Retail remains the undisputed leader in consumer spending, despite the continued velocity in the digital retailing space. So how, then, what should startups know about retail and retailers? And how does user-centered design play a role in unlocking the tremendous opportunity? This was the subject of a two-hour talk give an Denver Startup Week in September, 2014.

1. Startups and the Retail
Opportunity
Designing Experiences That Work
Rich Bowen | Terry Logan
Denver Startup Week | September 18, 2013

2. Retail is Dead: Long Live Retail

3. Retail is Dead: Long Live Retail
•
Overall US retail sales in August 2013: $381B USD
•
e-Commerce sales in August 2103: $22B USD
$360B spent in retail stores
Source: US Dept of Commerce April Trade Report (http://www.census.gov/retail/)

4. Influence Beyond Retail
It is too difficult to measure ROI
in a traditional sense against
digital and eCommerce
investment vs. a specific line of
transaction data.
Omni-channel is not
complicated, its Commerce.
Transactions by Channel of Influence – Total Retail
$5.0T
Online to Online
$6.2T
CAGR
8%
Online to Store
12%
(11-19%)
Traditional Channels
to Store
-3%
Sources: Forrester, Morgan Stanley, US Census

5. Retail is Dead: Long Live Retail
•
•
The essential dynamic is the interplay between retailers, CPG
brands, and the consumer
Knowing how these three constituencies effect one another will
give you a competitive advantage when bringing solutions to
market

6. Actionable Insight
(Lean in here)
•
Retailers rely on CPG brands (and the agencies that support
them) to bring consumer-driven solutions to market

7. Who’s In Play?

8. The Playing Field: The Basics
•
•
Retail decisions are influenced before store trips, at the shelf, and
then reinforced post-purchase
We define this as Pre-Tail, Retail, and Post-Tail

11. So Where’s the Opportunity?
•
It’s all in providing value
•
Does value = $$$ ?

12. Personalization is the Future of
Retailing
Increasing efficiency
3.0
Personalization
2.0
• Supermarkets
• Super Centers
• Chain drugstores
4.0
• Localization
• Personalization
• Customization
• Small grocers
• Neighborhood drugstores
Size of retailers
1.0
• Specialty shops
• General store
Transactions become de-coupled from the retail
experience
1880’s
2014+
Increasing choice
Personalization used to be
inversely dependent upon the
size of retailer - now in an
unprecedented time they
actually work in correlation.

13. Retail is Evolving
Language
Consumer Behavior
Retailer Enablement
Multi-channel
Consumer shop across different channels which
function independently of one another
In-store, e-commerce, call-center channels
function in technology and operational silos
Cross-channel
Same consumers shop across channels and
perceive these channels as part of the same
brand
Omni-channel
Consumer does not perceive channels at all,
simply a brand
In-store, e-commerce, call-center and mobile
channels are connected through integration of
varying sophistication and reliability
All channels served by common set of
technology services, single set of data, and
visibility beyond the individual retailer

14. Shoppers Depend on Different Tools to
Meet Different Needs
Check out
72%
Look up product information
66%
Locate a Store
72%
Look up product information
66%
Look up/Compare pricing
61%
Look up/Compare pricing
66%
Look for coupon/promotions
65%
Check user ratings/Reviews
57%
Look up product information
58%

15. How?
•
Provide the right experience at the right time
•
It’s not enough to focus on features. Why not?

17. “If I had asked people what they
wanted, they’d have said faster
horses.”
-Henry Ford

18. “It’s really hard to design by focus groups. A
lot of times, people don’t know what they
want until you show it to them.”

19. Retail? Think Mobile First
•
Do we need to talk about mobile device penetration rates?
•
(We hope not)

20. SHOPPERS RELY ON MULTIPLE APPS TO MEET THEIR NEEDS
What Today’s Shoppers Rely On:
Which types of shopping apps have you downloaded?
Mass online retailers
61%
Barcode scanners
48%
Coupon or deal services
48%
P2P marketplaces
42%
Specific store brands
38%
Price comparisons
Consumer reviews
NEXT-GEN RETAIL:
MOBILE AND BEYONDº
37%
22%
28

21. Shoppers Expect Mobile to Improve Their
In-Store Experience
HAVE YOU EVER USED YOUR TABLET
WHILE SHOPPING IN A STORE?
33%
Yes
44%
No, but I might be interested to
23%
No, and I probably
wouldn’t be interested to
SHOPPERS EXPECT MOBILE
TO IMPROVE THEIR IN-STORE
RETAIL EXPERIENCES
77% of shoppers are interested in
the possibility of having digital
content (e.g., product
recommendations, videos,
simulations and so on) delivered to
their mobile phones while in-store.
Offer Expertise, Not Just Information
Shoppers are already using their mobile devices to look up product information, run price comparisons, and even make online purchases while
shopping in a store. Retailers have an opportunity to leverage these behaviors by providing the information themselves that people are already looking for—or don’t even know they want yet. With mobile, retailers can offer
people the expertise that traditional, face-to-face customer service provides, but in a more personalized, real-time way. This might include an app
that recommends other items in a store that would pair well with a specific
piece, or one that already knows your personal preferences and provides a
list of products (available in-store) based on that. Seventy-nine percent of
shoppers are interested in the possibility of having digital content—product
recommendations, demo videos, virtual “try on” simulations, and so on—
delivered to their mobile phones while shopping in a store. In fact, 77% of
dual owners have already used or would be interested to use their tablets
while shopping in a store.
*Data displayed for tablet owners only.
NEXT-GEN RETAIL:
MOBILE AND BEYONDº
20

22. People Feel:

23. How Do We Get From...
This
To This

24. Focus on Outcomes
designing around human-focused outcomes uncovers empathetic cues

25. Outcomes, Looking Backward, Tell Stories
the happy user gives substantial guidance to successful digital
product design

26. The User-centered Design Process in Eight
Easy Steps
-Build user personas from demographic and psychographic data
-Write stories that begin with pre-conditions and move to post-
conditions
-Identify key points in the story (ask yourself this question: Were I
to illustrate my story, which moments would make the most
sense?
-Sketch those interactions (screens, human interactions, etc)
-Iterate on the screen interactions
-Prototype the sketches
-Iterate on the prototypes
-Build, test, rebuild

27. Design Resources
These three books provide a quick read for designing, and building,
great digital products:
Mobile First, Luke Wroblewski
Tapworthy, Josh Clark
Designing for Emotion, Aaron Walter

28. What Comes Next?
•
Lean in to trends, consumer insights, and technologies
•
Apply a user-centered design process
•
Iterate, and iterate some more

29. Mobile “Future Requests” For Physical Retail
82%
79%
View similar products
bought by others
92%
Receive a list of a store’s
most popular items
95%
94%
Compare products
79%
Tap “smart” posters for
coupons
Watch demo videos
Self-scan items for
check-out
87%
86%
79%
Be alerted when near
a store with sought-after
items
Virtually “try on” clothes
72%
Access store maps to
locate products
See if items’ colors
match
*Data represents the percentage of people who would be interested in each offering (n=909).

30. The Big Win?
•
Payment & e-Wallets: Earning a place inside the consumer’s
wallet dominates the conversation among huge players in the
space (Visa, AmEx, Walmart, Walgreen’s, Google, and the list
goes on)