As part of the 10×10 series by Method, we contributed the article “Changing Retail Currency”. It’s a companion piece to The AppLounge.

“Changing Retail Currency” is about the new role of the store, and the opportunities this creates for retailers.

Take a read: http://method.com/

As e-commerce continues to shape the retail experience, new and exciting opportunities for retailers and customers are emerging. The transactional value of the storefront has a different currency than the value that online shopping offers. We are witnessing a transformation in business models for retailers, opening up possibilities for more fluid and convergent retail experiences.

The article is build around 4 insights from different market sectors that have witnessed commoditisation and margin pressure in the recent past, and highlights a few cases that adapted successfully to new customer experience requirements.

01 Think Like an Editor

02 Learn from the Fashion Industry

03 Embrace Hospitality in Your Brand

04 Own Your Community Network

Method has co-published this piece with Fast Company’s Co.Design.

Check it out online here: http://www.fastcodesign.com/1662269/four-keys-to-surviving-the-future-of-retail

]]> http://digitalwellbeinglabs.com/dwb/changing-retail-currency/feed/ 0 http://digitalwellbeinglabs.com/dwb/the-applounge/ http://digitalwellbeinglabs.com/dwb/the-applounge/#comments Sun, 05 Sep 2010 15:23:29 +0000 agrunsteidl http://digitalwellbeinglabs.com/dwb/?p=608
A place to meet and discover great apps matched with accessories that fit your mobile life.

The AppLounge is a hybrid space, featuring a selection of well-crafted mobile applications and services. It opens from 15 September 2010, at 100 Wardour Street for coffee during the day and cocktails at night, encouraging people to discover and sample exciting new mobile and tablet applications, digital content, including eBooks, eMags, and useful online services. During the London Design Festival, the AppLounge will also conduct inspiring AppTasting events and AppHealth workshops.

This first-of-its-kind ‘pop-up’ space was has been designed to facilitate discovery, education, and engagement. The AppLounge is an innovative alternative to the traditional retail environment, converging the best of in-store and online retail experiences. This unique collaboration between Digital Wellbeing Labs, Method, App.itize.us, Spotspot, and D&D London, celebrates the best in contemporary design languages from around the world and aims to answer the challenges that retailers face as e-commerce reshapes the retail process and consumer behavior. Says Grünsteidl: “The value of the storefront is changing from one of transaction to experience. We are witnessing a transformation in business models for retailers which is opening up possibilities for convergent retail experiences. The AppLounge is a pilot store that aims to bridge the gap between the in-store and online retail experience. The space is designed to encourage customers to slow down, have a drink, and sample a variety of applications and accessories on display.” The Applounge serves as a conduit between producers and customers and is not necessarily involved in any transactions.

Conceived by Alexander Grünsteidl, together with a collective of design agencies and a hospitality group, the AppLounge proudly presents a new retail concept, bringing together hospitality and the latest in physical and digital products under the umbrella of Mobile Lifestyle. Mobile Apps, accessories and content, like music and iBooks are presented as collections that will enrich daily life and resonate with consumer lifestyles. The first Digital Lifestyle Showroom made its debut during the 2006 London Design Festival to critical acclaim. Grünsteidl has also written a thought piece on the topic of retail convergence, titled “Changing Retail Currency” for the 10×10 thoughts on design series published by Method.

The AppLounge is open from 15 September through to 2 October at Meza, 100 Wardour St, London W1, UK.

Hours of Operation:
Monday – Saturday 12pm – late

Location:
The AppLounge at Meza
100 Wardour St
London, W1F 0TN UK
http://www.mezabar.com

For more information please visit www.theapplounge.com

About the Sponsors:

Method
Award-winning product, service, and experience innovation firm Method proudly sponsors the AppLounge. Method designed AppLounge materials and lead execution, from the brand identity and mark to the website, in-store displays, posters, and promotional material. Additionally, Method has provided direction on marketing strategies, event production, and the retail experience.

Alexander Grünsteidl is the Senior Director of User Experience at Method, and the author of a thought piece for Method’s 10×10 series, “The New Retail Currency.” Learn more about Method and read Alexander’s 10×10 piece at www.method.com.

To get in touch with Method, please email inquiries@method.com.

app.itize.us
Jason Fields founder of app.itize.us is happy to have provided guidance and curation for the carefully selected applications and services available at the AppLounge. Find out more about app.itize.us at app.itize.us.

Spotspot Creative & Engineering
Spotspot proudly participates in the AppLounge concept development and design of the pilot shop. Spotspot creates interactive objects for public and commercial spaces that link physical and digital customer experiences. Learn more about Spotspot at www.spotspoton.com

Meza and D&D London
D&D London is the UK’s leading high-end restaurant group with an annual turnover of more than £70 million and 20 individual restaurants across London, including Meza in Soho, which plays host to the AppLounge this September. www.danddlondon.com.

In the next few years we will see various types of consumer electronic devices all look like thin black boxes being defined by the size and proportions of the displays that characterise their shape. In traditional retail settings it will be increasingly hard to sell these products based on some imperceptible quality differentiations related to “improved” display or audio qualities.When towards the end of the last century products started shrinking in response to the miniaturisation of components , the old mantra “form follows function” didn’t work anymore. The outer shape of products used to be dictated by the arrangement of the internal functional components. But once mechanical components were replaced by electronics, there was not much left to follow.

In the early eighties a few designers made some last critical statements about the disappearance of the physicality of products. A good example was the radio in a bag by Daniel Weil, clinging on to components that soon were rendered invisible.

Radio in a Bag, 1982, Daniel Weil

In the eighties postmodern philosophies were brought into play to justify shapes that indicate how to interact with products. Designers sought an explanation of functions in the semantics of form, making products understandable and easier to use. Different approaches were applied to instill meaning into new behaviors enabled by electronic and soon digital functions.

One of the best examples was the Phonebook prototype by Lisa Krohn and Tucker Viemeister, which won the Neste Forma Finlandia price 1987. It is a digital phone based on the principle of a file-o-fax , combining functions like a basic phone, an address book and an answering machine. Each function is accessed by turning pages exposing only the required interface elements for each application. In retrospect these products were longing for a past, not ready for a future yet to come.

Phonebook, 1987, Lisa Krohn & Tucker Viemeister

Extreme design-sketches emerged in the quest for form at consumer electronic corporations around the world. Most impressively a personal sound system player, created during a workshop at Philips Corporate Industrial Design, in the shape of a head, called Beethoven. The expression of the design went beyond the pure functional requirements of the audio system. The mouth was to hold an audio cassette. The ears were to adjust the volume, in place of the eyes was a display, the hair hid the loudspeaker, the power switch looked not unlike Harry Potter’s scar.

Beethoven, personal audio system, Philips CID, 1980. image: past tense, future sense; bis publishers 2005

One outcome of this quest was the unexpectedly successful Philips Roller Radio, which stood out from the boxy, tech looking, metall finished appliances common amongst consumer electronic brands in those days. This radio was explicitly designed to appeal to the youth market. The loudspeakers were clearly separated from the main body holding the radio tuner and cassette player. The handle expressed portability. The back revealed bulges underneath which the batteries fitted. The bright colors and shiny plastic finish created a distinct youthful contemporary look and feel. As the story goes, the initial proposal was refused several times by top management, who couldn’t believe that such a radically different approach could sell beyond the required quantities to break even. The development team managed to secure initial orders in opposition to the opinions of management and  production began. Against all odds, sales soon exceeded the wildest expectations.

Roller Radio, Graham Hinde, Philips Corporate Industrial Design, 1981….and later versions from the Moving Sounds series,

Link kindly provided by picasaweb.google.com/vedodesign

Soon a next generation was created to jump on this success. Interestingly the second Roller Radio, a basic restyling exercise of the original, turning the cylinder shaped speakers into spheres, didn’t manage to continue the success of the first. Instead of applying this new thinking to a wider range of products, Philips lost the initial momentum they had created. Their competitor  Sony was more successful at capturing this new design spirit, creating a line of products that lasted well over a decade around the ranges of My First Sony in bright primary children’s colors, with expressive interface elements, and the Sony Sport series based on highly visible yellow hues and a rugged look and feel, products that could withstand a rough handling. One of the main decisions was to sell these products outside the common consumer electronic retailers and place them in toy and sports stores, where they could be discovered within the context of their intended use.

My First Sony, mid-eighties

Philips soon followed suit, with the Moving Sounds line, in stark yellow with brightly coloured highlights, trying to catch up in the niche they had created in the first place, but failed to keep innovating. In the end Philips never really managed to sell these products outside the established consumer electronics markets.

A decade later, with the arrival of the tiny MP3 players, opportunities for expressive physical design shrunk together with the smaller spaces left for cover art, when music media moved in succession from vinyl sleeves to CD cases and almost vanished with various digital audio formats distributed over the internet. For many years diminishing form factors and the improved portability were sales features in their own right. But as mentioned in another post ,  once the design passes a critical minimal size, one has to design around the only requirement left, in this case that of the battery.

In recent years we see products converge at two ends of the design spectrum. On the one side we find the rationalized multi-functional devices, which, like a chameleon, will change their skin to adapt to whatever context they are required to operate in. On the other side we find highly expressive appliances, quite often devices with a singular functionality, providing an entertaining one-liner for marketeers to create advertisement buzz. One of the best recent examples in this category is the Sony Rolly.

Sony Rolly, MP3 robot, 2007

The Sony Rolly is a robotic loudspeaker accessory  that can play MP3 files, streams music wirelessly via bluetooth and can be programmed to react to the music with colour changing LEDs and motion created by its wheels and ear-like sound reflection flaps. These are the products that tell a simple story, display astonishing behaviours and are easy to sell … it’s oh so cute! But it’s hard on the shop floor; these products require constant attention from a sales assistant, even when they are placed under a transparent dome by the entrance to the shop. On the other hand, once you are shown a sample, their expressiveness is so infective, that they almost sell by themselves.

Things look different at the other side of the spectrum. These products have typically an almost square shape, with few physical controls and are defined by what occurs on their displays. When their displays are switched off, as it often happens on the sales floor, there is little story to tell. When the first digital photo frames appeared in the late nineties, till well into the first years of the popular Philips and Kodak digital picture frames, around 2005, it took retailers quite some time to realize that it would be a good idea, to take a sample of a frame out of the box and have it actually switched on in the shop. When we had the dwb pilot store in 2006, we were amazed to find most retailers across Europe to have hardly any working displays in their stores for customers to experience.

Things radically changed in 2007. When the iPhone arrived in the shops, over thirty five working units were placed on the display tables in the Apple flagship store on Regents street in London. People walked in to the Apple stores to just try the iPhone and form their own opinion. Customers came to see and touch the iPhones themselves, they were amazed by the physical behaviors build into the graphic user interface, sliding windows with a flip of their fingers, page movement mimicking physical inertia, tilting the device in all directions to move virtual glass marbles around the screen. Most mobile service providers at the time (an still these days), were showing only non-working phone dummies of different brands lined up along the walls of their high-street stores. I still have the feeling that retailers are almost afraid, apart from having their samples damaged, to show the awkward interfaces that contradict the hype created in the advertisements which promote new features in each successive new phone evolution.

By now many companies bring many, virtually similar products to the market. Switched off they are almost indistinguishable. They behave quite differently under the hood.

Apple iPhone, Samsung F700, LG Prada, RIM Blackberry Storm

Computing and display technologies have reached a level of maturity that almost any product can be created out of a choice of the same set of components. The cheapest and least risky option, offering most flexibility for consumer electronic manufacturers, is to produce different appliances assembled  from the same components. These products are only set to perform particular functions once they leave the manufacturing floor. Either the functionality is locked into the product’s firmware or the user can install the desired functionality at a later stage. The introduction of cheap precision touch displays and photo realistic graphical user interfaces has taken functional flexibility even a level further. These products are the result of so called rationalisation of the manufacturing process, wrapped in neutral, often black frames, holding an LCD or other display in one of the common formats. Software will make these devices behave in any way the market requires.

It’s similar to the eighties, when United Colors of Benetton created white jeans as blanc canvasses in the manufacturing process, which then were coloured only at the last moment, to suit the demands of a particular geographical market. In the same decennium was rather costly to adapt consumer electronic products to fit market requirements . An appliance platform, for example a portable cassette player like the Walkman, retained almost the same configuration of  internal components for a few years, whilst the outside was restyled on a regular basis like a dress following the fashion of the day. Tooling costs to create the molds for the outer shell and the cost of distribution, generally required sales guaranties of at least hundred thousand units in the low to mid price segments.

iPhone skins

Now the dress is the software that creates the look and feel of the application on the surface of the display and can be exchanged at a moments notice. Development, production and distribution costs have diminished and prices can now be calculated on very different business models and in direct response to market opportunities. Little work, apart from the detailing of the back of the display and the specification of materials, is left for traditional industrial designers to do.

Tilt, shake and other interface mechanisms have emerged out of the research labs, offering alternative physical experiences, instilling a whole new sense of excitement in designers. The Wii and iPhone, and before the iPod click wheel, have created a popular introduction to gesture based interfaces, demonstrating responsive feedback behaviours, applying “natural” physical effects like flipping and inertia, similar to the ones we are accustomed to in the real world, to improve usability expectations of an interface. Minority Report type interfaces, perhaps not the most desirable, which till recently have been confined to experimental prototypes in labs, are now appearing in professional applications. We are just waiting for a few more years until the prices become low enough, that we will see them feature in consumer interfaces. As new “cultures of use” emerge we are creating opportunities to form a language of gestures, similar to the conventions of “right-clicking” and standardised keyboard shortcuts. Currently designers are coming to grips with requirements to design affordances into these gesture based interfaces which indicate how to interact with them.

These products featuring behavioral interfaces wont sell in closed boxes on shelves in supermarkets. They may be demonstrated in videos, but in the end the most convincing way to be introduced to these products is to experience them for real. More about this in another post.

At DWB we are investigating how we can create innovative physical environments to discover, learn, subscribe to, and/or purchase these new breeds of software dresses and behaviour based products. We are interested to create retail conditions in which innovative physical consumer electronics type devices can be introduced to potential customers. Conditions that normally cant be found in large “pile’em high, sell’em cheap” type retail environments.

related articles:

The state we are in …

It’s time for new “features” ?

Products that connect the physical with the social on the web, create innovative opportunities for retail.A new type of product has emerged in recent years, starting with the introduction of Nike+ together with Apple iPods in 2006. These devices link to the accumulated statistics of an activity over time and share these with an online community.

You may call them mash-up devices, taking a range of sensors, attaching meaning to the extracted data and linking these to other information and more importantly to various social networks based around shared interests. Some call them social objects.

Interestingly these physical linked devices are initiators for commercial transactions, partly based on social pressure, recommending products and services based on the patterns gained from the user’s activities.

Here are some examples:

 Nike+ and iPod

nikeplus.nike.com

I recently had the pleasure of meeting Ray Riley, one of the driving forces behind the project. What Nike Plus did is to combine insights from early adopters who used for example GPS technology and heart rate monitor, to create their own tracking tools to log distances and speed during excercise. Nike used these insights to develop a low cost accelerometer and paired these with an established and ubiquitous device, the iPod, already used by many athletes, to facilitate data exchange with computers and an online service. It allows users to visualize their progress and set new targets. On the back of it, this application establishes a continuous relationship with the Nike brand. It offers regular updates on products for runners including sports gear and nutritional additives like vitamins depending on your workout requirements. In a few years they established a huge community of runners, encouraging each other and competing in virtual sports events around the globe. 

Snifftag 

www.sniftag.com

So around comes a company that uses a similar accelerometer, attaches it to a dog’s collar and then adds, in their words a low powered active RFIDs with a proprietary radio protocol, to communicate with other Tags. When two dogs wearing SNIF Tags are within close range of one another, the tags automatically swap unique identifying codes, recording the encounter and relaying it to a server when the dogs return to a connected SNIF Base Station.

The company has a great strap line “Tails told, Friends Made” ; “Monitor your dog’s activity while you’re away. Keep in touch with his friends and yours. Share helpful information and pet tips online. And get connected to your community. It’s hi-tech, it’s hi-style, easy to use, and completely customizable.”

You can guess where this is going. Combining the activity level with the pedigree of your do, recommendations will be offered about how much and what to feed your dog. The dog colar becomes a innovative shopping basket in disguise 

This is more sophisticated than the way we currently exchange business cards in the corporate world. Where is the version that clips on to a tie or cufflink or goes well with a ladies handbag?

Actually this has already been applied on a mass scale  …

Clickables: Walt Disney Pixie Hollow, Fairies friendship charms 

disney.go.com/fairies/  Clickables™ technology

Roll over princesses and princes, if you have not noticed it hase been all things fairies for the past few years in the world of Disney. With this new direction came a whole set of technologies linking the virtual and the real together in a continuous social network. Disney extended play in the virtual world of Pixie Hollow.

Connecting Pixie Hollow to the real world are Clickables. Pixie Dust eJewelry Collection includes a magical jewelry box, a charm bracelet and exclusive Disney Fairies charms powered by Clickables™ RFID technology. When a girl touches a charm to the center of her jewelry box, which is connected via a pc to the internet, Pixie Dust sparkles and music plays as the jewelry box comes alive. Each charm unlocks a unique fairy gift at www.PixieHollow.com, including exclusive clothing, and décor for their online avatar. The friendship eCharm bracelet is connected to an online avatar that lives in Pixie Hollow land. A profile of the avatar, messages and gifts can be stored offline on the bracelet and can be shared with others just by touching the bracelets together. They glow, and the transaction is complete. Very magical indeed. 

All this includes a virtual currency, virtual gifts and real jewellery and other merchandise. It comes with a handheld electronic game. Points earned in the offline game can be turned to Tink Points for buying virtual goods or completing quests. It all sumes up to an integrated retail strategy, created by a team selected from marketing, technology, design, even finance and lawyers, coming together to form a holistic vision and unified implementation.

You can expect this technology to roll out across different themes and Disney brands in the near future.

Webkinz

www.webkinz.com

A lower tech predecesor is the popular Webkinz. Using cuddly soft animal toys to represent a link to a virtual world.  Each toy comes with an unique 8 character ID allowing users to access the virtual alter ego of their stuffed pet and start playing in an online world.

A summary from wikipedia : Each Webkinz stuffed animal and Webkinz accessory comes with an 8-character code. By registering this secret code on the Webkinz website, the customer “adopts” his pet in the virtual Webkinz World. The Webkinz World is an online play area with its own economy. The user receives money, called KinzCash, by adopting new pets, playing online games, answering general knowledge questions, and through daily activities. With each Webkinz toy purchased, more money, rooms, and items are added to the user’s account. Accounts expire within one year, unless another Webkinz animal is purchased.

Users can spend their KinzCash at what is called the W Shop, where they can purchase food and clothing for their pet, items for their pet’s room or to build additional rooms onto their house, or outdoors areas etc. Users can decorate a room for their pet with pre-made themes, or mix and match their own furniture.

The online world also contains many rare or exclusive items. Some of these items are obtained by registering other Webkinz accessories purchased in the real world. Each type of pet gets a special food available exclusively for them. Also, a Pet of the Month is announced at the beginning of each month. If a person registers the announced pet in that month, they will receive other exclusive items. 

This fascinating approach is the basis for many similar formulas, creating a continuous set of incentives to engage in a virtual economy and linking it back into real world transactions.

Barcode Battlers 

Barcode Battlers wikipedia

It all reminds me vaguely of the pioneers of it all; Barcode Battlers. A Tamagochi type game launched in Japan in the early nineties and was based on in-game strength or energy for each of the battling characters derived from scanning barcodes found on real consumer goods. In fact you battled one barcode against another. The game was so popular that when some barcodes of obscure products were found to be very powerful these products instantly sold out in the supermarkets. Thinking of it,  it makes for an interesting retail strategy ;-)

eco:Drive Fiat 

Using sensors to measure your impact on the environment and helping you to adapt your behaviour according to insights into your usage patterns is another big area for innovation.

www.fiat.com/ecodrive/ 

eco:Drive works using Fiat’s Blue&Me entertainment and communications system. Plugging any USB key into the Blue&Me port allows eco:Drive to record detailed information about the vehicle’s efficiency and your driving style during a journey. The information is tranfered by plugging the USB key into your computer when you’ve finished driving.

Users can analyse fuel consumption and emissions for each journey made, and receive advice on how to drive more efficiently, reducing their impact on the environment. eco:Drive will give you a score out of 100 – your eco:Index – to show how efficiently you have driven, based on your acceleration, deceleration, gear changes and speed.  A series of tutorials will help you to improve your score, showing you how to perfect your driving using detailed information from your own journeys.

Drivers who start eco:Driving can expect to improve their driving efficiency by up to 15 per cent. That means a 15 per cent reduction in CO₂ emissions and in fuel costs. Fiat has also created ecoVille, a unique online community populated by all eco:Drivers from around the world. Users will be able to share tips, watch the community grow, and see just how much CO₂ they are all saving together.

ecoDrive is an evolution of the Blue&Me platform, developed by Fiat Group Automobiles in conjunction with Microsoft and first installed in the Fiat 500 and Grande Punto. The system is open for feedback from users for future improvements. Most importantly it creates a really useful, continuous relationship between the customer and the Fiat brand. More sincere than any customer relationship message received as regular email newsletter ever can do.

Wattson by DIY Kyoto

This same principle can be applied to your home. The Wattson launched by DIY Kyoto in 2006, helps you to investigate your electricity usage in your home down to cost of operating individual appliances.

www.diykyoto.com

DIY Kyoto’s aim was to develop a product that although it fulfills a very technical function, looks and behaves like a stylish interactive piece of furniture that lives well in the surroundings of your domestic environment; very different from the engineered electric meter you would expect. As such it has become one of the first high tech products that is being sold in interior and design shops. It tells a story about being actively engaged with managing your carbon footprint.

When we first showed one of the initial production models of the Wattson as part of the dwb showroom collections, we realized that it not only works to convince people to save energy, but in fact that it could very well serve eco-aware home owners, who already would be applying energy saving strategies, to show-off  their eco-credentials by demonstrating the efficiency of the appliances, solar collectors, double glazing etc they had invested in.

EasyBloom 

Put together a temperature, light and humidity sensor, combine it with a data analyzing algorithm first used on a Mars mission, package it in the suggestive form of a flower and you get easyBloom. Place the device for a few days in the soil in your garden, in a location where you would like to grow some plants, and once connected back to the internet with its integrated usb plug, it will inform you about the type of plants recommended for the conditions found at that spot. 

www.easybloom.com

This is seriously clever design. Not only does this little appliance help you to remove anxiety about what plants to choose, but it actually links you directly to websites of garden centres and at a later stage even supplies you with information about fertilizers and where to order them. Now this is what we mean with innovative retail solutions; it’s a contemporary update to the Gillette model: give away the handle almost for free and people will come back to purchase the razor blades. It is a high tech product that lives easily in the surroundings of a garden center or a flower shop. It’s design makes a perfect lifestyle gift. 

There are many more examples appearing each week. For me these type of products represent real opportunities for design and will lead to new design languages.

So where is this leading in the future, it’s easy to start brainstorming:

… Musical instruments that sense skill and style and link you to similarly skilled musicians within your locality and offer music lessons or instrument upgrades.

… Houses that compete on their eco-credentials with others within the community, based on a  handicap level, similar to a handicap levels applied to sports like  Golf or Sailing. The handicap could be calculated on the type of building, the amount of rooms, the volume, type and amount or surface area of windows, type of heating etc.

… Mobile devices that sense your location and activity and link you to … (there are many of these)

… Soon we are likely to see all kind of iPhone accessoires emerge, similar to the current iPhone App for Nike+. This will be sensors and devices that send all kinds of messages to be displayed in a lifestyle management type dashboard app on your iPhone.

So why not try something yourself. Some tools to get you started are available at …

Pachube

 Usman Haque   started an online project that encourages people to make their data from all kinds of sensors, spread around the world, publicly available and stimulate all kinds of mesh-ups and he hopes will lead to new applications and services.

www.pachube.com  

Pachube is a service that enables you to connect, tag and share real time sensor data from objects, devices, buildings and environments around the world. The key aim is to facilitate interaction between remote environments, both physical and virtual.

Both landline and mobile networks have already been carrying for the past decennia, invisible to the public eye, an enormous amount of data from commercial sensors and controllers like security and farming applications. Only now they become affordable and accessible and we start experiencing these on a personal and consumer level. These are exciting times and I am looking forward to be surprised by new types of products and services to emerge.

There was no way that you were able to buy a Nintendo Wii nor a Nintend DS on the spot. Not even any of the software titles. When I asked where I would be able to buy one of the Wii Fit ™ outfits that afternoon, the attendants only could give me a leaflet with various details about  the top 10 titles. They could not even name a place within the Westfield shopping mall where I would be able to buy the products that afternoon. On the back of the folder was a list of logos of the usual suspect retailers. Interestingly no direct link to any online stores to buy any of the top 10 titles. My real surprise was to see on the leaflet both Ocado and Cineworld, seemingly the co-sponsors of the event, hardly places to purchase Nintendo products, but companies that see themselves as being aligned with the Nintendo brand type of users and offering their wares as prize incentives.

What was really inspiring about the set-up that there were plenty of different types of seats to facilitate different types of experiences. There were benches, comfy sofas, bean bags and bar stools. Each of the set ups are inviting potential customers to spend some time, and not just walk past, the games on show. It takes time to learn about an experience. Experiences are difficult to sell with just a good Logo and catch phrase or a cool screenshot. It requires more than a moment or the blink of an eye and Nintendo yet again demonstrates how to attract the crowd. They first demonstrated this when launching the Wii they took over a complete house in London in 2006 to showcase the Wii in its natural habitat. Sure this is an expensive event to run, each cluster demonstrating a separate title with a dedicated attendant at hand, trained to engage anybody of any age with the products.

Most visible has been the demise of content providers; the record stores, the book shops and the news traders. The changing nature of distribution of content and the cost structures around it, have made physical locations redundant… or are they? Airline and travel agents have already virtually vanished and post and bank services are desperately seeking ways to validate their presence.

At the same time the consumer electronics industry has matured to a point that most products are sold as commodities. Retail margins have diminished, partly driven by online comparison engines and sales aggregators, such that is has become almost unfeasible to offer any customer facing sales services in brick-and-mortar environments. Consumer electronic stores and soon most mobile service provider shops will vanish in the form we have known for the past decades.

The high street is a social environment. A place where people go to discover and learn about products and services, up till recently an essential place for contact between the producers and their customers. Sure companies have always been depending on word of mouth between friends and colleagues, mail order catalogues arrived with the rise of the railroads, and a range of advertisement tools have evolved to reach customers in the most appropriate context, but the current changes are not far from a revolution.

What type of retail is still viable in brick-and-mortar setting? Over the past decennium, since the advent of the internet, the diversity of stores has been greatly reduced. An average high street is left populated with fashion and footwear stores, the odd telecom service providers and plenty of coffee-shops. One may argue that there are increasingly less incentives to visit the high-street.

Retailers and sales executives will point out that perishable goods, instant gratification, last minute orders, impulse purchases and cross-selling opportunities remain a strong incentive for maintaining a presence on the high street. We have only just arrived in the Information Society and we can see many online and mobile services in development which will directly be competing with this argument.

Recently the discussion has been heated by the news that some of the large supermarket brands in the UK are successfully starting to compete on the internet with huge online catalogues filled with “convenience” fashion articles.

Still, we hang on to business models which emerged as part of the industrial society. Industrialisation drove rapidly expanding transport and in succession communication infrastructures, followed by new distribution models for goods. Retail, in simplified terms, has always been about trading in demand and supply models, based on scarcity or basic availability, volume or quality. The department store emerged as a direct result of industrialisation, purchasing large quantities of certain products straight from factories and then repackaging these into smaller fractions which then are passed on, at added value to the customer. Continuous and transparent access to the internet in combination with modern, highly efficient distribution infrastructures make the traditional retail models obsolete. In the end online retailers like Amazon will always offer more choice at the lowest price.

We are offered more choice, but within less variety. It becomes increasingly difficult for a customer to find out what fits with their lifestyle. The highly successful iPhone Appstore is a point in case. There are already over ten thousand products on offer. How do you know which one suits you? Do you have time to test all the alternatives? How do you know if the reviewers can be trusted and match your sense lifestyle? Recommendation engines and current CRM systems are a far way off to offer trusted insights into products and allow us to form meaningful service relationships.

Future retail innovation, for example, is predicted to include 3D online shelves, in Second Life type environments, promising to offer a chance to preview, see demonstrations and learn about the use of products in the privacy of your home. Really? Shopping online, in its current form, is a solitary experience, but people are inherently social beings that enjoy shopping together with friends and family.

Only in recent years have broadband connections started offering seamless transitions, user interfaces across product and service touch points have become sufficiently integrated, that for the first time we get a hint of what continuous user experiences will be like in the future.

In this blog we investigate the rise of the experience stores, scrutinise technologies appearing to benefit the customer experience, explore the development of new types of products and services that are offering innovative product development opportunities, discuss new directions in CRM (customer relationship management), or what some call CMR (customer managed relationships) and we will make a case for a new type of lifestyle showrooms.

The High-street is an essential part of our economy and we at dwb-labs are investigating the type of hybrid environments that will emerge to replace the vacancies left by diminishing brick-and-mortar retail.