Service Innovation in Retail / Service Design Drinks Berlin
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This document discusses the future of retail and how service design can help address challenges facing the industry. New technologies like mobile, social media, and location-based services are driving changes in customer behaviors such as showrooming and buying/trying products anywhere. Retail stores are struggling with a 4% sales decrease while online sales are increasing. Both online and offline channels have advantages and disadvantages. The solution is seen as an omnichannel approach that combines the best of both worlds through seamless customer journeys. Service design can help create integrated physical and digital experiences like those demonstrated by case studies of Kate Spade, Nike, Bonobos, and Burberry. The retail experience needs to be rethought beyond online vs offline models
Service Innovation in Retail / Service Design Drinks Berlin
- 1. Service Design Drinks FJ O R D / A P R I L 2 3 , 2 0 1 4 Service Innovation in Retail
- 2. Martin User Experience, Nokia Katrin PhD Candidate, University of Potsdam Who are we? Olga Business Consultant, FuxBlau Manuel Service Designer, Fuxblau
- 3. Where we are today
- 4. Where we are today
- 5. Who is talking today? Johannes Wrubel Founder of ///
- 6. “The Times, They Are a-Changing!” — B O B DY L A N , 1 9 6 4
- 7. smaller type Retail is broken! Service Design can fix it.
- 8. /
- 9. Future of Shopping 1. Retail is struggling to face the challenges of digitalization 2. New business models threaten old ones 3. People adopt to new technologies with new behaviours STAT U S Q U O :
- 10. Some Numbers Increase of online sales in fashion retail 2007: 4,9% 2012: 16,8% Increase of mobile sales > 1.000.000 mobile transactions in Q1/Q2 2012 = 152% more than 2011 ! Increase of mobile devices: T H AT H AV E I N C R E A S E D :
- 12. New Technologies Mobile Social Communities: Twitter, Facebook, Instagramm Location Based Services: Foursquare, FB Places, Google Places Physical World Connectors: NFC, RFID, QR, iBeacon Mobile Payment: Square, SumUp, Google Wallet T H AT D R I V E M O B I L E CO M M E R C E :
- 14. Treiber: SoLoMo
- 17. New Behaviours Shop everything everywhere anytime Use whatever device is there ! Get instant social feedback ! Buy & Try > Return ! Showrooming: choose offline/order online T H AT D R I V E T H E C H A N G E :
- 19. Retail Store Sales in Germany, 2012 H O W B A D I S I T ? $ Quelle: BrandEins 04/13 - 4 % - 3.000.000.000€€
- 20. Retail Sales H O W B A D I S I T ?
- 21. Physical Store P R O : CO N T R A : Costumer ! Experience fashion ! Immediate Take-Away Costumer ! Limited Selection ! No time to decide ! ! ! ! Company Higher conversion rates ! Lower return rates Company ! Showrooming ! High fix costs/ Hard to “scale“
- 22. If the average online customer spends 100€ per order ! and the retailer has ! 18.000 orders a year: How much profit will they make? $ Price Question W I N S O M E M O N E Y
- 23. Price Question W I N S O M E M O N E Y Costs Minus Rest Average Basket Size 100,00 € Returning 40 % -40,00 € 60,00 € Cost of Product 40 % -24,00 € 36,00 € Discounts 10 % -6,00 € 30,00 € Cost of Advertising 10 % of ABS -10,00 € 20,00 € Shipping 4,90 -4,90 10,93 Callcenter/Fulfillment 13,5 -8,10 2,83 Shop Setup 40.000 € -2,22 € 17,78 € Product Shooting 35.000 1,95 15,83 Cost of IT 5 -3 -0,17 Result -60,16 -0,16 18.000 = -2880€ Quelle: BrandEins 04/13 $
- 24. eCommerce P R O : CO N T R A : Costumer ! “Unlimited” products Research & Compare Costumer ! Cannot touch and try ! Waiting for delivery ! ! ! Company Tracking of customer behavior ! Instant improvement Company ! High return rate ! ! No “customer contact” and insights !
- 25. So what? ”eCommerce and stores both got their pro’s and con’s. If you know what you want, web shop is the place to go. For some products it’s nice to actually experience them and talk to somebody. ! The perfect shopping experience in my opinion would be the combination of on- and offline regarding Information, Ordering, Delivery, Returning and Service in a seamless process - at a reasonable price.“ ! Werner Reinartz Professor for Commerce and Customer Management at the „Wirtschafts- und Sozialwissenschaftlichen Fakultät“ of Cologne University T H E S O LU T I O N I S
- 26. //
- 27. A N E W CO N C E P T ?
- 28. Omnichannel A N E W CO N C E P T ? “Channel’ means nothing to the consumer – they think in terms of what they’re buying, not how they’re buying it.” Quelle: h5p://www.harvardbusinessmanager.de/he=/ar>kel/a-‐816329.html
- 29. Omnichannel S C E N A R I O S
- 30. Omnichannel 1. Store to Web ! 2. Web to Store 3. Check and Reserve ! 4. Same Day Delivery 5. Pick-Up Return S C E N A R I O S :
- 31. Omnichannel Complex customer journeys ! Multiple touchpoints Seamless switch between devices ! Blending of offline/online Best of both worlds 24/7 – EVERYWHERE C H A L L E N G E S :
- 32. Returning Inspiration Selecting Wearing Omnichannel C H A L L E N G E S : CO M P L EX C U STO M E R J O U R N E YS Purchasing $
- 33. Service Design H O W I T C A N H E L P :
- 34. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Service Design H O W I T C A N H E L P :
- 35. ///
- 36. Case „Kate Spade“ STO R E TO W E B / S A M E DAY D E L I V E RY:
- 37. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case „Kate Spade“ STO R E TO W E B / S A M E DAY D E L I V E RY:
- 38. Case „NIKE“ F R O M P R O D U C T TO EX P E R I E N C E : D I G I TA L P H YS I C A L
- 39. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case „NIKE“ F R O M P R O D U C T TO EX P E R I E N C E :
- 40. Enabler „Go Try It On“ I N STA N T S O C I A L F E E D B AC K :
- 41. Inspiration Selecting Purchasing Wearing Returning Home on the go Store I N STA N T S O C I A L F E E D B AC K : Enabler „Go Try It On“
- 42. Case „BONOBOS“ W E B TO STO R E :
- 43. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case „BONOBOS“ W E B TO STO R E :
- 44. Enabler „UPCLOAD“ P E R F E C T F I T T I N G O N L I N E :
- 45. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Enabler „UPCLOAD“ P E R F E C T F I T T I N G O N L I N E :
- 46. Case „Burberry“ P H YS I C A L D I G I TA L M E LT D O W N :
- 47. Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case „Burberry“ P H YS I C A L D I G I TA L M E LT D O W N :
- 48. Case „Burberry“ P H YS I C A L D I G I TA L M E LT D O W N : ”Then, there was the back end: one of our key strategies from day one was operational excellence. We wanted to be as admired and as respected for the back end of our business as for the front end. When I started, we had just embarked on a business-wide rollout of SAP.“ ! Angela Ahrens, CEO of Burberry
- 49. Retail needs to be rethought: beyond online/offline as new integrative business/service models providing the best customer experience!
- 50. /// Skalitzer Straße 86C 10997 Berlin ! [email protected] 0151 191 21 889
- 51. Exercise Plan the perfect retail experience for a persona
- 53. What examples can you share? What should the next topic be? servicedesignberlin.de @SD_Berlin fb.com/servicedesignberlin