The Future of Retailing


Connected smartphones in a big city

New research project on smart cities

An innovative project funded by the German Ministry of Education and Research and coordinated by KLU has just been launched. The project is designed to help the retail sector meet the needs of urban customers and their environments.

Retailers are currently facing a challenge: embrace omnichannel commerce or find themselves left behind. “Retailing is no longer a competition between online and offline shopping,” explained Professor André Ludwig, the coordinator of the SURTRADE project (Smart Urban Retail Services – An integrated service system for omnichannel commerce for the city of the future). “There are no online-only customers – customers switch dynamically between channels, deciding spontaneously how they interact with retailers, where they get prices or product rating information, and how the products should be delivered. Logistics services will be one essential criterion determining customer decisions.”

To stay competitive, retailers need to grow their online and offline businesses together, says Ludwig: “We want our project to provide retailers with tools for integrating all the interaction points along the customer journey. The overall customer shopping experience, which could include elements such as new pop-up store concepts and in-store tools like augmented reality and smart mirrors, is key.” 

The ambitious omnichannel commerce project was launched in March and is set to run for three years. “What we are basically developing is a cloud platform that integrates the different ‘touch points’ between customers, retailers, and service providers,” Ludwig explained. In addition to the cloud platform, the project will develop apps to support the different stakeholders. “We are planning to use showrooms in Hamburg and Leipzig to demonstrate what we’ve developed and get feedback,” added Ludwig.

To achieve the project’s goals, a number of specialized public- and private-sphere partners have been enlisted to deliver subprojects. “The University of Leipzig, for instance, is our partner for architecture,” Ludwig explained. “Shopping malls are becoming less attractive to shoppers and we need to think about how to change that.” Other partners include the Handelshochschule in Leipzig, retailer Tchibo, IT specialist SALT solutions, and mobile applications company CHECKMOBILE.

“Apart from coordinating the project, KLU’s role deals with the modeling and IT aspects. We adopted our service-oriented design approach from information systems. It allows us to describe retailing, logistics, and payment services in a way that facilitates their integration,” said Ludwig. “We believe that in the future, the actual product-offering will no longer be the physical product, but instead the combination of the product and a number of related services, including logistics services. We are confident that with this project, we can develop new ways of describing and integrating services.”