THE FUTURE OF R E TA I L 2050 Branwen Bindra Augustina Leung FASM 415: Non Traditional Retail Professor Cory Quach Spring 2018 Final Assignment
CONTENTS
INTRODUCTION CONCEPT OVERVIEW -INDUSTRY -MARKET -GEOGRAPHY LOCATION JUSTIFICATION PESTLE SWOT ANALYSIS INDEXES -CONSUMER FUNNEL -CONSUMER SEGMENTATION RESEARCH TIMELINE 2020 2030 2040 2050 CASE STUDIES -AMAZON -ALIBABA “NEW RETAIL“ CUSTOMER JOURNEY
INTRODUCTION
The Future of Retail 2050 Retail is the journey that provides a consumer with a good or service through different distribution methods to earn profit. The development of retail has changed into creating a new model that implements cutting-edge technology and consumer based experiences to provide a new outlook on retail. Traditional brick and mortar stores have evolved from just showcasing products to curating a story. Consumers are changing their values and lifestyles which has challenged businesses to adapt their marketing strategies to keep up. Various factors such as social and political policies influences how industries take shape with fashion following suit. Particularly utilising technology and implementing digital aspects within retail spaces. Through research and understanding current trends, a prediction of each decade concludes to how 2050 will look like for a fashion retailer in Seoul.
Retail in 2050 will be divided into two options. As people prefer connectivity and being able to touch physical items, brick and mortar stores will continue to have a storefront. For fashion
CONCEPT
retailers, the idea of a showroom is fully revolutionized by technology. Due to how consumers live and utilise digital devices the showroom will be a space for consumers to interact with all aspects of the space. Possibilities are endless and connectivity will continue to drive the stores. Products will be shown in store with the ability to download a patent to own the garment. It can be implemented in an individual’s personal closet within their devices. Clothing can be projected onto consumers to see how different styles look on their bodies and personalised to fit their own style. A shop assistant will still be in store to provide a perfectly executed store journey and make sure consumers are satisfied. Brick and mortar stores became a place for friends to meet and download clothes together. There are also different services such as photo taking, live streaming, reviews which is better in person. It is also an experience to be and meet other people with similar interests. The second option focuses on home assistance technology such as the Google Home and Alexa but with 30 years of evolution and development. Consumers can be at home and project any brick and mortar store within the walls of their own home. The use of virtual reality will allow consumers to have a 360 experience of a store. With the use of chatbot characteristics, personal shoppers can assist with looking for styles and look for the best options in the most efficient way possible. There is a lack of interaction due to full technological experience which gives the physical brick and mortar spaces a permanent place in our lives. A connection with friends and others shoppers are made with live streaming options projected through the device. Drones can provide any needs necessary for each consumer whether it is a beverage or physical item to connect with.
PRIMARY RESEARCH
OVERVIEW Within the report, a primary focus will be on Seoul, South Korea Asia’s fourth largest economy.
INDUSTRY The retail industry within Korean is fast paced and dynamic. The market size reached $255 billion in 2016. The retail industry grew by 3.2% between 2012-2016. The industry will continue to modestly grow over the next few years given the market maturation. Traditional retailing channels are growing slower in comparison to online retailing, however they are still maturing. (Export.gov, 2018) To be a successful retailer, you must be sensitive to changing trends and move rapidly to exploit opportunities when they arise. To survive this fast face changing retail environment, Korean retailers have to adjust their business models and value propositions to focus on customer attraction, product differentiation and new technology within brick and mortar stores. The protection of small to medium business is necessary. Mega-malls that are rapidly being built led by conglomerates are jeopardising these businesses. These local stores are what makes each neighbourhood unique and creates a certain character within them (Chitrakorn, 2017). There is also unexpected growth within the information and communication technology (ICT) industry creating new opportunities within the market. The country has a strong manufacturing base and has potential demand for industrial software solutions (Austrade, 2018). With home assistance technologies such as Google Home and Alexa allowing the chance to order everyday items by asking is a game changer. No extra fees are accounted for but the convenience is an attraction in itself.
MARKET The South Korean retail market is saturated with domestic players, mainly conglomerates. To achieve bigger control of the market, leading players have actively pursued merger and acquisitions. They have become a “conglomerate” retail force that operates retail businesses in diverse retail industry segments (Societe Generale , 2018). Such as Lotte, Hyundai, Shinsegae, GS, CJ, and E-land, which own multiple retail channels (Export.gov, 2018). Brick and mortar stores will continue to grow as the concept of ‘value consumption’ is important to consumers driving expansions of stores. Apparel and fashion accessories are becoming increasingly popular within them. In terms of market trends, many consumers visit brick-and-mortar stores for showrooming purposes and then purchase goods online after trying out products at brick-and-mortar stores. Showrooming is an important part of attracting consumers and boosting sales as Korean retail giants have vertical lines of retailing channels. Retailers are opening flagship and speciality stores for consumers to attract consumers to their brick and mortar stores. At the stores, they are offering more food and entertainment contents and trying offering various ways for consumers to try out products (Export.gov, 2018). The most important infrastructure for goods carrying are roads, that carry over 90% of the country’s transport volume. For large cargo, Korea has 57 railroad routes that act as the main mode of transport. There are eight international airports, including Incheon International Airport, and seven domestic airports with three main port authorities being Ulsan Port Authority (UPA), Incheon Port Authority (IPA) and Busan Port Authority (BPA) (Societe Generale , 2018).
Trade regulations within Korea vary and it is important for brands to understand the uniqueness of Korean culture and market. To enter into the market, partnering with Korean distributors and importers with strong retail industry networks is crucial as Korean retailers usually source products through distributors and importers (Export.gov, 2018). An obstacle for small businesses is that department stores will often not extend space to brands that lack international recognition, hence the need for more independent stores. The use of new payment systems and sales are also increasing as consumers seek more convenient ways to shop. The evolution of assistance technology is disrupting Korea’s retail industry by forming a new ecosystem combining retail, communication, payment and entertainment channels.
SEOUL
LOCATION JUSTIFICATION
•
Seoul Special Metropolitan City
•
Largest Metropolis of the Republic of Korea
•
Home to half the country’s population
•
Leading rising global city
•
Modern, contemporary with historical aspects
•
Youthful perspective compared to other Asian cities
•
Supports new and emerging designers
•
Care about personal appearance
POLITICAL
ENVIRONMENTAL
•
•
North and South Korea (boost in travel and tourism/travel retail). This will have
As the income level and citizenship has improved
PESTLE
a long term impact as this freedom is relatively new and is still being
•
explored.
There is an overall improvement in public transport to avoid urban traffic congestion
•
Politically stable since becoming a democratic state in 1948
•
(Data Monitor , 2018) •
Strong foreign relations creating
Reinforcing Seoul’s global competitiveness
• Wasteful packaging of consumer
opportunities for mergers and
goods impacting brand image
acquisitions. This will have a long term impact as Korea continues to strengthen their global relationships
•
Clean technology, there has been a huge push for clean energy due to the lack of effort towards nuclear
• Trade restrictions and import tariffs will have an impact on how many products can easily be entered in the Korean market
waste disposal
SOCIAL
TECHNOLOGY
•
• Highly qualified labor force, which
Pyeong Chang Winter Olympics 2018 (major sporting event/tourism,
makes it possible to both produce and
advertising and marketing). This will
commercialise advanced technologies
create a huge attraction and will create
(Data Monitor , 2018). This will have a
strong publicity for Korea short term
long term effect for the overall Korean society as they will have a fast, forward
• Medical tourism due to infrastructure and high connectivity will continue to
thinking approach when generating new products.
attract visitors • Online selling, the online shopping •
•
Airbnb (local providers: BnBHero/
transactions in South Korea grew by
Kozaza), will provide accommodation
19.2% compared to 2016 (Statista,
and an increase to visits in Seoul
2018)
Ageing population by 2030, this figure will peak at 52 million. The tech home appliances will act as a friendly device keeping them company in the comfort of their own homes (Sang-won, 2016)
SWOT ANALYSIS
ECONOMIC •
Incheon International Airport Expansion
•
Households in Seoul spent on average
(passenger capacity/increase tourism)
23% more on housing and transport than
(Chitrakorn, 2017). This will increase a rise in
elsewhere in South Korea in 2016. Higher
the consumer giving them the opportunity to
housing expenses disadvantage Seoul’s
spend.
affordability within South Korea. Nonetheless, the city remains relatively affordable in the
•
Average income is Seoul is 16% than rest of
context of developed cities in Asia Pacific,
South Korea ( larger average household size
especially in comparison to those in Japan.
in the city (2.7 persons) compared with other
(Euromonitor, 2017)
parts of South Korea (2.6 persons). This will have a great impact, as the city continues to
• Economic boom (Miracle on the Han River),
expand the population will continue to grow.
an increase in the overall population
(Euromonitor, 2018) • • Consumer expenditure per household
Low unemployment rate in 2017, the rate was at 3.68%. Unemployment reducing
(excluding housing and transport) was 20%
consumer incomes (Statista, 2018)
higher in Seoul than in the rest of South Korea in 2016. Amongst discretionary items, private
•
There are regular measures on exchange
household spending on communications and
rate, this will have a short term impact as
education stand out in the city in the national
this is regularly monitored. (Chi-Hyoung
context. (Euromonitor, 2017)
Cho, n.d.)
LEGAL •
Legal procedures are complex and consuming making this difficult for foreign investors. This will have a long term effect as foreigners will not want to invest in the country due to the hassle (Data Monitor, 2018)
•
Employee and consumer protections laws encouraging businesses to increase labor productivity to pay for the cost of the legal improvements
•
There are a number of consumer protection laws in Korea ensuring that the design and production of new products will have to customers safety and product qualities as priorities such as the Korea Consumer Protection Act
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
• Domestic, local Chinese consumers are a
• Language barrier, will have a long term effect
strong target market
on how retailers communicate to their in-store customers on a daily basis
• Growing in Asia Pacific - Asia’s fourth largest economy (Chitrakorn, 2017).
•
The economic development affected by strikes due to a long history of labour militancy
•
Fashion forward market such as avant-garde
(Shi, 2016)
streetwear that is trend driven. • Union power can be an obstacle when doing •
Positive outlook on travel and tourism industry
business in South Korea (Shi, 2016)
affecting the purchasing power within retail (Bartleby, 2014). This will have a significant
•
impact on profits for brands.
High power of economic nationalism to influence the levels of foreign takeovers will have a significant impact on how international
•
Many top technology firms production is
trade is perceived within Korea (Shi, 2016).
based in Korea (Shi, 2016). Korea will continue to be a leader in this industry and be known for their reliable assistance technology. • Free trade agreement with European Union (Shi, 2016). •
Strong travel infrastructure (Shi, 2016).
•
Highly trade dependent as Korea has a lack of natural resources (Gateway, 2016)
OPPORTUNITY
THREATS
•
• Region and international competitors, difficult
Increase in K-POP influence (make-up, music, fashion, entertainment). These influences will
to predict the market. This will have a short term
have long term impacts, as Korea is globally a
impact as each competitors varies depending
trend setting region
on the economic climate
• Seoul fashion week will have a long term
•
• Fast adapting markets, need to keep up. This
impact on a global scale as other countries
will have a short term effect as retailers need to
turn to Korea for the latest product and
constantly be up to date on the latest markets
technological innovations.
and how they are changing
“The Korean market for designer apparel and accessories is approximately worth $5 billion
• E-commerce growing exponentially to $32.56 billion USD by 2021(Statista , 2018)
and growing 7.2 percent on average each year, according to Euromonitor” (Euromonitor, 2017)
• Financial stability influenced by high level of external debt (Shi, 2016).
• High tax on imported goods therefore creating an increase in retail price. This will impact the sales of goods as there may be a short term decline when adjusting the tax rates •
Short term capital and celebrity endorsement
CONSUMER FUNNEL The consumer funnel is a marketing tool that illustrates the theoretical customer journey towards the purchase of a product. Traditionally, this approach was literal and straight award. Firstly, creating awareness to the customer of the existing product and then the consumer becomes familiar with the product by actively expressing an interest in it. The consumer then considers it as they aspire to have the product. They then take the action of purchasing the product and are then loyal to it by repeatedly purchasing it. However, consumers have changed the way they research and buy products and are moving away from this marketing funnel. Consumers more than ever are actively shopping and this has changed the way they are making buying decisions. This has now become a circular journey with four phases (David Court, 2018). The first initial consideration of a product, then active evaluation, the purchase of the product from the brand and the post purchase when consumers experience them. Customers are also more actively engaged with brands creating more loyalty. Brands need to create a seamless cross-platform experience for their brands to make it easier for consumers to move back and forth between smartphones, laptops and now assistance technology. They have instant access to information about products and they will conduct their own research and comparisons before deciding on a product. For example, Google Home will show options of various products within the price you choose before you make your final purchasing decision. As consumers become more comfortable with talking to these devices as virtual assistants, their spending will increase. Another device is Alexa, when you ask her to buy an item she responds with two simple suggestions rather than a long list that you would normally get when researching. The drive of adoption and loyalty to technology is the future in guaranteeing a sale. South Korean consumers purchasing powers have changed over time. They now tend to be concerned with the health attributes and brand name of a product. They also seek impeccable after sales service. In terms of technology, they typically research products online actively engaging on social media before shopping and enjoy being well informed when purchasing a product (Santandertrade, 2018).
CONSUMER SEGMENTATION Korea’s consumption behavior is increasingly developing due to the rapid economic development and the opening of the international market. The median age of South Korea’s population is 41.8. South Korean consumers are traditionally homogeneous in nature however, Wthey are rapidly embracing international influences. Increasingly, middle- and working-class consumers have begun to shop in outlet or discount stores to obtain a better value for the money they are spending. Many resist making big or bulk purchases because of the need to touch and see the product before buying it. Consumer preferences are highly dominated by influencers (actors, celebrities, pop stars etc) and the latest fashion trends. Young South Korean consumers purchase apparel and other fashion items in which they can use to express their individuality amidst a rather uniform society. (15) There is need to be unique and these consumers believe they can express their personal style through the purchasing of clothing in a store (UK Essays , 2015). Here, they are able to try on the clothes with ease and received a full in store experience. South Korea is a worldwide leader in terms of shoppers who showroom products. As one of the world leaders in high-speed technology and IT infrastructure, 98% of South Korean households access the Internet regularly. They are also the world’s top credit card users, the middle-upper class South Koreans are well-connected, informed shoppers with particular interests in the quality of goods. They dedicate time to researching and purchasing the best products money can buy by using their online resources to explore, review and shop (Owen, 2018). The share of single-person households has increased 500% over the past 30 years and represents the most common type of household being 27.2% in 2015 (Santandertrade, 2018). The purchase decision tends to be for one’s self. In 2015, 21% of consumers had brought a product based on an urgent need and 41% was a purchased a item for themselves (Statista , 2018). They like the ease and the functionality of the assistance technology, it fits around their daily routine and does not cause any disruptions.
TIMELINE
Online shipping grows Facebook reaches 100,000 business pages Brick and mortar increases quantity Company pages are introduced 1999
2007
E-receipts Go Green initiatives
Drone delivery Home assistance
2015
2020
1995
2001
2013
2017
Amazon sells first book online
First Apple store
New technologies Apple tracks iPhone Omnichannel is introduced
New Retail Concepts Experiental Introduction to Artifical Intelligence and Augmented Reality
Merit System Holograms available
Robots Downloading content to devices
Purely Digital Home services
2030
2040
2050
2025
2035
2045
Cashless Smart Glasses
Livestreaming through glasses Data patches
Memory devices Need for less physical stores
2020 HYPER CUSTOMISATION Customisation is currently a consumer demand due to the evolution of retail. With a new competitive landscape from e-commerce to other omnichannel services, cutting-edge technology has allowed customisation to be possible within brick and mortar spaces From 3D printing, embroidery to adding personalised elements such as initials, this phenomenon is a factor in consumer and retail spaces. The concept is not new however due to mass production of fashion goods, the lack of exclusivity and added value through personal touches are lost. Social media is also a driving force to showcase personality and uniqueness. From Nike ID to Ralph Lauren T-shirts in Hong Kong. In store customisation has given more options to consumers from a wide range for quality, affordability and options to change the product to suit their needs. Customisation has become part of the experience for retail (Twilkit, 2018). The nature of products have changed to speciality shops that create their own brand identity through enforcing strong values and creating strong consumer loyalty. Online retailers also how the power and means to specialise in one off products that can be manufactured with personal elements. Online ordering has also turned retail into a 24 hour business with minimal stock and reduces costs in contrast to retail spaces. (Twilkit, 2018).
DRONE DELIVERY Logistics for delivery within retail has changed over the years with more efficient options to provide goods and services to the end consumer. Amazon orders are delivered by large quantities from around the world at top speed with prime services giving one day shipping options. The use of commercial drones have given the option save time and money. Amazon Air Prime provides products within a 30 minute window. UPS and Dominos are also experimenting with test drones. (Desjardrins, 2018). Other than fast deliveries, drones have also been used to create art installations and gain interest with travel vloggers. In June 2018, TIME magazine used 958 drones to recreate their iconic red border. (Grigonis, 2018). Dolce and Gabbana used drones to showcase handbags during their 2018 Milan fashion show. (Ong, 2018).
HOME ASSISTANCE Artificial Intelligence has entered our homes. Three front runners for home assistance technology are Apple, Google and Amazon. The Apple HomePod has is built in with Siri while Google Home has the Google Assistant and Amazon Echo uses Alexa. Google Home is a smart speaker that implements voice assistant to do orders made by owner. The idea of voice controlling your home through a speaker has began to increase interests in household automation in 2018. From a music speaker, the virtual help gives an new environment into a home. (Gebhart, 2018). As consumers begin to welcome these new devices into their homes, data from each machine found that 41% of users interact with the speakers as a friend and use ‘please’, ‘thank you’ and ‘sorry’. 72% of people use voice activated devices during their everyday lives. There are privacy issues and new case studies each day featuring the full force of the usage of these voice activated speakers. From listening to murder cases to firing guns remotely. (Terdiman, 2018)
2030 HOLOGRAMS Holograms provide a three dimensional view images through laser, interference, diffraction, light intensity, recording and illumination of recording. (Ammar, 2014). After much speculation, Rihanna used holograms of herself in her new lingerie line Savage x Fenty. (Masters, 2018) With the connectivity of Augmented Reality, holograms have began to increase in momentum to a race for the company to create a well executed 3D holograms. The next step for human possibilities lies with how holograms could revolutionise how we view products and people. From 3D presentations for office conference calls and improved communication worldwide, holograms could improve skills that humans need to practice in real life. For marketing, holograms are exciting applications that provides a 360 view of a good or service. In 2018, the development of hologram AR headsets are being made to sell for a high price. (Elgan, 2018). We predict holograms without phones or headsets. Using a technological device that is convenient for consumers will allow projections of anything and everything to be available.
WALLET FREE Payment methods are being implemented with smart devices through applications that are turning purchasing items into a cashless situation. From Venmo to Apple Pay, as consumers continue to use their smartphones religiously, mobile payments have began to spread into food and beverage to public transport. Being built into devices allows a closed circle with families such as Apple users and Wechat users in China specifically. Apple Pay works with fingerprint recognition for authentication and notifications for each transactions. Competitors such as Samsung are also catching up with mobile applications. (Pinola, 2018). Our prediction is that in 2030, our wallets will be digital. With technology and wearable devices, the need to carry cash and wallets are unnecessary.
SMART GLASSES We continue to use our devices for daily tasks in 2018 but with the development of the world, smartphones will cease to exist. Consumers will have other options of communication and connection through wearable technology. Voicebots take us closer to robots and through these devices, the need to communication with the smartphone lessens. As bots become part of our lives, they understand how our homes work and move to the office and everywhere else we go. (Pinola, 2018). The idea of smart glasses started with Google but needed to further develop to be used to its full potential. By 2030, the lack of GB and space for our memories will be backed up on another database that we can download and access freely. In 2018, AR glasses introduces wearable smart displays. (Lankin, 2018).
2040 DOWNLOADING CONTENT Downloading streaming media is necessity that will be upon us soon enough. Due to media consumption, the transition to on-demand content is a high demand. As consumers, we are demanding that we should have access to all of the content a service offers, in the format that you want and anywhere convenient. There is also the challenge of choosing which apps you want to download in the first place and discovering them in an easy manner. At this time, home screens will be close to redundant, discovery of apps will be faster and the installation of apps will be transparent. A new concept will be introduced called “dynamic delivery�, which will involve downloading an app to any device but not directly. (Maddern, 2014) This concept will request for another action or content that will best deliver and install the app. The best option for education and learning is to download different courses to implement in your life. With a library full of options, anyone can learn anything.
MERIT SYSTEM Social media has become a part of every industry and integrated in business strategies. As individuals, we have our own accounts that we use to share, connect and discover content. The amount of users have increased so rapidly that businesses are now using social media as a tool to target different markets and understand likes, wants, needs, dislikes as well as look for patterns. Social media has many advantages such as creating brand awareness, reputation, increasing website traffic, interactions with consumers to creating brand loyalty. However, there are negative connotations with how unstable online can be. Consumers have began to create content that they want to present to the world with unrealistic expectations causing distress worldwide. Influencers have taken over marketing through brand collaborations and large followings that companies want to tap into. (M, 2018). Credit scores have been implemented in the United States and China. China’s social credit systems affects citizens by a ranking system that controls how they are able to use different services. The idea by the government is to create “integrity and level of trustworthiness of Chinese society”. An example of how this labelling system has created chaos is with the ability to book flights and train tickets. If you are redeemed as “blacklisted” or “unqualified” and there are different ways to lower and raise your value. When booking reservations, missing an appointment equals to a lower credit store. (Zeng, 2018). Black Mirror has also created an episode revolving around the idea that social media rating controls how consumers interact with social circles, services, big investment purchases such as housing and is controlled by likes. We predict that in 2030, the holographic services will show the value of a person. It will cause a dramatic turn of events for people will less influence online.
2050 MEMORY DEVICES Technology will remake the face, the bones, and the brains of retail. Computing capabilities will change the level of costs, physical sizes of stores and performance levels that will disrupt the retail environment. Retailers have historically focused on designing the retail space to manage inventory, handle secure transactions and optimise supply chain. New interactions between retailers and customers will be important to improve the “face” of retail. Computers that can see, hear and understand the environment around them will make the shopping experience more efficient and enjoyable. The memory collection will act as giant data centers that will act as the “brains” of retail. This added intelligence will help analyse every stage of the retail environment and will drive operational efficiency, with a better understanding of customers and deliver personal experiences to the customer. This data collection will be able offer more personalised options and niche customised services and products (Intel , n.d.).
ROBOTS INSTEAD OF PEOPLE Robots in retail will help brands stay relevant with consumers. They will provide in-store customer service such as helping consumers find the goods they need within the store. They will be able to speak directly to the robot and if they have a certain product they are looking for, they will be can show the product in the camera of the robot and it will be able to recognise it. The shopper experience is important, if a customer comes in a store and the product they want is unavailable they will leave disappointed. The retailer would have missed out on an opportunity to sell. (Underwood, 2017) Robots will exist in this period, they will not adapt to the retail environment. The retail store will change to accomodate the robot.
LIVESTREAMING THROUGH GLASSES Live streaming through glasses will online customers to browse physical stores, tightening the relationship between the two. This technology will ensure speedy customer experience ensuring that customer’s needs are met in an instant. With this technology, the sales person will be able to search for stock in warehouses faster as well as sifting through documents in high definition. Staff members in store will be able to work their hands free and will ensure that they connect with the online customers. If a customer is online, they can instantly connect with the sales representative in the store if they want a clearer idea on how a product looks. This gives thesales person a chance to upsell products and potentially increase conversion rates. (Roboxatech, 2018)
DATA THROUGH PATCH The idea that downloading different programs within your devices and implementing these skills during your day to day tasks are our reality. With a huge database of information, people are capable of browsing a variety of topics to download onto their patches. The patches act as a chip that holds information, the more you share with other people, the more access you have to other databases. To carry on legacies and be the most efficient, educational institutes share informaton to individuals to further create a world of intellectuals. These patches also connect with to devices and to the home location service that is a holographic world.
HOME LOCATION SERVICES Home location appliances will be in every home during this year. It will be the norm to consider the home device as an additional family member and perhaps even a friend. Products such as Google Home and Alexa, will help control your home environment and every aspect will be inter connected (Darmon, 2018). These devices, will essentially become a home assistant. They will have also learnt how to react to individuals to talking at them with no speakers embedded in them, they will become truly conversational. Human speech will be replaced by thought communication. They will track your progress through the home with sensors and learn your daily habits (Bell, 2018). The product will also be able to send dault data to manufacturers and self-diagnose problems. Having collected data on recent purchases and daily routines, purchasing via the devices will become the norm and instant. Anything will be able to purchased, bills can be paid with an easy and seamless experience.
CASE STUDIES
ALIBABA
Eliminating the friction with physical stores through combining online and offline retail. Digitalisation will allow “new retail” to adapt traditional stores and brands. Alibaba has created an interactive supermarket that allows consumers to use their mobile phones to track the products, order food and get it delivered. Auto vending machine to help consumers experience the car before talking to sales associates. Local stores can implement “new retail” through a mobile application that controls the amount of distribution and provide products that consumers are looking for. The shopping centres are digitised through a virtual shelf and implementation of smart screens that is connected to smartphones. Products can be ordered and delivered straight to homes and features are put in throughout areas of the shopping centre to reach consumers. For example, women can look at a smart mirror and virtually wear different shades of makeup with an option to purchase those items
AMAZON GO
Amazon Go is the first retail store that connects technology and physical retail entirely through an mobile application that allows consumers to purchase items without stopping at a cashier. The shopping experience focuses on getting physical items with queuing and saving time with the use of technology. Consumer can still look and touch products through a physical space and merges smartphone technology. Currently in 2018, the Seattle based Amazon Go is still developing the experience before expanding stores and giving other retailers a chance to begin omnichannel retailing. The connectivity between physical and digital are brought together through sensors and smart technology that allows consumers to see their journey through the application. From looking for the product to ordering it to be delivered, the seamless experience saves time and trust for Amazon users. Understanding the behaviors of consumers will further influence how retailers such as Amazon create better services through data. Using omnichannel analytics will hold the key to the next step in retail. This new retailing concept opens opportunities for brands to be efficient and effective with their own operations. Products can be allocated and created in controlled quantities to reduce waste.
CUSTOMER JOURNEY
To connect with other people, get
If needed delivery services will
This experience can be shared
approval, ask for real time advice
provide any product straight to your
with friends and family through
is to livestream within the four walls
door. There is no need to leave the
holographic chat services to either
of your home. This also relates to
house for any physical item. The
call or video anyone at anytime.
the social merit system to further
instant service will satisfy your
With the lack of human interaction
influence your following or watch
demands and create a seamless
during the process, having someone
other people while you shop.
shopping experience.
else around will help make the shopping journey easier.
Chatbots act as personal stylists
Options are endless using the
giving an interactive experience
holographic elements to browse
with knowledge from collected data
any style with creative control over
of likes, dislikes, past purchases and
personalisation. Another way to
trendy items that are curated for
look for other options is to discover
you. The option to speak to another
other items that you may like. The
person also gives the ability to ask
way you feel prompts the device to
questions regarding sizing, colour
change which items are shown.
and fit.
Home assistant devices act as a virtual reality for users to immerse themselves within different situations such as brick and mortar stores. With the comfort of your own home, you can visualise locations and download data to have the latest products to choose from.
Consumers still want
Brick and mortar
As wearable tech
This also becomes
The main point of
a physical brick and
retailers act as
allows us to connect
a communal space
the showroom is to
mortar space. It gives
showrooms for
anywhere, smart
for indivudals to
provide a physical
them an opportunity
consumers to look
mirrors in the
meet their friends to
space for consumers
to get out of the house
at products chosen
showroom give more
grow their network.
to come together and
spend time looking for
based on a concept
custom shopping
The space acts as a
discover new items.
products.
or them. The space
journey with the data
omnichannel physical
is catered towards
to provide exact wants
experience that can
The customer journey
The journey begins
a mass audience
and needs. This also
change based on
is seamless and
with deciding what
with an emphasis
acts as a service
different features
personalisted by
kind of retailer to go
on whoever they are
concierge from food
within the technology
data and years of
to.
targeting.
to livestreaming and
with many options to
development.
more.
choose from.
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Images https://www.wendywutours.com.au/south-korea/seoul/ https://www.huffingtonpost.com/rachel-stine/a-modern-shaman-inseoul_b_8747172.html https://qz.com/1231423/the-future-of-retail-is-happening-right-now-inchina/ https://en.wikipedia.org/wiki/Amazon_Go