The Future of retail copy

THE RETAIL OF TOMORROW: 
BACK TO THE FUTURE
FEBRUARY 2015
Mattèo Piano
Chief Executive Officer
NARROWAY

CONTENTS
INTRODUCTION 3
Coming out of a draining impasse 3
MISCONCPETIONS THAT HINDER SOLUTIONS 4
Debunking myths that blind the eyes for real solutions 4
WHY RETAIL IS WHERE IT IS TODAY 7
The causes of the retailers’ decline 7
WHERE RETAIL SHOULD GO 10
HOW ICT CAN PLAY ITS ROLE 13
From feature filter to result contributor 13
HOW FINANCIERS AND CITIES CAN PLAY THEIR PART 15
Investing in retailers who mean business 15
BACK TO THE FUTURE 17
The dialectic of the retail market 17
KEY STRATEGIC GUIDELINES 18
Pragmatic actions that can make a difference 18

White Paper | The retail of tomorrow
INTRODUCTION  
Coming out of a draining impasse
Since a couple of months I get upset when I read
certain papers related to the future of retail.
Especially when I read the solutions that are put
forward. Is it passion or irritation? It could be both.
My irritation and dismay is fuelled by the solutions
that are presented, that only deal with the
symptoms of the decline in offline retail. Solutions
that do not address the real causes of the matter.
Or because solution providers are looking for clues
in the wrong direction.
In this paper, I will attempt to contribute to a
paradigm shift, presenting a solution that is far
simpler than the solutions I have read so far. By
solutions I don't mean tools, but a mindset that will
generate more pragmatic and effective tools.
Let me start by debunking a couple of
misconceptions. Why? Because these
misconceptions are orienting experts and
specialists in the wrong direction, wasting money
on solutions that do not make any difference.
Misconceptions are believed to be true until
someone sheds a different light and debunks them.
Debunking misconceptions shifts paradigms. A
paradigm shift is what we need if we want to
invigorate the retail market.
The scope of my paper is not to repeat valuable
findings worth mentioning. I want to recommend
the books of Cor Molenaar, which whom I agree in
most of his analysis. I believe that by now there is
enough awareness that retail has no choice but to
change. All I want to do is contribute to the way out
of this impasse.
Understand that the way out of the retail crisis can
be simple but never simplistic or easy. There are
many retail experts out there and yet they have not
been able impede the retail crisis. Either nobody is
listening to them and they lack professional
authority, or they are good at writing and speaking,
yet not converting their thoughts into reality. I am
aware that writing this paper, can qualify me as one
of them. Nevertheless, the proof is in the pudding.  
Let me tell this: there is no shortcut for the solution.
In my view solutions are always holistic. Multiple
variables play an interconnected role. When one
variable is disregarded the outcome is zero. Or, if
the focus is on just one part of the solution, the
desired result will not be achieved. We should get
rid of simplistic, fragmented reasoning that
consumes time and money and on top of that
installs a climate of ‘mission impossible’. The
mission is possible if we don’t compromise on the
details that cause the desired result.
Mattèo Piano 
CEO 
Page 3
“A solution deals with
prerequisites for the desired
result — successfully !”

MISCONCPETIONS THAT
HINDER SOLUTIONS
Debunking myths that blind the eyes for real solutions
The crisis has hurt the
retail market
A crisis is not the cause of
anything, it is the escalation of
an unsustainable situation only
waiting to happen. Let me
explain this with a metaphor. A
crisis is not the cause of a bad
marriage, but a bad marriage is
the cause of a crisis. A crisis is
not the cause of the state
someone is in, but the revelation
of the state someone is in. A
crisis reveals that a certain
situation, model, concept,
ideology, etc… is no longer
sustainable. In that sense, if the
retail is in crisis, it must have
embarked on a road that leads
to nowhere.
I firmly believe that the retail
sector has been in a fruitless
modus for a couple of decades.
Before the crisis, circumstances
allowed room to compensate for
the deficiencies of the retail
sector. The reason why so many
stores have been closing during
the crisis, is that there is no
more slack.
There is no longer room for one
good month to compensate the
disappointing results of another
month. Every month needs to
ensure a store’s survival. This is
the simple reason why stores
close down. There is no more
room left for failure. The crisis is
the stress test. There is no more
room left for failure. The crisis is
the stress test. The current retail
model outdated in the first
place, though because of
circumstances, the average
outcome was still workable. 
e-commerce and
conventional retail are in
competition 
Although a lot of retail stores
have gone out of business
because of the rise of e-
commerce, e-commerce and
conventional retail are not
competitors by nature. This is a
misconception I often hear. It
implies that in the case of retail
there is no room for a symbiotic
existence between the online
and the offline world. Let me
prove the opposite. In the world
of leisure and tourism, the
internet is a helpful tool that is
complementary to the offline
business. Online and offline go
hand in hand. Internet travel
booking revenue has grown by
more than 73% over the past
five years (source: eTrack,
eMarketer, alexa.com). 38% of
the online bookings related to
travel are for hotel booking
(source: eTrack, eMarketer,
alexa.com). The online hotel
booking and purchase is
increasing yearly. Almost 60% of
all travel reservations is done
online. People book online and
get the experience offline. This is
also the case with restaurants.
In the case of tourism and
leisure, people see the online
tools as part of the offline hotels
and restaurants. I don’t see e-
commerce reducing the
affluence in the leisure and
tourist market or competing with
it.
There is a reason why the retail
sector is not benefiting from
online activities. Retailers offer
online what they offer offline. The
offline experience is not adding
to the total customer experience
The end result for the customer
is practically the same. Hence
why e-commerce is in
competition with the offline
retails market.
ICT technology is the
key to the future of retail

Let me start by saying that the
future of city retail does not
depend on technology, but on
relationships. Technology will not
save retail, it will only increase
the pressure on retailers.
Technology is not the solution,
but an instrument that will serve
the solution. ICT cannot
Page 4
“A crisis is not
the cause of the
state we’re in,
but the
disclosure of the
state we’re in”

neutralise the mistakes that
retailers make and the lack of
customer experience they
provide. A bad store cannot be
turned into a good store by
using ICT tools. A bad store is a
matter of bad management.
Customer experience is all
about people interaction.
Take the example of a
restaurant. Not the restaurant's
website is responsible for its
success, but its excellent food
and service will be. A good
website cannot hide bad food
and service. People visit a
restaurant because of the
experience.
An excellent restaurant can
benefit from ICT to enhance its
excellent service. There is
however no direct correlation
between the use of ICT and
customer satisfaction.  
 
ICT developers are no retail
experts, let alone customer
experience experts. ICT people
are primarily focused on
functionality, that's their job.
They are not people
engagement experts, they are
programmers who focus on
products.
The solutions for the retail
market should be conceived by
retail experts — not IT people.
Compare this to the CRM
bubble. For years, we believed
that because we had data about
customers we were able to
stimulate better customer
relationships.
CRM was developed by IT
people, not by relationship
experts. Customer relationship
is not only driven by product
preference, but by service,
contact with staff and support. I
found a paper of which I here
quote an extract that makes a
clear point.
“The consumer today makes
his choice of products or
services based on not only
features and price but also on
the type of services provided
by the in store staff, the kind of
relationship which the sales
executive created with the
customers and how useful they
are when the customer is not
much aware about the product
and how easily they convince
the customer to go for a
purchase.
With the customer getting
more smart and intelligent due
to advancement of technology
and great knowledge available;
providing value added service,
creating a personal healthy
relation with the customer,
having a sophisticated trained
sales staff who can relate
themselves with the customers
play a very vital role in
moulding the buying behaviour
of the customers at that
moment of time and thereby
developing a long lasting
relationship.
Measuring customer service is
not an easy task as it is very
difficult to predict which factors
are actually influencing the
relationship building process.
However it is a known fact that
face to face conversation
between staff and customer is
an important criterion for the
same.
Hence the quality and the
process of customer service
are important to measure
rather than the outcome of the
service encounter. This is
because “courtesy and
friendliness become important
not as ends in themselves, but
because customers partially
conflate delight at courteous
and friendly treatment with the
actual quality of
service" (Fountain 2001, 58).
The same applies to the
solutions for the retail market.
ICT technology can be an
instrument, but never the
solution. People don’t go to the
mall because of the Near Field
Communication. Neither are
people going to a shop because
that shop has a website
A middle market
positioning is ideal to
compete with the upper
and lower market
segment.  
This is a very simplistic way of
looking at customer behaviour. It
sounds logical but it isn’t.This is
a static view of the retail market.
The current challenges with
V&D, Mexx, and many more
retailers in the Netherlands
prove that mid-market
positioning does not pay off.  
Customers are not static, they
move. Retailers who aim to
compete against the upper and
lower market to get some of
their share, are actually right in
the middle of the danger zone. 
 
Customers who want to
upgrade , who are looking for
more emotional gratification, will
evolve toward the upper retail
offer. Customers who are
looking for lowers prices, will
shift to the lower market. In other
words, retailers who target the
Page 5
“ Tools cannot
replace a lack
of vision or
skills”

middle market are facing stiff
competition from both sides,
especially as both are moving
more towards the middle to gain
market share.
Customers will always look for
clear benefits and gratification. A
retail offer that has a little bit of
both and is not outspoken, will
always loose to the focused
price or quality leader.
Debunking these
misconceptions are an
essential part in the quest for
the solution.

As long as these
misconceptions linger in our
minds, we will fail to have the
right focus and overlook the
simple solutions that will lead
us out from this retail crisis.

In the following chapters I will
shed light on some focus
points that will lead us to a
roadmap for a successful
future retail market. 
Page 6

WHY RETAIL IS WHERE IT IS
TODAY
The causes of the retailers’ decline
The retail market has been in decline for
decades now. Today's retail crisis was
not caused by the recent economical
crisis. It simply reveals the flaws of a
deteriorated model.

Trading between consumers and
companies has evolved. While the rest
of the world was evolving, the retail
market was not.

The relationship between shop owners
and brands has disappeared 
The franchise market has lowered the risks of
retailers to start a business, because of the
predefined product range and operational
procedures. However, the relationship between the
brands and the shop owners has disappeared. The
product range has increased and it has become
difficult to get to know the products sold.  
In the past, shop owners traveled and visited trade
fairs to select the products they sold. They knew
the suppliers, the products and the story behind it.
Now there is hardly any relationship between shop
owners, brands, products, manufacturers.
Employees working in a shop have even less
familiarity with the brands and products in the
stores. Often customers know more about the
products than the people who work in the stores.
And so the stores have become nothing more than
a physical outlet — shelf space. 
Underpaid and clueless personnel 
In order to make a profit, shop owners employ
students with very low salaries. These employees
have hardly any training. Why? Because the shop
owners know that they might leave anytime and
therefor training students is not profitable. This has
reduced the quality of the sales force with direct
consequences for the customer experience.
Compare it to student tenders in a snack bar. You
know that these people are carriers of drinks and
food — nothing more and nothing less. Yet, if you
go to a restaurant and pay 100 Euros or more for a
nice evening out, you expect qualified personnel.
If you go to a shoe store and buy a pair of shoes
for 100 Euros, you are helped by a student who is
absolutely clueless about how to serve you and the
background information regarding the product. But
go to a restaurant and pay 100 Euros for a meal
and you get treated like a king or queen. Cheap
personnel means cheap brand experience. In both
cases you invest 100 Euros, yet the service is
different. One may say, but a pair of shoes of 100
Euros is not an expensive pair. The discussion is
not how expensive a shoe is or whether a
restaurant bill of 100 Euros is high or low. We
should ask ourselves how much retailers really earn
from a turnover of 100 Euros. It is all matter of
valuing each Euro.  
The relationship with the customer
has deteriorated 
 
A direct consequence of the former point is that
temporary shop personnel who are working just for
the money, have no interest in a relationship with
the customer. The shop owner is often dealing with
administration and only comes to the counter if
there is a problem the employee can’t solve. If there
Page 7
“taking the relationship
with customers for
granted, will end up by
them not granting their
commitment”

is such a thing as a relationship with the customer,
then it is a relationship driven by problems or
complaints. If the retailer does not want to spend
time to nourish the relationship with his customers,
why should customers show any kind of
commitment in terms of time or investment?  
 
In the eyes of the retail market, customers have
dropped in value. If customers are not happy with
the service, they can take a hike. There are plenty
more customers waiting.
This mentality has deteriorated the relationship
between retailers and customers. Customers who
have a complaint are not seen as an opportunity to
generate positive brand experience, but are seen
as a nuisance. Customers who judge that a shop
has not delivered all that it promises, know that they
will be treated like ‘difficult’ customers. For many
decades store owners have exhibited an arrogant
attitude. Instead of adopting an attitude of service,
they developed an attitude of civil servants. Instead
of entrepreneurs, they behave like frustrated
employees.
The relationship with customers is in a crisis
because of the retailers themselves. And now we
are surprised that customers are embracing e-
commerce instead? If the customer has become
replaceable, then the store has become
replaceable, too. This is how a relationship works. If
one of the partners treats the other as if (s)he is
replaceable, then a separation should not come as
a surprise. Retailers have adopted a wrong attitude
for decades. Of course there are exceptions
— thank God for that.
Though these exceptions are rare — very rare. I
am not pleading for an American style of artificial
customer service. However, we in Europe have
gone to the other extreme. We don’t care about the
customer.
We have the most excellent CRM tools, but data
cannot engender a genuine customer relationship.
It is one of the biggest myths in the business world.
Assuming that one has a relationship based on the
extensive data one has of someone, is delusional.
In the world of marketing this is called ‘Customer
Relationship Management’. In the real world this is
called ‘stalking’. A reality check is certainly in place.  
A large number of shop owners should
have never started in the first place 
 
Opening a shop may seem straight forward and an
easy road to success. People are passionate about
a product or believe that selling goods on the high
street is easy money. They overestimate their
abilities and underestimate the challenges. They
believe that a high affluence in front of their store or
even a high capture rate (visitors visiting the store) is
all it takes. Many shop owners are sitting ducks
waiting to be shot. What they don’t know is that
beside affluence and capture, there are more
parameters that need to be in place such as
conversion rate, basket, return visit and word of
mouth. If any of these parameters under-perform,
the overall turnover is at risk.  
It is my opinion that many retailers have survived
because the pre-crisis period gave them some
slack. Now there is no more margin for error.
However, the errors were there all the time. This
reminds me of the story of the emperor’s new
clothes. The emperor was not just naked at the
moment the little boy cried out from the crowd. The
emperor was naked all the time, people just didn’t
have the guts to tell the truth.  
 
“The truth will set you free” is a phrase we read in
the Gospel of John. This phrase is not only
applicable in the spiritual sense, but also in
business. Facing reality and truth can liberate a lot
of entrepreneurs from the illusion that hold them
captive. An illusion that one day will be paid with
the loss of property, social life and relationships. 
More of the same 
 
It is striking that when you visit a new city, you
always find the same brands. Based on the brands
in the stores and the signage, you could be in
Brussels, Bologna or Bremen. The uniformity in
brand offering in cities is blatant.  
 
What is more striking is that different brands sold in
different stores come from the same manufacturer.
The diversity between brands has suffered too. You
will find the same quality and design in one brand
store as in the other. There are exceptions.
However, in any city you can count on one hand
Page 8
“ Passion is not enough to
become a retailer ”

the stores that stand out from the rest. The offer on
the high street has become very exchangeable.
The laws of scarcity tells us that if more of the same
is on the market, value drops. So these brands
have to compete on price. The more something
can be compared, the more it will be compared. If
something similar is cheaper, why pay more? 
 
People like to buy cheap clothing, though this
endless thirst for the lowest price is fuelling a killing
competition. It is a vicious circle. The more
comparable the offer is, the more customers will
want to bargain on the price. The lower the price,
the more of the same will be offered on the market.
The stores that stand out through a unique offering,
are often situated in off the beaten track areas of
the city with lower rents and for some reason they
survive! These are the shops that should be
promoted, because they aliment the local
economy. These are run by real entrepreneurs,
driven by their passion and intimate market
knowledge. They add personality and character to
the city. 
 
I have nothing against franchise concepts. However
if franchising implies the impoverishment of brand
and customer relationship, dullness, more of the
same, bad service, bad after sales, unqualified
personnel, etc. why should customers be
interested? No really! Why does it come as a
surprise that e-commerce is winning? If retailers
have forsaken their relationship with their customers
and offer similar products as the store next door,
why should we expect anything different than what
we are witnessing?  
Page 9
“ The more of the same is
on the market, the less
value is attributed to it”

WHERE RETAIL SHOULD GO
The power of inexchangeability  
Value is expressed by the amount of money one is
willing to pay. In other words, what one is willing to
invest. This is based on the law of scarcity. The
more of the same is on the market, the lower its
value. The more rare something is, the higher the
value. Let me convert this principle to value. The
more exchangeable something is the less value it
has. The less value, the less commitment and
investment.
So in other words, the more unexchangeable
something is, the higher its value. This is exactly the
opposite of how the retail market has evolved. Here
is the key to unlock the future growth of the offline
retail market. Shops should become less
exchangeable. Instead of uniformity, the market
should go for uniqueness.  
 
Unexchangeability can be achieved on many levels.
This can be the concept, the product range, the
service, the ambiance and business model. The
more unexchangeable the combination of the
elements mentioned, the higher the perceived
value. It becomes very difficult to compare when
there is nothing to compare with.
Value is something emotional, not rational. People
pay millions of dollars for a painting, not because
the painting on the canvas is worth millions. Not
even because the painter was successful in his
day. Most famous painters could hardly make ends
meet. No, it is pure subjective and emotional. And
experience is unexchangeable, and therefore
valuable. Experiences are unique and not
transferable, therefore they are precious and
valuable.
There more retailers increase their level of
unexchangeability, the more value they will have in
the eyes of the customer. This does not imply a
quick win, but rather sustainable growth and
capitalisation of investment.
The left and the right brain
In the past, the terms ‘left and right brain' where
used as metaphors for our rational side and our
emotional side. Today, we know that there is more
than just our left and right side when it comes
down to our rational and emotional behaviour. 
 
Let’s now use this picture of our left and right side
for the sake of illustration. The left and right sides of
our brain work together in a decision making
process. The more rational a choice is, the less our
emotional side is involved. This is also true the
other way round. The more a choice is emotionally
driven, the less our rational side is involved. There
are people who can always find a right balance
between the emotional and rational side. Though
even the most balanced person on earth has his or
her weak spot.
We see a trend where consumers are at the same
time rational and emotional driven in their
purchases, however, not simultaneously. 
 
Let me take the example of the Netherlands. The
Dutch have a reputation of being very penny-
pinching. They will not pay more than they believe
something is worth. An interesting benchmark.
According to the Centrale Bureau van Statistieken
(CBS) in the increase of spending (1992 compared
to 2010) in spending in food has increased with
41,5%. When we look at the expenditure for
clothing and shoes we see an increase of 37%. It is
my guess the trend of cheap fashion plays its part
here. However, if we look at the trend in leisure and
Page 10
“ The future of retail is its
ability to reach for the heart
of customers, more than their
heads ”

self-development expenditure, we see an increase
of 85%. This increase is significant.
Consumers can no longer be categorised as they
were in the past. Today, a consumer can as well be
economising on food, drive a jaguar and go on
vacation twice a year. A consumer can economise
on food during the week and go out to a classy
restaurant in the weekends. Consumers spend
their money where their heart is.
What does this say in regard to the e-commerce
and offline retail competition? It tells us that
consumers are not merely rational-driven or merely
emotion-driven. When it comes down to
economising money, consumers will go for the
rational. That is the reason why e-commerce is
popular. You can instantly compare, get a good
bargain, save parking fee, economise on time and
even return the product if you don’t like it. All
rational reasons. This is exactly why offline stores
are suffering. For many years they have been
nothing but a big display. Customers don’t have to
go a store to see products being displayed. Now
they shop at their own convenience, saving time
and money. Because of the absence of the
emotional side of the story, shops are in direct
competition with e-commerce. The stores that
suffer today are right-brained — rational.
The trend for the future will be that consumers will
economise on rational purchases and indulge on
emotional purchases. The more shops will be left-
brained, the more they will gain from it. 
From offer to demand
The new role of stores is directly linked to where
they went wrong. As I explained earlier, retailers
have neglected the aspect of relationship in every
sense of the word. For decades, stores were a
large display or a large room with shelf space. This
trend will change for sure. Why should I go to a
store to by my favourite brand? All I need to do is to
order it and have it delivered home at the same
price.
Retailers should reinstate their relationship with the
brands they sell. They should regain their passion
for their products. Yes, we need more passionate
retailers, that can enthuse us with curiosities and
stories about the products they sell. Divert the
consumer from the rational into the emotional
mode.  
Retailers should reinstate their relationship with their
customers. They should know their names, their
likes and dislikes. They should see their customers
as a partner. It is the customer that has the money
to pay for the kind of life the retailer hopes for.
Retailers should think of ways on how they nourish
the relationship with their customers in a natural
way — not artificial. Retailers should talk to their
customers and find out how they want to be
treated.
It is the role of retailers to become matchmakers. If
they have a passionate relationship with the brands
they sell and a strong relationship with their
customers, then they are invaluable in nourishing a
relationship between customers and brands.
The focus of stores should be on brand relationship
and brand experience. Shops should be turned in
'experience centres' and not shelf spaces. To
achieve this they don’t need to build up stockage
or a large shop. 
 
They should turn their stores in places where the
customer get’s into the emotional mode. Online,
the customer wants to be gratified rationally and
partially emotionally. However, a customer can
never have a holistic emotional experience online. It
is like booking a hotel or a restaurant. You can
select online but never sleep or eat online. 
Let customers do their purchase online, yet let
them have the experience offline. Let the customer
pick up his or her order in an offline shop. Turn the
delivery moment into a real experience.
Let retailers introduce new products or brands to
the customers. Let customers get familiar with new
brands. It doesn’t matter if a customer buys online.
The retailer will get his margin anyway. Let
Page 11
“ Giving customers what they
ask for can still end in a
disappointing experience ”

customers taste the products, try them on,
compare them.
This approach requires an e-commerce business
model, where online shopping and payment is
centrally managed. Customers can login locally and
products are delivered locally. In this way, the
customer buys directly from the manufacturer,
reducing the number of in-betweens while the
relationship with brands is nourished locally.
 
In this way, retailers can focus entirely on building
relationships between customers and brands.
Leisure retail
Until now I have been talking about smaller stores
with smaller surfaces. There is also a solution for
larger surfaces. How can we turn larger trading
surfaces into places offering valuable brand
experience? By turning retail into leisure.
There are already malls that offer leisure experience
next to the shopping experience to attract visitors. I
know some shopping centers in Italy which are very
strong in offering entertainment to visitors. Though
offering leisure next to the shopping experience will
only drive footfall. From a site manager point of
view, I can understand this. However, if shops
cannot convert a higher footfall into more sales,
than retailers will not benefit from it. 
 
What I am talking about is the symbiosis between
retail and leisure. It is about turning shopping into
leisure.
The best way this can be achieved is by working
around themes. Let’s take the example of music.
Imagine a large surface where customers can find
old records, buy musical instruments, buy sound
equipment as well as antique sound equipement,
subscribe for music lessons, get information about
theatres, have a meet and greet with their favourite
artist, attend a small concert, buy merchandising
items related to artists, visit a music museum, visit a
piano bar, etc… 
 
Instead of separating retail from other spheres of
culture, why no blend them together in one holistic
concept? By creating themes, the customer will
plan a day out around that theme. It integrates the
commercial, cultural and social spheres in one
holistic experience.  
 
By creating a symbiotic blend of offers around one
theme, we can increase the dwelling time of
visitors. The longer the dwelling time, the higher the
conversion rate. By combining a vast
merchandising mix with a variety of services, we
can increase the expenditure and therefore the
density.
There are plenty of themes that can be developed.
It is crucial that the combination of offers and
services within one theme generates a unique
customer experience. Thematic Leisure Retail is in
my opinion the solution for populating large trading
surfaces.
Even now shopping centers can adopt the concept
of leisure retail, by creating thematic events, where
the offer of the resident stores is combined with
additional offers from outside the shopping center. I
would suggest to explore the cultural and social
spheres for inspiration. This approach will turn the
visit of a customer into an exploration, where the
emotional side of the customer is gratified. It is this
kind of gratification that customers are still willing to
invest their hard earned money in.  
Page 12
“Leisure retail is not leisure +
retail, but leisure x retail”

HOW ICT CAN PLAY ITS
ROLE
From feature filter to result contributor
Playing a catalyst role in generating
customer experience. 
ICT can play a gaming changing part. It may sound
contrary to what I said before, but ICT is the
catalyst in all this. 
 
Today, ICT companies are developing solutions and
trying to get consumers to like them. Too many ICT
solutions are symptomatic. Consumers will not go
to a store because of the ICT behind it. People get
used to technology.  
 
ICT should play an indispensable and invisible part.
A catalyst does not take the lead but makes things
possible — better and quicker.
All the ICT innovations should start from customer
experience. First the kind of customer experience
should be defined and the result of this customer
experience — whether tangible or intangible.  
 
Then, a number of solutions should be designed to
generate this customer experience. ICT should be
integrated to make the impossible possible. ICT
should make a customer experience possible
where it would not be possible without ICT. 
 
Let me give one example. I'm still talking in term of
'online' and 'offline'. It is clear that customers are
more and more online. It is the retailers who are not
online. Customers and retailers should share the
same platform. In the future, we should talk more
about being ‘connected’. Retailers and consumers
are either connected or disconnected.
Let’s assume a customer connects online with an
e-shop. Then the customer’s profile is available. If
the retailer is connected to the same platform, why
can’t the retailer in the offline shop greet the
customer by name when he or she enters the
offline store? Why can’t we see a picture of the
customer coming in in the store while being
greeted ‘welcome mister Piano’? What if the
customer makes an appointment with the retailer to
try the selected products (if fashion) at a convenient
time? What if the retailer has all the curiosities and
stories behind the selected products on his tablet?
Why can’t the retailer not entertain the customer by
matching the selected product with other
products? 
 
I am just giving hints here. The main thing is, that
when customer and retailer are connected, a new
world opens. In this case, ICT plays a facilitating
role. No one will go to the store because the retailer
will welcome him with a tablet. The consumer will
go to a store because of what the retailer will do
with the tablet.
The less the tablet is visible, the better. Though
without the tablet and the software behind it, the
retailer cannot deliver this kind of experience. It
would be impossible to remember all the names of
the customers. It would be impossible to remember
all the stories behind all the products and brands.
Why? Because we live in a world that changes so
quickly. In the past, the retailer in the drugstore
around the corner could remember it all because
his customers didn’t change much, and neither did
his product range. 
Page 13
“ People are not interested
in technology itself, but in
the experience technology
can deliver them”

ICT can play a great role, yet as the facilitator, not
the solution. Let’s not forget that a customer
experience can delivered without ICT. It will only
take more time and would be harder. Again the role
of ICT is to be a catalyst — a catalyst we don’t
want to do without.
ICT as the MatchMaker
A large number of ICT solutions are data based.
This means that products are categorised
according to a number of characteristics. The
consumer can select the characteristics that he/
she is interested in. However, this approach is not
consumer friendly. 
 
Let me use an illustration to show how unfriendly
this approach is. Let say you go into a shop and
the shop owner ask you what you are looking for.
You say that you are looking for a blender. The
shop owner ask you what color, how much power
the blender should have, what are the features that
you need, etc… In other words the shop owner
presumes you know what you need and tries to get
a briefing from you. Once you go home, you find
out that the blender you bought is too big for you,
since the volume of the beaker is too much
compare to how you use it.  
 
You go back to the shop and confront the shop
owner and tell him, that he/she advised you the
wrong blender. The shop owner replies that he/she
gave you exactly what you asked for.  
 
There is a difference between giving what the
customer asks for and what the customer needs.
The ICT approach in the case of most e-stores is
focused on giving what the customer asks for. The
database is organised in a way consumers can
choose between of product features and attributes.
However, despite this information consumers can
still pick the wrong product for them.  
 
ICT should focus more on using the data related to
a product to help consumers find the best product
for them. The same way a smart sales
representative asks a number of questions to
understand what the result is that a consumers
expects from a product.  
 
I believe that by reorganising data, ICT can create a
match between the consumer and product.
Because of the vast choice of products,
consumers don’t know which products fits them
the best. They are not the expert. Retailers should
play that role. ICT can help them play this role.
When consumers and retailers share the same
online retail platform, the retailer can use the data
shared by the consumer to give him a better
service.  
 
Imagine an ICT solution that is able to make the
perfect match between consumer and product.
What would the benefits be of such an approach? I
can think of a number:
— Less negative customer experience, because
of reduction of trial and error
— Less time wast to get to the desired result
— Less need for expensive shouting packaging
— Reduction of choice stress
— More alternatives will be considered (breaking
habitual patterns)
— Stronger relationship between retailers and
customers
— Higher value of expertise and brand passion
— Shops become experience enters
— Customers are approached as unique
individuals
— Possibility for cross-selling is higher
— Increase of return visits
— Increase of basket because of cross-selling
— Increase of word of mouth because of a
positive brand experience
— Higher conversion rate
Page 14
“ Selling a product is not
showing people where they
can find it, but telling them
why they need it ”

HOW FINANCIERS AND
CITIES CAN PLAY THEIR
PART
Investing in retailers who mean business
When we talk about financing a store we cannot
disregard the related risks. Part of the risks are:
• Faulty businessmodel
• High rent
• Stockage
• Marketing costs
• Inexperience of retailer
• Non-competitive offer
• Managerial skills
I believe the solution is to develop shop formats
where each of these risks are covered. I would call
them Turn Key Stores. Turn Key Stores are shops
developed and if required managed by retail
experts. It is a holistic approach where each aspect
contributing to the end result, is engineered. This
means that not a financial plan is presented but
instead a holistic business plan, in which each
prerequisite for success is taken into consideration
and covered.  
 
Turn Key Stores are designed from a scenario
where all KPI’s are challenged. From this scenario
solutions are developed that will drive customer
desired commercial behaviour. 
 
As a holistic format, each aspect of the Turn Key
Stores contributes to the overall customer
experience. By covering all the risks proactively and
methodically, financiers will see that the risk for
investment is acceptable.
Financiers will understand that it is not the retailer
who came up with the business plan. Too often
retailers are too optimistic, missing out on all the
possible challenges and dangers. They
overestimate the odds and underestimate the risks.
The fact that Turn Key Stores are the result of
meticulous and holistic scrutiny will boost
confidence towards investors.
Turn Key Stores can be developed in a push or pull
mode. Either a retailer comes up with an idea and
asks a team of experts to turn the idea into a Turn
Key Store, or an agency can develop a series of
Turn Key Store concepts and offer it to the market
of retailers.
The Turn Key Store model is similar to a franchise
model when its comes down to management.
However, there is no franchisor behind it.
Support retailers who want to
contribute to the leisure appeal of
cities.
It is in the interest of cities that city centres become
populated again with attractive shops. City centres
should be turned into culture, social and leisure
centres. Cities are suffering from a desolate look
due to the empty stores.
I believe that city councils should encourage
retailers to take their place in the city center.
Page 15
“ Being a retailer is requires,
talent, passion and
diligence ”

However, I encourage the city councils to go for
quality instead of quantity.
City councils should develop incentives and
support those retailers who embrace the future
approach of retail. City councils should encourage
retailers who have a Turn Key Store mindset, who
invest their time in getting to know their brands and
are connected with their customers — retailers who
are serious.
Simultaneously, city councils should discourage
those retailers who run shops that are terminal. I
believe that every retailer should have a second
chance but a retailer who asks for support yet
believes that his or her approach is the best,
should put his money where his mouth is.
The city council can play an active role in turning
the city center into a place where there is more
animation. The city center should encourage more
leisure, turning the city into a place that customers
love to visit. 
Page 16

BACK TO THE FUTURE
The dialectic of the retail market
It all boils down to a dialectic discourse. First,
we had the small grocery store and drugstore
where the relationship between brand and
customer was intense. I like to call this the
thesis. Then we had the large distribution with
the malls, shopping centres, outlets, franchise
stores, the e-commerce with little or no
customer or brand relationship. I like to call this
the antithesis.

We cannot go back to the past and we cannot
continue the way we are going. I believe that the
future will be the synthesis of the past and the
present, integrating new ideas and technology.
Yes, we have to go back to the past when it comes
down to appreciating products, brands and
customers. Because the world has changed, we
cannot go to the past regarding the technical side
of the matter.
By going back to the future, we learn from the past
and continue to innovate in a way where the
innovations will add value instead of subtracting
value.  
 
From whatever side we look at the solutions, it all
comes down to valuing relationship. It is all about
relationship. Without relationship life has no
meaning. Everything become exchangeable and
disconnected. Without relationship there is no
sense of value and no sense of meaning.
The retail of the future should not be a world of
consumerism but a world where value is
experienced and promises are kept. Where
authenticity will win and the artiﬁcial will be
exposed. Where ICT plays its catalyst role because
it becomes part of a larger team of people were the
focus is no longer on functionality, but on
experience and result.  
Page 17

KEY STRATEGIC GUIDELINES
Pragmatic actions that can make a difference
Let me summarise the key strategic guidelines
that in my opinion will lead the retail market to a
new era. An era that is different though more
sustainable than the past.

• Stop blaming the crisis for the retail crash
• Stop thinking of simplistic ICT solutions
• Design shops around customer experience
• Focus on building relationship between brands
and consumer
• Convert from managing the offer to managing
the demand
• Convert from a push (products looking for
consumers) to a pull mode (consumers looking
a specific product
• Develop ICT tools that play a catalyst role in
generating the desired customer experience
• Develop ICT tools that can make a match
between the consumer and the product
• Develop performing retail ICT tools by focus on
the desired results, rather than on functionality
• Develop Turn Key Stores concepts to reassure
investors in investing in the retail market
• Support those retailers that mean business
and adopt the retail mode of the future
• Combine the values of the past with the
technology of the future
• Manage the entire customer lifecycle
• Make your profit out of cross-selling and up-
selling
• Be passionate about what you sell
• Invest in a professional passionate salesforce.
• Become an artist of customer experience
• Learn from the hotel and restaurant sectors
Page 18

Mattèo Piano

m.piano@narroway.eu

+31 6 514 14 686

The Future of retail copy

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