Our CEO Jürgen Berens from Rautenfeld went on an innovation "truffle hunt" in New York City to familiarise himself with new hybrid retail formats and exciting food concepts and visited Silicon Valley to discuss with thought leaders from Google and Salesforce, among others, what will shape the future of retail - chatbots and voice control were at the forefront here. The study trip inspired by the EHI was quite exhausting but above all very impressive. The tour illustrated the increasing fusion of online and offline and of the areas of IT, marketing and shopfitting.
In Silicon Valley
Anyone who has not yet visited the famous Silicon Valley is sure to be duly impressed. Innovation is in the air here. Three days of a tight programme was certainly not enough, but it was enough to get a first impression of how important shopper data already is and will become even more important in the future as the basis for numerous startup business models. In the retail sector, this applies in particular to the further development of data-driven omnichannel models. However, American data protection law (opt-out as opposed to the German opt-in) is also much better suited to this.
A visit to Google, the world's largest innovator, is a must in Silicon Valley. The campus of the Internet giant Google is very open, the offices and conference rooms as well as the working environment are simply great, and the size of the campus alone gives you a good feeling for how much actually happens at Google. We were lucky enough to have a meeting with key product developers and Melanie Ditschke, Industry Manager Retail at Google, to discuss Google's ideas about the future of retail at first hand. Obviously, Google's primary interest is to access the ERP data of large retailers in order to extend the product search to the shelf. Keyword: in-store navigation. Of course, this also involves Google's successful "paid advertising" business model, which is certainly worth more in terms of "conversion", i.e. the actual purchase of a product after a search.
A visit to the world's largest start-up accelerator, Plug and Play, rounded off the first day. Plug and Play brings the ideas of young business models to market maturity and connects start-ups with companies. Dropbox and PayPal were founded there. Of the one thousand start-ups, most of which are software-based, fewer than twenty ultimately survive, such as Danger or ScanScout. Just how small the software family is is illustrated by the little anecdote about Plug and Play founder and owner Saeed Amidi, who rented out his garage to the current internet giant in the early years of Google.
At Salesforce, the international provider of cloud computing CRM solutions, we were given an insight into how the successful listed company envisages the future of commerce. Salesforce, which has now been in business for 19 years, is actually old hat and is now an important provider of venture capital for start-ups. The speed at which Salesforce is growing with its business model is particularly impressive. Within a year, the Salesforce team has grown from 30,000 to its current 36,000 employees.
Manhattan - New York
The short journey through the US retail landscape vividly demonstrated the dynamism and excellence of retail in America. In New York, we couldn't avoid the World Trade Center, particularly impressive here was the Transportation Hub, the transport hub of One World Trade Center with its unmistakable white construction called Oculus, designed by Spanish architect Santiago Calatrava and a very present, long digital advertising space.
Just a few hundred metres away, in the Westfield World Trade Center shopping centre, is the new, second New York branch of Eataly. Eataly, one of the largest distributors of Italian consumer goods in the world, stages dolce vita in the symbiosis of shopping and direct consumption on a total of 3,700 square metres. In addition to five different restaurants, some with a view of the One World Trade Center, the focus is on gourmet, fresh, exotic and Italian specialities. The experience is rounded off by an integrated cookery school.
The visit to the new Nike flagship store at 529 Broadway was a clear highlight in terms of retail innovation. The multi-sport store spans 5,000 square metres of retail space over 5 levels. The connection between Nike's digital services and stationary retail has been perfectly realised here. Digital offerings meet experiential shopping in the shop: for example, customers can try out sports and products in various "trial spaces" and those who wish can design their own shoe or bag.
Located in the south-west of Manhattan is the artists' quarter and shopping paradise SoHo. The name is derived from South of Houston Street and is also a reference to London's trendy Soho neighbourhood. Every street corner is lined with shops - a pleasant mix of large, well-known shops and smaller labels. We took a closer look at the Gourmet Garage, a classic neighbourhood food market that initially operated as an importer of high-quality delicatessen products. We also looked at the experience-orientated shop concept of the Brazilian shoe brand Mellissa and Galeria Melissa, which combines a boutique and art gallery. Artists & Fleas, a dynamic "marketplace" with constantly changing vendors, a mixture of art and flea market.
The Rebecca Minkoff shop was also exciting; the premium fashion brand's shop is considered one of the pioneers in linking online and brick-and-mortar shops, e.g. with the interactive "Connected Glass" shopping wall as a mirror wall. The Webster store of the multi-brand luxury retailer, which opened in November 2017, displays works by Italian artist Gaetano Pesce, fabrics by Pierre Frey and tables by Nada Debs, as well as lamps and wallpaper reminiscent of the 1920s and 1930s on around 1,000 square metres spread over two floors. At Chrome Industries, you can have personalised bags made within 3 hours, and they are made directly in the shop.
The appointment with Jesse Johnson, the store manager of the world's first Sonus store, was really impressive. The creative concept store of the US speaker manufacturer is very experience-orientated and designed by local artists. The STORY store consistently implements the showroom concept and not only regularly changes the suppliers on 180 square metres of sales space, but also the entire interior and the presentation of goods every 4-8 weeks, each time in line with a new theme.
The Adidas brand flagship, designed according to a stadium concept, transports visitors into a lively world of sport. Right at the entrance, customers are guided into the shop via a dramatic stadium tunnel. Here, an oversized bronze figure of company founder Adi Dassler invites customers to take a social media-relevant selfie. Customers can expect fitness advice, a concierge desk and hotel delivery service as well as personalised shopping offers such as the "Run Genie" running analysis system. So many sports-orientated services make a lasting impression.
And of course I couldn't avoid the Amazon Bookstore - if you're ever in the area. It opened for the first time in June and the concept is now a model for many other companies. The more than 3,000 book titles are displayed with their covers visible on the shelves, with shelf labels (paper!) showing not prices but the Amazon customer rating with the number of stars and reviews. Amazon's current website prices, which fluctuate constantly, always apply to all products in the store. Voice assistance systems based on Amazon Alexa, including those from Bose and Sonos, are currently a focal point of store communication.
New York has a lot to offer when it comes to food. Trader Joe's in Brooklyn has over 450 shops across the US. The entire store area was realised quite inexpensively, but customers don't have to do without anything elementary, as the entire shop design and signage is executed in friendly, bright, modern colours. The discounter, which was taken over by Aldi Nord in 1979, scores points with Americans for its southern flair, organic products and strikingly friendly staff. Trader Joe's also focuses on favourable prices and own brands.
The Whole Foods Market in Brooklyn is more upmarket and experience-orientated. The organic supermarket chain, which was acquired by Amazon last year, impresses with well-maintained and well-stocked shelves (hardly out of stock), a predominantly regional range and wide walkways. What was particularly striking was the extremely attractive presentation of goods and the outstanding emotional appeal to customers, including the store's own coffee roastery. Interesting fact: Whole Foods generates significant sales via personal shoppers on behalf of affluent customers. During our store check, we discovered at least ten personal shoppers who were scanning items or ticking off shopping lists. On the roof of the market is a 1,800 square metre greenhouse run by urban farming start-up Gotham Greens, where selected herbs are grown organically. Currently, it was mainly basil, which is sold as a young plant or in the form of pesto directly in the Whole Foods store. Whole Foods also has a well-frequented rooftop bar, where the products just purchased can also be consumed. The link to the new Whole Foods owner Amazon is not yet available on the site. There are only yellow Amazon Lockers in the vestibule, which serve as pick-up depots for classic Amazon online shoppers. If you want to know more about this, I recommend the article on the ZDH platform.
The American fashion chain Urban Outfitters, which has also recently expanded rapidly in Germany, has its largest store in NY with 5,000 square metres. Charles Scribona, District Brand Leader and Chris Morris, Store Brand Leader, explained the mix of retail, gastronomy, galleries and meeting point with hairdresser, partner shops for glasses and plates, gastronomy and changing pop-up areas.
Last but not least, we also took a look inside the Victoria's Secret store. The shop design is divided into several scenarios for different target groups. Here, the erotic-emotional products are perfectly staged using digital signage elements, with the shopper being digitally flashed almost across the entire surface, especially in the area of the connecting staircases. The store also has its own museum on the upper floor, in which the famous angel costumes are set up and are more reminiscent of a vernissage thanks to the coordinated image and sound staging.
Conclusion
For retailers of the future, the use of powerful software will increasingly form the basis of their own business model. The "Factor X" speed at which the many start-ups and established software manufacturers in Silicon Valley are moving is breathtaking and will increasingly fertilise omnichannel retail. A key driver here is the knowledge of the customer's wishes, whose digital traces are constantly being read and measured. Even if this data-driven retailing cannot be implemented one-to-one in Europe due to the new GDPR data protection regulation, the path to creating increasing relevance for the shopper has been taken. I was pleased to see that these legal framework conditions in Europe, which at first glance seem unfavourable, do not necessarily have a negative impact on the quality of brick-and-mortar retail locations. It is precisely here that retailers on this side of the Atlantic do not have to hide, as it is here that you will find the most sophisticated store concepts that make very good use of the symbiosis of analogue and digital in order to be perceived as approachable, trustworthy and authentic.
If you are interested in a similarly inspiring retail study tour, I can warmly recommend the EHI's innovation tours. Or you can simply write me a short e-mail at juergen.vonrautenfeld@online-software-ag.de.
