The Future of Retail – Nike just did it.

11

September

2019

5/5 (1)

A lot of talk has been around the typical stationary trade and brick-and-mortar stores losing more and more relevance in our increasingly digital lives. Not only has online retail, including giants like Amazon and Alibaba, made our day-to-day living easier and more convenient but today’s generation’s preferences are so fast-paced that it is said to be a challenge for companies to keep up and to constantly satisfy our needs.

Still, innovative store concepts are on the rise, potentially proving these thoughts wrong. How can in-store shopping still be a success, even though it is thought to be much more time consuming for all the oh-so-busy customers? The answer is: Experiential Retail.
Nike realised this and went to market quickly. In line with its young and dynamic brand appearance, it opened its House of Innovation 000. First in Shanghai, then in NYC – 68,000 square feet of real-time store evolution. Nike found that 80% of their customers still want a physical experience: to go in store, feel and see the product in live. What this basically means nowadays is flawless integration, customisation and synched profiles. Nike uses technology to build the most seamless, high-speed customer experience.
Ever went to a store to try on something you saw online that was not available in store? Reserve your Nike outfit from home via the App and try it on in the store.
Do you also often wonder what the mannequin is wearing and where to find it? ‘Shop The Look’ lets you scan a QR-code next to the mannequin, shows what it is wearing, what sizes are available and also enables you to have it sent to your fitting room.
Sick of the mainstream sneaker? Fully customise your shoe from start to finish at their ‘Customisation Lab’.
Can’t be bothered to stand in line to pay? ‘Nike Instant Checkout’ let’s you scan the products with your phone and pay online.
Looking to run a marathon? Visit the ‘Nike Expert Studio’ and get an in-depth consultation session.

Nike is attempting to convert its store to more of an offline platform (in so far possible) and so, to soften the distinction between digital and physical retail. This leads to full connection over all of its five floors which means Nike can give new visitors direct live insights into what is trending and what customers are trying on most right now. Doing so, it can still target potential customers who are rather short on time due to their busy lives and who do not come to the store with an entertainment  purpose to fully exploit all its opportunities offered – which could literally cost you hours.
Will retail be able to completely integrate both digital and physical in the future? Gartner predicts that, by 2020, more than 40% of data analytics projects will relate to customer experience. Looking at companies like Farfetch, Vans, Ikea, Space Ninety 8, there is no doubt that there is a real change in retail happening – and by saying that I do not mean the retail apocalypse.

 

Literature:

7 Case Studies That Prove Experiential Retail Is The Future

YouTube – Inside Nike’s New Futuristic Store

50 Retail Innovation Stats That Prove The Power Of Customer Experience

Retail Case-study: Nike’s House of Innovation

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Will malls and retail shops soon disappear?

27

September

2017

5/5 (2)

After America’s most popular department store Macy’s announced that it would shut down 100 stores across the country, we knew that it was a sign that shopping malls are being killed by online shopping (Peterson, 2017). Shoppers who once spent their hours in stores trying on products and queuing in the line to pay, are now shopping online comparing prices among the competitors and choosing the most ideal time to deliver at their homes. Shopping online is not only convenient and accessible 24/7, but it also provides more options to the consumers and it is much more timesaving. According to Ram (2017), nowadays consumers are much more into shopping for experiences. Millenials have shifted their ways of spending to dining out and traveling. Furthermore, millenials are more driven by the experiences that will make the best social media content (Thompson, 2017). All in all, this group noticed how time is a luxury and prefer to order products online. Malls and retail stores need to wake up soon and realize that in order to stay relevant and grow, they need to adapt and change their strategies.

So will malls be able to overcome this trend and continue to survive? There are several things malls can do to strengthen their position in the retail industry:

  • Setting up a diverse tenant mix: the once occupied spaces in malls could now be replaced with entertainments, learning zones or food hotspots (Schaefer, 2016). By housing fitness studios, medical offices, beaty salons and grocery stores in the mall, many consumers will find there are more values added in going to a mall that will contribute to their experiences.
  • Creating a ‘click & collect’ concept: in order to make shopping more convenient for customers, malls could start using the ‘click and collect’ concept. This way, customers could purchase products online and then collect it later at the mall. According to ICSC (2015), consumers who participate in click and collect shopping, they tend to buy additional goods that were not part of their original purchase once they hit the store.
  • Rolling out mobile apps: malls could start rolling out mobile apps, or upgrading their current apps to be more interactive and customer-focused. For instance, shoppers could use their location and find real-time parking lot spaces on the app, real-time navigations to find certain stores, finding their customer’s loyalty on the app and much more. The app could also personalize offerings and recommendations to the consumers, which in return would likely stimulate consumers to purchase more in the mall or on the app.

With these action points, malls could certainly step up their game and combat the current crisis they are in. I strongly believe that malls would not fade away entirely if they start providing more diversity of products and services within their malls and start embracing technology. Sometimes you would find me hours in a mall because they just have so much to offer: from sitting in a Ferris wheel to joining 2-hours art classes to eating at delicious restaurants. Of course, many malls (especially older and traditional ones) still have to catch up with these ideas and it will take some years before they could fully implement it. Lastly, what are your thoughts regarding malls becoming obsolete? Do you think they will disappear in the future or they will rejuvenate?

Bibliography

Peterson, H., 2017. Macy’s may shut down even more stores. [Online]
Available at: https://www.businessinsider.nl/macys-might-shut-down-more-stores-2017-5/?international=true&r=US
[Accessed 24 September 2017].

Ram, S., 2017. Meeting millennials where they shop: Shaping the future of shopping malls. [Online]
Available at: http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/meeting-millennials-where-they-shop-shaping-the-future-of-shopping-malls
[Accessed 25 September 2017].

Schaefer, S., 2016. How Malls Will Survive In The Age Of Amazon. [Online]
Available at: https://www.forbes.com/sites/steveschaefer/2016/07/08/can-malls-stay-relevant-in-the-age-of-amazon/#30dbda2330b2
[Accessed 25 September 2017].

The International Council of Shopping Centers (ICSC), 2016. A Whopping 91 Percent Of Holiday Shoppers Made Purchases In A Physical Store, According To New ICSC Holiday Consumer Purchasing Trends Study. [Online]
Available at: http://www.prnewswire.com/news-releases/a-whopping-91-percent-of-holiday-shoppers-made-purchases-in-a-physical-store-according-to-new-icsc-holiday-consumer-purchasing-trends-study-300202004.html
[Accessed 26 September 2017].

Thompson, D., 2017. What in the World Is Causing the Retail Meltdown of 2017?. [Online]
Available at: https://www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/
[Accessed 25 September 2017].

 

 

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Technology of the Week – the real estate Industry

16

September

2016

5/5 (2)

Watch the video here

This week, we had to make a video regarding Industry Disruption. We chose to focus on the real estate industry, as it is often overlooked when thinking about disruption, while there are endless technologies that could disrupt the industry. Real estate plays an important role in everyone’s live, as we all need a place to live. In order to learn more about the industry, we watched several videos and read different articles (which you can find in our reference list, if you are interested).

The real estate industry, as we currently know it, has been stable for a long time. While some processes have been digitized, the majority of the processes is still done offline (for example, visiting a house, meeting with a broker and signing a contract). However, digitization is about to have a huge impact on the retail industry. Currently, the top 50 largest real estate companies own 30% of the market, and rivalry among competitors is high, mainly due to low barriers to entry (if you wanted, you could be a broker tomorrow!). While there are substitutes, production is limited (it takes time, money and material to build a house. The bargaining power of both suppliers and buyers depends largely on their geographical location (for example, finding a house in Amsterdam is way harder than finding one in a small village).

Since classifieds moved online with Craigslist in 1995, real estate has started innovating by advertising online. However, since trust is very important when purchasing a house, it is hard to totally complete the process online. While they are more specialized portals nowadays, such as Zulia or Trillow, a large part of the transaction still takes place offline. However, the platforms offer value-added features, creating a new business model: the online real estate marketplace. These marketplaces are likely to substitute traditional brokers to a large degree and to automate the whole real estate purchase process. These online platforms eliminate the broker, and thus its commission. Online platforms offer numerous options, depending on the willingness to pay for both parties (for example, a buyer can choose between different subscription plans, and a seller can pay to have its listing appear on top).

But what about fraud? This is where the block chain comes in. While it is commonly known as the background technology for Bitcoin, the block chain offers many additional benefits which can be used to optimize the process of buying or renting a house online. The core advantage of block chain lies within its decentralized structure. The block chain is essentially a database that provides cheap, durable, time-stamped and transparent records of all transactions online. However, the security issues that arise, as well as the immense energy costs that go together with the transaction volume and the data storage have prevented the technology from being legalized in the majority of the countries.

We believe the real estate industry will change, based on the Newly Vulnerable Markets Theory. By changing the online real estate market place by implementing block chain, the three conditions for the theory are met: it will become attractive to attack, easy to enter and difficult to defend.

What do you think? How do you believe the retail industry will change?

 

REFERENCES:Brennan, M. (2016, September 15). 3 Real Estate Scams And How To Avoid Them. Retrieved from Forbes: http://www.forbes.com/sites/morganbre… Buterin, V. (2015, August 7). Vitalik Buterin: On Public and Private Blockchains. Retrieved from CoinDesk: http://www.coindesk.com/vitalik-buter… Deloitte. (2016, September 15). Blockchain: the next game changer in real estate? Retrieved from Deloitte: http://www2.deloitte.com/nl/nl/pages/… Ernst & Young. (2016, Semtember 15). Retail sector – Top 10 Opportunities . Retrieved from EY: http://www.ey.com/GL/en/Industries/Co… FranchiseHelp Holdings. (2016, September 15). Real Estate Franchise Industry in 2016 at a Glance. Retrieved from Franchise Help: https://www.franchisehelp.com/industr… IBM. (2016, September 15). What can blockchain do for you? Retrieved from IBM: http://www.ibm.com/blockchain/what_ca… Kinsman, S. (2015, December 10). I witnessed the largest bank heist in history ……. It would have been impossible with the loanbook published on the Blockchain. Retrieved from Medium: https://medium.com/@BambouClub/i-witn… Makkonen, J. (2016, September 15). Marketplace Academy . Retrieved from Marketplace Academy : https://www.sharetribe.com/academy/ho… Marino, B. (2015, December 2). Smart Contracts: The Next Big Blockchain Application. Retrieved from Cornell Tech: http://tech.cornell.edu/news/smart-co… Mougayar, W. (2016, September 15). The Blockchain is Perfect for Government Services, Here’s A Blueprint. Retrieved from Medium: https://extranewsfeed.com/the-blockch… Oparah, D. (2016, September 15). 3 Ways That The Blockchain Will Change The Real Estate Market. Retrieved from TechCrunch: https://techcrunch.com/2016/02/06/3-w… Reuters. (2016, September 15). This Country Is Testing the Tech Behind Bitcoin for Real Estate Transactions. Retrieved from Fortune: http://fortune.com/2016/06/16/sweden-… Schneider, J., Blostein, A., Lee, B., Kent, S., Groer, I., & Beardsley, E. (2016). Profiles in Innovation: Blockchain. New York: Goldman Sachs . The Economist. (2016, September 15). The promise of the Blockchain: The trust Machine. Retrieved from The Economist: http://www.economist.com/news/leaders… Torpey, K. (2016, September 15). Why 2016 May Be the Year of Real Estate on the Bitcoin Blockchain. Retrieved from Inside Bitcoins: http://insidebitcoins.com/news/why-20… Tracey, M. (2016, September 15). VR Headsets: Real Estate Game Changer? . Retrieved from RealtorMag: http://realtormag.realtor.org/technol… UK Government Chief Scientific Adviser . (2016). Distributed Ledger Technology: beyong block chain . London: OGL. Weiss, M. (2016, September 15). How Bitcoin Technology Could Make Home Buying Hassle-Free. Retrieved from Fast codesign: https://www.fastcodesign.com/3045710/…

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