© shutterstock.com/Westend61 Premium

Digital and yet Exciting: Retail of the Future

CANCOM, ECE, Kaufland and Zukunftsinstitut speak up

If you don’t want to lose out, you have to keep reinventing yourself. “Digitalization” and “shopping experience” are currently the magic words in the retail industry. How can the industry employ these trends effectively? We invited four experts to an interview: Werner Schwarz from CANCOM, Joanna Fisher from ECE, Dr. Angelus Bernreuther from Kaufland and Andreas Steinle from Zukunftsinstitut.

 

We are observing two trends in the German retail environment: Digitalization and a focus on experience. How can these two trends be prevented from cannibalizing each other and encouraged to support each other? What can architecture, urban planning and marketing contribute?

 

Werner Schwarz, CANCOM: Online or offline – the dialogue with the customer must be conducted using smart technologies across different channels and provide a personal value added. Shops can become interconnected worlds of experience by intelligently linking stationary retail and e-commerce, and retailers can score with their customers by offering them relevant services.

In the big cities, a general trend towards flagship stores with high-quality equipment can be observed. With showrooming concepts using digital features they offer a special shopping and product experience. For example, some retailers offer their customers the possibility to design and customize the products on configuration displays or screens according to their own ideas.

Trendy: Showrooming concepts with digital features”

There are also interesting concepts, such as digital shelves, for smaller shops or retailers with a particularly broad range of products. With the so-called “virtual shelf” the available product line can be extended virtually, so that only a small fraction of the items has to be stocked.

For marketing digitalization means looking into many different technological tools and services as well as completely new service providers. This is only possible by working hand in hand with IT. Thus, many traders have already started equipping all their stores with Wi-Fi. A functioning IT network is indispensable as a basis of digitalization for connecting the individual channels.

 

Joanna Fisher, ECE: Digitalization and a focus on experience complement each other. A focus on experience raising emotions is mainly generated by “analog” excellence. But it is also important to use all channels by integrating the digital world. In center design we increasingly emphasize the quality of the time spent there, e.g. we use sound worlds and mall scenting in the Aquis Plaza in Aachen; at the Milaneo in Stuttgart it is outstanding architecture with a special spatial experience, and we generally increase the gastro portion in our centers. Quality of time spent, food and drink and a focus on service are the decisive “feel-good factors” for the customer. This is also reflected by many retail concepts – e.g. the quality of the time spent at Nespresso, the gastro integration in About You or by the service in the Apple Stores.

Quality of time spent, catering and a focus on service are the decisive ‘feel-good factors’”

There is a strong tendency to apply digital solutions in the service industry. Interactive guidance systems, indoor navigation with beacon technology, but also customer advice using live video chats, are just a few examples. All of this has already been introduced to some centers and will become more common in the future. In entertainment we also develop modern products like digital children’s playgrounds or selfie boxes with green screen technology.

In marketing we are also observing a clear shift to the internet. In the future, innovative tracking technologies will allow us to bridge the gap between different media from stationary shopping to the digital world. It will be possible to approach customers who first looked for products online about the products available when they visit stationary shops.

The architecture of the future will also be faced with new requirements. Autonomous driving will have consequences for parking concepts. Click & collect services require drive-through zones, digital food court ordering concepts etc. On the other hand, pure online players of the past will need stationary areas in order to give their brand an identity. About You, Blue Tomato, Elbenwald or MyMuesli have already opened stationary shops in our centers.

 

Dr. Angelus Bernreuther, Kaufland: Retail must combine digitalization and the focus on experience. It is important for us that our customers feel comfortable when the visit us. This includes a fresh and appealing appearance of our outlets offering a pleasant shopping atmosphere. Our customers can do their quick lunch break shopping at our outlets, but also their extensive weekend shopping. Of course, we have also included digitalization in our concept, e.g. digital price labelling in the fruit and vegetable section, info screens, self-scanning checkouts, contactless payment and our online ordering service (delivery service with pickup station) in Berlin.

The location and architecture of a property are also becoming increasingly important and will change in the future. Instead of exclusively peripheral markets more and more individual properties are included, which fit into the urban structure and enhance their surroundings with their appealing architecture.

Location and architecture are becoming increasingly important”

Andreas Steinle, Zukunftsinstitut: The essential element of digitalization is interconnection. This driving force is a perfect tool for the focus on experience: it turns customers into communities with a shared passion. Retailers have to change their mindset and must not regard digital communication as an extended arm of advertising or promotion tools. A harmful focus on prices and discounts (“Black Friday” etc.) is still predominant. The point should be to raise the customers’ excitement about relevant topics, to get them to communicate with each other and to come to the shops. This means that retailers, urban planning and marketing have to be more interconnected.

The point is to raise customers’ excitement about relevant topics.”

 

Do you think that there already are examples of the successful integration of the two trends? Keyword multichannel/cross-channel marketing?

 

Werner Schwarz: Shopping experience can be redesigned on all channels individually. For this purpose checkout systems and stock data must be connected quickly and safely, just like the customer data from all devices.

Virtual shop windows allow you, for example, to order goods outside opening hours and to have them comfortably delivered to your home. With location based services new approaches are opened up to addressing the customer specifically at the particular place and time and to providing context-related information. Skilfully combined with loyalty programs the customer will be convinced by relevant and individual offerings.

To mention an actual example: Media-Saturn are currently working on revolutionizing the shopping experience in their markets by introducing various digital features. For example, solutions with virtual reality and robotics are being tested in combination with internet-of-things technologies. Thus, the customers can already configure their new kitchen using virtual reality tools at some test markets. We are also experimenting with smart robots which present products or deliver goods. The important thing is: Having the courage to just try things out in order to really use digitalization in the interest of the customer.

Having the courage to just try things out”

Joanna Fisher: Rebekka Minkoff’s store in SoHo, New York shows the future of stationary retail: On a big “digital wall” customers can obtain information on the product line when they enter the store, or just order a coffee which will be served immediately. In the changing room, digital mirrors allow them to order products in different sizes and colors right into the changing room or even to check them out immediately. Of course, this is still a show-case stage, but it shows where we are heading.

Burberry relies very much on a “seamless customer experience” and has completed the transformation from a very traditional brand to a brand in which the digital experience is rooted in the brand’s DNA. In selected stores product videos can be accessed using RFID chips, live streams are provided in Fashion Weeks. Starbucks is another example offering an excellent omni-channel experience with their app. Apart from a well-designed loyalty program, the customer can also use the app for mobile payment. In the US, anybody who has little time can use the “order and pay” function, which allows you to place an order using the app, so that you only pick up your drink in the pick-up area of the shop and do not have to wait any more.

Transformation from a traditional brand to a brand with a digital DNA”

Andreas Steinle: With “Welle 7” the Swiss Migros Group recently introduced a trend-setting concept at Bern railway station: The building is not a classical shopping mall. Never have the offline and the online worlds been so close in retail. Customers can have parcels they ordered online delivered to the “Collect Lounge” on the ground floor, e.g. by Zalando. In special changing rooms they can try on the clothes – and send them back immediately, if they do not like them. On top of that “Welle 7” offers many very broad options with a co-working space, a gym and further education.

Never have the offline and the online worlds been so close”

 

Let us take a look into the crystal ball: Who are the “big players” in tomorrow’s retail industry? Which concepts will help them get there?

 

Werner Schwarz: The big retailers who will work intensively on digitalization and experiment with new innovative concepts around the customer journey will be tomorrow’s big players. Who would have thought a few years ago that even the discounters would take up completely new shop concepts to create worlds of experience for their customers – from innovative space and shelf planning to digital touchpoints and mobile concepts.

For example, Aldi Süd recently made it into the headlines with its mobile pop-up bistro where cheap three-course meals are prepared with ingredients from the discounter’s range. Lidl also operated a pop-up store for its Esmara textile brand for ten days between the luxury stores in Hamburg last year. REWE and Penny, however, are causing a stir with lasered fruit. This saves packaging and labels, so that it is a contribution to the protection of the environment and to sustainability.

Thanks to new, innovative technologies individual customer requirements can be met quite differently. It is important to see digitalization in the interest of the customer and to offer a real customer experience by using data intelligently. This is the only way to develop a point of sale to a point of service.

Even discounters want to create worlds of experience today”

Joanna Fisher: You will only be successful in a digitalized world if you offer a barrier-free omni-channel experience. It is not about impressing the customer with as many digital gimmicks as possible. It is, in fact, about creating an optimum customer journey without media disruptions, but with maximum interconnection. This starts with the online product search with real-time availability information for the stationary shops and ends with digitally supported individual personal advice in the shop. Delivery concepts like same-day delivery or even same-hour delivery will become more important; intelligent loyalty concepts with mobile payment functions are also bound to be a must. On the other hand, only those concepts will be successful which will return to the strengths of stationary retail and convince the customer with excellent advice, an emotional experience and curated product lines.

You will only be successful if you offer a barrier-free omni-channel experience”

Dr. Angelus Bernreuther: Customers still decide where and how they want to shop. Therefore, the big players of the future will penetrate all channels, both online and offline, with the strength of their brands, from the search for information to the purchase and aftersales. It is important to interact with the customer. With a friendly store design and additional services, stationary retail will remain a “marketplace” and meeting point – supplemented by online services, such as delivery services, pick-up stations and the like. Customers appreciate the flexibility to be able to use the services fitting their needs, depending on their individual situation.

Customers appreciate the flexibility to be able to use the services fitting their needs, depending on their individual situation.”

Andreas Steinle: The big players will include the big online providers like Amazon and Zalando, on the one hand, because they do not see themselves primarily as retailers, but as tech companies. This means that they will be able to utilize the possibilities of smart algorithms to improve customer experience better than their competitors. Apart from that, completely new players will emerge, who will create interconnected ecosystems and connect, for example, hotels, restaurants, housing and retail.

The big players of the future will not see themselves primarily as retailers, but as tech companies.”

Werner Schwarz

Werner Schwarz, Vice President CANCOM

As Vice President, Werner Schwarz heads several competence centers of CANCOM GmbH throughout Germany. One of his functions is the responsibility for the extension of the business solutions portfolio, which offers innovative solution modules for the digitalization of the retail industry. The retail expert of CANCOM has been involved in the technological possibilities of approaching customers across different channels as well as in the focus on experience at the point of sale. Before Werner Schwarz joined CANCOM in 2005, he worked in top positions in various IT companies in Germany and England, including EINSTEINET AG and Nortel Dasa.

 

Joanna Fisher

Joanna Fisher, Managing Director Center Management ECE

Joanna Fisher has been a managing director for center management since 2014 and heads the existing business of ECE in this function. She started her career there in 1998 as a center manager at various locations in Germany and abroad, mainly in Eastern Europe. Apart from the management and numerous restructurings of existing properties, her responsibilities included the opening and launching of new shopping centers. From 2011 to 2013 she first supported the regional area east and later southwest including Switzerland as Regional Director Center Management. After that she took on the responsibility for the new markets as a Senior Director and, thus, the support of the ECE developments in countries like Italy, Denmark, Turkey and Qatar. Joanna Fisher was born in Stettin in 1973. She studied economics at the European University Viadrina in Frankfurt (Oder) with a focus on marketing and controlling. She loves shopping and traveling.

Dr. Angelus Bernreuther

Dr. Angelus Bernreuther, Senior Project Manager Kaufland

Angelus Bernreuther has been working for Kaufland in the region south-east since 2017. As a Senior Project Manager he is responsible for the real estate development of new locations in Bavaria and Baden-Wuerttemberg. Before that Angelus Bernreuther was employed by one of the leading German retail consultants as Head of Market Research & International Affairs in Germany and abroad. He was also a research associate at the University of Bayreuth and a consultant for community and regional planning. He has more than 15 years of experience in the field of location planning, utilization concepts and building legislation support for retail properties. Angelus Bernreuther has a diploma in geography. He acquired a doctor’s degree in this field and the qualification of an ‘Immobilienprojektentwickler’ (property project developer, EIPOS).

Andreas Steinle

Andreas Steinle, Managing Director of Zukunftsinstitut Workshop GmbH

Andreas Steinle provides consultant services for companies on “fitness for the future”. He focuses on the practical implementation of trends in business innovations. This is also the core of Zukunftsinstitut Workshop GmbH, an affiliate of Zukunftsinstitut, which he established in 2014. His career took him from the Trendbüro in Hamburg to the Zukunftsinstitut, which was founded by Matthias Horx in 1998 and is one of the most influential think tanks in European trend research and futurology. He has also worked and lived in New York. Steinle has also worked part-time as a lecturer at the Institut für Sprache und Kommunikation (Institute for Language and Communication) of the Technical University of Berlin. He graduated as a Diplom-Kommunikationswirt (master in communications) at the Berlin University of the Arts. He has published a number of books, the most recent one being “Neugier-Management”: Treibstoff für Innovation“ (Curiosity management: Fuel for innovation) (Nov. 2014). Andreas Steinle is a self-confessed urbanist with a green heart: mushroom picker, jam maker, passive horse rider.

Leave a Reply