In-Store Innovations - Disruptive Retail Tactics

Carter JensenPublic House - July 11, 2017
Periscope Public House - July 2017
In-Store InnovationBrands, strategies and tactics that outpace the competition.

A Quick Warning
Presentation previews, like this, are only a small portion of the
overall keynote experience. Some slides may be omitted or seem
to be lacking or bare. That is by design.
Many of the visuals included within are simply meant to spur
thought and further support the intended conversation.
With this said, enjoy! I hope this preview gives a good idea
of the journey I look to bring audiences through and the
inspiration that sparks from a presentation like this.

The New Consumer
A shift in preference provides a new target.
Our Past
We tend to focus on the hype. The big stories.
The “Death” of Retail
The acquisition was out of character.
The Winners
Emerging physical stores that are reaching this evolved audience.
Key Takeaways
Determining actionable next steps.

Our Past
The current state, near and far.

Retail Unit Closings, USA, 1995-2017 YTD
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017E
UnitClosings
Average
Store closings
break a 20-year
record.

We often miss highlighting tactical
opportunities for change…

Reality
Traditional retail is dying.

Reality
Static retail is dying.

Department Stores
Mid-1800s
Shopping Malls
1950s
Corner / General Stores
1800s
Supermarkets
1930s
Discount Chains
1950-60s
Wholesale Clubs
1970-80s
Superstores
1960-80s
E-Commerce
1990s
Illustrative Generational Overlap
Silent Generation
Baby Boomers
Generation X
Millennials

Yahoo Finance / Business Insider

Why?
Did not move fast enough
to meet the demands of
the new customer.
Outdone and
overshadowed by
companies who could.

Who is this new
consumer?
Convenience and control.
Need-it-now, for me mindset.
Experience-driven.
Value, not cost, centric.
Diminishing trust in brands.

Customer Service → VIP Experience
Sales Associates → Product Experts
Out Of Stock → Always Available
Information Silos → Knowledge Networks
Intuition-Led → Data-Driven
Retail Transactions → Brand Relationships
We are selﬁsh!

Digitally-native brands go ofﬂine.
Physical retailers become digital retailers.
Digital retailers become data-optimized physical retailers.

$1,466
$1,560
$2,951
$3,000
$5,546
Michael Kors
Lululemon
Athletica
Tiffany & Co.
Warby Parker
Apple
Top 5 Physical Retailers
by Sales / Sq. Ft., USA, 2015*
Mary Meeker / 2017

Products Become Brands…
Brands Become Retailers...
Retailers Become Products & Brands…
Retailers Come Into Homes...
Mary Meeker / 2017

direct-to-consumer commerce in the home...
Brands
Retailers
(Warby Parker)
Retailers
Products / Brands
(Thrive Market)
New DTC
Distribution Models
(Stitch Fix)
Products
Brands
(Casper)
Mary Meeker / 2017

any Internet Retailers / Brands @ $100MM in Annual Sales* in <5 Years..
ok Nike = 14 Years / Lululemon = 9 / Under Armour = 8**
Source: Internet Retailer “2016 Top 500 Guide”, company filings
Note: *Data only for e-commerce sales and shown in 2015 dollars. **Years to reach $100MM in annual revenue in 2015 dollars. Chart includes pure-play e-commerce retailers and evolved pure-play
$0
$20
$40
$60
$80
$100
0 1 2 3 4 5
AnnualSales($MM)
Year Since Inception
Average
Sales Growth For Select Internet Retailers*, USA,
First 5 Years Since Inception
Viral Marketing / Sharing Mechanisms (Facebook / Instagram / Snapchat / Twitter...)
+ On-Demand Purchasing Options via Mobile / Web + Access to Growth Capital
+ Millennial Appeal = Enabling Rapid Growth for New Products / Brands / Retailers
Internet Retailers & Brands at $100MM in
Annual Sales in <5 Years
Mary Meeker / 2017

Nike = 14 Years
Lululemon = 9
Under Armour = 8
Mary Meeker / 2017

1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s
`
Retail Companies Founded by Decade (Illustrative Example), USA, 1900 – 2015
Generational Overlap
Silent Generation
Baby Boomers
Generation X
Millennials
GI Generation
Generation Z
Mary Meeker / 2017

The Triumph
How are brands winning today?

Experience-driven.

We Must Protect
this Store
Under Armour ushers in Asian expansion with
storytelling-focused retail experience.
Apparel brand Under Armour has opened its first Under Armour Experience, a retail
store in Shanghai’s Jing An Kerry Centre that the brand hopes will serve as a base for its
Asian expansion, while simultaneously redefining the apparel retail experience.
Designed by Brooklyn-based agency Hush and Marc Thorpe Design in Manhattan,
which worked with Under Armour’s in-house creative team Tight Shirt Productions, the
2,000 sq ft store devotes more than 80% of its space to experiential elements, rather
than racks of clothing and product displays. As Under Armour founder Kevin Plank
portrayed it earlier this year, the experience is part store, part roller coaster.
As Hush describes the experience: ‘Upon arrival, visitors see a highly angular, closed-off
retail façade designed to contain the energy within – an enigma compared to the open
glass facades of the surrounding stores. Visitors then enter a sensory decompression
chamber, created with a tunnel of bright LED walls and directional sound – a bold
contrast to the mall’s polished interiors.’
Under Armour has opened half a dozen stores in China since 2011, but the Under
Armour Experience marks a new tactic for the brand – one that acknowledges a
different consumer base found in Asia than in its home market in the US.
Text Excerpt and Images Source from C I/O

Burberry World Live
UK luxury brand hides the cash-registers to deliver
technology-packed retail experience.
Coinciding with the launch of London Fashion Week, Burberry, the UK luxury fashion
brand, has opened a new flagship store on London’s Regent St. The Grade II listed
building, formerly a cinema in the early 20th century, is the brand’s largest retail space at
44,000 square feet.
Dubbed Burberry World Live, the space is set to be more than a retail location,
streaming the brand’s fashion shows live to a 6.9m screen, in addition to hosting
concerts and performances.
In terms of technology integrated into the store, RFID tags in the garments trigger
bespoke multimedia content relevant to the products, with mirrors turning into screens
when entering changing rooms. On the main shop floor, RFID tags in items such as
handbags are used to trigger making-of videos when certain screens in the space are
approached. More than 500 speakers and 100 screens are built into the environment.
The cash registers are either placed on mobile stations or are hidden away in corners.
All sales staff are kitted out with iPads which allows the team to get real time stock
updates and information on certain items as well as customers' purchase history and
shopping preferences. In the childrenswear section, iPads are present to entertain kids
when accompanying their parents to the space.
The space has been designed to mirror the brand’s online experience, from its acoustic
music sessions to Burberry Bespoke and the Art of the Trench. The store features
Burberry’s most complete collection and has been restored using British craft specialists
including stonemasons, metal workers, mill workers, wood carvers and joiners.
Text Excerpt From PSFK Future of Retail

True Religion
Omnichannel customer data uploaded to
associates’ smartwatches.
Denim brand True Religion outfitted employees at its Los Angeles and New
York City locations with Apple Watches that sync with shoppers’ profiles to
personalize the in-store experience. When a customer with the True Religion
mobile app enters a store, his or her name, sizing preferences, purchase history
and wishlist populate to associates’ watches. The connected associate can
access relevant product information across stock channels and cast images on
larger displays to create an endless aisle for shoppers.

Best Buy
Product-fetching robot creates always-
open store.
At its Chelsea, New York location, electronics retailer Best Buy
implemented a robotic retrieval system named Chloe that lets
customers make purchases even when store associates are not
available. If consumers need to purchase small items such as
headphones or chargers when the store is closed, they enter the
Chloe kiosk and place an order via a large touchscreen; Chloe
retrieves the product from its inventory and dispenses it. Chloe
offers an always-on shopper experience without requiring Best Buy
to staff its store around the clock.

Patagonia
Inventory Needs Predicted By Demand Trends
In an effort to reduce material costs and waste, outdoor outfitter Patagonia
partnered with cloud-based platform 7th online to optimize wholesale inventory
based on customer demand. The platform monitors customer purchases,
including product, location, in-store and online, to understand demand from an
attribute level and predicts preferred styles, colors and sizes. With this data,
Patagonia is able to understand inventory productivity, assess inventory
position and reduce inventory aging.

Sharing Bags
Retailer, Freitag, lets travelers borrow backpack in
exchange for social media posts.
Swiss retailer Freitag is giving people the option to borrow one of its £240
($311) F512 Voyager 33-litre backpacks to travel with this summer.
Anyone interested just needs to go into a Freitag store or one of a few select
dealerships and ask for one. In exchange participants just need to share photos
of their travels with the bag, with the #gonewithfreitag hashtag.
Bags can only be borrowed for three weeks, and the promotion runs until 30
September. But, starting 27 July, people can also borrow Freitag’s new F511
Skipper bag, which is more compact at 19 litres.
See more detail of the product via this video.

Pumped up Kicks
Sportswear brand uses AR to let customers
unlock limited edition trainers.
Nike is using the augmented reality functionality in its SNKRS app to allow
people to access and buy limited edition trainers.
The first trainers on offer are high tops designed with celebrity chef David
Chang. To unlock the Nike SB Dunk High Pro, Momofuku’s customers need
to use the SNKRS app to scan a menu from David Chang’s restaurant Fuku in
New York City (either at the restaurant or online).
Once they’ve scanned the menu, a 3D model of the sneakers will pop up
within the app for them to look at. And, if there are any left, an invitation to
purchase the shoes will be sent to their SNKRS app inbox.
Anyone interested can also access the AR function within the app by
scanning one of a few posters stuck up outside Chang’s various restaurants
across the US.

Staples’ In-Store
Ofﬁces
Office supplies retailer targets small-business owners
with in-store co-working spaces.
Staples has set up co-working spaces in three of its Massachusetts stores as the brand
targets young entrepreneurs and small businesses.
The office supplies retailer has partnered with Workbar to build co-working spaces in
Staples stores in Brighton, Norwood and Danvers. The co-working spaces within
Staples will be run by Workbar and will be available to customers through a
membership scheme.

If the Shoe Fits
Fashion tech company launches software that
scans customers’ feet to match them with the
perfect shoes.
Israeli fashion technology startup Invertex has launched FeetID, a system that
creates a 3D scan of customers’ feet and recommends shoes that will fit best.
When in-store, customers can scan their feet using Invertex’s Launch-Pad, a
physical piece of tech that will create a digital 3D model of their feet when
they stand on it.
Once their feet have been scanned, customers can have their ‘virtual feet
profile’ sent to their phone so they can get more accurate sizing information
about various styles of shoe. Using the Invertex app, they will also be able to
scan different shoes in the shop to get personalised sizing information.
The Invertex app also allows people to scan their feet at home. Users just
need to stand with their heels against the wall and with a piece of white paper
under the balls of their feet, and they can create a digital 3D model by taking
a photo.
People can also use their feet profile to find the right sizes when shopping
online.
Invertex is currently piloting the system with multiple partners in Europe and
the USA.

Thinking Outside
the Box
Postal service gives its mailboxes a high-tech
makeover.
To make its mailboxes a little bit smarter, the United States Postal Service
(USPS) worked with MRM/McCann in New York to create a voice-enabled
device that could be installed onto any of its 152,000 collection boxes around
the country.
With the addition of the device, the solar-powered Smart Blue Boxes can talk,
listen, weigh and facilitate transactions – and using a combination of artificial
intelligence and voice authentication they cut out the need for stamps
entirely.

We must connect the dots.
Driving inspiration, not replication.

Points of Action
Macro-Trends in Winning Retail

Points of Action
With a constant layer of technology throughout the lives of target consumers, complete
convenience and control of all retail experiences is not only important, it is expected.
Consumers have come to expect what they want and when they want it, and the retailers who
are successful today are able to deliver.
Experience-driven.
Create retail experience that looks beyond the product to provide a unique offering for the
new consumer demand.
Realize that cost, high or low, may not have a direct impact on purchasing decisions. Creative
value is core to attracting the new customer.
Transparency is the key to success in today’s world. Brands that are just a label will be beat out
by transparency or generics that provide nearly identical services and benefits.

In-Store Innovations - Disruptive Retail Tactics

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