2. CONTENTS 13
FOCUS
07 Pop-up store takeover 17
Rise of the pop-up store could
revolutionize high street retail
FEATURES
RETAIL 13 Self-serving
Fast, easy and convenient retail experience
REVOLUTION 19 Flagships
Focusing on creating an
19
immersive brand experience
The entire world is now a store – one in 27 Shopping mall in your pocket
Brands embrace mobile devices
which we can make instant purchases as the future of retail
regardless of time or place.
31 Moving retail online
The world of shopping is undergoing a Major investment in online retail could
signal a move towards virtual retail
sweeping transformation driven by the
demand for immersive experiences, 35 A cashless society
new technologies, and new services. Cash is no longer king 35
Whilst virtual stores are growing in SPOTLIGHTS
popularity, physical stores remain as
vital as ever, providing an environment in 17 Urban Station
which the retailer can promote their brand 23 Levi’s
and offer an unparalleled experience.
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3. Retailers and brands have to
create new and innovative
shopping destinations that engage
the consumer, driving them to
explore what there is to offer.
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4. PoP-uP
Left:
Gap uses pop-up
stores for a variety of
its web based brands
store
takeover
RISE Of ThE pOp-Up STORE
COULd REVOLUTIONIzE
hIgh STREET RETAIL
Over the last couple of
years, American and European
cities have seen a growing trend
to utilize public spaces better.
This has manifested itself in
the development of the guerilla
gardening movement, as well as a
rise in temporary ‘pop-up’ shops,
cafes, restaurants and cinemas.
Although previously seen as a
a variety of pop-up stores in major cities.
In the US, pop-up retail has considerable The surprise factor of a shop
retail approach that only small, traction with big brands. Toys R Us will be
opening 600 new pop-up stores and hiring
‘popping-up’ in the high
independent companies would
take, we are now seeing big
at least 10,000 people for the holiday season
this year. This follows last years success of
street found considerable
consumer brands running small the 90 stores it opened, and also the need
to maximize sales during the holiday season,
traction among consumers,
pop-up stores in major cities. the period where the company makes a bulk with small, independent
of its sales. By putting many of these pop-
Due to the recent economic crisis, a number up stores in malls, the brand becomes more retailers providing an
of retail businesses shut down in Western accessible to consumers and can also leverage
economies, leaving behind a large amount of itself as the place to find the years best toys. alternative, unique offering
vacant shop space. These empty retail spaces
were utilized to great effect last Christmas In the UK, music retailer HMV opened up 10
for Christmas in both their
by both small, independent retailers and big
brands, who took the properties on as short
temporary stores across the country. They
were joined by upmarket department store
products and retail experience
term leases just for the holiday period. The retailer Harvey Nichols, who set up a pop-up
surprise factor of a shop ‘popping-up’ in the food and wine store in Manchester’s largest
high street found considerable traction among shopping mall. This met a need for the retailers
consumers, with small, independent retailers to expand their presence in the high street,
providing an alternative, unique offering for and showcase their particular expertise
Christmas in both their products and retail and products to consumer in an attempt to
experience. However, big brands also felt the draw them into the main retail outlets.
need to take the same approach, opening up
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5. Right:
Phaidon has opened
pop-up stores in
London and New York
However, the short-term leases attracted strong following among younger people, the
Phaidon, the book publisher, into opening brand looked for other ways to interact with
up retail stores in Central London and SoHo, its consumers and found a pop-up café to be
New York. Describing themselves as ‘reluctant the most culturally relevant, as well as having
retailers’, Phaidon moved into using small retail high visibility and low risk. It is important for
spaces because of the decline in the independent brands to keep themselves fresh and relevant
bookselling base and a lack of interest from to consumers and this is especially true for
chain bookshops in niche publications. We food makers, who face tough competition
should expect brands that haven’t entered for shelf space inside grocery stores.
retail before, or that don’t have a physical retail
presence, to start using pop-up stores as a Brands that have only ever had a presence
way of reaching out directly to consumers. online have also started to use pop-up stores
as a way of having a physical presence that is
Another brand that has never had an independent both flexible and low cost. Gap’s website based
retail experience is Pop-Tarts, yet they have brand Piperlime has used pop-up stores as a
recently opened up a pop-up store in Times bricks and mortar supplement to its online retail
Square, New York. The Pop-Tart ‘café’ features model. The brand generates hype by renting
a 30-item menu, including ‘Pop-Tart Sushi’ and out space for as little as three days at a time,
the ability to customize your own Pop-Tarts becoming a social event and enhancing the
with a variety of fillings, frostings and sprinkles. niche, contemporary equity of the brand. Gap
The ‘café’ was prompted by social networking has also installed a permanent, rotating pop-
interest in the brand, with Pop-Tarts being one up store in New York next to its flagship retail
of the top 20 most popular pages on Facebook. store, where it promotes collaborations with
Realizing that Pop-Tarts had a particularly designers and brands based on seasonal and
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6. Right:
Pop-Tart Sushi
at Pop-Tart World
Far Right:
Pop-Tart World opened
in Times Square,
New York
A pop-up store can
generate an extensive
amount of information on
not only the profitability
of a certain location, but
also the consumer types
that shop there, and their
purchasing habits
cultural events. This is an interesting use of the flexibility to provide a more unique, customized
pop-up store format as a supplement to the main experience for their consumers at a minimal risk.
store, providing a retail space to give consumers Pop-ups serve not only as a way of reaching
a totally different experience and range of out to consumers in new ways, but also as a
products to what they’d find in a standard store. way of gaining consumer information about
a location and testing it for profitability.
We should also expect more pop-up stores
to be used by big brands as a barometer for We should expect brands to increasingly use
potential future success in certain locations. A pop-up stores as a key retail strategy, particularly
pop-up store can generate an extensive amount during the holiday seasons. This could lead to
of information on not only the profitability of a a wholesale change in the way that our malls
certain location, but also the consumer types and high streets currently function, with a move
that shop there, and their purchasing habits. towards flexibility and the short term. We could
If sales exceed expectations then a business soon see our retail areas changing with the
should have enough information to not only seasons, as brands seek to maximize profit and
decide to deploy a permanent store there, reduce risk by providing a smaller scale, more
but also have enough information on what to customized retail experience for consumers.
stock there and what customer experience
they should provide. This business model is
particularly relevant in today’s tough economy,
where risk is reduced and consumers are
targeted with a more customized experience.
What started out as a movement by small,
independent retailers has now been adopted
by some of the largest retail brands in the
world. The availability of short term leases
on retail properties provides brands with the
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7. self-
All:
Mondrian South Beach
Hotel vending machine
www.mondrian-
serving
miami.com
fAST, EASy ANd CONVENIENT
RETAIL ExpERIENCES
Retailers are ushering in a new world
of self-service buy-and-pay applications,
with consumers increasingly using self-
checkout stations at grocery stores,
paying for travel through airport check-in
kiosks, renting movies from self-service
DVD rental kiosks, and motorists are
refueling their vehicles at pay-at-pump
gas stations. Restaurant diners can trend will only accelerate and consumers will increasingly $3,000 to $10,000 a square foot a year. In airports, where
buy a wider range of items at vending machines. 70% of ZoomShops are situated, the numbers are even
even order from touch-screens at fast-
more striking – airport stores make about $1,000 a square
food chains and use hand-held, pay-at- In the UK Sainsbury’s is currently trialling a vending foot while ZoomShops generate $10,000 to $40,000
table devices at sit-down restaurants. machine for NHS prescriptions, offering consumers a square foot. As an example one Apple iPod vending
a secure and convenient way to obtain medicine at machine ZoomShop in Hartsfield-Jackson International
This new mode of self-service kiosk commerce is being a time that suits them, while in Pennsylvania USA, a Airport makes $55,000 a month (Atlanta Journal). Retailers are ushering in a
wine vending machine is currently being trialed.
built on ground already broken by ATMs and vending
machines, both of which are going through challenges In addition each ZoomShop incorporates an interactive new world of self-service
and exciting developments in their own right. Well
aware that helping consumers serve themselves is
Changing consumer preferences about shopping and
the high cost of operating brick-and-mortar stores are
touch screen so that the consumer can learn more
about the products before purchasing. This not buy-and-pay applications
big business, manufacturers are working to develop inspiring premium brands to rethink how they sell their only allows the consumer to shop at their own pace
applications to compete in this burgeoning market. wares. As well as the traditional cheap items, more high- without a shop assistant but it also presents accurate
end items are achieving sales success through vending. information, replicating the process that consumers
Consumers increasingly desire a fast, easy and convenient have become accustomed to on the internet – not
retail experience, and it can help businesses increase ZoomSystems offer consumers the chance to purchase only are they comfortable with researching and
revenue and build customer loyalty. A study by NCR found high-end brands such as Apple, Sephora, and ProActiv, buying products on their own by touching screens
that 86% of Americans were more likely to do business with and can now be found at over 1,000 locations across the and pressing buttons; they often prefer it.
companies offering some sort of self-service. This appears US and Japan. According to Gower Smith, the founder and
to be especially true of young shoppers who are particularly CEO of ZoomSystems, “Zoom does for retail what ATMs did In March ZoomShops introduced their first vending
comfortable with the technology, and as part of the internet for banking. A ZoomShop costs less than an employee”. machines at leading supermarket chains including Kroger.
generation demand instant gratification without feeling the The revenue that can be achieved via a vending machine These ZoomShops bring Body Shop’s popular body care
need to handle the product prior to purchase. As consumers is also very impressive, while mall stores produce about and bath products to convenient locations across the US,
become increasingly more comfortable with this method, the $330 a square foot a year, a ZoomShop can generate creating a new channel for the boutique brand. “More
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8. The United States currently has The description for the $90,000
400,000 self-service kiosks (Self-
Service & Kiosk Association) Bentley reads “‘When admirers
ask where you bought your 2003
Across Japan there are 5.4 million Bentley Arnage convertible, we
vending machines – that is a dare you to say you bought it
vending machine for every 23 people
(Self-Service & Kiosk Association) from a vending machine”
Over $60bn is spent in vending
machines across the US each year
(Ingenico)
Eight out of ten British shoppers
are happy to swap their purchasing from
more traditional ‘bricks and mortar’ retail
outlets to vending machines (Ingenico)
Revenues for vending operators are
expected to be $11.3 billion this
year (IBISWorld)
In the US the self-service economy is than ever, customers today want to access products on the shockingly new and the reassuringly ordinary”.
set to reach $1.2 trillion in 2012 their own terms when and where they want to. For The The description for the $90,000 Bentley reads CEO of U*tique, Mara Segal describes the modern
(IBISWorld) Body Shop it is an opportunity to meet their expectations “‘When admirers ask where you bought your consumer as “savvy, information hungry, and
in an innovative way,” said Al Montalvo, Director of New 2003 Bentley Arnage convertible, we dare you to time-strapped… e-commerce bridged the gap
Sales and Emerging Channels for The Body Shop. say you bought it from a vending machine”. between products and information, automated
UK vending machines sold over retail will bridge the gap between information and
Not only are we witnessing premium brands utilize vending Front Office Manager James A. Bryant III is quoted instant gratification – it’s retail on demand”.
£4.3bn in products, of which $1.5bn in mass locations, but also in boutique venues where as saying “People just pass by it, and literally even if
was refreshments consumers have traditionally preferred greater service. they weren’t thinking about buying something, they While in the UK they’ve been slow off the mark to
This month the Hudson Hotel in Manhattan, New York, buy into the idea. They want to purchase something exploit the instant gratification offered by vending
introduced a new vending machine in their lobby that cool; it’s almost a story to tell - really an experience. machines, some of London’s hotels are beginning to
is available for guests around the clock. Their vending I’ve seen people spend 20 to 30 minutes just looking follow suit. As part of London Fashion Week the St
machine is stocked not just with travel necessities but with at the different products, and just be amazed.” Martins Lane Hotel hosted ‘The Love Machine’ stocked
items that are both luxurious and a little quirky, and vary with Selfridge’s products including an Alexander
greatly in price from as little as $4 to as much as $10,000. Another upmarket vending model is being installed across Wang dress and Vivienne Westwood fragrance.
the US this year – U*tique, an interactive luxury store
This page: Kim Walker, Senior Vice President and Creative that dispenses high-end and niche labels that include These new machines are offering a new way for retailers
U*tique vending
boutique Director for Morgans Hotel Group believes that Frédéric Fekkai and MD Skincare. Available in boutique and brands to interact with their consumers, having the
“This incredible concept gives us the opportunity to hotel lobbies, upscale gym locker rooms, nightclub ability to delight them in new ways, offering them greater
www.utiqueshop.com
enhance our guests’ travel needs by offering exciting lounges, premium shopping malls and airports. information, and in return the automated machines learn
Opposite: luxury brands, everyday essentials and unexpected about consumers’ shopping habits. As vending becomes
Hudson Hotel
vending machine experiences to take advantage of during their stay.” Russell Greenberg, Director of RUX who were responsible more popular, sophisticated brands will have to develop
for the overall design of the machine said “The words new packaging and communications at the point of
www.hudsonhotel.com
The Semi-Automatic machine in New York follows the upscale, automated and retail are not typically found in sale that can profit most from the new technology.
successful launch at their Mondrian South Beach Hotel, the same sentence. We needed to invent an image and
Miami. The machine here has been dispensing items experience for U*tique that was so seductive, elegant,
priced between $10 and $1.2 million, including Bentleys and streamlined that it would instantly transform people’s
to bathing suits. The Semi-Automatic with its sleek design preconceived notions about what shopping could be.
became an instant success and has become a feature The magic and allure of U*tique is that it combines
of the hotel where guests gather to explore the store.
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9. urban station
www.urbanstation.com.ar
In Buenos Aires a new coffee shop has opened that meets the
growing trend for people to work remotely, which is estimated at
between seventeen and twenty-six million people. The shop is
filled with desks, conference rooms and electrical outlets, giving
it the feeling of a trendy workspace more than a coffee shop.
They rent the desk space, which includes food and drink in the
cost of the hour. In addition, the large and airy store offers art and
business magazines and books to read, comfortable armchairs
for lounging and casual meetings, fully equipped meeting rooms,
printers, fax and scanners, plus lockers for your possessions.
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10. flagshiPs
All:
Apple’s new flagship
store in London’s
Covent Garden
www.apple.com
fOCUSINg ON CREATINg AN
ImmERSIVE BRANd ExpERIENCE
There is a growing desire
for service that is intuitive and
worthwhile, adding a level of
discovery and education to Takings are predicted to top £60 million per
the shopping experience. year, making it even more profitable than the
Regent Street Store, which is currently Apple’s
Retailers are increasingly giving consumers most successful store globally taking £2,000
a reason to visit the store, enabling them per square foot – more than Harrod’s.
to discover new products that they had not
previously considered, and encouraging them to Apple Stores deliver an holistic brand experience
try them. Flagship stores are opening up across allowing consumers to have a deeper
London’s West End, including Louis Vuitton, interaction with the brand, helping Apple to
Chanel and Apple. achieve the success it has today. More brands
are trying to replicate Apple’s strategies and
For the last few years Apple have led the way develop every store as a flagship store.
in developing a branded retail experience
and their new store in Covent Garden is their In particular, Steve Jobs, as part of his role
biggest ever store, becoming the ‘world’s on the board, is attempting to repeat the
flagship store’. The store includes a Start Up success he has achieved with Apple by
room where staff assist consumers to set up assisting the Walt Disney Company revamping
their purchases before they leave the store. 300 retail stores. The new store designs are
intended to put the magic back in the retail
Apple even hope that the store will become a experience. The goal of the new stores is to
destination for excursions, with a new Community make children clamor to visit the stores and
room that can be used for classroom visits. stay longer, bolstering sales as a result.
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11. All:
The new Disney
Store in California
www.disneystore.com
The first of the new Disney Stores opened in
June in California. Here, theaters allow children
service, and with more options of where and how
they choose to spend their money, retailers and
Increasingly consumers are
to watch film clips of their own selection that
emits scents matching the footage, participate in
brands alike are having to respond by delivering
unique experiences that attract consumers to
demanding better service, and
karaoke contests or chat live with Disney Channel
stars via satellite. Computer chips embedded in
visit their stores and spend time inside. with more options of where
packaging activate hidden features around the and how they choose to spend
store, for example walk by a ‘magic mirror’ while
holding a princess tiara and Cinderella appears. their money, retailers and brands
Jim Fielding, president of Disney Store Worldwide alike are having to respond by
wants to “make each visit customizable so
that it is much more memorable. This is truly
delivering unique experiences that
an immersive, one-of-a-kind retail experience
for children and families that only Disney
attract consumers to visit their
could deliver”. Paul Gainer, Vice President
and General Manager of Disney Store North
stores and spend time inside
America adds “The magic and wonder of Disney
is captured within the unique experiences that
await families at the newly designed Disney
Store. More than a store, we’ve created a
destination that brings Disney stories to life”.
Increasingly consumers are demanding better
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12. levi’s
www.levistrauss.com
Levi’s revenues are rising - growing 17%, (Reuters) - in no
small part to their investment in their retail strategy.
By opening high-end concept driven boutiques like
the one on Regents Street in London are helping
to elevate the brands fashion credentials.
This store, which has been open since March, is dramatic and
inspiring, engaging consumers as they are taken on a journey
through the origins of denim and the brand’s evolution. This
space offers their customers the ultimate brand experience, while
providing expert knowledge, product offering and story telling.
The store is designed to give consumers a tangible look into the
craftsmanship that goes into the original and definitive jean, and
instead of putting clothes in the window they have dedicated it to art.
Armin Broger, President of Levi Strauss & Co. Europe, Middle East
and North Africa is quoted as saying “On Regent Street, Levi’s has
created a place where craftsmanship and authenticity deliver the
most genuine experience of the brand anywhere in Europe.”
Through such stores Levi’s are successfully maintaining
a premium image whilst also offering more accessible
alternatives in other high street outlets.
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13. Modern technology allows us to
purchase whenever and wherever
we are, whilst assisting us in
those decisions. Brands that use
these technologies to support
their retail models and products,
are those that will have greater
chance of success in the future.
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14. shoPPing mall
Left:
N-building by Qosmo
and Terada Design
in your Pocket
BRANdS EmBRACE
mOBILE dEVICES AS ThE
fUTURE Of RETAIL
The prevalence of mobile
devices, and the continuing
increase in the abilities of our
technologies, mean that we can
now interact with products and product then consumers are more likely to make The ability for mobile devices to give consumers
places like never before. This a positive purchasing decision on that product. access to ‘background’ information has also
has already infiltrated our lives become a highly innovative area of retail. The
A recent retail program has used a combination growing adoption of augmented reality among
in the form of social networking, of mobile device technology and RFID tags to brands is a strong indication that they see this
where people can connect enhance the consumer experience of purchasing becoming a strong area of the mobile web, and The future of augmented
whenever and wherever they are in-store. A collaborative project between TOTeM that it will grow prevalent among consumers in
reality for retailers could
(Tales of Things and Electronic Memory) and the the near future. Augmented reality has already
thanks to their mobile devices,
letting friends know where in
charity Oxfam, has resulted in various donated
objects and clothes being infused with personal
been used in print advertising, and even in
concert programs. The rock band Muse have
be where users preview
town they’re having a drink, or stories, through RFID technology. Consumers
can walk around the store accessing memories
utilized augmented reality in their concert
programs, linking it with their website to give
and purchase whatever
rating the latest restaurant and
sharing it with the community.
and stories that the previous owners have
instilled within their old possessions, using
interactive tours of the stage and access to
exclusive interviews with the band members.
they see, anywhere they
their mobile devices as readers to access see it
With the increased use of mobile devices as the information in text or audio format. However, the ultimate use of augmented reality
portals to various aspects of our lifestyle, the for retailers is in the ability for digital information
potential for brands and retailers to generate This innovative approach could be applied to appear on top of the physical world, when
sales through them is enormous. However, by other retailers and brands to create a it’s viewed through a mobile phone camera. The
this also means that the need for brands and more immersive and informative experience, Layar app allows content partners to provide
retailers to provide products and services that which could add value for the consumer. For special paid content that users can access via
serve as stand alone experiences, is much example, through using RFID technology, their mobile devices. This can allow them to look
greater. Creating an infrastructure to deal with a protein supplement brand could include at anything from product information to restaurant
the increased ability of consumers to access information on how to use the product in reviews, as well giving consumers a way to
information about products has become vital. conjunction with the right training regime, navigate new locations by brands and retailers.
Mobile applications like Stripey Lines use asking the consumer what results they want The future of augmented reality for retailers
barcode scanning and image recognition to and helping suggest the right product for them. could be where users preview and purchase
enable users to access information quickly The technique could also encourage people whatever they see, anywhere they see it.
about a product – if a brand can provide sample to realize the sentimental value of products,
reviews, helpful tips or further information for that appealing to their desire for authenticity.
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15. Worldwide smartphones market
is expected to reach 804.42
million units by 2015. (GIA)
Using mobile devices as a way to
purchase goods and services is
expected to exceed $300bn
by 2013 (Juniper research)
Ticketing will represent 40%
of the mobile payment market
by 2013 (Juniper research)
Augmented reality has also been used on the order to sway them over to paying for things by 2011, giving a clear indication that the Far Left:
Subports uses a text
exteriors of buildings, such as the N-Building by via their mobiles. One of the key areas that will future of retail will be moving more towards based payment system
Qosmo and Terada Design. The low-rise retail stimulate growth in using mobile devices for mobile devices sooner, rather than later.
www.subport.com
building is covered with QR codes, which can payment is ticketing, which could represent 40%
be then photographed using your phone. This in of the market by 2013 (Juniper research). This will Mobile devices allow consumers to create, Left:
Stripey Lines App
turn shows what retailers are inside the building, be driven by usage of mobile device payments communicate and explore the world in ways
any sales and coupons that are currently valid, on rail, air and bus networks, as well as with that are constantly changing. The challenge for www.stripeylines.com
and even offers the ability to make a restaurant sport and entertainment venues and events. retailers will not only be keeping up with new
reservation. Layered on top of this information are technologies, but also utilizing them in ways
the Tweets and comments of the people inside, An example of growing use of mobile payments that are easy for the consumer to understand
due to the use of Twitter geotagging. What is is subports.com, a New York-based mobile and access. Using new technology is not
most innovative and exciting about the project technology business that allows buyers, enough – it has to work on the lower tier of
is that it doesn’t require a special application on sellers and donors to use text messages in the consumers to be accepted and adopted by
your phone – all that is required is that the phone transaction of products and services. Its main all the big brands. Mobile devices provide a
has QR capability. This makes the innovation selling point is that its innovative retail model portal for brands and retailers to layer on extra
less about the technology, and more about lowers the barriers of doing business between information and features that would be difficult
its application in everyday life - the ability for independently-owned shops, designers, artists and expensive to apply to their store interiors
consumers to scan the skyline with their phone and consumers. Subports also calls out the fact or products. We should expect our mobile
and read what shops are open, which have offers that its innovative format is a safe and highly phones to soon become as important in our retail
and where everyone is having a good time. sustainable alternative to the traditional credit- experience, as they are for social networking.
card swipe. Consumers order a product or
Mobile devices are providing more than just service by texting its unique ‘subcode’ on their
portals for additional information. How we mobile to subport, which will send confirmation
purchase things could be one of the biggest by text and email. We will continue to see
revolutions that these devices bring to consumers more of these innovative businesses taking
in the next five years. Using mobile devices as a a greater share of the market from traditional
way to purchase goods and services is expected retail models through using mobile technology.
to exceed $300bn by 2013 (Juniper research). The total value of mobile payments (including
Retailers are trying to tap into the familiarity that mobile remittance and payments made via Near
consumers already have with web shopping in Field Communications) will exceed $587bn
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16. moving retail
Left:
Zara now has an online
store for many of its
European markets
online www.zara.com
mAjOR INVESTmENT IN ONLINE
RETAIL COULd SIgNAL A mOVE
TOWARdS VIRTUAL RETAIL
Despite the fact that online
retail has been a strong, and
growing, presence in our lives
for the last decade it still only
accounts for around 10% of sales
in the US and UK markets – so
why is it not larger? We could
soon see a change in this, as
major retailers and brands start Brands have also realized that 50% of consumers
to roll out more innovative and research products or services online, before
going in store to make a purchase. With the
ambitious online retail programs. understanding that online research drives sales in
stores, brands and retailers have to look at how
Changes in consumer purchasing habits and they present product information online. Some Brands have also realized that 50%
decision-making will also play a part in moving retailers are doing that by making their online
retail sales to the online world, as will the growing presence more interactive, adding audio and of consumers research products
usage of mobile technology in retail. video elements to their sites to give consumers
a more immersive and customized experience. or services online, before going
The main attraction to online shopping is that
it is totally flexible to the consumer, who can However, there is an alternative view to the in store to make a purchase
shop where and when they want, from the ‘research-before-you-purchase’ process, in
comfort of their own home. As consumers that customers will also purchase from online
spend more time and money online, brands retailers after researching the product in store.
have begun to question whether it is worth This process is particularly prevalent in consumer
having a physical store presence. For many electronics, where consumers may try the
consumers, a walk-in store is a physical product in store, get advice, then go home and
expression of the brand and a vital component purchase the product online to be delivered
of more high-end, experiential products. It is to their door. It is important for brands to
often difficult to reproduce the luxurious aspects understand how consumers view their products,
of brands in an online format, and so their and where they purchase them, in order to
stores and its customer service are one of the correctly position their store presence as either a
foundations to the success of the business. standard retail point or more as a showroom.
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17. Left:
Cosmetic brands like
Benefit use YouTube
to showcase their
products in tutorials
www.youtube.com/
benefitcosmetics
Increasingly, retailers are
looking to bring some
aspects of the online world
into their stores, particularly
with social networking
As a further sign of the growth in online to start to install technology in store that allows to look at what they sell, and explore consumer
retail, there has been a rush by many major consumers to connect to each other. This gives perceptions of whether they are products
brands to secure online payment service consumers instant feedback and advice from they feel more comfortable researching
providers. For example, Visa recently bought some of their most trusted connections, as well online and buying in store, or vice versa.
Cybersource, a California-based online as opening up the brand to a larger audience. Most importantly, we should start to see a
payment and security outfit, for $1.3bn. variety of retail brands increasing their online
Other payment service networks have, or will Diesel has installed such a system in some of presence and using various technologies to
be, doing similar things in order to secure their stores in Spain, with a kiosk that allows link the online world with the physical.
a future part of the online retail market. you to take pictures as you try on outfits. These
can then be posted directly online to sites like
Retailers and big brands have increasingly moved Facebook, where consumers can ask their
into the online space to combat the likelihood network of friends for opinions on what style
of a global decline in high street spending. This looks best. Youtube has also played a role in
has been especially true in Europe and America, online retail, by providing a place for consumer’s
where consumer confidence has waned due to give reviews and tips on all sorts of brands and
to fears of an economic slowdown. Despite products. Although this is not necessarily a direct
this, online fashion sales have been resilient, link to the online retail of that product / service,
prompting the Spanish clothing retailer Zara to it does have an effect on consumer purchasing
open a new online store for France, Spain, Italy, habits and choices. We can expect collaborations
Portugal and the UK. We should expect other between retailers and online content providers
clothing retailers across Europe and America in the near future, where online brands get a
to start reducing the number of physical stores presence inside physical stores. In exchange
they have and to increase their presence online. for this, retailers gain a greater presence online,
reaching out to a wider audience, as well as
Online retail is not just restricted to purchasing, aligning themselves with an innovative brand.
however. Increasingly, retailers are looking to
bring some aspects of the online world into Although a major player in the industry, online
their stores, particularly with social networking. retail has yet to fulfill its potential and gain a
The rise of mobile devices as a key portal to considerable share of the market from more
social networks has prompted many retailers traditional formats. We should expect brands
No.43
33 | 34 ANTENNAE
18. a cashless
Left:
Visa iPhone case that
lets you pay without a
credit card
society
Below:
The iPhone continue
Visa’s development in
making payment easier.
In 2007 they released
Micro Tag key fobs
www.visaeurope.com
CASh IS NO LONgER kINg
In the next few years we
will witness a revolution in the
way we pay for things, with cash
rapidly going out of fashion. Mike
Bownman, Head of Policy and
Markets at the Payment Council
said, “Although cash won’t
disappear in our lifetime, the
continuing payments revolution
will make it an ever smaller part
of our spending”. the instantaneousness of purchasing online. on its Onepulse card, and by the end of this
According to a survey by Barclays nearly two- year this will grow to four million, with a total of
According to the Payments Council thirds of people have abandoned a queue in a twelve million contactless cards in circulation,
banknotes and coins will be used for fewer store, as it was taking too long to get served. resulting in one in seven consumers in the
than half of all transactions in five years In addition two minutes is the longest many UK having the ability to pay contactlessly.
time. While overall spending has doubled British consumers are prepared to queue,
since the turn of the century transactions down from five minutes just six years ago. If the roll-out is a success, then it is hoped that
with cash have only risen by 7%. contactless technology will move into mobile
At the beginning of this year Orange partnered phones. Antony Jenkins, Chief Executive of
The consumer card payments market has with Barclaycard to launch a contactless Barclays’ global retail bank believes mobile
reached near full penetration in western credit card. In theory these cards never phones are the future, and that people will
European countries and is now standard need to leave the wallet, making them very be receiving, making and managing their
in the wallets of many Europeans. convenient, and speeding up shopping. payments on mobile phones in the near future.
However, in the US, this market has
struggled to gain a foothold. But, smart As part of this system, users can set He even believes that consumers may soon be
cards may now be getting a second chance themselves spending limits and for those able to hover their mobile over the price label of
in the form of contactless technology. who are also Orange mobile phone users, an item in a shop, confirm their purchase and
they will receive an SMS message when take it away without having to go to a checkout.
they are approaching their limit.
Retailers, along with banks, are looking to Visa is currently trialling mobile payments around
make non-cash payments even easier and The two main contactless cards are Visa’s the world, exploring the services that work best.
more attractive than using coins and notes. PayWave and Mastercard’s PayPass, with They are using the mobile to pay for transport in
Consumers’ patience to queue in stores is Barclays the main bank signed up to them. Germany, fast food in Guatemala, and to receive
becoming increasingly limited, in part due to Barclaycard already has one million customers coupons and discounts in North America.
No.42
35 | 36 ANTENNAE
19. Right: Bottom right:
Barclaycard OnePulse Mastercard Zoompass
Oyster card is a
www.zoompass.com
In Europe currently six in ten transactions
combined credit card
and London travel involves cash, but almost 80% of these are
for less than £10.
card meaning that
commuters need never
queue to pay again
www.barclaycard-
onepulse.co.uk
Approximately £1 in every £2.50 is spent
Below: on cards, and this is predicted to change
Accessing accounts
in the future may be to £2 in every £3 by 2015.
done by biometrics
(Visa Europe)
More than 20,000 retailers now have
incorporated contactless pay systems in
store (Orange)
There are currently 5 million
contactless cards in use (Visa)
In 1999 nine out of ten pints were bought
with cash, today only four
out of
ten are bought with cash
(The Guardian)
Although it will be several years before the new provider or handset manufacturer in the West
In the EU ¤1.68 trillion was spent
technology will be introduced globally, with was to partner with, or purchase, a credit card
more than 27 million point of sale locations company, they could leverage their brand In the next few years we on cards in 2008 and has been growing
at 12% a year for the last five years
in need of updating, an iPhone app already
makes payment by phone possible. The Send
equity, and utilise their retail relationships.
will witness a revolution (European Central Bank)
Money app, developed by PayPal, which
has already been downloaded by one million
Many may see mobile phones as the payment
system of the future, but the solution maybe even
in the way we pay for
people, allows two owners of iPhones to simpler. In schools across the world children are things, with cash rapidly In 2009 59% of the 37 billion
‘bump’ their phones together in order to make paying for their school lunches by just pressing transactions were done with cash – a
a connection and send money to each other. their finger onto a recognition panel. With children going out of fashion. sharp decline from the 73% in 2000
being brought up paying for things without cash, (Payments Council)
Additionally, this month Visa are releasing or even cards, they are likely to demand similar
an iPhone case that makes the handset systems throughout the retail chain. In the United
compatible with contactless consoles, whilst Arab Emirates, Barclays have already introduced In the UK withdrawals from cash
Mastercard have also introduced tags that a new cash machine that enables people to
stick to phones. These, however, are purely use their fingerprints to withdraw money, and at
machines fell by £1.6bn compared
interim solutions, as from next year all of RetailTech 2010 Coca-Cola presented a vending
with a year ago, a fall of 3.2% (Payments
Nokia’s smartphones will incorporate NFC machine that employs a biometric system that Council)
(Near Field Communication) chips, with many scans your finger vein to see who you are,
expecting the other large brands to follow. NFC allowing consumers to ‘pay’ with their finger.
is expected to become ubiquitous within the Last year 27% of US adults paid their
next five years, which will give new hope in In the next few years the way we pay for goods
determining the future of the mobile wallet. is going to change rapidly. It is essential that
bills online (Packaged Facts
retailers, banks, and consumer brands find the
Yet the West is behind the rest of the world – in best solutions that make the shopping process
Africa, six million people are already paying for as enjoyable and easy as possible while ensuring 68% of American adults have a debit
goods on their mobiles, and mobile payment that the system is secure and trusted by all. / credit card in their wallet (Packaged
is quite advanced in East Asia. The Japanese A new system may even offer consumers the Facts)
call it ‘osaifu keitai’ (cellphone wallet). In Japan ability to keep better track of their spending
NTT DoCoMo took control of the mobile-wallet helping them manage their budgets.
market by buying a bank. If a mobile services
No.43
37 | 38 ANTENNAE
20. Customized.
Bespoke.
Your Antennae.
NewEdge is a dynamic innovation consultancy The world is constantly changing, how
with a world-class team of strategists, trend will it impact your brand and business?
forecasters, researchers and designers. We bring
a fresh approach to growing business and brands For a tailored report specifically
through upstream and downstream innovation. for your business email us at:
antennae@new-edge-com
Our Antennae Trends team are continually
researching emerging design trends, ideas and Or call Richard on:
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through to changing consumer lifestyles. These
trends indicate how markets are being shaped in
the future, giving us the ability to anticipate how
consumers are likely to respond to future solutions.
If you would like to know more about our innovation
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No.43
39 | 40 ANTENNAE
