Tailored Retail

1. LEAN SERVICE CREATION Tailored Retail Futurice’s point of view on Retail digital evolution

3. We create digital services for people to love. Founded in 2000 200+ employees from 18 countries

4. Lean Service Creation LEAN SERVICE CREATION LSC is a multi-disciplinary way of working that maximizes the probability of creating successful digital services

5. LEAN SERVICE CREATION Futurice people

7. Summary LEAN SERVICE CREATION Welcome! 4.  Quick view on CONSUMERS 5.  Physical and Mental EXPERIENCE JOURNEY 1.  DIGITAL? Why should I care? 2.  The Retail DIGITAL ECOSYSTEM 3.  10 TRENDS: their CHALLENGES & OPPORTUNITIES An introduction to Futurice, who we are and how we work. 6.  Retail SEGMENTS 7.  Available TECH & TECH to Watch 8.  Conclusion

8. 1. Digital? Why should I care? Retail is changing fast. Customers are embracing digital and starting to behave in more complex and challenging ways. They are shopping everywhere and at any time. They research and compare. They want to make their own versions of the product. They want to know how things are made.

9. 2. Retail Digital Ecosystem Payment touch points: In-store Online store Kiosks Mobile payment Internet browser: Chrome Internet Explorer Safari Existing services integration: Internet banking Mobile banking E-commerce platform Loyalty program CRM system Engagement: Loyalty program In-Store offers Online store offers Gift cards Customer behavior UX cycle experience Payment touch points: Family Friends Work Social network Mobile phones & tablet platforms: iOS Android Windows IoT: Localization: Cultural issues Inventory Transparency Beacons Kinect Sensors Shopper

10. 3. //10 TRENDS: their CHALLENGES & OPPORTUNITIES

11. 10 TRENDS 1.  Mobile Confidence 2.  Wearables go retail 3.  Beyond sales / infotainment 4.  Millennial consumers 5.  Brand stories 6.  Consumers become Creators 7.  Going beyond the screen 8.  Touch point immersion 9.  Shared experiences 10. Brand interaction

12. TREND1 Mobile confidence

13. TREND1 Mobile confidence Confidence in the usage of “mobile” is growing   Exploring what mobile is capable of Buying and sharing experiences

14. Trend 1 Mobile confidence Trend intro Facts about the trend Challenges Opportunities Customers feel more and more confident about the usage of mobile applications.   Retailers should explore more mobile capabilities, as buying and sharing experiences. Friends are becoming an unintentional salespeople, if they like something you may like it too. 65% of the global population will have a mobile phone by 2015. (Deloitte) Inventory transparency, chain supply, logistics and mobile experience design. People are still concerned about security and privacy, so consider these issues is important.   Customer data integration, inventory data integration, mobile e-commerce services, social media integration, mobile payment applications. •  83% of internet usage will be through handheld devices. (Deloitte) •  30% of e-commerce transactions globally will be done via mobile. (Criteo) •  53% of e-commerce transactions are coming from smartphones, rather than tablets. (Criteo) •  Facebook and Twitter added buy-it- now buttons in 2014. Apple Pay fingerprint recognition. In its first month, the cash-free system accounted for 50% of all tap-to-pay transactions in McDonald’s in the US. (New York Times) •   

15. TREND2 Wearables go retail Source:  h*p://www.wired.com/2015/03/disney-­‐magicband/  

16. TREND2 Wearables go retail Experiences that go beyond the screen Personalized, but also reflects more their identity Open possibilities to collect and respond to customer info data Knowing customer better is the key to shape more meaningful and personalized experiences, physically or even digitally.

17. Trend 2 Wearables go retail Trend intro Facts about the trend Challenges Opportunities Customers are expecting digital and personalized experiences, which go beyond the screen and that reflects more their identity.   Wearables will make possible to retailers to collect data, such as location, personal info, social network, previous experiences, among other kinds of data. By knowing customers better, retailers will shape more meaningful and personalized experiences, physically or even digitally. Most consumers have heard of wearable technology by now, according to a new survey from Magid Advisors. More than a quarter of the 2,500 mobile consumers surveyed said they planned to buy a wearable device within 2016. Meaningful experiences. Previous bad experiences in Retail. Consumer products and retail companies struggling to innovate . In-door location, smart lists, in-store digital experience, loyalty programs integrated to on-demand data. •  Omni-channel will be the key driver of growth, but only 38% of senior executives say Omni initiatives have a positive impact on profit margins. (Source: EY Global Media Relations) • 

18. TREND3 Beyond sales / infotainment

19. TREND3 Beyond sales / infotainment Consumers are buying the best experience.   Companies are teaching people how to use their products and services.   Digital TV is bringing a new generation of advertising models and customer experiences.

20. Trend 3 Beyond sales / infotainment Trend intro Facts about the trend Challenges Opportunities Services are no longer consumption oriented, but they are consumer oriented and consumers are buying the best experience.   Companies are teaching people how to use their products and services. They want users to have the best experience with their products.   Companies like Apple, Google and Amazon are getting into the TV models they are also bringing to companies the possibility to brands sell products inside a show rather than around it (Futures Laboratory). Buying will begin to live inside of story  experience, becoming a natural, integral and shoppable part of it. Technology maturity, what to do, how long it will take to get digital right. Are the retail company prepared to the customer dialogue? Meaningful experience, the exactly moment where the digital adds to the physical experience. Finding the right moment on the customer journey. Second screen cross experiences. It’s time to start considering how retail will ride the next wave of shoppable TV. Services that help customer to understand your brand and help retailers to understand them. Be involved with customers daily life. Be part or give the room to the communities where they are. •  Companies like Google, Amazon, Apple have their own TV channels and new advertising models. Android has open platform where consumers can personalize their experience. • 

21. TREND4 Millennial consumers

22. TREND4 Millennial consumers Millennial consumers are increasingly concerned about the brand ethics. They care about how things are made and where they come from. Technologically-savvy. Online experience integrated into in-store experience. They inform their choices. They read up and compare. Tight budgets, cultured and up-to-date.

23. Trend 4 Millennial consumers Trend intro Facts about the trend Challenges Opportunities Millennials have distinct relationships with each of their devices. The amount of time is less interesting than the role of each device itself. Their laptops act as a retail portal and catalog, their toolbox, information curator and also their preferred device for viewing TV shows. Their tablets acts as a luxury that falls somewhere in between a downsized entertainment center. Their smartphones makes them feel like they are on steroids, have a fifth limb and act as a fail-safe antidote to FOMO (fear of missing out). 92.3% used a mobile phone in 2012, among whom 63.2% used the mobile web and slightly fewer used smartphones. (emarketer.com) Over half of twitter users are millennials (16.6m in 2012). Millennials can not be defined by a single device. Seamless multi-channel experience. Insatiable need to be connected and continually validated for their level of “insider” status, millennials are their own medium. Addressing clearly your ethics can help millennials make the choice towards your products. Multichannel experiences to complement in-store experiences. Hand over’s are crucial.

24. TREND5 Brand stories

25. TREND5 Brand stories Brands tell their stories. They are storytelling about their heritage and their brand. They are opening the curtains to give insights to the way they manufacture and the materials they use. The brand story becomes part of the shopping experience.

26. Trend 5 Brand stories Trend intro Facts about the trend Challenges Opportunities Find a heritage moment Behind the scenes  / Backstage. People wants to see how things are done, how they were created. Try to remind people moments and things that they forgot about. Find the story. Controls the whole design process. People journey, one day in his/ her life. The everyday story. Companies like Shinola, Dior and Mr Porter are telling their brand stories, about their heritage and their mission. Content creation around how things are produced. (e.g. Dior, Mr Porter)     Previous experiences with the brand and product. People are more and more concerned with ethics. Telling their brand stories may need to answer to some of those issues. Believable transparency. Drafting a brand story can enhance the customer engagement. Storytelling approach can help customers identify with brand. Content production around the brand story can enrich the products and shopping experience. Co-create brand story with customers and build up for future.

27. TREND6 Consumers become Creators

28. TREND6 Consumers become Creators Customers are becoming the designers.   They will sell customized products to their friends and community. Consumers will care more about what they can do or create.

29. Trend 6 Consumers become Creators Trend intro Facts about the trend Challenges Opportunities Customers are becoming the designers and the best design will be perceived as the one which will give the customer the power of creation.   Consumers will not only buy from you but also sell the customized products to their friends and community. Consumers will care less about what they have or buy and more about what they can do or create.. 85% of the 2014 Best Global Brands have used crowdsourcing in the last 10 years. (eYeka) Privacy is a big thing when you create customers profile. Retailers need to treat it very seriously. Creepiness – avoid services that jus add extra work to customer, but rather gives an amazing and seamless experience. Find the right blend between customer creation and professional expertise. Always needs to be part of the brand strategy. New ways and channels to communicate with customers. Know from customers what they want and how much they are involved with your brand. Ideas about new services and also how to get the old ones improved. Create a controlled environment in which creation happens (ikeahackers, Bugatti, etc.) •  The Best Global Brands are three times more likely to use crowdsourcing platforms than websites and social media for their crowdsourcing efforts. (eYeka) •  There is a strong commercial case for personalization - those who are doing it report 14% uplift in sales. (e-consultancy) •     

30. TREND7 Going beyond the screen

31. TREND7 Going beyond the screen Technology enables extra dimensions to consumer choices. Emotional conversion. Sense presence more than screen presence. Collecting meaningful data that can be transformed in to seamless actions.

32. Trend 7 Going beyond the screen Trend intro Facts about the trend Challenges Opportunities Technology is the enabler to people choices. Tech is part of a bigger and holistic experience. Technology can bring emotional elements that involve customers. Sense presence more than screen presence. Technology should bring customers relevant content that help them to make decisions. Technology enables the collection of meaningful data that can be transformed in personalized and seamless actions 90% of respondents who recalled reading online reviews claimed that positive online reviews influenced buying decisions, while 86% said buying decisions were influenced by negative online reviews. (Dimensional Research)   When companies engage and respond to customer service requests over social media, those customers end up spending 20% to 40% more money with the company. (Bain & Company)   92% of organizations that view customer experience as a differentiator offer multiple contact channels (Deloitte) Seamless digital experience Support / not a broken computer in the store. No integrated experience. Customer sees something online that they can’t find in-store. There is a screen, but nobody interacts with it or notices its presence. Indoor location, hyper location services, more effective loyalty programs, product info (i.e. QR and RFID code), virtual reality, wall projections.

33. TREND8 The touch point immersion

34. TREND8 The touch point immersion Extension of the customer journey.   Exploration of products in-store.   Planned purchases and get Social proof. Customers seek a seamless shopping experience.

35. Trend8 The touch point immersion Trend intro Facts about the trend Challenges Opportunities The customer journey doesn’t start or stop in the store experience.   Customers can anticipate their buying process via smart lists, online stores, etc.   They can explore products in- store, search for better prices, find location of products, look for more information about the product, etc.    Omni-channel provides consumers with a seamless shopping experience across multiple platforms, including online and in-store. A customer’s journey—from first hearing about a product to purchasing it—involves a vast and growing array of encounters with a product or brand. Consumers “touch” a brand an average of 56 times between inspiration and transaction. (Ed Thompson, Gartner, at the Gartner Symposium ITxpo in Cannes, 200). Number of touchpoints is growing due to digital touchpoints such as blogs, videos, reviews, etc. The development of new and engaging touchpoint opportunities is being accelerated by technologies such as augmented reality (AR), Near Field Communication (NFC), IPTV, and “SixthSense” technology Finding the right moment to go digital. Controlling organic and viral social reviews.   “Conducting the orchestra” in a way that all elements work well together, unleashing their full potential. Living experiences, based on customer choices. Everything is a flux, nothing is static. Technology can bridge the challenges with the opportunities in the extended customer journey.

36. TREND9 Shared experiences (families, friends, etc.)

37. TREND9 Shared experiences (families, friends, etc.) Parents and children go shopping together. Friends go shopping together. Friends are taking a sales role with online shopping. Digital can be more than sharing and recommending.

38. Trend 9 Shared experiences (families, friends, etc.) Trend intro Facts about the trend Challenges Opportunities Retailers should rethink the whole shopping experience by adding also a shared experience and kinds of dialogue a family members or friends could have with each other when going through a buying customer journey. A shared experience will add very important elements as such how to entertain children or how to create a shared buying list with your friend, among other interesting customer needs. The experience is more intense when shared with another person. Usually the shopping experience is not a solitary experience. Companies usually look to the individual customer journey and other members are considered stakeholders. Sometimes they are not even part of the shopping experience. Creation of services that fulfill shared customer experiences. •  Market is lacking family services. • 

39. TREND10 Brand interaction

40. TREND10 Brand interaction Brands allow the customer to interact with them. The way the interaction takes place and is perceived becomes a feature of the brand identity itself. Retailers make use of the digital interactions to add value to brand communication and to get customer involved with their products and services.

41. Trend 10 Brand interaction Trend intro Facts about the trend Challenges Opportunities Brands provide the framework which customers can freely interact. The way the interaction takes place and is perceived becomes a feature of the brand identity itself. Retailers make use of the digital interactions to add value to brand communication and to get customer involved with their products and services. Differentiation and recognition by the use of new or unusual interaction modes communicating the brand identity. Interaction branding as a new emerging field in design. Big brands such as Google, Coca- Cola are already doing it. Interaction shouldn’t only be entertaining and diverting but should be a well planned and strategically implemented long-term solution. Coherence across various channels. Rational, habitual and emotional binding of the customer to a brand.

42. 4. //Quick view on CONSUMERS

43. Born 1946 - 1964 Baby boomers

44. Born 1946 - 1964 Baby boomers Many introduced a digital element into their shopping process Pre-purchase research online  Most likely to buy products that align with their values and ethics Involved with some form of health and wellness  The occasion, not life-style (habit, celebration, convenience) Willing to try new things •  •  •  •  •  • 

45. Born 1965 - 1978 Generation X

46. Born 1965 - 1978 Generation X They seek product information / Research online Review and rate products online They still respond quite well to other traditional ad-channels Loyal to brands that serve them well They appreciate a diverse range of styles •  •  •  •  • 

47. Born 1979 - 1999 Millennial

48. Born 1979 - 1999 Millennial Adapt rather quickly to social changes Informed shoppers who stick to tight budgets while still managing to stay up-to- date and cultured Strive for goods that express their individuality They want to integrate online with in-store experience They are the most technologically savvy generation Social media platforms and applications are incorporated into their lifestyle and define them digitally •  •  •  •  •  • 

49. Born from 2000 onwards Generation I, Me, One

50. Born from 2000 onwards Generation I, Me, One Reflects the burst of technology within the last decade Instant connection and constant isolation Generation I will drive themselves Enjoying the process the process of getting better •  •  •  •