Service Design Drinks FJ O R D / A P R I L 2 3 , 2 0 1 4 Service Innovation in Retail

Martin User Experience, Nokia Katrin PhD Candidate, University of Potsdam Who are we? Olga Business Consultant, FuxBlau Manuel Service Designer, Fuxblau

Where we are today

Where we are today

Who is talking today? Johannes Wrubel Founder of ///

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

smaller type Retail is broken! Service Design can x it.

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Future of Shopping 1. Retail is struggling to face the challenges of digitalization 2. New business models threaten old ones 3. People adopt to new technologies with new behaviours STAT U S Q U O :

Some Numbers Increase of online sales in fashion retail 2007: 4,9% 2012: 16,8% Increase of mobile sales > 1.000.000 mobile transactions in Q1/Q2 2012 = 152% more than 2011 ! Increase of mobile devices: T H AT H AV E I N C R E A S E D :

New Technologies Mobile Social Communities: Twitter, Facebook, Instagramm Location Based Services: Foursquare, FB Places, Google Places Physical World Connectors: NFC, RFID, QR, iBeacon Mobile Payment: Square, SumUp, Google Wallet T H AT D R I V E M O B I L E CO M M E R C E :

Treiber: Social Media

Treiber: SoLoMo

Treiber: Digital-Physical-Convergence

New Behaviours Shop everything everywhere anytime Use whatever device is there ! Get instant social feedback ! Buy & Try > Return ! Showrooming: choose offline/order online T H AT D R I V E T H E C H A N G E :

Retail Store Sales in Germany, 2012 H O W B A D I S I T ? $ Quelle: BrandEins 04/13 - 4 % - 3.000.000.000

Retail Sales H O W B A D I S I T ?

Physical Store P R O : CO N T R A : Costumer ! Experience fashion ! Immediate Take-Away Costumer ! Limited Selection ! No time to decide ! ! ! ! Company Higher conversion rates ! Lower return rates Company ! Showrooming ! High fix costs/ Hard to scale

If the average online customer spends 100 per order ! and the retailer has ! 18.000 orders a year: How much prot will they make? $ Price Question W I N S O M E M O N E Y

Price Question W I N S O M E M O N E Y Costs Minus Rest Average Basket Size 100,00 Returning 40% -40,00 60,00 Cost of Product 40% -24,00 36,00 Discounts 10% -6,00 30,00 Cost of Advertising 10 % of ABS -10,00 20,00 Shipping 4,90 -4,90 10,93 Callcenter/Fulllment 13,5 -8,10 2,83 Shop Setup 40.000 -2,22 17,78 Product Shooting 35.000 1,95 15,83 Cost of IT 5 -3 -0,17 Result -60,16 -0,16 18.000 = -2880 Quelle: BrandEins 04/13 $

eCommerce P R O : CO N T R A : Costumer ! Unlimited products Research & Compare Costumer ! Cannot touch and try ! Waiting for delivery ! ! ! Company Tracking of customer behavior ! Instant improvement Company ! High return rate ! ! No customer contact and insights !

So what? eCommerce and stores both got their pros and cons. If you know what you want, web shop is the place to go. For some products its nice to actually experience them and talk to somebody. ! The perfect shopping experience in my opinion would be the combination of on- and offline regarding Information, Ordering, Delivery, Returning and Service in a seamless process - at a reasonable price. ! Werner Reinartz Professor for Commerce and Customer Management at the Wirtschafts- und Sozialwissenschaftlichen Fakultt of Cologne University T H E S O LU T I O N I S

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A N E W CO N C E P T ?

Omnichannel A N E W CO N C E P T ? Channel means nothing to the consumer they think in terms of what theyre buying, not how theyre buying it. Quelle: h5p://www.harvardbusinessmanager.de/he=/ar>kel/a-816329.html

Omnichannel S C E N A R I O S

Omnichannel 1. Store to Web ! 2. Web to Store 3. Check and Reserve ! 4. Same Day Delivery 5. Pick-Up Return S C E N A R I O S :

Omnichannel Complex customer journeys ! Multiple touchpoints Seamless switch between devices ! Blending of offline/online Best of both worlds 24/7 EVERYWHERE C H A L L E N G E S :

Returning Inspiration Selecting Wearing Omnichannel C H A L L E N G E S : CO M P L EX C U STO M E R J O U R N E YS Purchasing $

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

Inspiration Selecting Purchasing Wearing Returning Home on the go Store Service Design H O W I T C A N H E L P :

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Case Kate Spade STO R E TO W E B / S A M E DAY D E L I V E RY:

Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case Kate Spade STO R E TO W E B / S A M E DAY D E L I V E RY:

Case NIKE F R O M P R O D U C T TO EX P E R I E N C E : D I G I TA L P H YS I C A L

Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case NIKE F R O M P R O D U C T TO EX P E R I E N C E :

Enabler Go Try It On I N STA N T S O C I A L F E E D B AC K :

Inspiration Selecting Purchasing Wearing Returning Home on the go Store I N STA N T S O C I A L F E E D B AC K : Enabler Go Try It On

Case BONOBOS W E B TO STO R E :

Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case BONOBOS W E B TO STO R E :

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

Inspiration Selecting Purchasing Wearing Returning Home on the go Store Enabler UPCLOAD P E R F E C T F I T T I N G O N L I N E :

Case Burberry P H YS I C A L D I G I TA L M E LT D O W N :

Inspiration Selecting Purchasing Wearing Returning Home on the go Store Case Burberry P H YS I C A L D I G I TA L M E LT D O W N :

Case Burberry P H YS I C A L D I G I TA L M E LT D O W N : Then, there was the back end: one of our key strategies from day one was operational excellence. We wanted to be as admired and as respected for the back end of our business as for the front end. When I started, we had just embarked on a business-wide rollout of SAP. ! Angela Ahrens, CEO of Burberry

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

/// Skalitzer Strae 86C 10997 Berlin ! jj@iii-agency.net 0151 191 21 889

Exercise Plan the perfect retail experience for a persona

Retail experience map

What examples can you share? What should the next topic be? servicedesignberlin.de @SD_Berlin fb.com/servicedesignberlin