Service Innovation in Retail

Service Design Drinks

FJ O R D / A P R I L 2 3 , 2 0 1 4

Service Innovation in Retail

Martin User Experience, Nokia

Katrin PhD Candidate, University of Potsdam

Who are we?

Olga Business Consultant, FuxBlau

Manuel Service Designer, Fuxblau

Where we are today

Where we are today

Who is talking today?

Johannes Wrubel Founder of ///

“The Times, They Are a-Changing!”— B O B DY L A N , 1 9 6 4

smaller type

Retail is broken! Service Design can fix it.

/

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

S TAT U S Q U O :

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 :

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 C O M M E R C E :

Treiber: Social Media

Treiber: SoLoMo

Treiber: Digital-Physical-Convergence

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 :

Retail Store Sales in Germany, 2012H O W B A D I S I T ?

$

Quelle:&BrandEins&04/13

- 4 %

- 3.000.000.000€€

Retail SalesH O W B A D I S I T ?

Physical Store

P R O : C O 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“

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 QuestionW I N S O M E M O N E Y

Price QuestionW I N S O M E M O N E Y

Costs Minus RestAverage 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 10,93Callcenter/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

$

eCommerce

P R O : C O 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 !

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 L U T I O N I S

//

A N E W C O N C E P T ?

OmnichannelA N E W C O 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

OmnichannelS C E N A R I O S

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 :

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 :

Returning

Inspiration

Selecting

Wearing

OmnichannelC H A L L E N G E S : C O M P L E X C U S T O M E R J O U R N E Y S

Purchasing

$

Service DesignH O W I T C A N H E L P :

Inspiration Selecting Purchasing Wearing Returning

Home

on the go

Store

Service DesignH O W I T C A N H E L P :

///

Case „Kate Spade“S T O R E T O W E B / S A M E D AY D E L I V E R Y:

Inspiration Selecting Purchasing Wearing Returning

Home

on the go

Store

Case „Kate Spade“S T O R E T O W E B / S A M E D AY D E L I V E R Y:

Case „NIKE“F R O M P R O D U C T T O E X P E R I E N C E :

D I G I TA L P H Y S I C A L

Inspiration Selecting Purchasing Wearing Returning

Home

on the go

Store

Case „NIKE“F R O M P R O D U C T T O E X P E R I E N C E :

Enabler „Go Try It On“I N S TA N T S O C I A L F E E D B A C K :

Inspiration Selecting Purchasing Wearing Returning

Home

on the go

Store

I N S TA N T S O C I A L F E E D B A C K :

Enabler „Go Try It On“

Case „BONOBOS“W E B T O S T O R E :

Inspiration Selecting Purchasing Wearing Returning

Home

on the go

Store

Case „BONOBOS“W E B T O S T O R E :

Enabler „UPCLOAD“P E R F E C T F I T T I N G O N L I N E :

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 :

Case „Burberry“P H Y S I C A L D I G I TA L M E LT D O W N :

Inspiration Selecting Purchasing Wearing Returning

Home

on the go

Store

Case „Burberry“P H Y S I C A L D I G I TA L M E LT D O W N :

Case „Burberry“P H Y S 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

Retail needs to be rethought: beyond online/offline as new integrative business/service models providing the best customer experience!

/// Skalitzer Straße 86C

10997 Berlin !

jj@iii-agency.net 0151 191 21 889

Exercise Plan the perfect retail experience for a persona

Retail experience map

Service Experience Camp 2014 Sept 13 & 14

Thank you!servicedesignberlin.de

@SD_Berlin

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