REDEFINING RETAIL BEYOND 2020 - POWERED BY - New West End Company
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REDEFINING RETAIL BEYOND 2020 P OW ER E D BY
REDEFINING RETAIL BEYOND 2020 | REPORT OVERVIEW Report Overview Purpose Content This report was compiled by Springwise in partnership with This report explores the future of bricks-and-mortar retail New West End Company to inspire its members and partners through the consumers lens, identifying trends, challenges to adapt and engage with future trends and the ever- and tangible opportunities linking with the wider global changing retail landscape. It offers valuable insight on the innovation trends and also focusing on London's West latest technologies and innovations from across the globe to End. It also covers five themes of consumer disruption and attract, retain and engage consumers in a disrupted market. relevant innovations with key takeaways. 3 Redefining retail 29 SEAMLESS SHOPPING 4 Innovation with purpose 5 The new consumer lens 30 Just Tress It 8 Themes of consumer disruption 31 DeepMagic 11 What disruption means for stakeholders 32 NearSt 14 Vision and Values 33 SelfieMark INNOVATIONS 16 THE NEXT BIG THING 34 DATA-DRIVEN RETAIL 17 Made By We 35 Wirecard 18 N26 36 TwentyBN 19 ChargedUp 37 ZigZag Global 20 ShopShops 21 Ministry of Supply 22 VTT 3D printing 23 IN-STORE TECHNOLOGY 38 THE GLASS BOX STORE 24 Expedia VR 39 Mitscoots Outfitters 25 Browns - Store of the Future 40 Lush Lens 26 Costa Clever Cup 41 Nudge For Change 27 Moby Mart 42 Wasteless 28 Oriient 2 | REDEFINING RETAIL BEYOND 2020
REDEFINING RETAIL BEYOND 2020 | REDEFINING RETAIL
Redefining retail
O
ne of the prime aims of New West End becoming increasingly blurred. But what might
Company is to be a convener and a that look like in reality, and how will it impact the
catalyst for positive change. As part of myriad of businesses in London’s West End and
that mandate, we’re committed to making our Mayfair?
members and partners aware of the innovation
which can enhance their businesses, and by One thing which is certain is that innovation
doing so, improve the experience of the 200 needs to be at the heart of the process, as we
million people who visit London’s West End and work to invent a new retail landscape which
Mayfair each year. is able to respond and adapt to constantly
evolving consumer dynamics.
Shopping is changing, and so are the
expectations and behaviour of our To investigate what the future may hold for retail,
customers. The UK currently has the world’s Springwise – with its unique perspective on
third most developed e-commerce market, global innovation – has been an ideal partner
with 20 percent of all sales now taking for this research. As you’ll see, they’ve created
place online (Source: ONS). However, you a report which challenges the conventional
only have to visit shopping hubs like Bond thinking around retail.
Street, Oxford Street and Regent Street
to see that physical retail is not dead, but We hope you find its content thought-
that its relationship with the consumer is provoking. Shaping a West End which meets
fundamentally evolving. future demand will be a collaborative process,
and in that context, we would be pleased to
Consumers increasingly want a retail experience hear your feedback on this report.
that delivers less friction, more interaction and
more variety than before. In future, retailers will Yours in partnership,
need to be entertainers as well as merchants
with the lines between shopping and leisure Team New West End Company
REDEFINING RETAIL BEYOND 2020 | 3
REDEFINING RETAIL BEYOND 2020 | INNOVATION WITH PURPOSE
Peshkova | Megapixl.com
Innovation with purpose
T
he West End has always been a vibrant, and often challenging way. We want to
progressive and exciting shopping create an awareness of what is out there - to
destination at the heart of London - the catalyse change and inspire innovation in
greatest city in the world. As we navigate your own work. Perhaps the most important
turbulent times, it is more critical than ever opportunity within this change is the theme
that the West End continues to evolve and of purpose - ethical, environmental and
innovate to maintain this global leadership social purpose. The green economy is
position. At Springwise our crowdsourced coming of age and as we all know, climate
community scours the globe every day to change is our greatest challenge. So, it
discover the most inventive and innovative is heartening to observe the increasing
ideas from all sectors, particularly retail. It is number of London retailers and landlords
through this lens that we are proud to bring who are putting purpose and positive
you this innovation report. environmental change at the heart of their
brands and operations.
Disruption is everywhere - from Amazon to
WeWork. Traditional business models are This sense of purpose is truly visionary and
being turned upside down. We need to act will be a powerful foundation for the West End
fast, but also with a pragmatic and agile as we capitalise on the age of disruption and
mindset to ensure that we safeguard and play our part in reinforcing London’s position
emphasise the West End’s values and history as not only the best place to shop but also the
while demonstrating our understanding of this best place to live, work and visit. P OW E RED BY
rapid change and our openness to embrace
it to create our future. This report has a James Bidwell
diversity of themes, from in-store technology Chairman Springwise
to data-driven retail, all brought to life by the Co-founder Re_Set
Springwise editors in an engaging, inspiring
4 | REDEFINING RETAIL BEYOND 2020
REDEFINING RETAIL BEYOND 2020 | THE NEW CONSUMER LENS
The new
consumer lens
Increasing consumer demands are pushing retailers to
focus more on delivering experiences and building a
relationship with shoppers.
S
hopping is evolving, and so are the
expectations and behaviours of
consumers. The tension between
online and high street spending continues,
but new technologies in real world and
virtual shopping spaces bring opportunities Omni-channel retail
for savvy brands to maximise ROI in both
locations. Omni-channel retail, with the ability to
switch seamlessly between online and
The UK holds the world’s third most- in-store shopping, has affected both
developed e-commerce market, with consumer expectations and behaviour.
Brick and mortar stores are growing at a
20 percent of all sales now taking place slower rate (2% over Q1 and Q2 2018*),
online (Source: ONS). Simultaneously, so it will require finding the right balance
bricks-and-mortar retail is continuing to and taking advantage of an omni-channel
grow, albeit slowly, at a rate of around two approach to retain and grow customers.
percent. In-store shopping is not dead, *Source: ONS
but its relationship with the consumer is
changing. Consumers increasingly want
“Rather than visiting a Increasing demands
shop exclusively to make
a purchase, consumers Consumers increasingly want a retail
experience that delivers less friction,
are coming to stores in more interaction, and more variety than
before. The stores of the future will need
order to interact with their to focus less on transactions and more
on building a relationship with shoppers,
favourite brands in new and they will need to deliver more features
than just products on shelves.
unexpected ways.”
a retail experience that delivers less In-store experiences
friction, more interaction, stronger on-line
/ off-line connectivity and greater product Be it customisation, personalised
variety and personalisation than before. recommendations, omni-channel
Stores of the future will need to focus less experiences or even more ethical
products, consumers want to feel
on transactions and more on building a connected to the brand and see retailers
relationship with shoppers; they will need experimenting with their delivery
to deliver more features than just products channels - creating vast opportunities for
on shelves. the store of the future.
The way customers engage with stores
and their products is evolving. Consumers
want to feel more connected to the brands
they use. Product quality alone is no longer
REDEFINING RETAIL BEYOND 2020 | 5
enough to attract a sale. Shoppers expect
retailers to share their values, including a International vs domestic visitor split for the West End
solid commitment to sustainability and the 65%
circular economy. Consumers of all ages 60% 60%
59%
- especially Millennials and Gen Z - are 55%
redefining the concept of convenience- 50%
with-a-conscience; demanding a greater 45%
41%
range of ethical shopping options, such as 40% 40%
packaging-free stores, giving back to the 35%
community and locally-sourced products. 30%
The provenance and ethics of products are
also important to Chinese consumers, who 20%
are paying greater attention to the entire
supply chain. 10%
Brand loyalty is also changing, and savvy
West End Oxford Street Regent Street Bond Street
marketeers are incorporating new styles
of marketing, new methods of collecting *Source: New West End Company estimates, 2017 International Domestic
customer data and Artificial Intelligence
(AI) to offer customers a more tailored and
personalised in-store experience. This is
particularly important for Gen Z, who suffer Retailers are offering the opportunity to try
from an attention split between phones, on virtual clothes, or to view products in a
friends and environment; necessitating the virtual environment. They are experimenting
curation of more inspiring and desirable with allowing shoppers to customise items
product presentations, interactive elements in-store, or sample products in a real-world
and personalisation to influence their situation. Retailers are adding value with
purchase decisions. pop-up shops in non-traditional locations
like transport hubs or education settings,
Rather than visiting a shop exclusively to or offering highly curated collections or
make a purchase, consumers are coming to direct-to-consumer brands. Digitally-native
stores in order to interact with their favourite consumers, such as Gen Z, also expect
brands in new and unexpected ways. easier in-store navigation, including the use
BEST FOR SENSORY EXPERIENCES BEST FOR FAST-PAYMENTS BEST FOR IN-STORE CURATION
Paris Shanghai Amsterdam
London’s great rival, Paris is seeing a China’s rise has grown a young and Curation is key in Amsterdam – a world
renewed focus on joyful browsing as dynamic market willing to experiment with design capital – as more spacious
sensory experiences – particularly in technologies – making it the world leader in stores featuring highlighted items have
cosmetics and food – continue to be mobile wallets through AliPay and WeChat, come into fashion as the latest boutique
reimagined for consumer delight. as well as being the furthest ahead in trend.
checkout-free convenience stores.
BEST FOR NOVEL STORE FORMATS BEST FOR EXPERIENTIAL SHOPPING BEST FOR DIGITAL CONNECTIVITY
New York Singapore Seoul
Strapped for space, New York retail Bricks-and-mortar stores are doing Possibly the world’s smartest city,
continues to innovate with fresh exceptionally well here as shoppers Seoul’s shopping scene is aided by
experiments in spatial capacity, such look to them for accessibility and ubiquitous phone charging, free public
as Ikea’s 2019 Planning Studio, and familiarity, coupled with the preservation WiFi, virtual stores at bus-stops – run by
a burgeoning pop-up scene taking of experiential shopping for items like Tesco – and safety devices for children
advantage of local micro-trends. toys and fashion which are growing by and the elderly which tap into the
10% and 6% as markets*. surveillance network.
*Source: Statista
6 | REDEFINING RETAIL BEYOND 2020
REDEFINING RETAIL BEYOND 2020 | THE NEW CONSUMER LENS
Age Consumer Region
GEN X (Born: 1966-1976) EVERYDAY USERS EU & US 71%
Time-poor and high value, these customers Impulse buying at lunch, chore shopping In London for the transatlantic brand
value retail experiences which combine after work and just passing through experience, offering new high-end
high quality customer service, seamless means new payment methods and store experiences will be essential to
cross-channel selling and convenience. formats will bring more trade. remaining competitive with other global
cities like Paris and New York.
MILLENNIALS (Born: 1977-1994) SHOPPERS
By 2020, this generation will also be Attracted by a new store format, M EAST & E ASIA 3%
shopping for their children and demanding event or sale, shoppers will benefit Often in the West End for high value
authenticity, transparency, customisation, from new technologies supporting goods, familiar payment methods such as
interactivity and omni-channel accessibility AR, showrooming and personalised AliPay – the highest penetration mobile
at the heart of their shopping experience. recommendations. wallet in the world – could grow this
segment.
GEN Z (Born: 1995-2012) TOURISTS
This growing segment suffers Attention Coming as much for the experience as NEWER MARKETS 2%
Partiality – the attention divide between the stores, novel retail concepts that With a growing middle class, visitors
phones, friends and environment – meaning encourage London visitors to spend from countries like India will command a
inspirational curation and personalisation longer in-store will increase revenue. higher percentage of sales – especially
above all else will convert into sales. beyond 2020.
*UK customers - Source: Statista
of smartphone apps and GPS to direct them information. New apps could allow customers
to specific products. to scan items in-store and pay at the counter
or in-app, or to pay using crypto-currency
Experiential offerings might range from or a retailers’ own-brand currency. Asian
allowing shoppers to wear ski gear in a cold- consumers now expect to pay using mobile
room before purchasing, allowing customers wallets such as AliPay and WeChat Pay, which
to design and configure their own products, automatically process currency conversions.
or taking a lunch-time nap on a mattress to Other platforms are developing ways to allow
test it out. Providing unique experiences in-store customers to buy now and pay later,
helps consumers to contextualise ways to link a payment card to a business to earn
they might utilise a product. It also builds rewards, or seamlessly allow tourists to fill
relationships, encourages shoppers to in VAT refund forms by uploading photos of
spend longer in-store, and inspires loyalty.
This type of experiential shopping is
particularly important for holiday-makers
and Millennials who demand authenticity,
“With the emergence of mobile
transparency, customisation and interactivity as an important channel for
at the heart of their shopping experience.
commerce, the line between online
In addition to experience, customers are and in-store shopping is also
blurring in the area of payment.”
also demanding friction-free shopping that
moves seamlessly between the online and
offline worlds. For example, around 65
percent of US bricks-and-mortar retailers their receipts. This range of payment options
will offer a delivery component by the end is particularly important to members of Gen
of 2019, signalling a new interpretation and X, who are time-poor and so place value on
function of the ‘store’. Delivery innovations retail experiences which combine high-quality
may include low-carbon delivery, drone customer service, seamless cross-channel
delivery, or free 24/7 delivery. retail and convenience.
With the consolidation of mobile as a To reach the new consumer, retailers will need
significant channel for commerce, the line to innovate methods of delivering an omni-
between online and in-store shopping is channel approach. In the end, the future of
also blurring with regards to payment. Many retail is not that different from the past. It is
consumers already use their phones in-store focused on putting the customer front and
to compare prices and search for product centre of their experience.
REDEFINING RETAIL BEYOND 2020 | 7
REDEFINING RETAIL BEYOND 2020
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Themes of consumer
disruption
Consumer behaviour is changing, and this represents an unparalleled
opportunity for retail.
T
he themes emerging in consumer 'experiential retail') involves creating a
disruption point to a clear direction community destination. As ‘chore’ shopping
for retailers seeking to adapt their moves online, consumers are looking for
business strategies. The future of retail lies added value from the physical retail space.
in delivering cross-channel selling in an This could mean hosting events or art
engaging environment. Here we look at installations, or creating a hang-out space
some of the key themes that are emerging with comfy furnishings, free phone chargers
in consumer disruption, and how to tackle and food trucks. Pop-ups and innovative
the resulting challenges. store formats add interest. In fact, pop-ups
have become an industry in their own right,
THE NEXT BIG THING worth over $10 billion annually.
Many retailers are talking about
the ‘retailtainment’ trend. But Curation culture is another key trend,
what does this mean in practice? Originally especially with younger shoppers. This
described almost 20 years ago as a way to includes hyper-local stores, and smaller,
use ambiance to put customers in the mood less-cluttered shops featuring a reduced
to buy, today retailtainment (also called range of goods focused around a specific
8 | REDEFINING RETAIL BEYOND 2020
REDEFINING RETAIL BEYOND 2020 | THEMES OF CONSUMER DISRUPTION
theme. Combining curation with digital look like without needing to try it on, or
innovation can allow stores to reach a a digital mirror that allows customers to
wider range of customers, as ShopShops instantly request wish-list items in different
(p. 20) has demonstrated, by livestreaming sizes and colours. Virtual Reality (VR) could
US store events to shoppers in China. be used to visualise a hotel room before
Consumers are expecting a much higher booking (p. 24), or to see how a sofa
degree of personalisation, including would work in a users’ own home. Used
instantly customisable goods and together, this technology will help deliver a
recommendations tailored to individual more streamlined and appealing physical
tastes. environment, by allowing retailers to
remove checkouts and stock from the shop
One example of the destination trend floor. For those who do visit the store, this
in action is Nike by Melrose, where the is made easier with GPS-powered in-store
available items are determined by data navigation tech, like that from Oriient (p. 28).
collected via the NikePlus app and change
frequently to reflect local micro-trends. SEAMLESS SHOPPING
Shoppers can use the app to buy online Studies show that 78 percent of
and collect from an in-store vending women base their purchasing
machine. The physical shop includes choices on advice and recommendations
artwork and a Sneaker Bar where shoppers from friends and trusted influencers. New
can receive in-depth one-on-one advice. apps are already allowing customers to
Nordstrom Local is another example. Stores poll their social media contacts about
are designed as experiential showrooms individual purchasing decisions. Using
where consumers can meet with a personal peer-to-peer marketing (p. 33) to create
stylist, sip a latte, get a manicure and a real conversation and relationship with
be pampered as they consider clothing
purchases.
IN-STORE TECHNOLOGY
“Consumers are expecting
The retail store of the future a much higher degree of
will be an intelligent store using
digital to inform the physical store format.
personalisation, including
This trend will see digital used to deliver a instantly customisable goods
hyper-personalised and adaptive in-store
experience. Retailers will need to adopt a and recommendations tailored
range of payment options, such as mobile
wallets and contactless payment, which
to individual tastes.”
are already standard in China. Following
the introduction of Amazon Go, which consumers could help retailers to maximise
demonstrated that facial recognition can brand loyalty and help customers feel more
be harnessed to allow instant payments, valued. Retailers could use technology to
it is now possible to eliminate checkouts bring social influencer marketing ‘in-store’.
altogether, and even create staff-less stores
for a completely frictionless shopping Concurrently, new customer-relationship
experience. In China, the unstaffed Moby management (CRM) technology is allowing
Mart (p. 27) is open 24/7 and uses AI to the in-store personal shopping experience
allow shoppers to stock up using automatic to extend beyond the door (p. 30). With 48
payment. Automatic payment can even be percent of customers already saying they
applied to single items, as with the Costa want a higher level of customisation, these
Clever Cup (p. 26), which is embedded with ‘Conversational Commerce’ tools could
a payment chip. help deliver a greater connection between
online and in-store shopping.
Technology can deliver more flexible retail Increasingly, competing with online
spaces, including bringing more of the shopping comes down to delivery speed,
online world in-store. With Apple’s release with around 76 percent of retail shoppers
of the augmented reality (AR)-supporting saying they would spend more if they could
iOS11, digital displays can be placed get same-day delivery (Source: Deloitte).
directly into the hands of the consumer. Creating a seamless retail experience also
This could allow stores to augment their means wider cross-channel selling and
physical displays, for example by using AR more innovative delivery options, such as
to show customers what an outfit would grab-and-go, click-and-collect, immediate
REDEFINING RETAIL BEYOND 2020 | 9
REDEFINING RETAIL BEYOND 2020 | THEMES OF CONSUMER DISRUPTION
Ipopba | Megapixl.com
delivery (p. 32) or the option of leaving Stores that incorporate social inclusivity
items in-store for home delivery later. into their business model (p. 39), AR that
instantly informs customers of a products’
DATA-DRIVEN RETAIL sustainability (p. 40) and apps that alert
None of the trends discussed customers to a brand’s ethics (p. 41) will
in this report would be possible drive this trend.
without accurate data on shoppers, their
habits and their behaviours. In-store Brands will need to ensure their entire
analytics, such as customer tracking supply chain is sustainable and that means
through facial recognition, or even footstep greater use of data to enable technology
recognition, is making it possible to gather such as dynamic pricing to reduce food
new types of customer data and enable waste (p. 42) and reverse logistics to
more intelligence-led executive decisions. optimise the product lifecycle and reduce
The next frontier is gathering data on
customer emotions, and how this affects
their shopping habits. AI-powered software
“The next frontier is
is allowing retailers to use all of their data gathering data on
more effectively, by analysing historic
buying patterns (p. 35) and helping to
customer emotions, and
gather data on everything, from the effects how this affects their
of weather on shopping patterns, to
creating more efficient supply chains (p. 37). shopping habits.”
This data can be fed back into marketing
technology, for example by allowing the environmental impact of returns.
chatbots (p. 36) or digital billboards to Brands should do more to promote
respond to how shoppers are feeling at any sustainable models of consumption and
given moment. convenience with a conscience. This will
pay off for retailers, when shoppers feel part
THE GLASS BOX STORE of a wider movement that places positive
Millennial and Gen Z customers change for both our planet and its people at
are not just requesting, but its heart.
are demanding, transparency from their
favourite brands. Globally, around 86 The innovations discussed in this report
percent of consumers expect retailers are enabling retailers to become nimbler at
to take a stand on social issues, and establishing a comprehensive omni-channel
66 percent say they would be willing strategy. They are helping brands to know
to pay more for sustainable goods precisely who their customers are, what
(Source: Nielsen). The retail store of the their specific needs and buying preferences
future will be expected to demonstrate are, and how to reach them in the most
its ethical and sustainable credentials. convenient, customised and authentic way.
10 | REDEFINING RETAIL BEYOND 2020REDEFINING RETAIL BEYOND 2020 | WHAT DISRUPTION MEANS FOR STAKEHOLDERS
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What disruption means
for stakeholders
Driving growth in an era of disruptive technologies will require building
strategic partnerships between retailers, brands, landlords, the public,
and policy makers.
BUILDING PARTNERSHIPS IN THE new and unusual store formats; to provide
FUTURE OF RETAIL short-term leases, or leases that allow
It’s not only stores that are changing; the multiple outlets to share one space. Shorter
model of retail will need to adapt to shifts leases could provide greater flexibility for
in consumer needs and behaviour. Building both sides; they allow brands to try new
strategic partnerships between retailers, concepts with less risk, while shopping
brands, landlords, the public, and policy centres and malls benefit by keeping their
makers is crucial to driving growth in an tenant mix fresh, which drives traffic and
era of disruptive technologies and rapidly attracts new visitors. As more retailers and
changing consumer expectations. landlords experiment, lease standards are
likely to evolve.
ADAPTING RETAIL LEASING FOR NEW
MODELS OF PROFITS A 2016 PwC survey found 58 percent of
Strategic partnerships with landlords will respondents preferred to shop online
be crucial to developing flexibility. To because it is more convenient. Landlords
accommodate new store formats, like pop- and tenants can work together to offer new
ups, large concept stores, and unstaffed versions of in-store conveniences. Landlord
stores, landlords will need to be prepared / retailer partnerships could improve foot
to incorporate greater adaptability in rents, traffic and reduce barriers for shoppers,
length of leases, and store configurations. for example, by developing concierge and
Rental contracts may need to be tailored to return services.
REDEFINING RETAIL BEYOND 2020 | 11REDEFINING RETAIL BEYOND 2020 | WHAT DISRUPTION MEANS FOR STAKEHOLDERS
CONNECTING WITH CONSUMERS TO be how to deliver greater personalisation
MEET CHANGING EXPECTATIONS whilst safeguarding any collected data.
Retailers are experimenting with ways to
partner more effectively with consumers. Partnerships with government can help
This often involves the use of technology to attract new customers. China is now
create new opportunities for cross-channel arguably the world leader in developing
shopping. Specialised retail apps can and rolling out retail innovations. Retailers
drive traffic by offering in-store customers who wish to attract more Chinese and
personalised deals, grab-and-go and Asian consumers will need to adopt the
mobile payment options, while collecting technology these customers now expect as
data which helps them provide hyper- standard. For example, in China, more than
localised offers. For example, sports brand half of all transactions are made with mobile
Adidas now offers running shoes tailored wallets like AliPay, and Chinese customers
to the needs of runners in particular cities therefore expect this facility to be available
– their AM4NYC (‘Adidas Made for NYC) to them as they travel.
trainer is designed to help specifically with
the sharp turns found on New York City’s Creating ethical and sustainable supply
street grid. Each shoe is equipped with a chains will involve cooperation with
near field communication chip that allows international policymakers. For example,
runners to sync their shoes with the Adidas requiring less plastic use, greater
mobile app to receive original content and transparency in the production process and
information about the product. forging connected networks of suppliers
could enable returned goods to be resold
Facial recognition systems are being used locally, rather than shipped back to the
to create partnerships with consumers, and country of origin.
to build a bridge between the online and
offline worlds. Technology that recognises
customers when they walk in the door can
help stores to develop more personalised “Facial recognition systems are
shopping, for example, by reminding in-
store shoppers that there’s an item in their
being used to create partnerships
online basket and offering them the chance with consumers, and to build a
to try it on there and then. Partnerships like
these create opportunities to learn exactly
bridge between the online and
what customers want - and when - and then offline worlds.”
meet those expectations.
SAFEGUARDING PRIVACY IN HIGHLY BUILDING SUCCESSFUL PARTNERSHIP
CONNECTED STORES FOR CROSS-CHANNEL RETAILING
In the future, connectivity will be king. New retail experiences offer fresh
Retailers and policymakers will need opportunities for brands and stores to
to work hand-in-hand to develop the collaborate. One example is Macys' Story in
technology infrastructure - such as 5G New York, which changes its offerings every
connectivity - necessary to provide a four to six weeks to focus on themes of
seamless connection between the physical significance to sponsors and advertisers. A
and the digital. Payment infrastructure, sponsorship deal by health provider CIGNA
including legal frameworks, will need to led to the addition of a relaxation lounge
be developed to enable mobile wallets and Pilates classes. Additionally, the store
and other forms of contactless shopping. runs promotions like ‘Thirsty Thursdays’
Hard infrastructure changes may also be or ‘Snack Saturdays’, partnering with local
necessary, for example, to create car-free food trucks. The sponsorships and themes
destination shopping areas, or to allow add interest for consumers and create
robots or drones to deliver goods. additional sources of revenue for the store.
As the use of data grows, along with calls As we have seen, the retail space of the
for greater transparency, policymakers future will include opportunities for dining,
and retailers will need to work together on learning, and entertainment. Retailers
new initiatives around data collection and will need to develop partnerships with
privacy. One key question to address will independent experts, including online
12 | REDEFINING RETAIL BEYOND 2020Elenabsl | Megapixl.com
influencers and mobile vendors like food stores. Services, such as N26’s in-store
trucks and massage therapists, to deliver cash deposit and withdrawal (p. 18) can also
this added value. New shopping events can turn shops into convenience destinations
also build brand partnerships. For example, and make shopping easier.
events such as China’s Singles Day
(Guanggun Jie) could become fixtures in the While the retail ecosystem is experiencing
British shopping calendar and provide an rapid change, it is anything but dead. In
opportunity to partner with Chinese brands fact, new ways of partnering with brands,
or to attract more Chinese customers.
Alibaba has started its own shopping
festival - the 11.11 Global Shopping Festival
- in order to grow sales outside of China. It
“Retailers who wish to attract
now attracts more than 60,000 international more Chinese and Asian
brands across more than 225 countries.
consumers will need to
In order to develop greater omni-channel adopt the technology these
opportunities, many legacy brands have
begun partnering with digitally native customers now expect as
brands. In the US, large retailers like Target standard.”
and Walgreen’s have gained a new lease
of life by offering online brands such as
Casper’s and Birchbox in-store. This type consumers, policy makers and landlords are
of partnership brings the cachet of private fuelling a retail renaissance. At the same
brands and a curated in-store experience. time, there is a growing realisation that
For the digitally native brands, partnering going it alone is not necessarily the best
with a bricks-and-mortar retailer offers a course of action for retailers. In order to
way for potential customers to try before effectively navigate the continuing changes
they buy; allows the brand to test out in consumer expectations, technology,
markets before opening their own stores; e-commerce and omni-channel shopping,
and helps drive incremental business in retailers will need to be innovative in
markets which won’t support stand-alone developing options for creative partnerships.
REDEFINING RETAIL BEYOND 2020 | 13REDEFINING RETAIL BEYOND 2020 | VISION AND VALUES
Vision and values
T
his report will give everyone involved Our belief is that London’s West End is
in the retail sector tremendous food for ideally positioned to both embrace the kind
thought. It’s clear that technology in all of technological innovation detailed in this
its forms is reshaping retail and real estate, report, and also to respond to the ethical and
but ultimately it may be environmental and environmental issues of sustainability. The
ethical issues which have the most sustained diversity of London’s retail landscape from
long-term effect on what we buy and how it street food to super-luxury is enormous, and
is sold. we see part of our role as helping to sustain
that range.
Today’s consumer expects retailers to mirror
and share their values. They’re looking for Our work with our partners to enhance the
demonstrable commitment to sustainability environment of the West End, improve air
and the environment. As this report notes, quality and make it a pleasant and secure
consumers want retailers to take a stand place to be is of central importance to us. It is
on social issues, and a growing number of also underpinned by good business sense;
shoppers say they would be willing to pay the West End’s ability to attract the best
more for sustainable goods. This represents brands, restaurants, hotels, bars, cafes and
a massive opportunity for the retail sector – cultural hubs ultimately draws in visitors and
and good news for the planet. also supports the appeal of the location as a
workplace.
Millennials and Generation Z want
convenience with a conscience, and an New West End Company is committed
increased range of ethical solutions such to helping our partners and stakeholders
as packaging-free stores, community deploy the innovation that can support their
engagement initiatives and locally and businesses and enhance London’s reputation.
ethically sourced products. In the face of We hope this research will further encourage
these preferences, intelligent brands that debate and information exchange around the
can blend tech with ‘in real life experience’ fascinating challenges and opportunities that
will maximise their appeal to consumers. this unique location offers.
Social inclusivity will have a growing impact
on the identity of retail environments, while Jace Tyrrell
supply chains will be increasingly under Chief Executive
scrutiny. New West End Company
14 | REDEFINING RETAIL BEYOND 2020REDEFINING RETAIL BEYOND 2020 | THEMES OF CONSUMER DISRUPTION SUMMARY
REDEFINING RETAIL
BEYOND 2020
THE NEXT BIG IN-STORE TECHNOLOGY SEAMLESS
THING SHOPPING
Concepts like AR, showrooming and the removal of the checkout
The hyper-competitive retail will mature enough to become new themes in the store of the Chatbots, better CRM and
space is continuing to see future. cross-channel selling means
new experiences emerge – • Augmented Reality & Virtual Reality the in-store experience does
community, personalisation • Clutter-free stores not have to end – or start – at
and curation will be more the door.
important by 2020 and • New payment options
• Personalisation & CRM
beyond. • Removal of checkout
• Chatbots & AI
• Novel store format • Wayfinding
• Cross-channel commerce
• Community destinations
• Peer-to-peer marketing
• Curation culture
• Rapid personalisation
DATA-DRIVEN RETAIL THE GLASS BOX STORE
Accurate data on shoppers, their habits and Younger consumers are demanding ethical,
their behaviours - both in and out of store transparent and sustainable businesses
- will be crucial to retaining and attracting more than ever, meaning this new trend will
customers. go mainstream by 2020.
• In-store analytics • Diversity & inclusivity
• Emotions & data science • Sustainability
• Smarter commercial decisions • Business ethics
• Positive consumption
How to read the innovation pages EASE OF
IMPLEMENTATION
In this report Springwise has gathered a selection of innovations from across the
world focusing on the key themes that are emerging in consumer disruption. Each
innovation (from p. 17) provides a description, key takeaways and an illustration
of the ease of implementation - in a scale from 'easy' to 'difficult' depending on
whether the solution is as quick as 'plug and play' or requires more advanced
software development and extensive adaptation. Easy Difficult
REDEFINING RETAIL BEYOND 2020 | 15INNOVATIONS
THE NEXT BIG THING
INNOVATIONS
“The hyper-competitive retail
space is continuing to see
new experiences emerge –
community, personalisation
Novel store format and curation will be more
Community destinations important by 2020 and
Curation culture beyond”
Rapid personalisation
16 | REDEFINING RETAIL BEYOND 2020 Image credit: ShutterstockINNOVATIONS | NOVEL STORE FORMAT
WHAT
WeWork expands on
the idea of co-working
space by welcoming
the public.
WHO
www.wework.com
WHERE
United States
CONTACT
Made By We joinus@wework.com
Co-working space opens to the public TAKEAWAY
with desks, shopping and food
Opening up on-
demand co-working
WeWork expands on the idea of co-working space by welcoming the spaces provides
public. more opportunities
for networking and
WeWork has launched a new combination combination shared office and sales space socialising. It can
co-working space with retail and food called concept. WeWork currently has 603 open also help stores
Made By We. It is located in New York or coming soon locations in 100 cities and businesses to
City's Flatiron neighbourhood. It is open to around the world. That is an attractive monetise underused
the public and anyone can book a desk or captive audience. In the summer of 2018, space.
meeting space. There are nearly 100 seats the company announced WeMRKT, a
available that can be booked on-demand retail space to sell products from 10 Stores can sell their
or by pre-booking via the website. Made By WeWork member companies -- all of products alongside
We also offers meeting spaces for groups whom competed to sell company-branded the meeting and
of four to 10 people. Made By We doubles apparel, office supplies and food. working spaces,
as a shop, which sells clothes, snacks, and generating new
other products made by members of the revenue streams
"We community." Members include direct-
to-consumer online companies that will now
“... direct-to- as they cultivate a
captive audience.
have the opportunity to sell in a bricks-and- consumer online
mortar environment with small overhead
cost.
companies will
There's also a cafe. The idea, according to now have the
the company, is to be not just a workplace opportunity to
but also a community.
sell in a bricks- EASE OF
WHAT'S NEXT? and-mortar IMPLEMENTATION
Co-working spaces are growing in
popularity as people look for cost effective
environment”
ways to handle office spaces. Shared
work spaces also offer opportunities
for socialising and networking. WeWork
is clearly capitalising on these trends. Easy Difficult
Retailers surely will welcome this
REDEFINING RETAIL BEYOND 2020 | 17INNOVATIONS | COMMUNITY DESTINATIONS
WHAT
German startup N26
is transforming retail
stores into bank
branches, where
customers can
withdraw and deposit
money.
WHO
n26.com
WHERE
Germany
CONTACT
Peggy and Marco Lachmann-Anke from Pixabay info@n26.com
In Germany, deposit and withdraw cash TAKEAWAY
at thousands of local stores
Transforming stores
German startup N26 is transforming retail stores into bank branches, into bank branches
where customers can withdraw and deposit money. helps retailers to draw
in new customers by
offering a service.
A
s financial services come up with Germany and Austria and now reaches
ways to provide online customers over 1.5 million customers in 17 European Allowing consumers
with offline convenience, digital countries. Backed by Chinese giant to access banking
banks are exploring new collaborations Tencent, the German fintech opened services while they
with retailers to add value for in-store its online bank to British customers in shop helps turn
shoppers. German startup N26 is doing so October 2018. Consumers increasingly retail spaces into a
by transforming over 11,500 stores into bank want convenience with greater levels of destination. Stores
branches, where customers can withdraw could add other
and deposit money. complementary
Since its launch in 2015, N26 has
taken the hassle out of physical banking
“... digital services to transform
into destinations,
by moving inconvenient tasks — such as banks are such as incorporating
creating an account or cancelling a lost
card — online. Now, through a partnership
exploring new community meeting
spaces.
with Barzahlen, it has launched Cash26, collaborations
effectively turning shops into banking with retailers to
branches or ATMs. To use, N26 customers
visit one of the participating stores and add value to in-
launch the app. Next, they specify whether store shoppers. ”
they want to withdraw or deposit cash and
how much. The app will then automatically EASE OF
generate a barcode, which the customer self-service and single point access to a IMPLEMENTATION
presents at the checkout register. The broad range of services. N26 taps into this
cashier scans the code, the customer enters demand by offering clients instant access
their pin and the transaction is processed to financial services through a retail store.
immediately.
What other services can be integrated into
WHAT'S NEXT? bricks-and-mortar retail? Easy Difficult
N26 started with 50,000 customers in
18 | REDEFINING RETAIL BEYOND 2020INNOVATIONS | COMMUNITY DESTINATIONS
WHAT
A new service lets you
charge your phone
battery on the go.
WHO
www.chargedup.green
WHERE
United Kingdom
CONTACT
hello@chargedup.
ChargedUp green
Tech startup uses green energy for TAKEAWAY
rentable chargers Bringing more
services in-store
A new service lets you charge your phone battery on the go. encourages
customers to stay
longer.
A
t Springwise, we often come across with renewable energy company Ecotricity.
innovations based on providing a To prevent people from taking a ChargedUp Consumers are
unique service. These have included battery and not returning it, each battery looking for added
a concierge service that specialises in hard- has its own ID chip, and can be linked to value from the retail
to-find items and personalised nutrition individual users. Users can also purchase space, and this can
labels. A new innovation seeks to answer a ChargedUp battery outright for £30. This be met by providing
the question of what to do when a phone fee includes access to the chargers for one ancillary services
battery dies while you are out and about. year. such as charging
London-based startup ChargedUp have stations.
developed a network of vending stations WHAT'S NEXT?
where, for a small fee, users can borrow ChargedUp was inspired by London's public Focusing on the
portable power banks. bike-sharing scheme to solve the dead use of green energy
Users can locate a station using the mobile phone battery problem. ChargedUp allows retailers
ChargedUp app. Once located, they scan isn’t the only company to turn charging to highlight their
the QR code on the station to release a into a service. Services like ChargeBox green credentials
battery. Batteries come with connector can be found in some shopping centres. and appeals to
cables for both iPhone and Android. They allow users to lock their phone away Millennials and Gen Z
Prices for the rental batteries start from 50 and charge it for 30 minutes. However, consumers.
pence for 30 minutes, up to £3 for a full ChargedUp is the only service where users
24-hours usage. After charging, users can can take the charger on the go with them.
drop the charger off at any ChargedUp The startup recently closed £1.2 million
station. There are currently 30 stations in seed investment which will be used to EASE OF
around London, but the company aims to extend the mobile charging network in bars, IMPLEMENTATION
have chargers in more than 1500 locations cafes and restaurants across the UK and in
by the end of 2019. The company is also other cities around the world.
exploring partnerships that will let them put
charging stations in thousands of stores and What other ways are there to turn mobile
restaurants. charging into a service?
The entire ChargedUp network runs on Easy Difficult
green energy, provided by a partnership
REDEFINING RETAIL BEYOND 2020 | 19INNOVATIONS | CURATION CULTURE
WHAT
A new company
is riding the wave
of the growth in
livestreamed home
shopping in China.
WHO
www.shopshops.com.
cn
WHERE
China / United States
CONTACT
Pixabay www.shopshops.com.
cn/contentUs
Shopping platform livestreams events
online TAKEAWAY
Livestreaming in-
A new company is riding the wave of the growth in livestreamed home store events creates
shopping in China. a link between the
online world and
the physical space
M
illions of people tune in to home After the show, orders are shipped to and offers new
shopping TV networks every year to ShopShops, who repackage and distribute opportunities for
do their shopping. These networks the purchases to customers in China. cross-channel selling.
use hosts and time-limited offers to create ShopShops takes a commission of between
a dynamic atmosphere that generates big 15 and 20 percent on each sale. Stores can use online
sales. A new service is now offering to do events to deliver
the same for in-store shopping. WHAT'S NEXT? more curated content,
ShopShops creates videos that take ShopShops is part of a broader trend in highlighting particular
place in retail stores. Rather than TV, Chinese shopping. A new generation themes, brands and
ShopShops livestreams its events online. of wealthier shoppers are driving both items.
Customers can replay the videos later and livestreamed shopping events and
order the items if they are still available. The international e-commerce sales. According Using influencers to
platform creates events when stores are to a report by Deloitte, livestreaming present online events
closed, and is popular with Chinese viewers events were forecasted to reach 456 can help stores create
who get the experience of shopping ‘in’ million viewers in China in 2018, and a more personal
American stores. drive 4.4 billion in direct revenue. This relationship with
Since its launch, ShopShops has is an increase of 37 percent over 2017. customers.
generated, on average, around $8,000 ShopShops connects retailers, influencers,
worth of revenue per streamed show. and consumers through a live and authentic
Although it sells luxury goods, it specialises interaction in the store.
in brands and retailers that otherwise might EASE OF
not have access to its Chinese customer Could bricks-and-mortar retailers join forces IMPLEMENTATION
base. This includes vintage markets and to connect with consumers across borders
boutiques with no e-commerce presence and seize this huge market opportunity?
of their own. So far, the platform has
worked with around 150 partners, and
has streamed around 2,000 live events
from US stores to customers in China. Easy Difficult
Chinese micro-influencers host the streams.
20 | REDEFINING RETAIL BEYOND 2020INNOVATIONS | RAPID PERSONALISATION
WHAT
Researchers and a
retailer have teamed
up to deliver a
jumper that can be
customised in-store to
fit anyone.
WHO
www.ministryofsupply.
com
WHERE
United States
Ministry of Supply CONTACT
www.ministryofsupply.
com/contact-us
Customisable jumper can adapt to fit
anyone
Researchers and a retailer have teamed up to deliver a jumper that can TAKEAWAY
be customised in-store to fit anyone. In-store experiences
need to be authentic
and add meaning
A
t Springwise, we have seen a number batteries are needed and the jumper is not and value for the
of fashion innovations, including made of metal thread or shape-memory customer.
a soft ski-helmet that hardens on materials. Although the researchers will not
impact and a scarf that protects against air give details of the exact materials used, The customisation
pollution. Now, MIT’s Self-Assembly Lab they have said that the shape-shifting process allows
and direct-to-consumer fashion company technology depends on the way that two shoppers to interact
Ministry of Supply have teamed up to different materials interact together when with a brand in a
develop a jumper that can be resized on they’re exposed to heat. The jumper will be more personal way,
the spot to fit almost anyone. Shoppers can mass-produced in standard sizes and then and allows brands
choose a jumper off the shelf, and an in- customised in-store. to collect data about
store robotic re-sizer will use a heat gun to that customer.
adjust the jumper to a custom size while the WHAT'S NEXT?
shopper waits. The collaboration with Ministry of Supply is By resizing a single
MIT Researcher Skyler Tibbets and his a big step for the Self-Assembly Lab, which item to fit anyone,
team stumbled on the technique while has worked on commercial products, but stores can reduce
working to create a fabric that could be has never launched a textile that customers stock and free up
altered to become more breathable or could actually buy. For Ministry of Supply, floor space.
more porous, depending on the weather. the self-altering jumpers are an opportunity
Ministry of Supply, meanwhile, has been to mass-produce customised garments at a
experimenting with robotic knitting and relatively low cost.
customisation. The company’s goal was to EASE OF
create technology for customising different Will customers see the jumpers as a IMPLEMENTATION
aspects of design, including aesthetics, gimmick or an experience worth paying for?
functionality and fit.
According to Gihan Amarasiriwardena,
co-founder and president of Ministry of
Supply, the company’s vision is to bring the
one-hour photo concept to clothing. Unlike Easy Difficult
other types of transforming materials, no
REDEFINING RETAIL BEYOND 2020 | 21INNOVATIONS | RAPID PERSONALISATION
WHAT
Finnish company VTT
is developing smart
vending machines
that could produce
personalised snacks
based on preferred
textures and flavours.
WHO
www.vttresearch.com/
WHERE
Shutterstock Finland
CONTACT
Custom snacks on-demand with 3D info@vtt.fi
printing
Finnish company VTT is developing smart vending machines that could TAKEAWAY
produce personalised snacks based on preferred textures and flavours. 3D printing allows
retailers to combine
a unique experience
W
e've already seen an exercise production is still a few years away because with a high level of
machine that 3D prints chocolate equipment as well as materials must be personalisation.
according to how much users have developed.
worked out, and pancakes 3D-printed with 3D printer vending
the diner's face on it. Following the trend WHAT'S NEXT? machines can be used
of rapid personalisation, Finland-based As consumers demand more in-store, tech to develop mini-stores
VTT Technical Research Centre is using 3D is helping retailers enhance the customer that could be placed
printing to develop smart vending machines experience by achieving a greater level in new locations, such
that will be able to produce completely as bus shelters, office
customisable snacks. VTT scientists lobbies or inside
believe 3D printing could be the answer to “... 3D printing larger stores.
rising customer expectations for healthy,
nutritious food with added elements such could be the By linking the printer
as design and playfulness. answer to to an app, retailers
Consumers will be able to choose from
a variety of flavours and textures, such as
rising customer could develop more
opportunities for
crispy, crunchy or soft, to build their own expectations” cross-channel selling.
multi-layered food on-demand. Having
started with starch and cellulose-based
products, researchers are now looking into of personalisation. While 3D printing
the viability of printing protein concentrates is not quite quick enough yet to be a EASE OF
from plants such as oats and fava beans, viable option for in-store, the technology IMPLEMENTATION
and whey from dairy. Healthfulness is an is fast developing and opening plenty of
important part of the final product. opportunities for on-demand manufacturing.
Technically, the ingredient mix must
be able to flow enough to be used in the With 3D printing now available for
printing process, and as an emerging everything from cars to action figure toys,
technology, additional research is ongoing. what could best draw foot traffic and grow Easy Difficult
VTT’s scientists believe that industrial-scale retail sales?
22 | REDEFINING RETAIL BEYOND 2020INNOVATIONS
IN-STORE TECHNOLOGY
INNOVATIONS
“Concepts like AR,
showrooming and the
removal of the checkout
Augmented Reality & will mature enough to
Virtual Reality become new themes in
Clutter-free stores the store of the future”
New payment options
Removal of checkout
Wayfinding
Image credit: Shutterstock REDEFINING RETAIL BEYOND 2020 | 23INNOVATIONS | AUGMENTED REALITY & VIRTUAL REALITY
WHAT
The global travel
giant has showcased
its new VR service,
which lets customers
take a virtual tour of
hotel rooms before
booking.
WHO
www.expedia.com
WHERE
United States
Shutterstock CONTACT
twitter.com/Expedia
Expedia takes a trip into Virtual Reality
The global travel giant has showcased its new VR service, which lets TAKEAWAY
customers take a virtual tour of hotel rooms before booking. Retailers can use
VR and AR to
enhance the in-store
I
n what could revolutionise the way we WHAT'S NEXT? experience and create
book our holidays, Expedia - the world’s The idea of being able to browse a room a highly personalised
biggest travel platform - has embraced before booking does sound exciting, shopping service.
Virtual Reality (VR) tech and is making it and the use of VR is spreading into other
possible for customers to take a virtual sectors with projects such as the Holoroom Moving displays
tour of hotel rooms so they can get a How To DIY clinic and the Japanese Konica into the VR space
much better feel for shape and size before will help stores to
making a booking. That’s a far cry from a decrease the number
handful of (often misleading) jpegs. “... virtual and of items on the floor
Additionally, the user will also be able
to slide open the balcony door and step augmented and use space more
efficiently.
outside to see what the view is like. Arthur reality
Chapin, Expedia’s Senior Vice President
of Product and Design said at a recent
technologies will Customers can use
their own phones
conference: “If you're going to make the transform the to view VR and AR
decision of [booking] a cruise, wouldn't
it be cool if you could check out the ship
booking process, enhancements in-
store, connecting the
[virtually] before you spend that much inspiring people physical and digital
money?” to visit new space.
Expedia spent over a $1 billion on new
technology in 2016, with the VR experience places”
being one of several new innovations the
company has spoken of. Another area Minolta Planetarium project. EASE OF
it’s looking into is using devices such as IMPLEMENTATION
Amazon’s Echo and AI-powered chatbots With growing demand for technology
so users can browse, interact and book trips in store, how could retailers harness
using just voice commands. The company the power of VR to increase footfall
predicts virtual and augmented reality and promote additional browsing and sales
technologies will transform the booking for key items?
process, inspiring people to visit new Easy Difficult
places.
24 | REDEFINING RETAIL BEYOND 2020You can also read
