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.

Dixons’ browse-somewhere-else-then-buy-online-from-us advertisement campaign in London, is yet another indicator that business models for the high street have to change and will give rise to new retail formats. Stores with location overhead are competing with online retailers, who blatantly acknowledge that they depend to some extend on the services offered in brick & mortar stores, before attracting customers with competing price offers. Storefronts increasingly play a different role, which is less about actual transactions and more about brand driven customer relationship management.

With the advent, in the past decade, of fast and cheap broadband access for most of the UK population, the unacknowledged has become common practice. Most of us have been in situations discovering and trying products in shops on the high-street, or flipping through books in book stores, before searching for the best deal online. Many online retailers were implicitly silent about this behaviour whilst relying on this practice. Now for the first time, a company explicitly, although in a tongue and cheek manner, tempts potential customers to follow this practice. Dixons had to close or rename many unprofitable stores in the UK to Currys Digital in the past few years. As such they don’t have much high-street presence anymore. Instead their tag line has become “Dixons.co.uk The last place you want to go”

Naturally some high-street stores, who currently feel the effect of this practice are not too pleased.

Both Selfridges and Harrods have commented on the Dixons campaign. Both claim to be different by offering unique products and exceptional service in contrast to the Dixons online store. Although this may be true it is increasingly difficult for customers to choose between similar products whilst functional differences become negligible.

Online the debate about the Last-Click has been going for a few years, especially since AdSense and price comparison robots changed the rules of commerce. Recently companies like Google and Microsoft have recognised that users may visit many different sites in a chain of events that lead up to the final purchase click. In the current model the last click receives the full value of the the transaction, whilst persuasion to purchase or subscribe may have been accumulated through a succession of customer touch-points in the course of multiple sessions in as many days. This becomes increasingly an issue when driving communication about products and services into social media networks.

Various companies are developing tracking and measurement tools, which establish the value chain leading to the transaction and remunerate the facilitators accordingly. It’s a guess if Google and Microsoft are interested in this, not because of the ethical issues surrounding the current situation, but because they are worried that otherwise crucial links in the chain of events start missing. Mediators between producers and customers cannot afford consistently loosing out on their share, if dominant players keep grabbing it from them. If these mediators are removed from the chain it becomes harder for potential customers to get exposed and decide on a diverse range of products and services.

In fact in recent years advertisers increasingly demand quantifiable feedback to establish the effectiveness of a campaign and ensure ROI. These same mechanisms can be used to cut up the value cake and ensure that minor players can still fulfil a useful and worthy role in the retail customer relationship ecology. It’s possibly a way out of the dominance of the large brands and perhaps a route that makes the Long Tail actually work.

Our question is if it’s possible to merge these new online transaction-lead tracking tools, with customer touch points in the physical world. What’s missing is the possibility to uniquely trace a product purchase trajectory through the value chain. Some will argue about privacy and guaranteeing anonymity of the customers. Though customer loyalty cards, purchase vouchers and wish-list services exist already successfully in this environment, without necessarily having to compromise the individuals anonymity. The emergence of VRM (Vendor Relationship Management) type systems should support these requirements whilst affecting at the same time the remuneration in this value chain. But that will be the basis for another article.

Relevant Links:

Dixons-the last place you want to go? | Marketing Week | Rosie Baker | 22 Sept 2009 | Discussion of the the effect of the campaign on the brand perception.

Dixons-the last place you want to go? |jkr |22 Sept 2009 |reflection on the style of the advertisement.

Harrods attacks Dixons’ ‘low-down’ ad campaign | Retail Week | George MacDonald | 22 September, 2009

Moving on the last click wins | imediaconnection.com | By Robin Davies | April 01, 2008 | both Google and Microsoft are looking at ways to measure beyond the ‘last click wins’ model

]]> http://digitalwellbeinglabs.com/dwb/the-last-click/feed/ 0 http://digitalwellbeinglabs.com/dwb/location-based-services-barcode-comparison-and-other-disruptive-ideas/ http://digitalwellbeinglabs.com/dwb/location-based-services-barcode-comparison-and-other-disruptive-ideas/#comments Sun, 04 Oct 2009 23:21:20 +0000 agrunsteidl http://digitalwellbeinglabs.com/dwb/?p=402

Barcode and location based price comparison services, including augmented reality applications which overlay information on top of the physical world, are about to become mainstream. This will have a profound impact on business models in retail, will in the long run affect the way we conduct transactions in public space and will impact urban planning …

going shopping with a camera

Lets cast our imagination a few, lets say ten years forward. You walk by your local deli and your GPS enabled mobile phone, or some other piece of location aware wearable technology vibrates. A few days ago you agreed to dinner with friends and set a reminder on a service like reQall, to pick up a bottle of wine in the case you are in the vicinity of the shop. You walk into the shop and pick up a nice looking bottle. You scan the barcode  with Redlaser and confirm that this is indeed a variety you might like based on previous purchases. Whilst you are glancing at an expert review of the bottle and compare the rating with an trustworthy online forum, you notice an alert that shows the prices and locations of nearby shops offering the same bottle of wine. It turns out that another shop down the road offers a three-for-two deal and you decide it is worth to walk the couple of minutes.

T-Mobile G1 Shop Savvy Demo

In this scenario the retailer who made the effort to inspire you to consider this particular bottle of wine, loses out on the deal. You’ve been to his store before, it’s in a convenient location, the store has a great ambience and on previous visits the staff seemed knowledgeable, but in the end the deal offered at the box selling warehouse merchant around the corner is too good to let go. For various reasons the deli on the high-street has to calculate higher margins to be able to offer the level of service that attracts customers, but is unable to compete once information on price is available freely. In German there’s even a term for this: “Beratungsddiebstahl”. Loosely translated as “Customer Advice Theft”.

This scenario can be played out with a variety of products in different markets. Retailers will consistently loose out on sales and have their customers pulled away, even if they offer better services, as soon as any unfavorable price differences exist. It’s not long before the shop offering additional service will have to close. Sounds familiar?  In fact over centuries, changing availability and access to information, together with increasing mobility have been the major forces to alter the functional lay-out of our cities.

Actually this scenario is about to become reality much sooner. Most underlying technologies have been around for a while and many similar applications are expected to appear on iPhone, Android, Nokia and other platforms within the coming year.

More interestingly … I believe the above scenario will never become common place in the form described, as it becomes obsolete as soon as it is realized.

The resulting closure of shops in this scenario has unintended effects for the winemaker, affecting distribution and in succession the availability of his wine. This effect is already noticeable on the UK high street where a variety of stores are squeezed out of existence. (Sure the winemaker has the opportunity to sell his wine online, but that is a different story)

A BBC Click recently reported in an interview with a German games developer, as the amount of independent stores on the high street is shrinking, that smaller computer and console game manufacturers have diminishing opportunities to reach out to customers. According to the report less than 50 independent buyers for computer and console games are left in the UK. Smaller manufacturers find less and less outlets, few are able to set up their own branded shops and find it increasingly difficult to compete with large global brands both on and off-line.

One common strategy is to make products incomparable in retail. Companies will revert to old tricks, differentiating virtually the same product, lets say a compact camera called Gotak CS-y03 and the similar Gotak BS-09 to offer exclusive deals to different retailers. The cameras are virtually the same whilst the BS-09 includes a seldom used auto-smile-detection software feature, added on firmware level, allowing to price this product with a slightly different margin to remain competitive. A variety of similar strategies are deployed by manufacturers that produce multiple brands on top of the same product platforms to diversify margins for their retailers.

Drive by advertising

Lets look at a similar scenario, but from a slightly different perspective. Instead of the proactive case, having intentionally set a location based reminder to buy wine, we now have a more passive approach; contextual advertisements based on your location, time of day, weather, social context, your diary, mood and any other measurable patterns.

In a recent discussion amongst friends, we were talking about the soon to emerge widespread application of location based services, especially the common scenarios of GPS type location tracking together with geo-coded data. This will allow for example menus of restaurants to pop up on your mobile phone as you drive through the city, receiving alerts in the form of vouchers as you pass hotspots in synch with the preferences set in your profile. This will include time and location limited deals, offering selective access through coupons, to content and products available in your proximity. You can expect every few hundred meters yet another attempt to sell you some perfume or wet your appetite  for the latest lunchtime pizza deal. You can easily picture yourself driving down your local high-street or approaching a shopping mall from the highway, being bombarded by the same Starbucks, Pizza Express, H&M, Footlocker ect messages on your phone.

We realized that many of these location aware scenarios anticipate a variety of choices from a diversity of retailers situated in brick and mortar locations, vying for our attention. Instead we will be seeing the same messages appear repeatedly on our mobile devices whilst we traverse our homogenized public environments.

Starbuck locations in central London

Or am I wrong and these technologies will enable retailers to compete again on a local level; shops can now be “discovered” away from the well trodden paths of the high-street pavements, disperse footfall to side alleys by pointing potential customers to walk “around the corner”. This might diminish the value of “location, location, location” and level the real estate prices, so independent shops can manage their margins on a more competitive level with out of town online warehouses? The high-street will increasingly become a proxy to the online world and we expect new types of retail hospitality type of environments to start populating the the spaces vacated by retailers relying on traditional transactions.

from Flickr group

Augmented reality applications

This is not an argument against the development and commercialization of these technologies. To the contrary we are excited about for example  Augmented Reality applications, which currently start appearing on consumer level devices. for example Layar Wikitude by  Mobilizy and Delicious Monster using registration barcodes on books. cds and dvds creates a seemless link between books owned on your bookshelf and online recommendations from Amazon. These technologies and affiliated services emerge as part of the evolving nature of our networked society. Many of these applications are being realized on a “can do” basis. Relatively cheap and computationally powerful mobile platforms are now sufficiently distributed in the population. Online access to rich geo-tagged databases is rapidly growing. The time is ripe for services to come out of labs and offer opportunities for many start-ups to grab a piece of a potentially huge market.

What will happen?

It’s not surprising that retailers wont be too happy with people holding their mobiles too close to products on shelves and will want to prevent taking pictures inside their shops. Currently many places forbid photography, citing the right to “privacy” of fellow customers. But how will shops be able to enforce this? “Checking” your phone whilst taking a picture and running a price comparison app is hardly detectable by security staff. It’s a lost game similar to the early days of digital cameras, when concert visitors were told to leave their camera’s by the entrance because of possible copyright infringement. Now, a few years later, we are instead encouraged to take as many pictures as we like and upload them as soon as possible to a Facebook fan page. In the long run we will need a way of dealing with a situation were many products, including digital spectacles and brooches, will have camera type technology build-in and continuously store and compare image data online. This will lead to a situation where brand outlets will be inviting people to publish as many pictures as they want, to demonstrate brand loyalty , whilst department type stores who aggregate products through buyers who negotiate purchase and sales prices with the manufacturers and suppliers, will want to avoid people comparing prices.

Price aggregator sites serve a self defeating purpose. Once a site emerges the price differences between comparable products will run down to bare minimum levels, just about covering margins to sustain the cost of warehousing and delivery. A situation only maintainable by companies operating on sheer volume . At some point most prices will become almost similar and the reason to exist, the very purpose of the site, makes itself obsolete.

What’s next?

Location based price comparison technologies, if applied straight out of the lab to the current retail environment, are plain naive from a business point of view. We can and will not be able to run them successfully for any length of time unless we develop radically different business models that take into account how products are introduced and exposed across all communication channels and customer touch-points.

The emergence of these technologies is is unstoppable. The effect of these will be different, in different geographic locations, none the less the impact will be profound. We need to reconsider business models considering new forms of pricing, sales strategies, haggling, financing and distribution. We will need to understand the role of up- and especially cross-selling in these new sales environments. It will affect how we will encounter public spaces in the near future and we better prepare for it. Already now many traditional retail typologies are vanishing from the high street e.g. The Bookstores, Music-stores, travel agents, electric retailers are all becoming extinct. I don’t believe we should keep these types artificially alive in a wave of nostalgia. Instead we should actively encourage projects that consider how pubic space will be affected by new technologies and how we can take this massive opportunity to design appropriate solutions around innovative business models. We should not make yet again the mistake of watching and condemning something like music piracy, in the mean time ignoring to develop alternative business and experience models that match the sign of the times. Whilst these technologies will have considerable impact on the way communities interact in the near future, politicians are probably still ignorant of what is emerging. Once we planned cities for cars, now we might require complete new approaches to urban planning, based on integrating brick and mortar with an overlay of the virtual.

further reading:

ShopSavvy by Big in Japan for Google Android

The Future of Retail: Instant Price Match, Ad Lab

Stores Clueless About Mobile Barcode Scanning Applications?, Read Write Web

Barcode Shopping – The Future Of mCommerce?, Lester Madden

The guru of retail, Paco Underhill, has presented a verdict on the current state of digital signage in shopping environments at the Digital Signage Expo in February 2009. His critique was pretty rigorous. His proposals for improving the application of digital signage are very much in line with our own observations and the conclusions we’ve drawn.The title of Paco Underhill’s talk was Good digital signage is not ‘cool’   It was for the first time that there was critique in an other wise self-congratulating industry. As the industry speaks about all the successful implementations and its rapid growth, most”signs” on the high street point to the contrary. Few hyped implementations of digital signage, beyond the massive billboards on Piccadilly Circus in London or Times Square in New York, survive beyond the first year. One company after another promises yet another revolutionary display technology with increased light output and therefore attracting more views on the high street or inside malls. Smaller in-shelf pop-up displays come and go. The list of failed examples in recent years is long. I keep documenting bad examples popping up in regular intervals on the streets of London, especially Oxford Street. It doesn’t take much to witness this yourself. Just position yourself near a digital signage display and observe people passing by… what do you see happening?

The intentions are correct, the choice of technologies mostly adequate, but unfortunately it is the implementation, the attention to detail, which is done so often wrong. It’s like visiting a restaurant with the most promising menu, but if either, or both the service and the quality of the actually served food does not live up the promise, the experience will be broken and the customer will not return.

As a friend mentioned in recent discussion, this industry (like many others by the way) is based on justification by powerpoint; eg. X million walk each year on Oxford street, that gives Y amount of potential eyeballs, will lead to Z amount of follow ups and hopefully initiate N conversions, which allows us to price this service at M Pounds Sterling … really? The only reasonably accurate figures in this equation is the number of people walking the street and the cost of the equipment included in M, the cost of the service.

Paco Underhill’s key insights:

• Too high-tech means its easily broken - We have witnessed many examples, including the Prada dressing room, fail under the burden of technology maintenance. We have heard of plenty recent examples at well known retailers -
• The customer is easily bored - Cool interactive video installations in public spaces seldomly attract repeat visitors-
• Poor placement because of no understanding of sightlines - who will stand still in the high street, twist their head sideways, to watch a video clip of something they otherwise can watch on TV. Who looks upwards to a monitor fixed to the ceiling when the products yoru are searching for are presented below eye level?-
• Budgets blown on hardware, software forgotten – How often do design companies receive last minute requests to fix up an installation that has been months in the making?- 
• Not enough customization for the local market
• Audio can induce employee sabotage - Most audio we have seen in public spaces, even when using hi-tech through the window loudspeakers is at a useful barely audible level to the passerby’s -
• Digital signage attracts and is within reach of “evil nine-year-olds” – An old saying in product development; if you want to test resistance to breakage and level of vandal proof just take your product to a primary school.

some of our insights:

• cost of long term maintenance is seldomly calculated into the overall service development of a digital signage installation.
• few designers understand the real implications to design for digital signage. It’s very different from designing for TV ads or banner ads on the web, where the user is at least partly engaged with an activity already in front of her. Digital signage designers need to have the senses of an architect to understand placement and relationships in space, and the sensibilities of a composer to understand timing, rhythm and  timbre.
• apart from understanding sight lines, few developers and in-house merchandising teams seem to understand that the placement of digital signage is part of an overal user experience, The signage is not just an add-on but an integral part of the shop floor lay-out.

Paco Underhill’s key recommendations – with some of our notes:

1. Our visual language is evolving faster than our spoken word. ”Our ability to process images has never been better, but our eyes have never been more tired.”

2. A lot of digital signage is still technology in search of an application. ”The problem with anything cool is that it is directly linked to ‘uncool,’”. “What may be cool to someone the first or second time may not be on the fifth or sixth visit.” ”There is a fascination with hardware, while the attention to messaging is misconstrued.” – A lot of interactive installations in public spaces, unless really well designed and engaging, turn out to be “one-trick-ponies” similar to the ubiquitous  projected water ripples which are triggered by your footsteps, which now can be found in random locations all around the world. - 

 3. We are now more time poor than we are money poor.“Those who design in-store media have a lack of understanding of the clock that is inside our heads,” - A typical 30 seconds TV ad is completely out of place in an environment where a message needs to succeed in a fraction of a second. In fact we are becoming increasingly adept to filtering surplus messages out of our environment and shield ourselves from unwanted information.

4. People are looking for universal applications. Instead, they should be more sensitive to the local issue. Content that may be relevant in one area of the country may be completely ineffective elsewhere.

5. Good digital signage should “create placemaking” and serve as a gathering point. - This is at the foundation of the type of new “retail” environments we, at dwb, are developing. Well positioned (interactive) displays can facilitate social interactions and become excellent places to present relevant messages in the most appropriate context. One of the recent examples we have described in an earlier post are the way finding kiosks scattered around the Westfield shopping centre in London. We need to create social interactions around digital signage, instead of providing just background noise. 

In the next post we will investigate recent examples of two of the largest retailers, Karstadt in Germany and Tesco in the UK, having problems with their pioneering digital signage networks. They could have saved a lot of investment had they listened to Paco Underhill in the first place.

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 Karstadt Instore TV

September 2007: Karstadt press release  and   Karstadt Does Digital Signage

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…. The retailer plans to invest tens of millions in an “Instore TV” 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.

March 2008: Karstadt Instore-TV mit konzeptionellen Schwächen   (Karstadt Instore-TV with conceptual weak-points) 

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 “consume” some of the messages. In fact he notes, he seems to be the only one watching. 

September 2008: Karstadt legt Instore-TV auf Eis (Karstadt puts Instore-TV on ice)

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.

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.

… and another use case Tesco:  Tesco TV later renamed Tesco Screens

March 2004 : Tesco TV launches adverts as you shop (source: independent.co.uk)

… Tesco TV will be available in 300 of the company’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 … A whole new channel, called Tesco TV, will provide consumers with the company’s own promotional material, as well as advertising from third parties, such as shampoo or petfood suppliers … The channel will also offer shoppers “helpful hints” 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 …

March 2004 : Small screen, big profits? Tesco leads the in-store revolution  (source brandrepublic.com)

… 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…

… 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…

At  the time, the first sceptical voices were noticed: … you simply can’t just put up a screen anywhere and expect consumers to engage or advertisers to advertise … “You have to have a very well thought- out client strategy … “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.” …

January 2006 : Tesco in-store TV falters over lack of advertisers (source brandrepublic.com )

… 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 … 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…

January 2006 : Tesco’s digital signage advertising network may be struggling (source: wirespring)

An excellent article analysing the Brand Republic notes.

The key points are yet again poor implementation on detail level;

Placement:  … 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’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’s march through the store or their ability to search for products.  It’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’s 40+ screens per store is quite a bit more than most retail media networks employ…

Content: ...Bright colors and blinking messages might be attention-grabbing, but it can also grate the nerves after a while.  JCDecaux’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…With regard to content, there are virtually limitless ways to make attractive, eye-catching segments that soothe and suggest, not chafe and coerce. 

The article concludes that Tesco should not give up, face the challenge, learn from its lessons and conduct some “solid” experiments, implement changes, before hopefully launching some successful digital signage applications in the future.

May 2006: Signs of the times: digital signage industry    (source : canadianbusiness.com)

 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: “Too many screens, in less than optimal locations,” … 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…

This is the most significant business analysis i’ve read so far;

Mr Spicer, DW + Partners, suggests digital signage’s power has nothing to do with ad revenue. Instead, he thinks retailers should use this strategic tool “to drive consumers into purchasing categories they weren’t going to consider, like higher-margin private-label products.”

July 2007: Tesco TV to become Tesco Screens   (source: digital signage news)

… management group’s realization that digital signage isn’t like TV, it’s like POP displays, and their changes in relation to this have yielded spots that have driven advertised products an extra 5-25% … (dooh :- ) )... “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,” though he did note that “referencing a pre-existing TV spot is fine.” …

…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’ve taken to try and fix them are starting to pay off…

… And then, half a year later, news came that Tesco was about to remove the Tesco Screens from their stores.

February 2009 : Kinetic View: Tesco TV To Close: The End Of An Era?  (source: dailydooh.com)

… 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” … 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 … The costs of the network infrastructure and the need for bespoke programming made the service uneconomic for Tesco…

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.

March 2009 : Dunnhumby says Tesco screens were getting old (source : screens.tv)

As reason for removing Tesco Screens from the stores Dunnhumby (the content management group for the screens) was quoted: “The decision has been taken as much of the equipment is reaching the end of its operational life”

March 2009 : The failed strategy that drove Tesco TV  (source: marketingmagazine.co.uk)

… 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 …Tesco [launched] Tesco TV in 100 stores and invested in 5000 widescreen TVs that were suspended from the ceilings of the aisles – or retail zones – showing a mixture of relevant editorial and advertising. The network’s selling point was that it had a reach of 27% of all supermarket shoppers, equating to 200m shopping trips a year…

quotes: 

…’If you put a screen where people don’t look at it, showing content that requires people to be still, it doesn’t work’ …

…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…

…Sound was also a major problem – 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…

…Given that Tesco Screens was trying to attract brands’ TV budgets despite in effect being an outdoor retail medium, there was also confusion over which pot its sales agent, JCDecaux, should target…

… the real issue was that consumers weren’t interested in the first place. ‘If consumers had really liked the service and it had driven sales, agencies would have found a way to make it work.’ …

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. 

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’s interesting to see that the digital signage industry’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.

And now we are going to look out for successful implementations based on measurable ROI’s … Who and What has been watched Where? Any suggestions are greatly appreciated.

Post Scriptum : Freeview porn appears on Tesco TV screens

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” ?

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 “identical” 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.

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.

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 “choose” 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.

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.

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

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.