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		<title>Are we ready for Webfronts yet?</title>
		<link>http://digitalwellbeinglabs.com/dwb/are-we-ready-for-webfronts-yet/</link>
		<comments>http://digitalwellbeinglabs.com/dwb/are-we-ready-for-webfronts-yet/#comments</comments>
		<pubDate>Fri, 30 Oct 2009 18:08:22 +0000</pubDate>
		<dc:creator>agrunsteidl</dc:creator>
				<category><![CDATA[business models]]></category>
		<category><![CDATA[retail environments]]></category>
		<category><![CDATA[advertisement]]></category>
		<category><![CDATA[brick&mortar]]></category>
		<category><![CDATA[high-street]]></category>
		<category><![CDATA[kiosk]]></category>
		<category><![CDATA[location]]></category>
		<category><![CDATA[marketing]]></category>
		<category><![CDATA[public space]]></category>
		<category><![CDATA[urban planning]]></category>

		<guid isPermaLink="false">http://digitalwellbeinglabs.com/dwb/?p=503</guid>
		<description><![CDATA[

Is the time right for the emergence of the Webfront showroom? A place that links the high-street to online retail but does not necessarily depend on traditional retail margins to be profitable. A space that allows you to discover products and services, follow demonstrations and then try them out for yourself. You then are able [...]]]></description>
			<content:encoded><![CDATA[<p style="text-align: justify; "><a href="http://racked.com/archives/2008/11/21/now_open_wired_electrifies_18th_street.php"></a><br />
<img class="aligncenter size-full wp-image-504" title="webfront_harrods_dixons" src="http://digitalwellbeinglabs.com/dwb/wp-content/uploads/2009/10/webfront_harrods02.jpg" alt="webfront_harrods_dixons" width="580" height="250" /></p>
<p style="text-align: justify; ">Is the time right for the emergence of the Webfront showroom? A place that links the high-street to online retail but does not necessarily depend on traditional retail margins to be profitable. A space that allows you to discover products and services, follow demonstrations and then try them out for yourself. You then are able to order products or sign up to subscriptions directly in the showroom or postpone this decision to a later moment at home or on the road.<span id="more-503"></span>We recently wrote in “The Last Click” article how business models for the high street have to change in response to online commerce and will give rise to new retail formats.</p>
<p style="text-align: justify; ">Ian Yolles of NAU discusses in the <a href="http://www.businessweek.com/innovate/content/jan2007/id20070131_360739.htm">BusinessWeek article Retail2.0</a></p>
<p style="text-align: justify; ">“Of course, for many shoppers, online research of prices or customer reviews is the first step towards a store purchase. Others survey products in a store to decide which they want and then find the best deal online. In others words, for many consumers the Web and the mall are both parts of a larger shopping experience. &#8220;Nobody has really done anything to connect the dots and take discontinuity out of customer behavior [online and offline],&#8221;</p>
<p style="text-align: justify; ">Webfronts, coined and trademarked by NAU, are places which only showcase products and services whilst purchases are completed online and products then are shipped directly to the customer within a couple of days. These places have little or no merchandise for on the spot sales, in order to reduce inventory and distribution costs. Instead they offer hands-on demonstrations of services, or allow customers to try items, like garments, for size. Typically self service or managed kiosks are available to place an order online.</p>
<p style="text-align: justify; ">Over the past years quite a few instances of these innovative retail formats have emerged. But for various reasons many of them, after having been launched in a PR cloud of pioneering optimism, have failed to become economically viable.</p>
<p style="text-align: justify; ">It’s clear that these hybrid retail formats are not suitable for all types of merchandise and transactions especially in the <a href="http://en.wikipedia.org/wiki/FMCG" target="_blank">FMCG</a> and perishables sector, but then again, each sector is currently experimenting with internet integration.</p>
<p style="text-align: justify; ">We would like to understand why some hopeful integrated retail formats failed and others became successful, and how we can make this formula succeed in future development. There is only little data available but we can at least bring together a selection of examples to compare different emerging models and look at the pros and cons.</p>
<p style="text-align: justify; ">At the core of the debate on integrated internet retail innovation is the uneasy diversion from established, well proven, retail formats. These formats are based on common sales practices:</p>
<ul>
<li>Setting conditions for impulse purchases, by attracting customers with aggressively priced, loss-leading merchandise.</li>
<li>Various forms of price perception manipulation based on artificial sales offers and staged price reductions that lead to price erosion of products. As recently reported in <a href="http://news.bbc.co.uk/1/hi/uk_politics/8333079.stm" target="_blank">| Never-ending sales &#8220;have to stop&#8221; | BBC | October 2009 |</a></li>
<li>Up-selling by applying perceived quality differences within a family line of products to obtain higher margins.</li>
<li>Creating cross-selling situations that tempt customers to add more items to their shopping basket.</li>
<li>Negotiate unique and exclusive products with suppliers that allows the retailer to command the price with the highest margin, whilst telling the customer you are offering better service by helping to select the otherwise incomparable product.</li>
</ul>
<p style="text-align: justify; ">Retail is about only two things; sell more items with low margins or few items with large margins. The whole design of retail environments online or offline is based on these few principles.</p>
<p style="text-align: justify; ">Customer behaviour proves these business models to be very successful. Though at a time when consumption patterns are changing as we exit the industrial- and enter the information-society, we should consider different sustainable models to manage customer relationships. One form will come from the fact that the nature of connected products is changing value perception of transactions.</p>
<p style="text-align: justify; ">Customer expectations are driven by a whole range of psychological factors.  We don’t know how much we can manage these motivations and delay for example instant gratification of an impulse purchase and supplement it with something else. It will be at the core of these hybrid retail experiences that service design solution will have to be developed to satisfy customer needs and keep shoppers returning.</p>
<p style="text-align: justify; ">The increasing dominance of some (global) brands have lead to the Flagship-Store, which in effect is more about maintaining a brand image and fostering customer relationship rather than promoting instant sales. The question is if department like stores and curated boutique sized shops can offer profitable services based on business models which link smaller scale producers to their customers without necessarily providing direct sales?</p>
<p style="text-align: justify; ">
<p style="text-align: justify; ">Here is a selection of different approaches to the Webfront retail format, some more explicit and others almost transparently interwoven into the existing context.</p>
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<p style="text-align: justify; ">
<p style="text-align: justify; "><strong><a href="http://www.apple.com/pr/library/2006/oct/05starbucks.html" target="_blank">Starbucks and iTunes</a></strong></p>
<p style="text-align: justify; ">Starbucks was already a very successful vendor of music compilations cds, when it hooked up with Apple iTunes, offering wireless access to the location’s playlist from within the iTunes Application on for example an iPhone. A customer can see the current song playing and download it for the usual price. In addition a free song of the day is given away with a purchase coupon. Each Starbucks location becomes in fact a Webfront for the iTunes Online Store. It demonstrates that music stores don’t need to look like “traditional” music stores.</p>
<p style="text-align: justify; "><a href="http://www.engadget.com/2007/11/07/apple-and-starbucks-itunes-wifi-integration-hands-on/" target="_blank">Apple and Starbucks iTunes WiFi integration hands-on | endgadget | Nov 2007 |</a></p>
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<p style="text-align: justify; ">
<p style="text-align: justify; "><strong><a href="http://www.shazam.com/" target="_blank">Shazam</a></strong></p>
<p style="text-align: justify; ">Shazam turns any location that plays music into a Webfront. The customer uses his/her phone to transmit a sample of the music playing in the space, to a server and receives details about the song, album and artist, including a link to purchase the song from iTunes. Dj Clubs, Bars, Shopping-malls, Cars all become locations that  can act as instant Websfronts.</p>
<p style="text-align: justify; ">The store in this case is often formed by the social context in which music is consumed. The crucial question is if Shazam would be willing to share in the revenue as the location and time of exposure is known to the application.</p>
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<p style="text-align: justify; ">
<p style="text-align: justify; "><strong><a href="http://www.nau.com/" target="_blank">NAU Webfront stores</a></strong></p>
<p style="text-align: justify; ">Nau was an apparel company with an environmentally aware, sustainable mission, based around a disruptive business format. It aimed at fundamentally reinventing its relationship with customers. One of their many innovations was the design of their retail space, which they don&#8217;t call a &#8220;store&#8221;, but rather a Webfront. It combined the efficiencies of the Web with the intimacy of the boutique. At a Nau Webfront, one sample of every piece in the collection and every available size hangs ready for visiting customers to try on. The company encourages shoppers to use the Webfront just as a testing platform for the clothes. The central mechanism is a self-serve kiosk that transfers the online shopping experience to an on-site touch screen kiosk and encourages customers to have their purchases sent home, with the incentive of a 10% discount and free shipping. By running retail this way, Nau dramatically decreases the regular inventory required at its multiple physical locations, thereby reducing the impacts of freight and lengthy supply chains.”</p>
<p style="text-align: center; "><a href="http://trendbites.com/wp-content/uploads/2008/01/nau-information-tree-and-shop-to-units.jpg"><img class="aligncenter" title="nau information tree" src="http://trendbites.com/wp-content/uploads/2008/01/nau-information-tree-and-shop-to-units.jpg" alt="" width="400" height="600" /></a></p>
<p style="text-align: justify; ">summary articles:</p>
<p style="text-align: justify; "><a href="http://trendbites.com/in-a-search-for-the-authentic-i-found-nau/" target="_blank">In a Search for the Authentic, I found nau|TrendBites | Jan 2008</a> |</p>
<p style="text-align: justify; "><a href="http://www.fastcompany.com/magazine/116/features-leap-of-faith.html" target="_blank">Leap Of Faith | Fast Company | POLLY LABARRE | Dec 2007 |</a></p>
<p style="text-align: justify; ">about the customer experience:</p>
<p style="text-align: justify; "><a href="http://www.teamkanestreet.com/read/2007/09/16/nau-in-chicago-an-interactive-sustainable-apparel-store/" target="_blank">Nau in Chicago: an interactive, sustainable, apparel store | Team Kane Street | Sept 2007 |</a></p>
<p style="text-align: justify; ">Unfortunately the company had to close a year after opening after failing to raise the next level of funding, and is currently re-launching as a web only store.</p>
<p style="text-align: justify; "><a href="http://blog.oregonlive.com/breakingnews/2008/05/sustainable_clothier_nau_pulls.html" target="_blank">Sustainable clothier Nau pulls the plug | Jerry Casey | The Oregonian | May 02, 2008</a></p>
<p style="text-align: justify; "><a href="http://www.good.is/post/what-nau/" target="_blank">What Nau? | Good magazine | Luke O&#8217;Brien | October 2008</a></p>
<p style="text-align: justify; ">Analysts consider the failure after just one year of operation due to trying to reinvent too many retail practices simultaneously, whilst not being able to create enough storefronts and develop parallel sales channels to become profitable. We would be interested to learn more about how customer behaviour had changed in reaction to this new off-hybrid format. Apparently about half the customers, many more than the 10% predicted, choose to have purchases sent home. Although undoubtedly at the heart of the customer experience, the apparently pricey to develop website struggled to become usable soon enough.</p>
<p style="text-align: justify; ">Various technologies are being brought together to facilitate these new environments. A summary of these can be found in this <a href="http://www.nytimes.com/2009/03/29/business/29novel.html?_r=1" target="_blank">The New York Times article | Thinking of Going Blond? consult the Kiosk First | March 2009 |</a></p>
<p style="text-align: justify; "><a href="http://abcnews.go.com/video/playerIndex?id=7749282">Intel shopping kiosk prototype with Frog Design</a> video of the prototype</p>
<p style="text-align: justify; ">The question is not if we can make the technology work, but how far existing retail infrastructures need to be adapted, if the cost of implementation offers sufficient ROI and most importantly if it can be made acceptable to customers.</p>
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<p style="text-align: justify; "><strong><a href="http://www.oki-ni.com/" target="_blank">Oki-Ni</a></strong></p>
<p style="text-align: justify; ">Oki-Ni has been operating a similar retail format before NAU, featuring temporary gallery type shopfronts in different locations.</p>
<p style="text-align: center; "><a href="http://scrapbook.citizen-citizen.com/photos/uncategorized/exteriorcolourcopy.jpg"><img class="aligncenter" title="oki-ni london" src="http://scrapbook.citizen-citizen.com/photos/uncategorized/exteriorcolourcopy.jpg" alt="" width="600" height="472" /></a></p>
<p style="text-align: justify; "><a href="http://scrapbook.citizen-citizen.com/subjectivity/okini/">Images of the Gallery Shop</a></p>
<p style="text-align: justify; ">Their concept is based on offering exclusive products sourced from global renowned brands to unique collaborations with a range of niche brands, combined with the accessibility of on-line retail. The physical gallery is a place where consumers can view and try clothes. These outlets don’t sell any of the products, which must be ordered directly from the internet for delivery within a few days. Interestingly these pop-up galleries are seen as temporary marketing tools  &#8220;We always see the galleries as a springboard to the internet. They are a marketing push in each territory where people become aware of the brand but then are happy to go online. Once we&#8217;ve become established in a territory, the galleries are not as important and then our focus as a retailer is online,&#8221; says Paddy Meehan.</p>
<p style="text-align: justify; "><a href="http://goliath.ecnext.com/coms2/gi_0199-4130596/UK-RETAIL-Window-shopping-with.html" target="_blank">UK RETAIL: Window shopping with a difference at Oki-Ni. | Goliath | February 2005</a></p>
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<p style="text-align: justify; ">
<p style="text-align: justify; "><strong>eBay Drop Off stores</strong></p>
<p style="text-align: justify; ">Initially hyped as a new successful business opportunity with low start-up costs and growing returns. The format is based on branded high-street locations which accept and manage items to be auctioned on eBay and share in any profits made from a deal. After few initial success stories, many franchises failed. It turned out that location overhead, services costs which included labour to research products, create suitable images to present an item online, and writing descriptions were too high in relation to the deal margins on most low cost auction items. At the same time some more expensive items like cars were prohibited unless the franchise would obtain specific trade licenses.</p>
<p style="text-align: justify; ">http://tradingassistantjournal.com/2008/03/ebay-franchise-drop-stores-why-they-failed/</p>
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<p style="text-align: justify; ">
<p style="text-align: justify; "><strong><a href="http://www.evanscycles.com/" target="_blank">Evans cycles</a></strong></p>
<p style="text-align: justify; ">Evans Cycles makes use of in-store sales kiosks to aggressively expand business across London.</p>
<p style="text-align: justify; ">So called “Info Hub” kiosks are prominently placed on the shop floor and allow online browsing as a shared activity between staff and customer, ordering anything from their online catalogue and then have it send for pick-up at the store or delivery at home. Employing instore online sales kiosks allowed Evans to rapidly open new locations, even settling for smaller, less suitable shop properties, in close proximity to their competitors, whilst overcoming limitations of having not enough space to stock the complete range, and instead only displaying items suitable for the target audience at each location.</p>
<p style="text-align: justify; "><a href="http://www.evanscycles.com/pdf/buying-guides/delivery-options.pdf" target="_blank">Evans Cycles buying options</a></p>
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<p style="text-align: justify; ">
<p style="text-align: justify; "><strong>Apple Flagship stores</strong></p>
<p style="text-align: justify; ">Brand Flagship stores are in fact nothing but Webfronts. We always wondered how far for example the Apple Stores are designed to be Webfront locations. The Apple high-street stores are intertwined with the Online Apple Stores. They have been the game changers in the consumer electronics sector, allowing people to touch and tryout products before buying. It is claimed that Apple Stores have some of the highest retail turnover per square meter in the industry. But surely (even if we can&#8217;t prove it) the salaries of the numerous staff must be paid by more than just in-store profit margins.</p>
<p style="text-align: justify; "><a href="http://www.macworld.co.uk/mac/news/index.cfm?newsid=27038 Macworld | Nick Spence | Fri, 28 Aug 2009" target="_blank">“Retail Analyst: Apple Store Regent Street most profitable for size in London</a> &#8220;To make £60 million a year from a shop of Apple&#8217;s size is absolutely phenomenal&#8221;”</p>
<p style="text-align: justify; ">The figures in this analysis seem way over the top, but then again it’s within the range of the possible; over £150k average a day and £15k an hour. Lets assume they process consistently 100 paying customers an hour that would create an average spending amount of £150. Sure enough this calculation is to simplistic. It would be interesting to learn how sales are divided between core Apple hardware, third party products, software and accessories?</p>
<p style="text-align: justify; ">But what surprises me that although many have studied the Apple Stores since their first opening in 2001, no-one has been able to successfully emulate the formula. Even in London, the Nokia flagship store, across from the Apple Store on Regent Street, both, not quite incidentally, designed by the same company, Eight Inc. seems to completely miss the point. This showroom really can’t be more than an advertising space, in an environment when most handset sales are tied in with the service providers.</p>
<p style="text-align: justify; ">We wonder if it is about the presentation format, or about the choice of products which are out of synch with requirements in multi-channel customer relationships? Incidentally <a href="http://gizmodo.com/5387880/microsofts-first-retail-store-opens-like-apple-store-with-more-colors" target="_blank">Microsoft just opened the first store</a> this week copying many successful elements from the Apple formula.</p>
<p style="text-align: justify; ">It seems like this formula only works for brands that can offer a complete package; in Apple’s case, everything from hardware to software, to content. It makes us question if these type of stores actually can be developed in a different consumer sectors and with merchandise sourced from different brands without a core brand forming the central organising principle.</p>
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<p style="text-align: justify; ">
<p style="text-align: justify; ">Perhaps the food sector can offer some insights?</p>
<p style="text-align: justify; "><img class="aligncenter size-full wp-image-506" title="webfront_tesco" src="http://digitalwellbeinglabs.com/dwb/wp-content/uploads/2009/10/webfront01.jpg" alt="webfront_tesco" width="580" height="250" /></p>
<p style="text-align: justify; "><strong><a href="http://www.ocado.com/" target="_blank">Ocado the only way to shop for groceries.</a></strong></p>
<p style="text-align: justify; "><a href="http://www.tesco.com/" target="_blank">Tesco, Every little helps</a> and <a href="http://direct.tesco.com/" target="_blank">Tesco direct</a></p>
<p style="text-align: justify; ">We are really interested in the relationship between groceries bought the traditional way in Waitrose supermarkets and products ordered online. Or for the same reason how customers both shop online on Tesco Direct and Tesco.co.uk and Sainsbury’s online whilst having visited the comparable local supermarket locations. How much are the items chosen on the Webshop, depending on initial discovery on the physical shelf. On the other hand, how many products in the online shopping basket come from cross selling opportunities, for example by offering ready shopping lists based on recipes, which would have be difficult to realise on a physical shelf? How much is Waitrose a Webfront for Ocado.com? Instead most online discussions are about how much they compete on product ranges and prices.</p>
<p style="text-align: justify; "><a href="http://en.wikipedia.org/wiki/Ocado" target="_blank">http://en.wikipedia.org/wiki/Ocado</a></p>
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<p style="text-align: justify; "><strong><a href="http://www.kijkshop.nl/" target="_blank">De Kijkshop</a></strong></p>
<p style="text-align: justify; ">Just as a curiosity to include in this list is the 35 year old Kijkshop. (literally translated Look-Shop) A unique shopping format from the Netherlands. Initially the stores were located off main shopping locations but easy to reach by car. The shops were mostly designed with dark walls and flooring, with spotlights highlighting merchandise locked inside glass showcases. Each items was provided with extensive printed descriptions. Customers note down the product numbers selected items and pass them to a cashier. Merchandise is then delivered boxed up straight from the warehouse. When the the chain changed ownership a few years ago, a more conventional format, with products openly accessible to the customer, thought to provide incentives for impulse purchases, was tested in one of the locations. After failing to achieve the intended effect, the company has decided to remain with the proven format.</p>
<p style="text-align: justify; ">First was the announcement of the change</p>
<p style="text-align: justify; "><a href="http://www.trouw.nl/nieuws/economie/article1661036.ece" target="_blank">Kijkshop stopt met vitrineformule | Nieuwe eigenaar verwacht omzetstijging door ’open aanpak’ | Trouw | August 2007</a></p>
<p style="text-align: justify; "><a href="http://www.trouw.nl/nieuws/economie/article1661036.ece" target="_blank"></a>Then came the “disillusioning” insight after a year of trials, that the original formula was still pretty effective.</p>
<p style="text-align: justify; "><a href="http://www.deondernemer.nl/artikel/411082/Aanbod_Kijkshop_blijft_achter_glas" target="_blank">Aanbod Kijkshop blijft achter glas | de Ondernemer | April 2008</a></p>
<p style="text-align: justify; ">Similar to Argos in the UK, the Kijkshop has increasing web presence, although it’s arguable how far the relationship with the high-street showrooms goes.</p>
<p style="text-align: justify; ">
<div style="height: 1px; width: 580px; background-color: #000;"></div>
<p style="text-align: justify; "><strong><a href="http://www.wiredstore.net" target="_blank">Wired Store Christmas Pop-Up</a></strong></p>
<p style="text-align: center; "><a href="http://racked.com/archives/2008/11/21/now_open_wired_electrifies_18th_street.php"><img class="aligncenter" title="wired pop-up" src="http://cdn2.curbednetwork.com/cache/gallery/3175/3046364713_1a7a6eea3e_o.jpg" alt="" width="528" height="351" /></a></p>
<p style="text-align: center; "><img style="display: block; margin-left: auto; margin-right: auto; border: 0px initial initial;" title="wired store curated " src="http://cdn2.curbednetwork.com/cache/gallery/3221/3046364937_18814013d7_o.jpg" alt="" width="528" height="351" /></p>
<p style="text-align: justify; ">Here the well known magazine “Wired” lends its brand to endorse the selection of gadgets for a pop-up store during the holiday season. It is a yearly pop-up store in New York, “curated” by Wired staff, but as some commentators note, more likely driven by lucrative sponsorship deals. It’s a place where you are actually able to touch products you otherwise only encounter in blogs and magazine articles. A range of advertorial events and charity games are hosted on site during this period. Customers don’t purchase directly but from internet kiosks around the store. Items are then shipped to their homes in time before Xmas. The main aspect of this format is similar to Oki-Ni but to the level that Wired only takes a fee from sponsors to offset the cost for product placement and does not take a percentage of the sales revenue. The inaugural Wired pop-up store sold $9 million worth of merchandise,65 gadgets in all, and attracted 14,000 visitors. As such the Wired store becomes a trusted mediator between companies and customers.</p>
<p style="text-align: justify; ">
<p style="text-align: justify;">related articles:</p>
<p style="text-align: justify;"><a href="http://digital-lifestyles.info/2007/12/20/the-wired-store-nyc-gadget-feast-photo-essay/" target="_blank">photos of example products in the store by Digital Lifestyles </a></p>
<p style="text-align: justify; "><a href="http://www.nysun.com/business/wired-magazine-becomes-holiday-retailer/43899/" target="_blank">Wired Magazine Becomes Holiday Retailer | Phil Wahba, | Special to the Sun | November 2006</a></p>
<p style="text-align: justify; "><a href="http://www.psfk.com/2008/11/wired-pop-up-store-in-nyc-a-shop-of-wonders-and-letdowns.html" target="_blank">Some critical notes by PFK.com </a></p>
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<p style="text-align: justify; ">
<p style="text-align: justify; "><strong><a href="http://www.samplelab-international.com/" target="_blank">Sample Lab</a></strong></p>
<p style="text-align: justify; ">The obvious conclusion to where contemporary business models, in acknowledgement of the relationship between the high street and online retail, are heading is the Japanese Sample Lab franchise. It’s a true try-vertising space where potential consumers, called try-sumers come to test and experience products for free, before buying them elsewhere. The model evolved from the mostly unwanted, in-your-face free samples, offered at inopportune moments in the street or  whilst browsing in department stores. The business formula is build on product placement and includes demonstrations in a stylish but neutral environment creating a unique retail experience. Customers become members for a nominal yearly fee. At each visit they can try everything on display and then take 5 items home. Before being able to return to a store try-sumers are requested to fill out a questionnaire, either on the spot or in their own time online or on their phone. Companies who place products will receive information from in-store surveys and at same time will gain wider awareness of their products and services by word-of-mouth, spread in the social network of the Sample Lab members.</p>
<p style="text-align: justify; ">
<p style="text-align: justify; "><img class="aligncenter size-full wp-image-509" title="sample_lab03" src="http://digitalwellbeinglabs.com/dwb/wp-content/uploads/2009/10/sample_lab03.jpg" alt="sample_lab03" width="508" height="338" /></p>
<p style="text-align: justify; ">It is an alternative to the free-samples, often packed with print magazines, now with a vanishing role in competition with content on the internet. The model is probably best oriented to FMCG products but we are wondering how far this could be stretched to introduce online services and for example specific mobile phone apps. In the case of some consumer electronic products it has already proven to be a suitable place to gain exposure with people that otherwise would not be inclined to visit their a brand flagship stores related to the product. “&#8230;By renting lab space, Sony was able to put Playstations into the hands of women, many of them for the first time&#8230;There are a lot of people Sony can&#8217;t reach with their regular promotional events. Sony marketing thought this would be a way to access customers who normally wouldn&#8217;t visit game software shops or electronics stores&#8230;”</p>
<p style="text-align: justify; "><a href="http://www.americanwaymag.com/sample-lab-anthony-james-worldwide-ceo-of-marketing-giant-saatchi-saatchi-hot-musician" target="_blank">It’s All about the Freebies | American Way | Ethan Rouen | May 2009</a></p>
<p style="text-align: justify; "><a href="http://www.pbs.org/nbr/site/onair/transcripts/080327e/" target="_blank">A Trip To The Sample Lab | Nightly Business Report | March 2008 |</a></p>
<p style="text-align: justify; "><img class="aligncenter size-full wp-image-510" title="sample_lab01" src="http://digitalwellbeinglabs.com/dwb/wp-content/uploads/2009/10/sample_lab01.jpg" alt="sample_lab01" width="500" height="278" /></p>
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<p style="text-align: justify; "><strong>Conclusion</strong></p>
<p style="text-align: justify; ">This is only a small selection of the most prominent cases exploring hybrid business models, combining brick and mortar and online retail. It will require more than just placement of CRM technologies within existing retail environments to achieve customer acceptance, what we call a new Culture of Use, and satisfy underlying consumer needs. The question still is how far places on the high street need to evolve to adjust to these changes and what completely new formats will arise. What mechanisms draw people into shops on the high-street, compared to access to stores on their mobile phone in their hand? How can we create enough stickiness that people want to return to destinations on the high-street?</p>
<p style="text-align: justify; "><a href="http://www.bbc.co.uk/blogs/technology/2009/01/etailing_has_the_revolution_ar.html" target="_blank">E-tailing &#8211; has the revolution arrived? BBC January 2009</a></p>
<p style="text-align: justify; "><a href="http://www.retail-week.com/multichannel/online-retail/high-street-reaction-to-online-march-too-slow-says-george-davies/5006562.article" target="_blank">High street reaction to online march too slow, says George Davies  Retail Week September 2009</a></p>
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		<title>Is anybody watching out there? &#8211; part 2</title>
		<link>http://digitalwellbeinglabs.com/dwb/is-anybody-watching-out-there-part-2/</link>
		<comments>http://digitalwellbeinglabs.com/dwb/is-anybody-watching-out-there-part-2/#comments</comments>
		<pubDate>Sun, 29 Mar 2009 16:18:18 +0000</pubDate>
		<dc:creator>agrunsteidl</dc:creator>
				<category><![CDATA[retail environments]]></category>
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		<category><![CDATA[digital signage]]></category>
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		<category><![CDATA[retail]]></category>
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		<guid isPermaLink="false">http://digitalwellbeinglabs.com/dwb/?p=417</guid>
		<description><![CDATA[ 

In recent months two large European retailers announced that they were to close down extensive digital signage networks across hundreds of shops. What has happened to this much anticipated technology and what was the outcome of the initial marketing drive?We put together 2 use cases of Karstadt in Germany and Tesco in the UK:
Use case [...]]]></description>
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<p><img class="aligncenter size-full wp-image-418" title="tesco_displays" src="http://digitalwellbeinglabs.com/dwb/wp-content/uploads/2009/04/tesco_displays.jpg" alt="tesco_displays" width="580" height="183" /></p>
<p><span>In recent months two large European retailers announced that they were to close down extensive digital signage networks across hundreds of shops. What has happened to this much anticipated technology and what was the outcome of the initial marketing drive?<span id="more-417"></span>We put together 2 use cases of Karstadt in Germany and Tesco in the UK:</span></p>
<p><span><strong>Use case Karstadt Instore TV</strong></span></p>
<p><span><strong>September 2007</strong>:<a href="http://www.karstadt.de/redmedia/unternehmen/en/presse/86_325.htm"><span> Karstadt press release</span></a>  and  <a href="http://www.dailydooh.com/archives/221"><span> Karstadt Does Digital Signage</span></a></span></p>
<p><span><em>The German retailer Karstadt is to install an average of 45 flat screens in 52 of their top stores. If that is the case then 1 million customers could be reached daily&#8230;. The retailer plans to invest tens of millions in an &#8220;Instore TV&#8221; system. All 52 subsidiaries will be equipped with up to 45 big-screen LCD displays on which company products and commercials by partners will be broadcast. Wolf anticipates that the constant stream of multimedia will attract more customers to his stores. He also expects they will stay longer and, naturally, buy more.</em></span></p>
<p><span><strong>March 2008</strong>: <a href="http://invidis.mittelstandswiki.de/2008/03/karstadt-instore-tv-mit-konzeptionellen-schwachen/"><span>Karstadt Instore-TV mit konzeptionellen Schwächen </span></a>  (Karstadt Instore-TV with conceptual weak-points) </span></p>
<p><span>In this article the writer describes how a lack of follow through on the promise, breaks the whole experience. Instead of having dedicated messages, based on monthly changing themes, attached to specific location related to a particular product, video clips seem to pop up in random places, or all places simultaneously, eg an ad for Philips LED lamps shows up in the Jeans department. Another example is the lousy placement and integration of the displays in the overall concept of the stores. There is usually some broken monitors somewhere. The length and type of messages contained in the clips. Lack of opportunity to sit down and &#8220;consume&#8221; some of the messages. In fact he notes, he seems to be the only one watching. </span></p>
<p><span><strong>September 2008</strong>: <a href="http://www.lz-net.de/dossiers/itlogistik/pages/protected/show.php?id=3248&amp;backid=3241"><span>Karstadt legt Instore-TV auf Eis</span></a> (Karstadt puts Instore-TV on ice)</span></p>
<p><span>The article notes that the Instore-TV had aimed to promote lifestyle messages directly at the Point of Sale. The idea was to combine information produced by the brands related to the products on display and combine these with regularly changing in-house themes. 8 million Euro had been invested so far with an estimated return of 40 million Euro.</span></p>
<p><span>resume: from the outside it looks like a case of bad management communication across different layers within the organisation that led to not getting buy in from all parties involved and resulted in a confused implementation.</span></p>
<p><span><br />
</span></p>
<p><span><strong>&#8230; and another use case Tesco:  Tesco TV later renamed Tesco Screens</strong></span></p>
<p><span><strong>March 2004</strong> : <a href="http://www.independent.co.uk/news/business/news/tesco-tv-launches-adverts-as-you-shop-565766.html"><span>Tesco TV launches adverts as you shop</span></a> (source: independent.co.uk)</span></p>
<p><span><em>&#8230; Tesco TV will be available in 300 of the company&#8217;s 850 stores by the end of this year. Around 50 screens will be fitted in each of these shops in a move that will cost about £20m &#8230; A whole new channel, called Tesco TV, will provide consumers with the company&#8217;s own promotional material, as well as advertising from third parties, such as shampoo or petfood suppliers &#8230; The channel will also offer shoppers &#8220;helpful hints&#8221; on things like foods recipes and babycare, as well as news and weather updates. The television sets in a particular aisle will show material of relevance to the products available in that part of the store &#8230;</em></span></p>
<p><span><strong>March 2004</strong> : <a href="http://www.brandrepublic.com/News/514675/Small-screen-big-profits-Tesco-leads-in-store-revolution/"><span>Small screen, big profits? Tesco leads the in-store revolution</span></a>  (source brandrepublic.com)</span></p>
<p><span><em>&#8230; With the roll-out of its in-store television system this month, Tesco is hoping to circumvent the time lag and memory lapse problem by hitting up consumers right at point of sale&#8230;</em></span></p>
<p><span><em>&#8230; The screens will be in “zoned areas”: a power aisle (the central aisle from which all other aisles are accessed); the grocery aisle; health and beauty; beer, wine and spirits; home entertainment; counters (for instance the delicatessen); and the café. Each TV will show information that is directly related to the products in its area&#8230;</em></span></p>
<p><span>At  the time, the first sceptical voices were noticed: <em>&#8230; you simply can’t just put up a screen anywhere and expect consumers to engage or advertisers to advertise &#8230; “You have to have a very well thought- out client strategy &#8230; “I’m very worried when I see new companies within the market putting up screens and not thinking if they are reaching the right target audience.” &#8230;</em></span></p>
<p><span><strong>January 2006</strong> : <a href="http://www.brandrepublic.com/bulletins/br/article/533842/tesco-instore-tv-falters-lack-advertisers/"><span>Tesco in-store TV falters over lack of advertisers</span></a> (source brandrepublic.com )</span></p>
<p><span><em>&#8230; Major advertisers are understood to be unhappy about the network and have cited the placement and intrusive nature of screens as problems to be addressed &#8230; The original intention was for Tesco TV to divert revenue from TV advertising. But its sales house, JCDecaux, was forced to slash its rate card by 30% in early 2005 following poor take-up&#8230;</em></span></p>
<p><span><strong>January 2006 </strong>: <a href="http://www.wirespring.com/dynamic_digital_signage_and_interactive_kiosks_journal/articles/Tesco_s_digital_signage_advertising_network_may_be_struggling-258.html"><span>Tesco&#8217;s digital signage advertising network may be struggling</span></a> (source: wirespring)</span></p>
<p><span>An excellent article analysing the Brand Republic notes.</span></p>
<p><span>The key points are yet again poor implementation on detail level;</span></p>
<p><span>Placement:  &#8230;<em> Tesco analyzed their store traffic patterns when deciding where to place their digital signs, but traffic patterns can only tell you so much.  They might give you an idea of where shoppers tend to walk and where they frequently linger, but they won&#8217;t tell you which direction they tend to look (you can speculate to some degree, of course), or what other visual clutter is in the area.  Maybe the screen placement interfered with the shopper&#8217;s march through the store or their ability to search for products.  It&#8217;s also possible that there are simply too many screens in place and the overall effect is more harassment than promotion.  After all, Tesco TV&#8217;s 40+ screens per store is quite a bit more than most retail media networks employ&#8230;</em></span></p>
<p><span>Content: .<em>..Bright colors and blinking messages might be attention-grabbing, but it can also grate the nerves after a while.  JCDecaux&#8217;s own content guidelines recommend creating spots that are 10 seconds long, with sound.  The cacophony of multiple screens running different clips combined with the rapid visual changes of several 10 second ads swapping out might have overwhelmed some customers&#8230;With regard to content, there are virtually limitless ways to make attractive, eye-catching segments that soothe and suggest, not chafe and coerce. </em></span></p>
<p><span>The article concludes that Tesco should not give up, face the challenge, learn from its lessons and conduct some &#8220;solid&#8221; experiments, implement changes, before hopefully launching some successful digital signage applications in the future.</span></p>
<p><span><strong>May 2006</strong>: <a href="http://www.canadianbusiness.com/technology/trends/article.jsp?content=20060522_77701_77701"><span>Signs of the times: digital signage industry</span></a>    (source : canadianbusiness.com)</span></p>
<p><span><em> U.K. grocery chain Tesco, however, is a great example of a digital signage screw-up. Tesco installed screens in half its 100 stores. But the program has been temporarily suspended: &#8220;Too many screens, in less than optimal locations,&#8221; &#8230; Research indicates shoppers look at digital in-store screens for an average of 2.5 seconds. The medium may be the message, but it better be clearly on display&#8230;</em></span></p>
<p><span>This is the most significant business analysis i&#8217;ve read so far;</span></p>
<p><span><em>Mr Spicer, DW + Partners, suggests digital signage&#8217;s power has nothing to do with ad revenue. Instead, he thinks retailers should use this strategic tool &#8220;to drive consumers into purchasing categories they weren&#8217;t going to consider, like higher-margin private-label products.&#8221;</em></span></p>
<p><span>July 2007: <a href="http://digitalsignagenews.blogspot.com/2007/07/tesco-tv-to-become-tesco-screens.html"><span>Tesco TV to become Tesco Screens </span></a>  (source: digital signage news)</span></p>
<p><span><em>&#8230; management group&#8217;s realization that digital signage isn&#8217;t like TV, it&#8217;s like POP displays, and their changes in relation to this have yielded spots that have driven advertised products an extra 5-25% &#8230;</em> (dooh :- ) ).<em>.. &#8220;You can forget about the idea that the audience is going to put anything like the cognitive effort they put into a 30-second TV spot when they’re in-store,&#8221; though he did note that &#8220;referencing a pre-existing TV spot is fine.&#8221; &#8230;</em></span></p>
<p><span><em>&#8230;Too many others would have simply pulled the plug and written off the network as a giant capital loss, but Tesco recognized that while the potential of the thing was still good, there was a problem with its execution and management. From the looks of it, the significant steps they&#8217;ve taken to try and fix them are starting to pay off&#8230;</em></span></p>
<p><span>&#8230; And then, half a year later, news came that Tesco was about to remove the Tesco Screens from their stores.</span></p>
<p><span><strong>February 2009</strong> : <a href="http://www.dailydooh.com/archives/8863"><span>Kinetic View: Tesco TV To Close: The End Of An Era? </span></a> (source: dailydooh.com)</span></p>
<p><span><em>&#8230; It didn’t matter about the location; the concept of screens above head height, running TV-style content, with sound, to people on the move in focused ‘shopping mode’ in the busy, distracting, crowded supermarket environment is flawed” &#8230; However much Tesco may have been able to leverage big brands to spend, ultimately the effect on sales was going to be measured. If the brands that trialled the network had got the sales uplifts they wanted, they would have invested in numbers &#8230; The costs of the network infrastructure and the need for bespoke programming made the service uneconomic for Tesco&#8230;</em></span></p>
<p><span>Interesting is that this article is written from within the industry and still advocates digital signage networks without offering concrete examples of services that have created a measurable ROI. I believe there must be successful examples and I am looking forward to experience them myself.</span></p>
<p><span><strong>March 2009</strong> : <a href="http://www.screens.tv/article/11620/Dunnhumby_says_Tesco_screens_were_getting_old.html"><span>Dunnhumby says Tesco screens were getting old</span></a> (source : screens.tv)</span></p>
<p><span>As reason for removing Tesco Screens from the stores Dunnhumby (the content management group for the screens) was quoted: <em>&#8220;The decision has been taken as much of the equipment is reaching the end of its operational life”</em></span></p>
<p><span><strong>March 2009 </strong>:<a href="http://www.marketingmagazine.co.uk/news/888538/failed-strategy-drove-Tesco-TV/"><span> The failed strategy that drove Tesco TV</span></a>  (source: marketingmagazine.co.uk)</span></p>
<p><span><em>&#8230; Five years on, and Tesco has finally pulled the plug on the service, subsequently renamed Tesco Screens, leaving its stated ambition of attracting 5% of TV ad revenue seem rather hubristic &#8230;Tesco [launched] Tesco TV in 100 stores and invested in 5000 widescreen TVs that were suspended from the ceilings of the aisles &#8211; or retail zones &#8211; showing a mixture of relevant editorial and advertising. The network&#8217;s selling point was that it had a reach of 27% of all supermarket shoppers, equating to 200m shopping trips a year&#8230;</em></span></p>
<p><span>quotes: </span></p>
<p><span><em>&#8230;&#8217;If you put a screen where people don&#8217;t look at it, showing content that requires people to be still, it doesn&#8217;t work&#8217; &#8230;</em></span></p>
<p><span><em>&#8230;Another downfall was the assumption that advertisers would run the same ads in-store as on TV. This seemed to be predicated on a misconception that consumers had the same level of engagement when shopping as they did in front of the TV at home&#8230;</em></span></p>
<p><span><em>&#8230;Sound was also a major problem &#8211; early anecdotal evidence suggested that some shoppers and Tesco staff found the ads an irritation, perhaps not helped by the frequency with which they were shown&#8230;</em></span></p>
<p><span><em>&#8230;Given that Tesco Screens was trying to attract brands&#8217; TV budgets despite in effect being an outdoor retail medium, there was also confusion over which pot its sales agent, JCDecaux, should target&#8230;</em></span></p>
<p><span><strong><em>&#8230; the real issue was that consumers weren&#8217;t interested in the first place. &#8216;If consumers had really liked the service and it had driven sales, agencies would have found a way to make it work.&#8217; &#8230;</em></strong></span></p>
<p><span>The conclusion is that Tesco hastily developed the in store TV network without having fully understood, nor experimented sufficiently with prototypes to learn from customer behaviours before rolling out the service. </span></p>
<p><span>It seems there are plenty of companies out there still selling the same digital signage approach to unassuming marketing managers at different companies, that have not learned, or are not familiar with these examples. It&#8217;s interesting to see that the digital signage industry&#8217;s reports on the failing of these cases is rather meager, compared to the announcement of yet another grand marketing scheme, when it all initially kicked off.</span></p>
<p><span>And now we are going to look out for successful implementations based on measurable ROI&#8217;s &#8230; Who and What has been watched Where? Any suggestions are greatly appreciated.</span></p>
<p><span>Post Scriptum : <a href="http://www.techwatch.co.uk/2009/03/23/freeview-porn-appears-on-tesco-tv-screens/"><span>Freeview porn appears on Tesco TV screens</span></a></span></p>
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		<title>The state we are in &#8230;</title>
		<link>http://digitalwellbeinglabs.com/dwb/the-state-we-are-in/</link>
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		<pubDate>Wed, 10 Dec 2008 23:28:44 +0000</pubDate>
		<dc:creator>agrunsteidl</dc:creator>
				<category><![CDATA[retail environments]]></category>
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		<guid isPermaLink="false">http://digitalwellbeinglabs.com/dwb/?p=84</guid>
		<description><![CDATA[
This image signifies for me the state we have reached in the design of consumer electronic products. It is part of a national newspaper print advertisement campaign by John Lewis some time during 2007. I first thought this was meant to be ironic, unfortunately it is not. When we look at the advertisement we see [...]]]></description>
			<content:encoded><![CDATA[<p><a href="http://digitalwellbeinglabs.com/dwb/wp-content/uploads/2008/12/jl_displays.jpg"><img class="size-medium wp-image-121 alignleft" title="jl_displays" src="http://digitalwellbeinglabs.com/dwb/wp-content/uploads/2008/12/jl_displays-300x221.jpg" alt="jl_displays" width="300" height="221" /></a></p>
<p>This image signifies for me the state we have reached in the design of consumer electronic products. It is part of a national newspaper print advertisement campaign by John Lewis some time during 2007. I first thought this was meant to be ironic, unfortunately it is not. <span id="more-84"></span>When we look at the advertisement we see &#8220;identical&#8221; black squares arranged in increasing order of price. Each representing a TV unit identified by a slapped on brand logo of the manufacturer. Underneath three numbers; a serial product identifier for the manufacturer, a price label and a stock number by John Lewis.</p>
<p>These products have gained such a level of commoditization that it is rather difficult to discuss differences in subtle technical features commonly used to compete between consumer electronics in the past. The image and sound quality of most products is at such a level that most users are hard pressed to tell the difference on shelves in the showroom.</p>
<p>There is a hint in the small print underneath stating that these displays could fullfil different roles in individual lifestyle tastes like football, tennis, films and nature. The only promise is to offer personal advice to &#8220;choose&#8221; the right product and compete on price but especially warranty. This warranty is an interesting issue especially when product ranges have matured to a point where there are less incentives to replace an item before it dies just because some technical feature has improved. On the other hand there is little in these type of products that should go wrong.</p>
<p>As the frame to hold the technology shrinks and the graphic content on the display dominates there is little left for an industrial designer to do. The physical aspect of the design becomes truly transparent.</p>
<p>I am interested to see if part of the current economic downturn is fueled by a combination of saturated markets and the simultaneous maturisation of a range of technologies. More about this another time</p>
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