Store of the future 2020: How to drive footfall during and post Covid 19

Store Of The Future 2020: How To Drive Footfall During And Post Covid 19


Release date: August 17th, 2020 (87 pages)
PDF/Powerpoint format. Price: GBP1,075.00

Abstract

Covid-19 has changed everything and it is fair to say that the tech industry has stepped up to the plate by and large, when it comes to retail. On the other hand a lot of the solutions described in this report have been around for some time - and now represent old wine in new bottles. In our view the only real novelty and real innovation remains Amazon Go and its just walk out technology. That said, now many of the solutions are appearing in a new light due to changed circumstances brought upon by the outbreak of Covid-19. Whereas, for example, a self check out solution with computer vision capabilities to add up the prices in real time was mainly about eliminating costs, associated with manual check out staff and improving flow throughput, it is now all about hygiene issues and avoiding human contact, touchpoints and eliminating queues. In other words we have seen a big pivot not so much in the solutions themselves, but in the marketing around their use cases and capabilities.
Nevertheless, every decade new revolutionary retail concepts emerge (the Apple store turned electronics retailing upside down) and we think Peloton is one of these players. Like Apple, Peloton’s strategy is helped by selling its own product, the retailer has managed to combine social media, gaming and fitness with a subscription model and a significant draw for shoppers to visit their locations.
Obviously, tracking what Peloton does or how a running shoe retailer overcomes the crisis will have limited usefulness for other sectors at first sight, but there are elements that can be incorporated into other business models - especially around social media communication, online communities, engagement and the like.
Other currently successful retail case examples heavily involve online in some shape or form, be it the various (unmanned) click & collect stations, automated stores, lockers and vending machines or retailers using Zoom type offerings to sell to shoppers at home. The zero inventory stores are an inversion of this concept and should work well with clothes (especially when changing room use is heavily restricted).
Even now there are techniques how retailers can drive footfall to their stores, many of them involving tech, but not all of them. Much of the secret lies in retailers utilising their store locations in a much better way to regain authenticity and localize their stores. And we don’t mean building MFCs adjacent to their stores (even though that might be a good solution for some retailers).
In any case, coupled with the shift to online, the lockdown and the subsequent easing of it has revealed that a lot of physical retail is in a precarious state. So what will happen next? We don’t believe it’s contentious to predict that we are looking at a global recession to come. The likely recession impact will see many businesses going to the wall and unemployment rising fast, so we expect a channel shift to the discounters (Aldi and Lidl will win again). There will be huge distress on the high street, with retail bankruptcies forcing change on the property sector and rents and rate regimes (spreading upstream to pension funds as property investors and PE and so on). For all surviving retailers a huge speeding up of digitalisation trends is ongoing.
We believe that new tech enabled generation of stores will replace the old model battered by online and Covid-19. Finally, tech alone will not get retailers through the crisis, but it will play a crucial part towards finding a solution or many partial solutions that combined enable something akin to a return to a pre-Covid normality.

Table of contents

Executive summary p8
A new set of circumstances, Coronavirus and the depression to come p12
Covid-19 expectations, The new normal - between the first and second wave p13
Retail change, Online boom, category spend changes, recession impact to come p14
Retail change, Coronavirus - the online boom, data p15
Retail change, Outlook - what will happen next? Recession, cycling, gardening p16
New lease agreements, Turnover rents the new normal? How to account for online sales p17
Tech solutions p18
Making physical retail Corona safe p19
The return of price over value, … as the recession starts to bite p21
How to manage price focus, Price integrity - the case for ESLs p22
ESL - from 1st generation to new capabilities p23
Towards a cashless future? Coronavirus speeds up some trends p24
Going cash free, Cash seen as contagious - without evidence p25
…but of course cash won’t disappear any time soon p26
Data on contactless preferences, …rising across the board during the pandemic p27
Revolutionary check outs, the store of the future p28
Ahold’s AH TO GO, tapping the ESL…… and now fast forward to an Amazon GO style experience p29
Ahold’s Nano store, copying Amazon GO p30
Check out solutions, a wide range of solutions, Apple stores, Decathlon, Amazon p31
Amazon Whole Foods payment trial using hands as ID, avoiding facial recognition p32
Amazon Go: Store Visit - pictures p33
Amazon Go: Amazon’s Most Ambitious Research Project, Footfall issues in Chicago pre-Covid-19 p34
Amazon Go: from computer vision to sensor fusion, Scaling down initially to scale back up later p35
Amazon Go: all physical Amazon stores at early stage still, $3m on pilot store p36
Amazon Go: immense costs for a magical shopper experience, Up to 3,000 Amazon Go outlets? p37
Amazon Go: the economics of a Go store, basket size, frequency, sales density, London outlets p38
Amazon Go: the cost of the hardware, range limitations, packaging, everything is wrapped in plastic p39
Amazon is planning to open cashierless supermarkets in 2020, losses around $50m p40
Amazon opens Go Grocery in Seattle, scaling up p41
Amazon launches business selling automated checkout to retailers, … using the marketplace/FBA playbook p42
Amazon’s cashierless checkout technology coming to Newark Airport, a pre Covid-19 win p43
The essential footfall question after the lost summer of 2020 p44
Footfall as be all and end all, Catastrophic change, data p45
Footfall in the UK, London hardest hit p46
The rise of the virtual queue, “keep them out” p47
Queue management, Case examples, Aldi, Time Out Markets p48
Booking appointments - “get them in”, Watches of Switzerland Group ‘By Personal Appointment’ service p49
Booking appointments - “get them in”, Ellis Brigham Mountain Sports, Snow & Rock p50
Wiebelhaus working like a Start-up, Exploiting the running shoes opportunity p51
Wiebelhaus working like a Start-up, Appointments and masks for free p52
How to drive footfall: Case examples, Peloton p53
Peloton, "find a need and fill it” - footfall magnet par excellence p54
Rewriting the playbook for how to use retail space to win p55
Peloton, The showroom strategy p56
Challenge: staying exclusive versus generating brand ambassadors p57
How to drive Footfall: Case examples - walking tours, Team up and sponsor greeters and social tourism p58
How to drive footfall, the tech solution, Payback GO - loyalty solution across retailers, Push and check in coupons p59
Zoom retailing & Zero Inventory stores, go fishing where the fish are p60
Flagship store experience online, Dior, John Lewis & Partners, Dunelm p61
Zoom Retailing, Bambuser and H&M, Hero p62
Canada Goose - zero inventory store, An update on Bonobos and Nordstrom p63
Lockers, click and collect, unmanned stores, one of the biggest winners from Coronavirus p65
Lockers, click and collect, the boom in click & collect, Kesko, Cleveron p66
Next generation vending machines, Case examples: Farmer’s Fridge, Chowbotics p67
Unmanned stores, seeing a boost from Covid-19, Lifvs, Neste p68
Robots, the rise of the machines p69
Future use cases: security, sanitation, delivery, OSA checks p70
Delivery robots, Case examples: Fedex, Starship p71
Cleaning/disinfecting robots, Case examples: Frasers Property, Amazon p72
Micro fulfilment centres, the solution to unproductive space p73
Micro Fulfilment, New tech companies muscling in p74
Integrating robotics and AI, avoiding the drawbacks of the Ocado solution p75
Takeoff Technologies, an early market leader p76
Takeoff - announcing Version 2.0, Albertsons, Ahold Delhaize, Wakefern, Sedano’s, Woolworths p77
Takeoff - being hyperlocal, a profitable e-commerce solution? p78
The partnership with Knapp p79
Alphabot/Alert, the Walmart solution p80
Alert Innovation, An order of 25 products is completed within 6 minutes p81
How the tech fits into the Walmart business p82
Amazon-Dematic partnership, validates MFC model p83
Recommendations & Outlook p84
Partnerships and long term projects, time to be bold? p85
Sources p86