The smart future of retail

Logo of Surtrade

Digitalization is forcing retailers to rethink their methods. The “Smart Urban Retail Day” conference highlighted novel approaches and well-proven concepts from the retail, technology, logistics and urban planning sectors. The event, held on October 9, 2019, opened by addressing two questions. What is the role of brick-and-mortar stores in an omnichannel world? And: “Circular Cities” - What challenges are cities and retailers now facing?

The average online spending per shopper is on the rise, and more and more older people are now discovering online shopping. At the same time, the gradual demise of shops continues unabated.

Omnichannel focuses on the shopping experience

Omnichannel commerce, which blends stationary, mobile and electronic commerce, could offer a solution. This could be, for example, consumers using their smartphone while strolling through a shopping district. “Omnichannel is the smart answer for stationary retail,” summarizes André Ludwig, Professor of Computer Science in Logistics at Kühne Logistics University and the conference organizer. “Customers don’t just look for certain products when shopping; they also look for relaxation, fun and interactivity. Accordingly, successful retailers create a sense of adventure and experiential worlds that combine analogue and digital elements.”

Virtual shops and real surfing

At the Smart Urban Retail Day, Tchibo and the IT consulting company Salt Solutions unveiled a virtual living room, which allows customers to explore products displayed in a real-life environment using mixed-reality glasses like the Microsoft HoloLens or virtual-reality glasses. In addition, the company Arvato presented its ship-from-store service. Here, stationary stores serve as small warehouses for online orders. Prof. Santiago Gallino from the Wharton School (University of Pennsylvania) talked about the trend toward showrooms as a tool for promoting customer loyalty. In turn, André Ludwig provided further examples, like the sports department store L&T in Osnabrück, which attracts water sports enthusiasts and potential customers with a surfing pool in its atrium. Or the British retail giant Tesco, which has created virtual shops in subway stations for commuters in South Korea: illuminated panels present drugstore products that can be ordered by smartphone using QR codes.

The SURTRADE project: developing a digital infrastructure

“Revitalizing the inner cities is going to take more than just a handful of pioneers,” emphasizes André Ludwig. The research project SURTRADE (Smart Urban Retail Services), which Ludwig coordinates, therefore focuses on finding digital solutions for the retail branch, such as an urban retail service platform with open interfaces for retailers, shipping companies and customers. The latter can use smartphone apps to e.g. obtain real-time information on whether their product has been delivered to a store, to be alerted to on-sale items near their current location, or to find the nearest diaper-changing room on their shopping tour.

On foot through the “Circular City”

In turn, Dr. Gereon Uerz, an innovation manager at the consulting company Arup, focused on the future of cities. In addition to community, the keywords were sustainability and accessibility. How about taking a stroll across Trafalgar Square or Unter den Linden, without having to watch out for traffic? Instead, today’s inner cities are cluttered with parked cars, forcing customers and delivery drivers alike to fight their way through the “last mile” in Berlin at an average speed of 17 kilometers per hour. Fewer cars, he argues, would translate into a higher-quality stay in the city, and most likely, to more turnover. In addition, city centers that can be reached on foot should be seen as an economic infrastructure that creates jobs, and which should be invested in. In addition, Uerz shared insights into the concept of the “Circular City,” in which regenerative energies and closed material cycles, employed in three core phases – production, use and recycling – represent important building blocks for the networked smart cities of tomorrow.

The conference was organized within the framework of the SURTRADE (Smart Urban Retail Services) research project, funded by the Federal Ministry of Education and Research. Project partners include the University of Leipzig, HHL Leipzig Graduate School of Management, Tchibo, SALT Solutions and Checkmobile.

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