Return of the retail space – based on modular designMODULAR RETAIL

WHAT IF IN FUTURE...

… the flagship store is replaced by a well connected “fleet” of different service hubs?
… producers only sell their products directly from connected stores or via modular concepts?
… this “fleet” is organised decentrally but, as part of a customer request, can pool the required resources and stocks ad hoc in order to satisfy customer needs efficiently, such as with a same-day delivery?

The benefits of offline retail – the immediate availability and direct interaction with products – are obvious. Besides a prestigious flagship store in the city’s best known shopping street, more and more brands are now looking for other ways to present and sell their products. Modular retail means creative and flexible concepts in the right setting and short-term yet intense brand experiences besides the long-termism of flagship stores. Particularly brand names that mainly operate with online shops and smaller brands are experimenting with pop-up and shop-in-shop concepts or with showrooms that allow customers to experience the digital range of goods live. As inner-city logistics hubs, they also form the basis for Click & Collect and rental concepts. This trend combines a wide range of formats, such as showcasing individual products and developing a connected retail network based on modular design. It includes regular stores, pop-up concepts and autonomous self-service kiosks. For the year 2018, we expect creative concepts that will fuel this issue even further and give companies the chance to develop a combined, experience-oriented product and service presentation.


BEST PRACTICE INNOVATIONS:

Fashion boutique with no clothes

Zalando integrates local stores

Renting store space on monthly basis

Ordering an entire pop-up shop


INDUSTRY IMPLICATIONS:

RETAIL

  • Endless Aisle: Retailers have to develop their stores into showrooms that combine online and offline offers. The extended shelf allows an unproblematic offline access to the entire online range.
  • Connected Service Hubs: Stores will become inter-connected service hubs that meet the experience-oriented demands of modern customers and enable cross-channel services like data-based, individualised advice and Click & Collect.
  • Visibility & Testing: The store will become a platform. It can be used by online-only retailers to physically present and test products with the help of pop-up, kiosk or shop-in-shop systems.
  • Mono-Brands: The concept of modular retail no longer only refers to the full presentation of entire product ranges, but is broken down to the level of a single product by digital native vertical brands (DNVB).

IT & TELECOMMUNICATION

  • Smart IT: Modular retail concepts require an agile IT infrastructure that can harmonise cross-store back-end processes (Store2Store) and represent all the touchpoints to the customer (B2C).
  • Always On: Providing free and powerful Wi-Fi is essential in the modern customer journey. This forms the basis for related services like in-store navigation (customer) and in-store analytics (retailer). A local internet connection also increases customers’ motivation to communicate about products spontaneously and actively within their own social environment.
  • Phygital Products: For a multimedia product presentation, the products have to be fitted with Internet-of-Things technologies (e.g. NFC/RFID) to enable a direct interaction at the product level too.


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