites to social media in order to attract more visitors. Levi’s has incorpo-
ratedaFriend Storeontheirwebsite,enablingvisitorstopostproductsontheirFacebook
profiletogetfriends’feedbackbeforebuyingsomething.TheEuropeanretailerElloshasa
FriendStoreintegratedwithFacebook,wherecustomersshareideasandreviewsofprod-
ucts and services.
These are both examples of companies understanding the importance of remaining social
when entering the social network marketplace. Before converting social into sales, they
focus on interacting with consumers and watching them interacting with each other.
Yet another aspect of social commerce is the introduction of social media in physical
stores. Retailers have realized the consumer value of asking friends online what they think
about the clothes they are trying on in the fitting room. In Spain, Diesel has linked in-store
cameras to Facebook, so that customers can post photos of themselves for instant feed-
back from Facebook friends. Macy’s Magic Fitting Rooms toured from one department
store to another, allowing customers to virtually try on clothes via an augmented reality
mirror and share their outfit via Facebook, text messaging or email. ”Go try it on” is an
online community for sharing and getting feedback on what members are wearing at a par-
ticular time. Its mobile app allows members to get feedback on outfits when shopping.
These are small or emerging patterns of observations. We believe they have
fundamentaldriversandwillbemoreimportantinthefuturemarketplace.Their
direction, timing and impact is more uncertain.
We have chosen to highlight some of the most interesting phenomena and to
speculate about their potential for the future, and we look forward to follow the
developments of them in to the future.
PHENOMENA
1. GAMIFICATION OF LIFE
2. VIRTUAL SHOPPING PLACES
3. reinforced REALITY
4.TAGOMANIA
5. FROM COMMERCETO RECOMMERCE
6. NEWWINDOWSHOPPING
7. IN-STORETECH FRENZY
8. COLLABORATIVE CONSUMPTION
9.the coming of big data
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70
gamification of life
Gamification was one of the trends where the experts in the Delphi study expected early
breakthrouginthemarket.Withinthreetofiveyearsthiswillcertainlybemoreintertwined
with retail. Gartner group also ranks gamification as one of its coming hypes in a report
from July. On the other hand Gartners estimate assumes that the media and buzz hype will
peak in perhaps half a year and then drop while adaptation in to business will take some
more years. Many people enjoy play and fun, as a contrast to the seriousness of life. The
explosion and popularity of gaming apps on mobile devices proves that, no matter age we
love the excitement of playing games. By using technology, an increasing number of com-
panies are bringing an aspect of play into consumers’ everyday life. During the last year we
have seen a cascade of apps and websites contributing to the gamification of life.
Gaming has been brought into daily chores, public transportation, eating habits, and even
recruiting. But, these apps and sites do not serve the simple purpose of spicing up people’s
everyday life. Gamification of things also creates an opportunity for companies to engage
consumers and tie them closer to a brand, store of service.
UK -based company Epicwin provides an iPhone app turning a to-do-list into a game. After
completing a task on the list, users collect gold and other rewards, allowing them to move
on to the next level. The game serves as a motivator to get things done. The Foodzy app
keeps track on what you eat during the day, rewarding a healthy and varied diet.
The UK public transportation system wants to engage travelers through the Chromaroma
app. It rewards passengers with points for each trip, maps out where they have travelled
and recommends new areas to go to, as well as things to do there.
Gamification is also a way to benefit from consumers’ knowledge and time. In its effort
to index its digital collection of books, the Finish library launched an online game, allow-
ing players to help correct mistakes in the indexing while having fun. More than 20,000
people have already visited the site and more than 85,000 voluntary minutes have been
contributed.
According to salesforce.com’s Chief Scientist gamification is a trend that will continue, es-
peciallyamongyoungergenerations.Mr.Rangaswamimeansitwillformthefutureofwork
and be a crucial aspect in attracting talent.
An already existing example of this is the Facebook game provided by the hospitality gi-
ant Marriott International.With the aim to make more young people interested in a career
withinhospitality,thegameallowstheplayertotryoutmanagingdifferentpartsofahotel.
The Internet of things brings yet another aspect to gamification of life. GreenGoose uses
RFID-tags to track how much different things are being used in a home. Users are reward-
ed every time a desirable activity is performed.
DIGISHIFT 2020
Gaming has been brought
into daily chores, public
transportation, eating habits,
and even recruiting
1
DIGISHIFT 2020
72
virtual shopping places
Just like the entire e-commerce hype in the late 1990s is now becoming a reality, the same
might happen in the future with things currently on hype.Virtual reality may actually prove
to be interesting again. The rise and fall of things like Second Life may also return. Virtual
worlds like World of Warcraft and EVE online attracts hundreds of thousands and some-
times millions of engaged people. The players of EVE-online have created their own radio
station, TV-station and even a quarterly economic outlook that is presented by its chief
economist. There were 60 candidates in the presidential election and 18% of the online
population of 500 thousand participated in it. Their vision remains to create something
better then IRL.
Hype or not, it is undeniable that the increased digitization of society and the amount of
time consumers are spending online are driving a phenomena whereby the digital world
is gradually becoming a bordeless marketplace. The number of buyers and sellers in the
virtual world continues to rise as small online retailers are no longer alone. Entire shopping
malls and outlets are moving online creating virtual or cyber malls. At the same time, big
traditional online retailers are capitalizing on their online brand awareness to deliver new
services.
The shopping center Westfield has ventured into the virtual marketplace in Australia
by developing an entire virtual version of its mall. Without floor space limitations, the
Westfield online mall features 150,000 products, 3000 brands and 50 retailers. The on-
line platform manages sales orders from its multiple retailers through a single checkout
point.OnlineretailereBayhasdevelopedavirtualoutletmallprovidingbrandsanddesign-
ers with a platform where to directly sell their excess inventory. Already servicing the UK
and Germany, eBay decided to open its platform to US consumers since September 2011.
Payvmentisanothervirtualshoppingmallplatformwithmotrethan50,000retailersinits
network. Payvment uses the facebook´s social platform to create a unique social market-
place.
This trend in not exclusve to the US or Europe, after all the largest online mall in the world
is located in China. The Tao Bao mall has over 370 million register customers and offers
800 million product listings from more than 30,000 local and global brands. Owned by the
e-commerce giant Alibaba,TheTao Bao mall sells everything from food to technology.
DIGISHIFT 2020
”Our vision is to create
something better than
real life.”
Thor Gunnarsson head of business
development CCP Games (EVE online)
2
DIGISHIFT 2020
74
reinforced reality
Technologies reducing the differences between the virtual and the physical world are con-
tinuouslyemergingindifferentaspectsofconsumers’life.Augmentedrealityallowsanen-
hanced interaction with products, services and places. Web shops and websites in general
might incorporate augmented reality in their attempt to replicate tactical experiences in-
herent in physical stores. On the other hand, physical stores might incorporate augmented
reality capabilities to add extra information that might engage visitors in a unique way. No
matter if the consumer is at the store, at home, or on the streets, augmented realty gives
them the chance to interact with the physical and virtual environment like never before.
Online stores are incorporating augmented reality technologies into stores so consumers
can “try on” their items before making a purchase.Well-known brands such as Ray Ban and
JC Penny have implemented online stores with virtual mirrors.
One key aspect of the connection of the virtual world with the real world is the location-
based technologies. The virtual world is now connected to its specific location. A virtual
Nike store is found in a particular location IRL and can only be seen in the virtual (augment-
ed) reality. By connecting the location to the virtual environment a whole new set of rel-
evance can be attributed to information and the virtual world. All the things that have been
written about a place are becoming relevant. In media it is referred to as new relevance.
Thehistoryoftheplaceismorerelevantatthetimewhenyouarethere.However,whathas
been said about a place in the virtual world becomes more relevant. The ratings of restau-
rants in the neighbourhood, the most read articles of this place, the most popular music,
etc. In this sense, reality becomes truly augmented by linking together the physical with
the virtual place.
DIGISHIFT 2020
Online stores are incorporating
augmented reality technologies
into stores so consumers can
“try on” their items before making
a purchase
3
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how_the_digitalchannels_shape_the_future_of_shopping

  • 1. DIGISHIFT2020 - how the digital channels shape the future of shopping Report from Steen & StrømTrendlab 2011
  • 3. 3report from steen & strøm trendlab Steen&StrømTrendlabiswheretheemployees,retailersandotherexpertsmeettoshare thoughts and knowledge on future consumers, retail and shopping centres. Each Trendlab project produces a visionary report, but for the participants the process itself is also very valuable. It creates new strategic insights and learning. Steen&StrømistheleadingshoppingcentrecompanyinScandinaviaandwantstoexpress that by being perceived as the expert on retail and shopping centres. Trendlab is one of manyeffortstoachievethatambitiousgoal.Wewanttobethecompanyourpartnerswant to join in creating future meeting places. When we do our trend research we start with already existing megatrends, trends and phenomena.Wetrytofindoutwhichofthemwillremainstrongandwhichofthephenomena are strong enough to become a future trend. History tells us that many of the elements of the near future are things we already know. The challenge is to judge their future strength and duration. Sometimes a phenomena is strong enough alone, but most of the time it is depending on the growth of a number of other trends and phenomena, to become a trend by itself. Looking at a possible future is always holding a degree of uncertainty. But at Steen & Strøm we think we are better prepared by listening to the qualified assumption of leading experts in the field. In certain areas it can make us create the future, rather than being caught by surprise. This is the fourth Steen & Strøm Trendlab. The first three have been building on the findings of the earlier Trendlabs, like this one as well. With this fourth book we believe the foundations gets stronger and touch upon new areas which are important to better understand our common society and business environment of the future. This time we have had a closer look on how the digital channels that will shape the future retailandfutureshoppingcentres.Theimpactofthee-shiftisobvious.Wecanseechanges in the way we communicate in new channels.We see how e-trade gradually reshapes retail. But how will the future look for retail and shopping places? Steen & Strøm Trendlab has involved a number of internal and external experts to help predict the future development. Have a good read! Foreword
  • 4. DIGISHIFT 2020 4 © Copyright Steen & Strøm 2011 Graphic Design:TIBE Drammen Photo: Steen & Strøm, Kairos Future, istock.com
  • 5. 5report from steen & strøm trendlab Contents CHAPTER 1 Introduction 7 Background and context for the theme of Trendlab 4 CHAPTER 2 from pastto present 25 The Digishift Timeline CHAPTER 3 Trends & phenomena 39 The Trends and the Phenomena prioritized shaping the digitization of Retail. CHAPTER 4 the experts view on the future 89 CHAPTER 5 the likely future 113 Looking into the year 2020 CHAPTER 6 scenarios for the future 129 Multichannel • Showroom • Smartmart • Experience
  • 6. DIGISHIFT 2020 6 Most experts point out that the coming ten to twenty years will be the most dramatic years ever in history of mankind. The well-known futurist Theodore Modis states that five days in 2025 will be as ”event rich” as the whole 20th century. Even if you are not that dramtic it is important to be aware of many of the driving forces and shifts that is under way in a higher speed than ever. In Kairos Futures international research on how the most successful companies excel in turbulent times, we find that it is the companies ability to systematically scan for future trends and changes in their business environment and their intense efforts on making insights of the foresights that creates what we call Future Sense in the management team. Their understanding of different scenarios makes them innovative and prepared for increasing turbulence and more comlex business environments.
  • 7. 7report from steen & strøm trendlab introduction chapter 1 Background and context for the theme of Trendlab 4
  • 8. DIGISHIFT 2020 8 Tomorrow belongs to the people who prepare for it today. African Proverb
  • 9. 9report from steen & strøm trendlab This is the 4th research paper from Steen & Strøms TrendLab – a future workshop where we gather leading experts within different disciplines in order to collectively improve the possibilities to meet future challenges. The first report focused on consumer tendencies and shopping behaviour. The second report was trying to cover the most important shifts that will have big impact of shopping places in the future. We identified 10 major shifts that was further explored in the third TrendLab report which was called the Future of the moment of truth.The shifts has served as a strategic map for Steen & Strøm and are presented here below: • The Power Shift – from producer to distributor, to the consumer power. Increasing flow of information in an ongoing explosion of mediachannels makes traditional marketing less effective and the critical and advertising-weary consumers are arming themselves with new technology. With blogs, social networks and mobile phones they are acquiring greater power as they take over a number of media and sales channels • Anti-Age shift – from ages to life cycles. In a population that is growing older the conceptanddefinitionochyouthisslowlychanging.Seniorcitizenstodayareredefining the life ladder while experiencing a second period of freedom with time and money to spend.Youthhasgonefrombeingrelatedtoacertainageandbecomesastateofmind • Value shift – from indiviualism to dividualism (multiple and temporary identities). Postmaterialistic values and individual strife for life maximalization in a economy that is shifting from needs to desires, leads to a hectic hunt for experiences and satisfaction. A complete norm collaps in the society makes people focus on inventing their identity-projects. In our hectic world, more people develop mental agility. Life offers fewer stable relations, but a growing array of temporary acquaintances and encounters. This mental agility leads to a serious play with more identities and roles than ever before. The future belongs to the dividualists. • Convenience shift – from “what?” and “how much?” to “where?” and “When?” (Superconvinience and Just-in time living). Increased prosperity and a perceived lack of time for a growing number of consumers in combination with increased lack of energy creates a desire for superconvinience retail – that can help me live a no friction life. • Form shift – from function to form (Democratization of design and luxury and emergence of mass-clusivity). More aesthetics, appearance and finish will become increasingly important for the shopping culture of the future as consumers search for a more designed existence, devoting more energy to choosing attributes that can work as extensions of their selves. A series of research papers since 2007
  • 10. DIGISHIFT 2020 10 • E-shift – from physical limitation to multichannel opportunity (E-tailing, Mixed reality and immersive shopping experiences). E-commerce is growing stronger than ever. In most fields e-commerce is making inroads in relation to more traditional methods. E-tailing concepts becomes part of multichannelstrategies to create better relationships with consumers where ever they are, creating problems knowing what actually is sold and what is not in ordinary shops and shopping places. • Concept shift –from products to store and marketplace concepts. In the past the products themselves accounted for a large part of the brand and the concept. As quality convergence and globalization increase, the products become less important and the packaging of the product and the surrounding shopping experience becomes more in focus. Format is playing a larger role as stores attempt to differentiate and renew themselves in a faster and faster pace. • Metropolitan shift – from countryside vs urban challenge to metropolitan growth and Urbanity as the way for the future. The city previously viewed as a dirty problem is now seen as an engine for growth. Development of sustainable metropolitan areas is increasingly part of the solution and the search for new forms to unite classic citiy’s integration of work, home and shop with the new demands for accessibility, healthy environment and effective land use. Shopping places will be more integrated with the city and receive a far more versatile content than the previously discussed “boxes out on a field”. • Environment shift – from Eco-luxury and Eco-Chic to Survival (Sustainability rules, Small Scale and Local Heroes, Eco-smart shopping). We will se a peek of everything in not so far distant future. Energy, food, water and raw-materials are becoming scarcities for a growing global population. Consumers will be ever more critical of businesses and brands that behave irresponsible. Sustainability will be the driving force and focus in the efforts to create eco-smart production and consumption. • Class Shift – from Stable Socio-economic classes to Division of Multidimensional classes (Downward mobility, the minorities on the rise and creation of a new class society). Over the past few decades we have seen income differences increase as a new form of class society takes over where the class markers such as education and networking are becoming more multifaceted. Once again, the wealthy are becoming wealthier. Inequality today is not just a matter of money, but of a number of variables such as education, language skills, connections, access to media and networks. The most vulnerable today are unemployed young people and many immigrant groups. The continous work and updates of the trendshifts on a regular basis has given further understanding of what the future may bring. For the past years it has also been recognized that the strongest signals for change in retail and shopping places is coming from a wider perspective of the E-shift, digitization in general.
  • 11. 11report from steen & strøm trendlab “Bits, the DNA of information, are rapidly replacing atoms as the basic commodity of the human interactiony.” Nicholas Negroponte
  • 12. DIGISHIFT 2020 12 –The purpose of for this year’s report isto explore how the digital channels will shapethe future of shopping. Nicholas Negroponte, who gave the statement in his book Being Digital in 1995, referred to a belief that every object or product which can be digitized will become digitized in the future. During the 15 years that has passed since he wrote this, we have witnessed a total information- and communication revolution in society that still only is in its beginning. RichardNormann,afamousSwedishmanagementthinkerandwriterstatedinhislastbook that because of the digitization, the carriers of value in almost every business will become de-materialized in the future. Symbols, brands, information, knowledge, relationships are all examples of value that now are becoming digitized and fluid. The new mobility and connectivityreshapes,re-formandrestructuresbusinesses,branchesandsocieties. Look at what is happening in the middle east right now. The new connectivity and the fact that more an more products have been transformed to bits rather than atoms, creates a new type of density in the market where everything is reachable from the palm of your hands, from your computer, your mobile, your car, your Nintendo or Flatscreen. You’re closer to your co-workers or customers through Skype. You’re friends and family are almost always with you via Facebook, Twitter, Go-Walla or Foursquare, Your records and every record ever produced is near you through Spotify or Itunes. Even your money and savings are in the reach every second of the day. “If one believes in the digitization thesis than we have to realize that many of the prod- ucts in physical shops will be digitized during the coming ten year period. If more and more people will have a 3-D printer at home which is printing out the productbase then Ingvar Kamprad will be happy to skip the flat boxes. We will buy bits, ones and zeros, that represents the reading lamp Emma instead of the real thing. Ikea has the CAD-drawings already so they could start creating a shop that would sell in this new way in order to pre- vent ending up where the record companies did with free illegal down loading, or in this case, a Pirate bay of things.” Martin Törnqvist (Expert panel) trend analyst Media Evolution. The Digishift “Bits, the DNA of information, are rapidly replacing atoms as the basic commodity of the human interactiony.” Nicholas Negroponte
  • 13. 13report from steen & strøm trendlab Whether we believe in the thesis of total digitization or not, we can agree on one thing, it is a much bigger transformation, a total redefinition of traditional business logic that is going on. Several experts that we talked to thinks that the ongoing digishift is the biggest transformation of the retail landscape since the invention of the supermarket, within the coming ten-twenty years.What do you think? Much of the change is driven by maturing technology and if you compare with the visions and promises of the nineties and the start-ups in the new economy, the e-shopping infrastructure now has started to function in an effective way. Traditional retailers have started moving from single channel to multichannel propositions. More empowered consumers are interested in shopping in new ways. Equipped with digital devices like lap- tops, I-pads and smartphones and increasingly more intelligent location based search tools, the consumers are gradually becoming masters of the shopping process. And they want to use their power in retail space, perhaps in order to cut price or individualize their shopping experience involving their social network friends in the process. This change is of growing concern for more retailers all over the world. How can the retailers prepare for and meet these more sophisticated consumers and make them want to stay longer in the store? In an international poll retailers were asked what they thought was the biggest challenge facing retailers today? A majority said: To find new methods of consumer interaction Jim Caroll, futurist). Richard Normann stated that the carriers of value in almost every business will become de-materialized in the future. The new mobility and connectivity reshapes, re-form and restructures businesses, branches and societies. De-materialization reformation density componentizationmobility
  • 14. DIGISHIFT 2020 14 Cross-selling, F-shopping (Facebook), App-tailing, M-shopping (mobile), Blog-tailing, Flash sales, invincible pop-up retail, preview shopping, Crowd shopping are all relatively new terms that we find in a more experimental retail scene. In this report we will explore how the digital channels will change and form the future of shopping places and there are many interesting questions to ask: • Which are the most important trends within the digital field, e-shopping, m-shopping and multichannel that will have an impact on the shopping process? • What are the consequences for retail and shopping places? • How will physical and net-shopping cooperate and compete in the future? • Which and how integrated are the platforms that consumers will shop from in the future? • What retail categories will suffer much because of the ongoing Digishift? Which categories will disappear from the physical shopping arena? • Will E-shopping create a development of smaller or shrinking physical stores in shopping places? • How will shopping places of the future change in order to utilize the new mixed reality, the new hybrids of physical and virtual word? These are some of the questions that we had in mind while doing this project and we have tried to have a holistic view in the search for the future of shopping experience across the retail landscape.
  • 15. 15report from steen & strøm trendlab ”Plan for the future because that’s where you are going to spend the rest of your life.” MarkTwain
  • 16. DIGISHIFT 2020 16 Howwasthe information forthis report gathered? To try to catch the future is a guess work and you need some tools to qualify the guessing as much as possible. The project has been runned by Kairos Future and a small analyst group from Steen & Strøms Scandinavian offices with the following participants: • Harald Nilsen, Research manager • Annemette Wørmer, Marketing manager • Kajsa Rahlén, Research manager Together we have used four interlinked methods to create a possible scenario for the future. • International Trendwatch-study • Indepth-interviews • Delphi study with a panel of experts • Future Hearing Day InternationalTrendWatch-study During this phase Kairos Future consultants and its international research partners carried out an international trendscanning. The model below illustrates different search areas that was covered. In order to find contextual and structural drivers and changes we used a framework called E P I S T E L + M, which stands for Economics, Politics, Institutional changes, Social, Technological, Ecological and Media/Market changes. Further more we searched after trends related to a demand and supply-based structure and finally we tried to cover the specifics related to a changing shopping process. There the changes can appear in how consumer behave before, during and after the shopping activity takes place. This work resultedinaround100trendsondifferentlevelsandwithdifferentperspectiveandscope.
  • 17. 17report from steen & strøm trendlab Society (Context & structure) e pist e l + m demand (consumers) supply (actors) beforeafter during shopping- process the general framework for analyzing the future of shopping places
  • 18. DIGISHIFT 2020 In-depth interviews The following experts where interviewed: • Rune Glasø, innovator, Gyro • Johan Ronnestam, consultant, advisor and writer about digital media and future branding. Runs a famous blog; www.ronnestam.com • Ole Petter Nyhaug. speaker and blogger on consumer trends, marketing innovations, Partner and managing director, OnLive Research • Lars Tong Strömberg, Head of Internet at Aller Media. Writing a blog about strategy, marketing and all things digital in between • MartinTörnqvist,Trend analyst, Media Evolution • Ola Stavhammar, Sales & Sponsoring, Svenska E-sportföreningen • Michael Cronholm, Research Specialist at Inter Ikea Centre Group • David Jansson, Journalist at the nordic magazine Market • Moon-Suck Song, expert in mobile commerce, Managing Director Panagora Room AB • Mikaela Dyhlén,Trend analyst, BlikTrends & Insigts • Dan Ouchterlony, Investment Manager, SchibstedTillväxtmedier
  • 19. report from steen & strøm trendlab Delphi-study The Delphi method is widely spread and structured communication technique, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. Delphi is based on the principle that forecasts from a structured group of indi- viduals,skcollectiveintelligence,aremoreaccuratethanthosefromunstructuredgroups. The Delphi method gives us a broader sense of how the digital channels will develop in the near future and it gives us a structured idea of how the new marketplace will evolve. Kairos Futures research team carried out a webbased questionnaire with future state- ments that each expert had to answer. In total we had 40 international experts answering what they thought about the digitization and the future of shopping places. The results were revised and analysed together with Steen & Strøm analyst team. You can read more about the results on page 94 to 102 click here!
  • 20. DIGISHIFT 2020 Future Hearing Day The Future Hearing day was a one day meeting with internal key persons and experts from Steen & Strøm. During the hearing we presented the trends and Delphi-results. In this workshop we prioritized the most important trends for the future. We created a base sce- nario 2020 and based on the facts, trends and forecasts we created so called Future Snap shots of possible retail landscapes 2020. The following participants took part in the Future Hearing Day: • Karl Fredrik Lund • Tove Lise Foss • Charlotte Christensen • Lise Gård • KatrineVelter • ClausTüchsen • Søren Soelberg • Mark Rendbæk • Anders Bojer Nielsen • Charles Larsson • Anna Christenson Åberg • Kenneth Jävervall • The analyst team
  • 21. 21report from steen & strøm trendlab
  • 22. DIGISHIFT 2020 22 Authors The report is produced in a collaboration between Kairos Future and Steen & Strøm ana- lyst team. The thoughts, ideas and suggestions that the analyst team and both internal and external experts drew up were added to, explored further and analysed in more depth by Kairos Future. The final shape that the material takes in this book is essentially based on the results of this process. The following futurists were involved in the writing of this report: Magnus Kempe, Director of Retail and Finance Magnus has written several books and reports about the consumers of the future, as well as retail and financial markets. He wrote a well recognized report “after the credit party” about the coming loan crisis in USA already in 2006, two years before the actual finan- cial collaps. He has been the project manager for several of Kairos Futures major studies includingThe Ridderheims report and Urban families food lifestyles. Jörgen Jedbratt, Senior Partner, strategic advisor and writer Hehaswrittenaserieofmanagementbooksovertheyears,mainlyaboutmarketing,media and consumer behavior.Together with Magnus he has mastered many of Kairos consumer reports such as the Ridderheims report and Tomorrows Advertising market and Beyond Mobile. Already in 1994 together with Per Florén and Peter Gustafsson he wrote a book about how Internet would revolutionize the business world. Kajsa Ahlgren, market manager USA Located in New York she provides Kairos Future with an American perspective in global research projects. Her focus is innovation, especially sustainable social- and business development. Recent projects were within foodtrends, innovation and design. Jorge López Quinones, researcher. Jorge focuses on international research and trendscanning within a wide area of knowl- edge areas. His specializes in future technology and consumer behavior. Jonas Thulin, researcher and analyst JonasThulin works as an analyst at Kairos Future. He has two Master’s degrees in in politi- calscienceandineconomics,includingstatistics.Jonashasaspecialinterestinphilosophy and in history of ideas. 2 64 % according to Jim Carrol, Location is the New Intelligence: Customer interaction in the Era of pervasive mobile
  • 23. The best way to predict the future is to create it. Peter Drucker
  • 24. DIGISHIFT 2020 24 The longer you look back, the farther you can look forward. Winston Churchill
  • 25. 25report from steen & strøm trendlab From past chapter 2 to present The Digishift Timeline
  • 26. DIGISHIFT 2020 26 1990 2000 FROM PASTTO PRESENT SOCIETY (structure) Telephone bank Dot.com Crash GenerationC - digital natives E-Mail Amazon Ericsson Hotline Yahoo Windows based mobile phone + PC ShoppingC w/local service plus some ”add on” Homozappiens – from individual to dividual consumer Bulletin boards Increased focus on convinience Become your own bank or travelagency Self customization Price comparison DIY& self service society NewEconomy Tradera Tweenfactor Netscape From cash to card Y2K & IT-Heroes Media channel explosion –-- Laptop PC Communities: Lunnarstorm, Netby, Arto Google WWW Boo.com Let’s Buy it Nokia Increased shopping volymes in physical retail From Need to Desire oriented shopping Internetbank/online payment SUPPLY (shopping- environement) DEMAND (costumer) 1990 Telephone bank NewEconomy Telephone bank
  • 27. 27REPORT FROM STEEN & STRØM TRENDLAB 2001 2011 THE DIGISHIFTTIMELINE E-shopping focus on E-shoppertainment Willingness to pay for avoiding advertising Increased consumer power Time & energy poor consumers Shopping becomes a lifestyle E-shopping for smart living Hedonistic time gaps Collaborative consumptionn Situation based shopping Generation Free ------> Fragmentation Globalization Ebay buysTradera 3G Pirate Bay Web 2.0 Wikipedia Second Life Wireless internet Freemium Salesfinder To-muchness leads to demand for structure and smart solutions iTunes Swedish Post Office and other shops disappears due to the Net iPhone US election Obama via social media 4G World ofWarcraft Facebook Twitter App-explosion Web 3.0 Gamification Personal integrity issueBloggosphere iPad, handheld screens Economical & Structural volatility Always onlineDigital chips everywhere Cars, creditcards mm iPod E-shopping rise again Bubbelrom e-retailer of the year Multichannelstrategies in apparell, shoes, fashion, sports POP-up & Show rooms Digital dev. in retail but not ShoppingC Groupon, Guilt E-shopping influencing and challenging Fast moving consumer goods sector Spotify + Facebook Increased consumer power Generation Free Always onlineGlobalization
  • 28. DIGISHIFT 2020 28 history and driving forces A brief history of e-commerce 1990 - 2000The sky is the limit –the mental platform The 1990s was for many the time with the most inspiring thoughts of what the Internet might bring to the world. Traditional individuals did not last long either on stage or in re- cruiting. The world had discovered a new sphere: the virtual world with which one had to engage to be part of the future. To some extent both the problem and the blessing was that they were mostly ideas. While many of the notions of what the Internet might bring were discussed, they weren’t imple- mented. Apple launched the Newton, the new reading device, in 1993 and it did not imme- diatelybecomeagreatsuccess.ThePalmwasthefutureofcalendars,butafterawhilethe growth in use started to decline. Fewer individuals were seen writing with that small pen, which had been said to be the future. By the end of the decade the amazing mobile phones with Internet connection came on the market. It was said that the WAP, the new standard for the mobile Internet would prove extraordinary. Electrolux and Ericsson launched the project E2 a flagship project for how appliances, and the entire food distribution would be used in the future. Specially built flats, which were adapted to this new form of distribu- tion, were built. Some of today’s giants were founded during that decade including Amazon, eBay and by the end of it, Google. For the most part, however, most ideas cost a lot of money and hope withlittleresultinbusinessvalue.Thisperiodneverthelessprovedveryvaluableforestab- lishing people’s mindset. In some sense, both the mental and the physical infrastructures benefited from the hype and the visionary thinking. The buildup of 3G networks and fiber cables underground benefited greatly from the money flowing into the industry. More importantly, people and businesses started to imagine the world when it finally hap- pened and what the new business models might look like. Today’s superstars the iPhone, Facebook and the iPad were created mentally back then. In both Norway and Sweden so- cial networks such as Lunarstorm experienced tremendous success. In 2001, the site had 600 000 members; a fairly large number given that mostly young people were using the site. Sites like the cluetrain manifesto actually outlined the main thoughts of the future.We got toknowtheconceptvirtualrealityevenifweneverexperiencedit.However,forthoseofus who had the chance to create a visionary future for banking, payments, virtual reality, new intermediaries or experiences it had a purpose beyond being fun.
  • 29. 29report from steen & strøm trendlab 2000-2010The crash ofthe hype andthe rise ofthe periphery While the crash made mainstream media, consultants and managers consider more down to earth issues, some of the entrepreneurs continued to play on the Internet. Interestingly, their success didn’t make society change its perception fundamentally until recently. At least not in Europe, whose online retail and mobile phone usage lagged the development in the USA, Japan and South Korea.The 2008,TrendLab book described the doughnut-based theory of electronic commerce from 2004. According to most people, e-commerce only applied to goods on the periphery. After the hype, people began saying that e-commerce was of interest to …books, only financial services, only travel and tickets, only CDs, music and video, only business to business, only price comparisons, only home electronics, only mail order customers, only Christmas shopping… But “only” very soon covered everything, leaving no periphery – just like doughnuts, which surround an empty hole, the periphery that e-commerce appears to eat into soon covers all segments. No sector is left untouched. At that point in time the “only” syndrome continued it included … only shopping before major holidays … only the basics (while people “top up” on perishables locally) … only non-basics that people can’t find elsewhere (the long tail) … only busy families with children in metropolitan areas … only people in rural areas with no local stores … only heavy goods that can’t be carried home … only low-risk inexpensive goods … only high value items with a greater benefit of lower price … only a special type of customer who, just like the mail order customer, is a small part of the market, which eventually stops growing. Actually,wehavecomeacrossthistypeofargumentsinthisstudytoo.E-commerceisonly forshoemanufacturerswhocanmaintainacertainsizefortheend-user(sotheydon’thave to try it). E-commerce works only or primarily when stores are not open. As the core segments of FMCG and apparel have had a rather slow start people have con- tinued to believe that while e-commerce will grow the main retail categories will remain much the same for at least a decade.
  • 30. DIGISHIFT 2020 30 Surprisingly, during the past decade e-commerce has not experienced a large change. The sites look mostly the same. ” I agree. Isn’t it really boring?” Michalea Dyhlén pointed out. While innovation in social media has been intense with the launch of new sites like netby in Norway, Playahead in Sweden, Twitter, LinkedIn, FaceBook, Flickr etc. e-commerce has seen almost no innovation. For the past decade, e-commerce has proliferated primarily in niche areas on which most businesses other than the media sector did not focus. Even a digital sector like financial services has remained largely unaffected: while the big players remain the same, their way of operating has changed to allow consumers do more of the job on the Internet.There are no dominant Internet only companies, except for in particular niches. Markets are conversations. First thesis of the Cluetrain manifesto
  • 31. 31report from steen & strøm trendlab 2011 - looking intothe future “Online growth would be bigger if the incumbents started.” Moon-Suck Song Managing Director Panagora Now, we see something different. Big global players such asWal-Mart,Tesco, Metro, H&M, Zara are investing heavily in e-commerce. Online retail growth is currently generated from the bricks and mortar companies rather than from the Internet-only players. The Internet economy is returning to the boardrooms and the catwalks. According to Forrester, food is now the largest e-commerce segment in UK in terms of value; in France it is apparel. Cat- egories which were said to be difficult or very slow growing on the Internet are finding a growing number of viable business models. Sometimes, they remain niche segments but niches in terms of everything, payment method, delivery options, target customers, sales channel, product size etc. Social media, user interfaces, word of mouth, customer driven innovation, location based services, smart phones, NFC, and self checkouts are now part of the incumbents’ core strategies. This new area also includes retail categories for which online retail had the greatest influ- enceinthepastdecade.Musicretailisacategoryinwhichmostinvestorswouldavoidput- tingtheirmoney.TheheadofUniversalMusicrecentlygaveaspeechaboutthedepressing times: about cutting staff and losing revenue during the past ten years. In October 2008, however, Spotify launched their first payment solution to their music streaming service. This year 55% of sales by Universal Music are expected to come from digital channels, 80% of which comes from Spotify alone. In less than three years a whole new distribution method and customer is projected to account for 50% of revenue. Sony has now launched Music Unlimited in many countries; it competes with Spotify and offers a majority of all music available today. In the US, there are many services for streaming video as well. Lesson learned: change will come, but if embraced, it may become a rather attractive fu- ture. Or as Paco Underhill put it in the Trendlab book of 2008: “I think the concept of convergence and the cross between the online world, the mobile world and the bricks and mortar world are going to be very, very, very much a part of our future. Consequently, just as we engineer cost out of the supply chain, we’re also going to be engineering cost out of the distribution network. That means stores are going to get smaller rather than bigger. We’ll see a very radical shift in terms of what our shopping fu- ture is. Stores will change more over the next twelve years than they have over the past fifty years.”
  • 32. DIGISHIFT 2020 32 This report focuses on digitization’s impact on retail.The context within which this impact plays a role is of course greater. Some of the fundamental changes in society and in the marketplace in general establish a context within which digitization is a crucial part and for which it has consequences.The macroeconomic drivers are normally rather stable and have remained constant for a long time. At this point, we have to acknowledge that few in- dividuals, including us, feel certain about this. Society’s current main drivers may be some- whatdifferentthanthoseofthepast40years.Thefollowingsectionoffersafewthoughts on the fundamentals in society of the coming decade. Financial burden Europe’sfinancialdifficultieswillcontinuetodrivedevelopmentsintheretailsectorandin society as a whole. One banker, who is frequently quoted in the Nordic countries, recently claimed that the positive scenario was that a few countries wrote off some of their debt and that many banks failed, possibly including his own. Whether or not this actually happens, we may certainly conclude that the debt of many Western countries will either take long to pay off or be written off in a shorter time with a greater loss to banks and pension assets and a likely crisis as a result. Paying back the debt at 2% of GDP annually will take long: 45 years, in cases in which the debt ratio is 90% of GDP. Luckily, this applies only if the GDP remains flat. At a moderate growth rate of 2%, it may take only 30 years. In addition, all debt might not need to be paid to be under control, which may reduce the number to 15 years. In any case, losses in pensions in the form of low returns and high inflation or write downs will be difficult to avoid. In addition, the demographic situation makes the situation worse. Pensions will be either smaller, later or both. Many people are now expecting ”turbulent teens”: a decade of uncertainty and turbulence. Uncertainty and questioning of institutions As a result of the uncertainty regarding the economic environment, key megatrends like post-modern values, globalization, multiple choice, and distributed power are less certain. Analyzing the surrounding world requires an open mindset.To some extent, this applies to society as well. We tend to question things like never before in the last 50 years including central banks, capitalism, democracy (at least in some countries), human rights (in the UK after the riots), EU, journalism, artists. In reality, most of society’s institutions are ques- tioned, but unlike the 1970s there are few demonstrations.While today, people know that something has gone wrong, they don’t know what they want instead. We have things to demonstrate against but don’t know what to demonstrate for. Drivers in society
  • 33. 33report from steen & strøm trendlab Cycles coming back Much of the development may be understood in the context of cycles combined with trends. Some key developments in society are now changing. The report, Allt går igen – och ändå inte (History Repeats Itself – But not quite), provides an interesting model. It was partially inspired by Howe & Strauss who described the values of generations in four different phases. According to the model, we live in a cyclical world in which each generation fulfills its mis- sion to change the world in the best direction according to the values of the current period of time.What is considered best, however, varies considerably. Each era leaves an imprint on the following generation. Its birth year and most common names are located in the innermost circle, surrounded by society in general. The belief in the future by the long economic spring (right side of the figure) influence self-confident moralidealists(Prophets)whostronglywanttochangesociety,teardownrigidinstitutions andsavetheworld. Theiractionsinfluencethefollowingperiod.TheintegratingDiplomats who control society are caught up; the project of building the society is brought to comple- tion which involves expanding responsibilities. For example, the modern welfare state was The perfection quite diplomats constructive pragmatics Cynical culture Cynical nomades The re-take Autumn Short-term The Entrepeneur The Marked Buildup Action Winter Practical culture CHANGE The strong leader 1945 2020 2005 1985 1965 Long-term Distributed Power Strong individual “Anything goes” Power concentration Strong society Strong opinions The EngineerSpring Summer The Social Worker Passionate culture The building of society confident prophets we are here
  • 34. DIGISHIFT 2020 34 built in Scandinavia during this period in time. Meanwhile, the economic growth stagnates. Inflation rises, and the economic times worsen. A new, less protected, generation of root- less Nomads is born into a passionate culture of laissez-faire, in which the importance of the family as a societal institution is reduced. The cynicism of the Nomads influences not only the youth culture, but society at large, when the generation of Pragmatics is born. Economic growth has stagnated and the capi- tal, which has been accumulated during the long period of growth, needs financial returns. The price of real estate, art and other areas of financial speculation increases. Hopes of a new economy attract capital to the next wave of technology which has already begun, but does not yet have sufficient power to support society, which is confirmed by the com- pletion of deregulation. The deregulation of markets, sale of government monopolies, free trade and new financial instruments provide new opportunities for large returns. The searchforthenewproducesnewheroes:theentrepreneurandthespeculator.Newheroes areborn.Withintheframeworkforthenextwave,companiesgrowfromnothingtostarsat the stock exchange. Examples from the 1920s include companies such as GM which made purchases throughout Europe and Australia after it was bailed out after the automobile crisis of the 1920s. Companies such as Microsoft, Intel and Nokia are additional examples from the 1990s. AgenerationofconstructivePragmaticsgrowsupduringthisperiod.Theyknowthatnoth- ing is free; individuals can become anything they want as long as they want to and work hard. Nothing, however, is free. Unlike the Prophets, they know that the individual’s peace of mind is not the most important issue facing society, but the world around them. While there are challenges, the innovations that are created during summer and fall and which will generate the next wave, require support in the form of long-term investments with un- certain returns. Long-term rules are required to encourage private investment. Von Rosén’s attempt to build a privately financed network of railroads came to an abrupt endinthebeginningofthe1850safterBritishrailroadspeculatorswithdrewasaresultof thefinancialcrisis.Apublicrailroadfinancedbythestatewasthesolution.Theautomotive industry required the same government assistance to succeed in the form of investments in infrastructure. Getting from fall to a new spring thus requires an effort which removes old, obstructive structures while new ones have to be built. Winter thus becomes a period of anxiety and strong leaders; political radicalism and simple solutions. During this period, new visions are born, a new consensus is founded, and the new heroes are the strong leaders who are to bring the people from the darkness into the light. Longing for structure We are now in a phase which longs for strong opinions and leaders. Young people are more likely to demand strong leaders who do not care about elections surveys say. We want an authority who can provide structure when our environment is less transparent and chang-
  • 35. 35report from steen & strøm trendlab es too rapidly. Somebody somewhere will hold a speech, which in the case of Sweden, corresponds to Per Albin’sWelfare state speech of 1928 or Roosevelt’s New Deal of 1932. Until we know the content of the speech – and we might not know until afterwards- we remain in a turbulent and probing time during which we question everything. TheTrendLab book,The Future of Shopping Places, discussed the emerging neo tradition- alism among the youth, which may now be confirmed by more data. Studies like the World Values Survey, Kairos Future’s Drömsamhället and other studies and examples confirm these tendencies. In the Western world, individuals born after 1980 – 1985 depending on the researcher and the country are more conservative than previous generations. The tendency of an increasing number of post-modern values has come to an end or has been declining for some time. The longing for structure may also be found in the marketplace. Choice is a less sought after value, as the importance of tradition and authenticity grows. We used to say that we want to decide when to choose, and when not to. While this ambition still holds we opt not to choose in a growing number of situations. We ask for other people’s opinion and advice. While we don’t trust the authorities, we want more authorities than only ourselves. The most successful mobile phone company Nokia launched almost 60 models of phones in 2008. Giving consumers options was a key success factor. Today, Apple has become the highest valued company by launching one model per year. We give away credit card num- Generation x & y 1965-84 own products Use products & service saving for security generation order/millenials 1985-04 veterans 1925-44 boomers & jones 1945-64 borrowing for opportunity An example of generations’ views of money and consumption, which follow a cycle rath- er then a trend, only. From the Kairos future Club reports ”After the credit party 2006 and a report on Money and value 2011.
  • 36. DIGISHIFT 2020 36 bers and join the Apple eco-system because we prefer order and simplicity over choice. Theproliferationoffood-bagswouldprobablynothavebeenpossibleadecadeago.Allow- ing someone else to decide the recipes and ingredients with which we are to cook is only acceptable now that we are overwhelmed with choices, and ask to be freed from making them. Internetwith borders The most open and accessible years may already be behind the Internet. Google is now adapting their searches to previous ones and Amazon is targeting its offers to the needs of the individual.The same information is not given to everyone; we are instead actively directed to groups to which individuals may feel they belong and which confirm their previous standpoints and preferences.The open Internet is now increasingly locked into systems and structures like Apple, which for better and worse, also try to create bounda- ries to other systems. Even the entire Internet may not be as accessible to everyone in the future. In America a flat rate has been a driver behind smart phone sales.Telecom operators now seem to re- duce the focus on this payment model.The emergence of streaming video has increased traffic on the Internet substantially and capacity may be a limit. Operators are now asking TV-channels which create a lot of traffic to pay.They want the content providers to pay for providing information through their channels.While the Internet and the new technol- ogy will be more dominant parts of the future, they may not be only focus on openness and equality. Technologywith a humantouch In the book Megatrends from 1982, John Naisbitt explained the HighTech HighTouch symbiosis. As technology becomes more common in society people ask for more human touches.Technology is now moving into an era of expanding human development. Instead of technical focus there is more focus on human interaction with technology. Individuals are becoming more tech-savvy and tolerant.
  • 37. 37report from steen & strøm trendlab Shiftinthe Environment While many of the developments described previously apply to theWestern countries they may not be true for developing countries. On a global level the economic situation is moving in a positive direction for most people.The accelerating speed of change creates a drive to control the “small world” of friends, family and community as well.The search for authority and structure may, however, not be the same.The demands of the grow- ing economies known as BRIC, N11 etc. will have a great impact on society and global consumption.The use or resources and environmental impact of our way of living today will be constrained.This is another reason for believing that choice is going to be less of a driver in society. Conclusions • Megatrends can no longer be taken for granted in society. • Financial pressure will remain substantial in the Western world for the coming decade. • The increased turbulence in society leaves people searching more for authenticity, authorities and structure. • While the old people of the coming decade are the youngest since ever, the young are the oldest since many decades. • While information technology will be more dominant in society as a whole, consum- ers will also be asking for more high touch • Distrust in society’s dominating institutions leaves room for new ones to take their place. The formerly good may not be good and the formerly bad may not be bad. Business enterprises may be taking social responsibility to a new level. • The demand from the developing countries will put pressure on global resource use for the coming decades
  • 38. ”I can’t think of anything less trendy, than being trendy.” Focus group participant in Kairos Future youth study
  • 39. trends chapter 3 and Phenomena The Trends and the Phenomena prioritized shaping the digitization of Retail.
  • 40. In this chapter we describe a number of external changes within the area of digitization that will mean something for retail trade and shopping places. Our international researchers have identified trends and phenomena in Scandinavia as well as in the rest of the world in order to pick up signals that could mean something for the future. The material was then structured by the analyst group and presented to a bigger group of key persons at a Future Hearing Day in September. Here the material was prioritized and narrowed down to the 19 trends and phenomena in the list below. Each of these changes is full of interesting and important challenges and opportunities for the retail sector in the coming decade. Our suggestion is that you and your colleagues goes through the presentation trend by trend and after each trend you ask your self what it could mean in terms of possibilities and threats to your business. We can guarantee that you will have a rewarding discussion. And perhaps you want to share your findings in discussions with Steen & Strøm.
  • 41. trends ”When you do this for five years in a row, its no longer luck. It’s a trend line.” Hugh Grant
  • 42. 1. VALUE CHAIN BLUR 2. Superlocal 3. ALTERNATIVE PAYMENTS 4. MOBILITY COMMERCE 5. NETIZEN CONSUMERS
  • 43. 6.TEMPORARITY 7. ME-TAILING CUSTOMIZATION 8. PURE PLAYTO BRICKS’N CLICK 9. DELIVERY REINVENTED 10. SOCIAL COMMERCE
  • 44. DIGISHIFT 2020 44 VALUE CHAIN BLUR The first shift in the TrendLab book of 2008 was the powershift. The power had shifted fromstrongmanufacturerbrandstodistributors.Theproductabundancewasnotmatched by a similar abundance of distribution alternatives. Consumers tended to become more and more unplanned and more influenced by the retail environment in their selection of goods and services. At that point there was signs, however, that the power shift was con- tinuing downstream in the value chain all the way to the consumers. The digitization cer- tainly makes this shift more and more relevant.The distribution alternatives are becoming plentifold and the power in the value chain more unclear.There is a value chain blur. Like the head of Nokia retail Cliff Crosby was saying : Now this is also happening. Some retail chains are sending their suppliers invoices to com- pensate for the rebates they are giving in-store to these consumers. Empowered with new technology and alternative distribution, negotiations are coming back to the western world. An early example of the value chain blur was the flagship stores. The big brands were starting flagship stores to get hold of some of the power which had been transferred to distribution. A retail presence also gave control over how the brand was presented and a possibilitytoshowtheentirerange.WiththeInternetthiscompetitionwiththecustomers is becoming even more appealing, but sometimes also more questioned. Now even the big- gest brands are starting to compete on this arena. Nestlé are with nespresso cafées and Internet distribution moving strongly in to retail. Unilever are selling direct to consumer in more and more developing markets partly under the name Shakti. In some developed countries Dove products are sold direct to consumers. supplier distributor consumer “You’ll have really empowered shoppers coming into your store in the future. .... As a retail- er, you’d better be up on what’s happening here because you‘re going to have to negotiate in the retail space.”
  • 45. 45report from steen & strøm trendlab 1 When brands are selling direct to consumers it has been said that warehouses and middle- men are going to be cut out of the value chain. On the other hand there are also agents and wholesalers who can become retailers on their own. In some markets there are plans to go directly to consumers by wholesalers. Some Internet retailers are also behaving a little bit likewholesalerswithamainstorageunitwherepeoplecanpickupitemsiftheyliketosave some Euros relative to home delivery. Mediacompanieswhichusedtowriteaboutthingsarenowengagedinsellingthemaswell. “You can buy everything on the front page” is now the message. Interior design magazine Elle has partnered with the interior design brand Linum to sell an Elle-branded collection in 11countries.AlsoshoppingcenterslikeWestfieldarebecomingretailersand sellingtheir retailers and products to consumers. All in all who is the customer and who is the competitor may not be very clear anymore. More and more businesses seem to be heading towards the consumers.
  • 46. DIGISHIFT 2020 46 Superlocal New technology like positioning and gyros makes peoples location and attention possible to track and adapt to. Consumers are increasingly well informed, making them experts and curators of products and services that they use.Their knowledge and feedback is valuable information for both stores and other consumers. As more people carry around online ac- cess on mobile devices, they demand the right information at the right time. In return they are willing to contribute with their expertise on a specific product or service. Making the information as local as possible is one way of providing “the right information”. An emerging trend is location-based services. By checking in and sharing their location on amobileapp,customersarerewardedorgivenlocation-basedinformationaboutproducts and services. Local companies join to reach potential customers in an untraditional way. Foursquare is an app through which users check in to get discounts in stores. As soon as they check in, their location is posted on Facebook for friends to see, and perhaps be temped to visit the same store or restaurant. According to its CEO, the future of Four- square is to focus on what the consumers are going to do in the near future, instead of what they are doing. Using collected data on consumer’s real-time movements, Four- square’s Explore tab recommends consumers where to go next. By asking what they are looking for - be it a restaurant, movie theatre or store – the app will help the consumer find the closest alternative. Even brands are benefitting from the real-time customer access that mobile devices pro- vide. Using location-based services they can interact with consumers when they are close to or inside a store. GAP in Japan sends digital coupons to customers that are nearby. It is an effective way for marketers and retailers to reach the consumer at the right time, andinreturncustomersreceivegreatdealsandasenseofengagementfromtheirfavorite brands. Another example of location-based services is the app Checkpoint. Its users are rewarded with points for checking in at a store, scanning product barcodes, or recommending some- thingonFacebookorTwitter.Thepointscanbeexchangedforgiftcards,Facebookcredits, or gadgets. One way for stores to get closer to consumers is to be located where consumers are. Big- boxretailers,suchasBestBuy,PetSmart andToys ‘R’ Ushavetraditionallybeeninterested in power and community centers. To get closer to the consumer, and benefit from the mall traffic, they are now seeking spaces enclosed to malls. Wal-Mart has taken an initiative to open smaller “neighborhood market” stores, as part of their strategy to enter the urban market and be closer to the consumer.The Chinese giant and home appliances brand Haier has taken the store to its customers by touring around the US with a truck showcasing products and their functionalities.
  • 47. 2 People demand the right information at the right time. In return they are willing to contribute with their expertise on a specific product or service.
  • 48. DIGISHIFT 2020 48 ALTERNATIVE PAYMENts One emerging trend is the increasing number of payment alternatives that are available to consumers. Advances in mobile technologies, the ubiquity of smartphones, digitization of society and consumers’ search for convenience are the driving forces behind this trend. To some extent this is a trend of increased digitization where new technologies enable NFC or near field communication payments but it also involves new types of money. Vir- tual money has emerged in the digital world. A bookstore within eBay ”Qugelmatic” is ac- cepting Bitcoins (a virtual currency created by a company) as a form of payment. Another well-known online player, Facebook, allows users to pay for their virtual products and ser- vices using their own virtual currency or Facebook credits. The old-school loyalty points likeEurobonusarebeingchallengedbymoreandmoredigitalalternatives.ForScandinavi- ans may find it strange that people would want to use other currencies than those of their central banks. However, the trust in central banks is very low in countries that have been hit by the crisis. The impact of PayPal and other micropayment solutions may also be misinterpreted in Scandinavian countries. In Denmark, Norway and Sweden these payments represent 3%, 10% and 4% respectively of total e-commerce payments. In the UK, Spain, and Germany, thesefiguresare23%,22%and26%1 .Theemergenceofmicropaymentsolutionsalsoal- lows new business models to come up. Companies creating games and other services now pop-up out of nowhere and make a lot of money. The Finnish company that started Angry bird, now valued in billions, and the person behind Wordfeud (the online copy of Scrabble) are two examples. This creates a new business landscape where new companies and ser- vices are created –which were not possible before micropayments, and certainly not prior to digitization. The availability of alternative payment options is not exclusive to the digital world but it can also be seen on popular high street stores. Many retailers have implemented pay- ment terminals that transform smartphones into mobile wallets. In their effort to reduce in-store queues and to speed up the check-out process, retailers are accepting mobile al- ternatives. Starbucks has installed approximatelly 6,800 mobile payment systems at its stores across the US. Customers only need to download the Starbucks mobile app and hold the smartphone against the barcode scanner to complete their transactions. Similar- ly,McDonald´sinJapanhasinstalledcontactlessmobilewalletterminalsinapproximately 400 stores.
  • 49. 49report from steen & strøm trendlab 3 Banks are also jumping onto the trend and are developing services that simplify consum- ers’ shopping process. New NFC-solutions are arriving at stores. Fulfilling consumers’ search for convenience and secure payment options, The Danske Bank has launched a service that allows its customers to pay their bills by taking a picture. Insteadofcompro- misingcreditcardinformationwhenpayingwiththeirsmartphones,itscustomerscanfeel safe when using their mobile banking option. Another company providing payments via pictures is an online American start-up company called Jumio. The company has released ”Netswipe” which is a technology claiming to turn a webcam into a secure credit card reader. Users can make purchases by holding their credit cards in front of a webcam which uses video streaming technology to verify account details. Alternative payments may also include subscriptions such as Amazon´s delivery sevice called ”Subscribe & Save”, available in the US, UK and Germany. The service allows users to streamline their shopping baskets. Food and cleaning supplies that are always a part of the shopping basket may be automatically re-ordered and delivered. Targeting busy customersinsearchforconvenience,Amazonhasdevelopeddiffferentsubscriptionpack- ages allowing customers to sign up for monthly, bi-monthly, or quarterly deliveries. 1 DIBS e-handelsindex 2010 ”26% of German online payments are made with micropayments” DIBS
  • 50. DIGISHIFT 2020 50 MOBILITY COMMERce In these changing times many players try to define the world, but it is also an ever chang- ing maketplace. Forrester, Verdict, Posten Norden all define the e-commerce market dif- ferently. IMRG Capgemini deliberately states that it includes sales completed in-store as long as they are made using any interactive channel. It is important to stress that while m-commerce is a trend in which the device (usually a smartphone) is crucial, a key aspect is that the purchase is made while on-the-go from any location. Mobility commerce might be more common from smaller laptops, tablets or bigger phones. The trend might of course be called something different in a few years. We may end up talking about s-commerce as one type of retailing just like the oldTVchanged its name to Flat-TV. The combination of improvements in near-field-communication technologies and mobile tags together with the ubiquity of mobile apps and smartphones are driving the mobile commerce trend. In addition, increased consumer mobility is prompting companies to de- velop services that offer consumers the possibility of buying products and services while on-the-go. The rising number of purchases done via mobile devices during the past years seem to indicate that consumers are finally becoming more comfortable using their smartphones to make transactions. In the US, Pay Pal has experienced a rapid growth in the volume of mobile payments between 2008 and 2010. The company reported a volume of $750 million in 2010 up from $25 million in 2008 and expects to reach a volume of $7.5 bil- lion by 2013. PayPal´s numbers are a testimony that mobile devices and applications are becoming an important sales channel. In fact, buying products and services via mobile applications has been called app-tailing. The following are examples of recently launched mobileapplicationthatallowconsumerstotransformtheirmobiledevicesintoalternative retail channels: Since March 2011, The Wall Street Journal is selling daily digital issues through its up- dated iPad app. Until then, digital versions were only available to subscribers and daily issues were not available for purchase. The mobile app ”Pago” is a new app launched in August 2011 in California that allows users to shop goods directly from their smart- phones. Regardless of their location, users can remotely (via the app) search for, make orders and pay for products at over 50 participant stores. The mobility commerce trend M-commerce is a stupid name - are we going to call it TV-commerce, iPad-commerce too? Expert inteview
  • 51. 51report from steen & strøm trendlab 4 is not exclusive to buyers, however, as mobile solutions such as ”Square” and ”Intuit” al- low merchants to do their business while on the go. By installing the solutions and their correspondingappsintheirsmartphones,merchantscanprocesspaymentsanywhereand anytime Retail chains are becoming involved in the mobility commerce trend by launching mo- bile applications that enable customers to search for information and shop directly from their mobile devices. Best Buy in Canada has launched a mobile app that empowers cus- tomers beyond scanning barcodes to get additional product information while in-stores. The app allows Best Buy customers to check for product inventory at a particular store and place orders to be picked up at any location. Since July 2011, online retailer eBay has decided to capitalize on the trend by launching its ”eBay Fashion” and ”Fashion Vault” apps. The apps allow users to have access to designer clothes at low prices while allowing brands to reach consumers directly. Besides buying via mobile apps, consumers are also making purchases by scanning tags or barcodes or by taking pictures. Thanks to embedded NFC and barcode technologies, smartphones are being transformed into mobile wallets enabling users to make purchases by a single tap. In South Korea, the national telecommunications company SK opened a high-tech retail outlet in Seoul where consumers can buy almost every product via their smartphones. Barcodes placed on product’s price tags are scanned every time a consum- ers wants to place an order. To encourage consumers to use their smartphones, stores provide a 10% to 40% discount and offer home delivery. IOn the European market, British consumers have also been able to use their smartphones aswalletssinceMay2011.”QuickTap”,UK’sfirstcontactlessmobilepaymentsservicehas been implemented in a total of 50,000 stores in a collaborative effort between Orange and Barclaycard.ac Popular chains allowing Briton to use their mobile wallets are: Subway, McDonalds and Wilkinsons. One major event in the mobile commerce field is the recently launch of Googles own version of the mobile wallet in the US. Since September 2011, consumers in New york and San Francisco are able to pay with their Google Nexus S ena- bled devices. The only requirements are to load a credit card onto the wallet app and to have a Sprint wireless account. The entrance of a major Internet player into the mobile commerce market highlights the importance of this trend. 1 Internet Retailer May 20, 2011
  • 52. DIGISHIFT 2020 52 THE COMING ERA OF THE NETIZEN CONSUMER In the 1960’s, Marshall McLuhan, a well-known media theorist, presented new insights into the way in which cultures were formed and reformed by media techniques that were developed and introduced into society. He coined the well-known phrase: “The medium is the message”. By this he meant that a medium affects the society in which it plays a role not by the content delivered over the medium but by the characteristics of the medium itself. When the electronic screens on television sets and later on the computers entered the society, Marshall McLuhan identified an important shift from “light on” media to “light through” media. He believed that the TV made consumers that the world came to them. The world became a global village within our reach. Today we experience that the quote in the beginning of this text is about to become real. Social media, smartphones, new mixed reality techniques, 3D- screens, holographic projections etc. make us experience a shift which allows us to interact with the world and media in new ways. We slowly move from a culture characterized by “light through” media to a culture where people partly or totally “live through” media. Media and the web in particular, are becoming extensions of our bod- ies and minds in a constant digital flow of information. Among young Europeans, 52% say that they feel disconnected from the world without their mobile phones. 91 % of all mobile users always have their mobile phone within reach regardless of whether they are awake or asleep. Eight out of ten use Google to find answers to questions about health and medicine. Half of all Swedes are members in social networks. For young people the big leap was between 2005 och 2007. For somewhat older individuals, the interest in taking part in social net- works has increased over the last years. The increase was dramatic among individuals above 45 years. The share of individuals who visited social networks last year has more than doubled. 1.5 million individuals comment on what others have written online and just as many update their status. A half million Swedes upload pictures online every week .The pattern is similar in all of Scandinavia. 1. Olle Findahl, Svenskarna och Internet 2010 “In this electronic age we see ourselves being translated more and more into the form of information, moving toward the technological extension of consciousness.” Marshall McLuhan DIGISHIFT 2020
  • 53. 53report from steen & strøm trendlab The share of internet users in different age groups, Sweden 5 The graph is from the report: Svenskarna och Internet 2010 As the statistics and the graph above show, the digital maturity among the Scandinavian population has grown during the last ten years.We are gradually becoming Netizens.While the psychographic definition of Netizens may seem very wide, it is interesting to consider it as a new approach to defining a group of people. This approach leaves room to include people of all ages who are digitally inclined. People born between 1982 and 1996 have been immersed in the Internet from a very early age. They have grown up with the network culture and global online games. People bornbetween1997and2006werebornintothedigitalage,theworldofcomputergames and seamless communication 24/7. In the EU, 12-17 year-olds spend 11.7 hours a week on computer games and 9.1 hours a week surfing online. In Sweden, 99 % of 15 – 24 year olds play computer games. These groups are the first true native Netizen consumers and stay connected online most of the time, mastering a mix of real world and virtual world data through their digital de- vices. From a commercial perspective, the Netizens have the ability and the interest to get involved in the commercial process and will change the logic of product development, marketing and sales. Netizens not only see themselves as individual consumers, but also sometimes as navigators, media producers, researchers, resellers or marketers repre- senting their intelligent social swarm.When interested in a brand or a product they expect to get invited to the brand as co-creative partners. They demand creative space and when it comes to marketing they are searching for a new type of brand democracy, which means a new equal balance between the brand and the consumer. 2000 2005 2010 50 % 0% 100 % 35-44 år 45-54 år 35-44 år 19-24 år 55-64 år 65-74 år +75 år
  • 54. DIGISHIFT 2020 54 “If I tell my Facebook friends about your brand it’s not because I like your brand, but rather because I like my Friends”. So in fact it is a new power relationship where the consumers are realizing the commercial value of spreading the word or taking part in the buzz. Status among the Netizens is more about stories than products. Netizens who supply their swarm with the most interesting information win. It is a trade of stories in which I can tell my story including the brand if the brand will tell mine. The Netizens are developing a netnocentric worldview which means that their digital iden- tity becomes more important for whom they are but that a majority of the activities online are used for a constant search for ways to create togetherness, real meaning and experi- ences offline. The economy of presence is very important and The Netizens “use online to facilitate offline interaction. Their preferred method of communication is face-to-face… They will take mobile with them all the time but their goal is face time with friends…”1 . This is a significant insight for developers of physical meetings and shopping places to un- derstand. It shows how important it is to create social spaces and to develop social shop- ping both online and IRL (In Real Life). “Shops are meeting places. It becomes more important to help people choose the right place to visit and to facilitate friends to come to the same store at the same time and to create togetherness – a uniqe shopping experience together. The meeting probably starts online where they discuss lifestyles and the look of the products and ends in the shop, where they can test and try the real things.” MartinTörnkvist, Media Evolution 1. Graham Brown et al, Youth Marketing Handbook DIGISHIFT 2020
  • 55. “If I tell my Facebook friends about your brand it’s not because I like your brand, but rather because I like my Friends” Mike Arauz, Advertising Lab
  • 56. DIGISHIFT 2020 56 TEMPORARITY In search for experiences, consumers are drawn to what is new and cool. The novelty of new concepts no longer lasts for long, and an increased competition for attention forces retailers to constantly change in order to stand out. Companies like GAP, Zara and H&M have recognized that the turnover of the inventory is strongly correlated with the number of visits per consumer of the inventory is strongly correlated with the number of visits per consumer. A store which changes the inventory 20 times a year gets the customers in to thestore20timesayear.Ase-tailersenterthemarketplaceofferagreaterchallenge.One way to stick out is to offer a concept, product or service for a limited period of time. Vari- oustemporaryofferscreatebuzz,attractcustomers,andprovidetheexcitingexperiences they are looking for. A growing number of brands use pop-up stores to follow consumer crowdsThe in-creased mobility of people, combined with their lack of time, requires stores to be where consum- ers are. All types of retailers, from clothing brands and bookstores to shoe manufacturers, want to be part of the pop-up mania. With a fresh feel and surprise aspect, pop-up stores have proved appealing to consumers. Bigger, better and more extreme pop-up stores come at the order of the day. In May 2011, Tommy Hilfiger opened its preppy World Pop-up store, which was designed to look like an authentic East Coast beach cabin. Planning to travel across the world, the store appeals to the preppy and style-conscious consumer. In London, shipping containers are used to create a pop-up mall. Made of no less than 60 shipping containers, Boxpark opened summer 2011 and will be “invitation only”. Hand-selected small and independent brands will be open for sale. Swedish appliance manufacturer, Electrolux, has launched a pop-up restaurant in collabo- rationwithItalianarchitectsParkAssociati.TheCubewilltravelacrossEuropethroughout 2011, staying three months at each location. Thepop-uptrendhasalsoshoweduponline.InAugust2010,thebrandRachelRoylaunched a pop-up store on Facebook. During three days, fans were given early access to Roy’s new jewelry line.The brand’s fan base had boosted by 100% by the end of the campaign. “Flash sales” is another form of temporary offer on the rise. Groupon was among the first companies to provide daily deals online. Once a day a “group coupon” from a local store or restaurant is sent to Groupon followers by email. If enough people sign up, the deal is on. One Kings Lane is a site with good deals on furniture, interior design, clothes etc., but only for a very limited period of time. The site Jasmere handpicks lesser-known specialty retailers to feature, and offers its visitors exclusive discounts. The more people that buy, the lower the price. DIGISHIFT 2020
  • 57. 57report from steen & strøm trendlab Temporary offers of various kinds create buzz, attract customers and provide the exciting experiences they are looking for. 6 A marketplace in constant change also leads to temporary pricing in general. Online auc- tions, price comparing sites and flash sales have made consumers aware that prices are not fixed, and new business models keep evolving accordingly. The highly successful retailer Gina Tricot may, however, have taken this a bit to far promis- ing “New fashion every day” on its posters. At some point in time consumers may be over- whelmed and not come at all. report from steen & strøm trendlab
  • 58. DIGISHIFT 2020 58 ME-TAILING CUSTOMIZATION Our time is characterized by more demanding, knowledgeable, and individually oriented consumers. Feeling like experts they no longer want to be passive, accepting products and services for what they are.They want to personalize things, because they can and because it is part of building a personal style. For retailers to attract customers it is essential to make them feel involved, engaged and able to influence. The trend to customize products and services, me-tailing, is part of a socioeconomic change. In their book “The experience economy”, Pine and James talk about the transfor- mation economy as the stage following the experience economy.We can now see that con- sumersseekconsumptionbeyondexperience.Whenbuyingaproductorservicetheywant to develop as a person, they want the purchase to transform them. By allowing consumers to be part of product development, production and even sales, they get to use their own skills as well as develop new ones; they transform themselves. Mackmyra was one of the first to allow customers to be part of the production of whisky. When ordering a bottle, they got to determine storage time and label of the whisky. At the Waterhead Hotel, located in the English Lake District, visitors get to customize their stay. Invariousways,gueststailortheroomtoreflecttheirowntasteandstyle.Choiceofarrival drink, room artwork, fruit plate selection and toiletries are some of the things that make the atmosphere more individual. Blogs and social networks have contributed to a larger acceptance of, and willingness to express yourself and your personal style online. Threadless and Zazzle are two examples of websites that engage consumers to be part of the creation of new products. Within the threadless community, members submit and score T-shirt and sweater designs, that later become available for purchase if popular. Zazzle.com is a website for consumers to give their own personal touch on products such as clothing, office supplies, accessories, gadg- ets etc. One driving force behind customization is of course to individualize products and services; another is to be recognized for creative abilities. Forums, communities and blogs shine light on those creators whose contributions are sold, read or viewed. All to boost their egos, and keep the dream of being recognized alive among the rest. Weather online or in-store, creating a dynamic environment in shopping malls and stores, where consumer can interact, get involved and influence will be crucial to attract people in the future.
  • 59. 59report from steen & strøm trendlab 7 Buying furniture at IKEA, is an example of consumers being part of the produc-tion, since they do the last part of assembling the furniture. On the website bemz.com, consumers can involve in product development. By choosing a new fabric to the slipcover of couches, cushions, armchairs etc., they rejuvenate and personalize old IKEA furniture. Part of the attraction for retailers and manufacturers is also that consumers start doing more of the job. Assembling, transporting, making the transactions on Internet sites for travel agents and financial services firms lower the cost. Sometimes doing more of the job is part of the satisfaction. Sometimes chopping wood, running a Marathon or painting the wall is life satisfaction – or at least sometimes afterwards.
  • 60. DIGISHIFT 2020 60 FROM PURE PLAY TO BRICKS’N CLICK RETAIL The digitization of society, the rise of online sales and consumer expectations to access anything, anytime and anywhere have been driving a trend among retailers whereby they arestartingtosellproductsandservicesovermultiplechannels.Thepastdecadehasbeen the klondyke of players in the periphery. Companies like eBay, Skype, FaceBook and Goog- le have not primarily taken market shares away from big Fortune 500 companies, but have rather created new markets on the periphery. Now the big traditional players are entering the field one by one with ambitious take-overs and establishments. The need to sell products and services across multiple channels (physical and digital) has been recognized by well-known traditional brick and mortar and pure-play retailers. Although the following retailers have different strategies, they are all becoming ”brick and clicks”. Well-known traditional brick and mortar apparel retail chains such as GAP Inc., H&M and Zara began launching their first online shops in 2010 in order to capture a share of the total online sales within their product categories. They recognized the need for a digital sales channel after seeing a decline in their in-store sales and a rise in online sales. In the ”Do-It-Yourself ” product category, retailers of building materials begun selling on- line since the beginning of 2011. Swedish Byggmax and German Bauhaus launched their online stores to serve the internet-savvy consumers in Sweden and other Nordic coun- tries. Lagerhaus isanotherretailchainservingtheNordiccountriesthatdecidedtolaunch an online store althought not until June 2011. The retailer started its digital journey by selling its products over a blog but after noticing consumers positive responses it de- cided to launch its own online store. “Best Buy finds that multichannel customers spend 95 percent more than single-channel shoppers and generate 80 percent more profit margin. Target reports that its multichannel customers spend $1,000 per year, versus $551 per year for its store-only shoppers and $94 for online-only customers. In general, most re- tailersfindthattheirmultichannelcustomersaremoreprofitablethananysingle-channel shoppers, as they are comfortable crossing channels and often end up with larger baskets that tend to be higher-margin.” Anne Zybowski Retail Insights Director at Kantar Retail. Source: ICSC Shopping CentersToday June 2011
  • 61. 61report from steen & strøm trendlab 8 To differentiate from competititors, certain multi-channel retailers offer consumers the chance to order online and pick up the items at the nearest brick and mortar store. ”Click and collect” helps consumers to avoid waiting at home for product deliveries and provides retailers with the opportunity to drive traffic into their physical stores. Retailers such as Best Buy and Nordstrom in the US, Media Market in Spain and Tesco, Asda and Sainsbury in the UK are leveraging on the digital and physical channels to provide customers with click and collect services. Brickandmortarretailersarenotaloneintheirmulti-channeltransformation.Pure-playre- tailers are slowly venturing into the physical arena capitalizing on their brand recognition, low prices and diverse inventories. PowerTools Direct and Figleaves are two pure-play re- tailers that ventured into physical stores in 2010 as a response to consumers’ demand to feel and touch their products. In the US, Power Tools Direct decided to open a traditional brick & mortar store right next to its competitors: Home Depot, Sears and Lowes. Using a consession inside Allder’s Croydon department store, the UK lingerie retailer Figleaves decided to test the market before further expansion. Finally, other pure-play retailers could be soon entering partnerships with brick and mor- tars in order to leverage on each other´s unique capabilities. Internet-based retailer Ama- zon has recently launched a pilot locker system in Seattle in cooperation with 7-eleven. Amazon is allowing customers to pick up packages from Amazon lockers installed at the convenience stores. Customers can select to have their packages dropped off at a nearby locker at a 7-eleven which may be opened via a confirmation barcode received by email. If the service proves to be successful in the US, it might be re-launched in the UK; it might thus be Amazon’s first steps into becoming a multichannel retailer.
  • 62. DIGISHIFT 2020 62 DELIVERY REINVENTED Traditional retail was a merger between consumers and products. Consumers got the products from the retail environment.With mail-ordering the delivery was separated from the purchase location. Today, as the purchasing process is impacted by digitization, deliv- ery has become a crucial part for further innovation. As multichannel retailing evolves, a variety of customer-convenient delivery options develop. Delivery is being reinvented. Online order + home delivery has been around for a while. Increasing competition, howev- er, has forced retailers to lower shipping prices or even ship products for free. Fresh direct is an online-only supermarket, with free home delivery. As online shopping becomes user friendlier, detailed purchases such as groceries, can be made online. Trunk Club, an online retailer for men’s clothing, accepts orders online or over the phone. The clothes are deliv- ered for free to wherever it may seem convenient: at the office, at home, at a girlfriend’s place etc. If you don’t like the products you send them back with the trunk. In our Delphi study, some experts claimed that the solution to the touch and feel part of retail was al- ready in place as customers can return the products for free; they can try products and send them back if they don’t like them. The American chain J.Crew is a successful multichannel retailer. Online purchases are de- livered at home and can be returned in-store, to avoid extra shipping costs. They also of- fer in-store purchases for home delivery. Department stores like Saks Fifth Avenue and Bloomingdales collaborate with UBS or FedEx to offer home delivery for customers that don’t want to carry their shopping bags home. Whole Foods, a chain of food stores, offers home delivery of in-store purchased groceries for a very low price. Homedeliveryisinconvenientforsomecustomers,assomeonehastobeathomeataspe- cific time. Order online + pick up in-store has proven successful in the UK. Retailers such as Tesco, Asda, and Sainsbury offer so-called collection services to their customers. An onlineorderisputtogetherbyin-storestaff,tobereadyforcustomerpick-upatanagreed upon time. The Pago app recently launched in California, allows users browse, order and pay for goods and services before collecting them in local stores. Currently, 50 companies have partnered and users can locate dry cleaners, flower shops, coffee shops and restau- rants. The practice of car manufacturers to use the same logistic providers to create dis- tribution efficiencies has now spread into retail. The last mile problem is increasingly the focus of logistics. In the coming decade, we will likely see many more alternative solutions to the distribution part of the retail value chain. Home delivery of food bags is successful in Sweden and its growing in Denmark. Getting five dishes for four people to the door is now comme il faut among Swedish urban parents. While compromising with choice, parents get recipes and food delivered to their door. If a large share of the population is willing to give up choosing their meals, food distribution will certainly be cheaper overall. DIGISHIFT 2020
  • 63. Some experts claimed that solving the touch and feel part of online retail was already handled – since you can return the products for free 9
  • 64. DIGISHIFT 2020 64 SOCIAL COMMERCE Today’sconsumersarewellinformedandhaveknowledgeabouttheproductsandservices they purchase. Retailers, brands and store merchants are no longer the experts they ask for advice. Instead, they turn to friends and people sharing the same taste and interest, to get their point of view on the product they are thinking about buying. The problem is that potential consumers are not always with their friends when shopping, in-store or online. Social networks sites are one place where friends are always together. As ecommerce evolves, retailers are tapping into the opportunities of selling their products and services directly on social networks. Companies are present where consumers and their friends are. Social commerce lets consumers browse, recommend, get opinions, and buy without leaving the social network website. With its 600 million users, Facebook is an important “social market”. Most companies al- ready have a Facebook page that fans can follow, like and share with friends. However, the developmentindicatesFacebookwillbemuchmorethananetworkconnectingpeopleand companies. F-commerce has become the name for ecommerce on Facebook. Besides the benefit of having many consumers at the same place, there are two other factors behind this development. By introducing its own currency, Facebook credits, the Facebook team clearly shows where they want to take the platform. Secondly, tech-com- panies have started to develop social commerce software and applications supporting F-commerce. By using applications like Payvment, companies can easily set up small to medium sized stores. The free software allows retailers to create a Facebook storefront that accepts payments via credit cards or PayPal. Forbiggercompanies,itisimportanttoteamupwithane-retailsoftwareproviderthatcan bring the business to social network sites. About a year ago, retailer Ulla Popken decided to team up with MarketLive when building a better e-commerce site. Today, consumers can make purchases directly on the retailer’s Facebook page, by using MarketLive’s Social Store software. By collaborating with software companies, Facebook is introducing fol- lowers to pressing the “buy button” instead of the “like button”. Service retailers are also grasping the opportunities of F-commerce. Mark Pincus has be- come one of the seven “Facebook billionaires” thanks to his Zynga, the company behind Facebook games like FarmVille, CityVille and ZyngaPoker. Attractive to people’s search for play and fun, as well as a way to relax, these games have become amazingly popular. So popular, users are willing to spend money inside the virtual world of the games. Another example is Delta Airlines, that in September 2010 launched a ticket window on its Facebook page, allowing visitors to buy tickets without leaving the website. Second Porch is a Facebook service app letting users list and rent vacation homes. After the 30- day free trial it costs $10/month to be part of the community.
  • 65. 65report from steen & strøm trendlab 10 However, social commerce is not limited to storefronts on Facebook. Several brands are linking their websites to social media in order to attract more visitors. Levi’s has incorpo- ratedaFriend Storeontheirwebsite,enablingvisitorstopostproductsontheirFacebook profiletogetfriends’feedbackbeforebuyingsomething.TheEuropeanretailerElloshasa FriendStoreintegratedwithFacebook,wherecustomersshareideasandreviewsofprod- ucts and services. These are both examples of companies understanding the importance of remaining social when entering the social network marketplace. Before converting social into sales, they focus on interacting with consumers and watching them interacting with each other. Yet another aspect of social commerce is the introduction of social media in physical stores. Retailers have realized the consumer value of asking friends online what they think about the clothes they are trying on in the fitting room. In Spain, Diesel has linked in-store cameras to Facebook, so that customers can post photos of themselves for instant feed- back from Facebook friends. Macy’s Magic Fitting Rooms toured from one department store to another, allowing customers to virtually try on clothes via an augmented reality mirror and share their outfit via Facebook, text messaging or email. ”Go try it on” is an online community for sharing and getting feedback on what members are wearing at a par- ticular time. Its mobile app allows members to get feedback on outfits when shopping.
  • 66. These are small or emerging patterns of observations. We believe they have fundamentaldriversandwillbemoreimportantinthefuturemarketplace.Their direction, timing and impact is more uncertain. We have chosen to highlight some of the most interesting phenomena and to speculate about their potential for the future, and we look forward to follow the developments of them in to the future.
  • 68. 1. GAMIFICATION OF LIFE 2. VIRTUAL SHOPPING PLACES 3. reinforced REALITY 4.TAGOMANIA
  • 69. 5. FROM COMMERCETO RECOMMERCE 6. NEWWINDOWSHOPPING 7. IN-STORETECH FRENZY 8. COLLABORATIVE CONSUMPTION 9.the coming of big data
  • 70. DIGISHIFT 2020 70 gamification of life Gamification was one of the trends where the experts in the Delphi study expected early breakthrouginthemarket.Withinthreetofiveyearsthiswillcertainlybemoreintertwined with retail. Gartner group also ranks gamification as one of its coming hypes in a report from July. On the other hand Gartners estimate assumes that the media and buzz hype will peak in perhaps half a year and then drop while adaptation in to business will take some more years. Many people enjoy play and fun, as a contrast to the seriousness of life. The explosion and popularity of gaming apps on mobile devices proves that, no matter age we love the excitement of playing games. By using technology, an increasing number of com- panies are bringing an aspect of play into consumers’ everyday life. During the last year we have seen a cascade of apps and websites contributing to the gamification of life. Gaming has been brought into daily chores, public transportation, eating habits, and even recruiting. But, these apps and sites do not serve the simple purpose of spicing up people’s everyday life. Gamification of things also creates an opportunity for companies to engage consumers and tie them closer to a brand, store of service. UK -based company Epicwin provides an iPhone app turning a to-do-list into a game. After completing a task on the list, users collect gold and other rewards, allowing them to move on to the next level. The game serves as a motivator to get things done. The Foodzy app keeps track on what you eat during the day, rewarding a healthy and varied diet. The UK public transportation system wants to engage travelers through the Chromaroma app. It rewards passengers with points for each trip, maps out where they have travelled and recommends new areas to go to, as well as things to do there. Gamification is also a way to benefit from consumers’ knowledge and time. In its effort to index its digital collection of books, the Finish library launched an online game, allow- ing players to help correct mistakes in the indexing while having fun. More than 20,000 people have already visited the site and more than 85,000 voluntary minutes have been contributed. According to salesforce.com’s Chief Scientist gamification is a trend that will continue, es- peciallyamongyoungergenerations.Mr.Rangaswamimeansitwillformthefutureofwork and be a crucial aspect in attracting talent. An already existing example of this is the Facebook game provided by the hospitality gi- ant Marriott International.With the aim to make more young people interested in a career withinhospitality,thegameallowstheplayertotryoutmanagingdifferentpartsofahotel. The Internet of things brings yet another aspect to gamification of life. GreenGoose uses RFID-tags to track how much different things are being used in a home. Users are reward- ed every time a desirable activity is performed. DIGISHIFT 2020
  • 71. Gaming has been brought into daily chores, public transportation, eating habits, and even recruiting 1
  • 72. DIGISHIFT 2020 72 virtual shopping places Just like the entire e-commerce hype in the late 1990s is now becoming a reality, the same might happen in the future with things currently on hype.Virtual reality may actually prove to be interesting again. The rise and fall of things like Second Life may also return. Virtual worlds like World of Warcraft and EVE online attracts hundreds of thousands and some- times millions of engaged people. The players of EVE-online have created their own radio station, TV-station and even a quarterly economic outlook that is presented by its chief economist. There were 60 candidates in the presidential election and 18% of the online population of 500 thousand participated in it. Their vision remains to create something better then IRL. Hype or not, it is undeniable that the increased digitization of society and the amount of time consumers are spending online are driving a phenomena whereby the digital world is gradually becoming a bordeless marketplace. The number of buyers and sellers in the virtual world continues to rise as small online retailers are no longer alone. Entire shopping malls and outlets are moving online creating virtual or cyber malls. At the same time, big traditional online retailers are capitalizing on their online brand awareness to deliver new services. The shopping center Westfield has ventured into the virtual marketplace in Australia by developing an entire virtual version of its mall. Without floor space limitations, the Westfield online mall features 150,000 products, 3000 brands and 50 retailers. The on- line platform manages sales orders from its multiple retailers through a single checkout point.OnlineretailereBayhasdevelopedavirtualoutletmallprovidingbrandsanddesign- ers with a platform where to directly sell their excess inventory. Already servicing the UK and Germany, eBay decided to open its platform to US consumers since September 2011. Payvmentisanothervirtualshoppingmallplatformwithmotrethan50,000retailersinits network. Payvment uses the facebook´s social platform to create a unique social market- place. This trend in not exclusve to the US or Europe, after all the largest online mall in the world is located in China. The Tao Bao mall has over 370 million register customers and offers 800 million product listings from more than 30,000 local and global brands. Owned by the e-commerce giant Alibaba,TheTao Bao mall sells everything from food to technology. DIGISHIFT 2020
  • 73. ”Our vision is to create something better than real life.” Thor Gunnarsson head of business development CCP Games (EVE online) 2
  • 74. DIGISHIFT 2020 74 reinforced reality Technologies reducing the differences between the virtual and the physical world are con- tinuouslyemergingindifferentaspectsofconsumers’life.Augmentedrealityallowsanen- hanced interaction with products, services and places. Web shops and websites in general might incorporate augmented reality in their attempt to replicate tactical experiences in- herent in physical stores. On the other hand, physical stores might incorporate augmented reality capabilities to add extra information that might engage visitors in a unique way. No matter if the consumer is at the store, at home, or on the streets, augmented realty gives them the chance to interact with the physical and virtual environment like never before. Online stores are incorporating augmented reality technologies into stores so consumers can “try on” their items before making a purchase.Well-known brands such as Ray Ban and JC Penny have implemented online stores with virtual mirrors. One key aspect of the connection of the virtual world with the real world is the location- based technologies. The virtual world is now connected to its specific location. A virtual Nike store is found in a particular location IRL and can only be seen in the virtual (augment- ed) reality. By connecting the location to the virtual environment a whole new set of rel- evance can be attributed to information and the virtual world. All the things that have been written about a place are becoming relevant. In media it is referred to as new relevance. Thehistoryoftheplaceismorerelevantatthetimewhenyouarethere.However,whathas been said about a place in the virtual world becomes more relevant. The ratings of restau- rants in the neighbourhood, the most read articles of this place, the most popular music, etc. In this sense, reality becomes truly augmented by linking together the physical with the virtual place. DIGISHIFT 2020
  • 75. Online stores are incorporating augmented reality technologies into stores so consumers can “try on” their items before making a purchase 3