PORT OF THOUGHTS 2018 – REVIEW
BACK TO THE ROOTS & BACK TO THE ROOF
Digital tuning of traditional sales channels
Hamburg, 19.04.2018 – At the fifth Retail Summit – Port of Thoughts, 300 representatives of the retail sector discussed the renaissance of traditional channels and how digitalisation can make them smarter
‘Back to the roots’ was the theme of the fifth Retail Summit – Port of Thoughts held at the Empire Riverside Hotel in Hamburg on 19 April. More than 300 guests accepted the invitation to the event, which was organised by the Eversfrank Group, Comosoft, Ebner Stolz and – for the first time – ISA, Architects of Internet. As the title reveals, the focus this year was on traditional channels – the roots of retail. After years of concentrating almost exclusively on digital drivers of growth, the retail sector is now seeing a turnaround. Traditional retail channels like brick-and-mortar stores, leaflets and printed catalogues are enjoying a revival. And rightly so. “After all, a healthy tree needs two things: branches that reach up to the sun and grow higher, and roots that provide stability,” said Dr Jens Silligmüller, head of corporate development at the Eversfrank Group, in his descriptive welcoming speech.
Meanwhile, it has become clear that it is not a question of either/or, online or offline. “What is important is the variety and interplay of the different channels. Harmonious integration is the key to success,” said Kay Julius Evers, managing director of the Eversfrank Group. There are good reasons why e-commerce players like Amazon or MyMüsli are opening retail stores and advertising in print. Drinks manufacturer fritz-kulturgüter also appreciates the advantages offered by brick-and-mortar retail outlets. fritz founder Mirco Wolf Wiegert and managing director Winfried Rübesam explained that the company employs ‘crate artists’ who creatively present the bottle crates in the shops – perhaps stacked in the shape of a house, for example, or with the different coloured drinks bottles arranged in a rainbow. Photos of these are posted on social media, in line with Mirco Wolf Wiegert’s aspiration of turning consumers into fans.
Tuning the roots: online and offline integration
Retail giant Real is going even further back to the roots of the industry. Managing director Patrick Müller-Sarmiento reported that the company had sent entire teams out to different weekly markets in order to find inspiration. Real has since redesigned some of its branches based on these real-world examples and has brought the market atmosphere into its stores. At the same time, Real is also using digital solutions to make its branches smarter. The company is experimenting with a one-scan checkout, where all customers need to do is scan their items with their smartphones. With just this one procedure, they can pay digitally, receive an electronic receipt and collect Payback points, coupons and digital loyalty points. Waiting in queues is a thing of the past, as is juggling loyalty cards, coupons, bank cards and cash.
This example illustrated very clearly the point also highlighted by speakers Dr Philipp Andrée of Tchibo and Prof Klemens Skibicki of the Cologne Business School: digitalisation helps customers to be served better, enabling their requirements to be recognised and fulfilled more effectively. Digitalisation is not an end in itself and has no intrinsic value – it is only useful if it is combined with the right strategies and decisions. As such, it is also wrong to talk about a ‘digitalisation strategy’, i.e. treating digital channels as separate from analogue channels, said Klemens Skibicki. Rather, the aim should be to connect and merge the different options, he said.
This also includes using social media in a meaningful way. However, opinions differ as to how much Facebook, Instagram and other social media sites actually contribute towards the commercial success of a company. Dr Andrée and Prof Skibicki debated this topic in a fascinating panel discussion. While Dr Andrée thought that social media certainly played an important role in building brands, he doubted whether it was possible to actually generate long-term profits in this way. By contrast, Skibicki said he believed that social media helps companies find the right customers. If retailers turn their back on social networks, they will lose the next generation. Both speakers agreed that social media content needed to be defined to ensure it succeeded on the different social networking sites.
Greater relevance thanks to personalisation
For Philipp Andrée, one thing was absolutely clear: multichannel retailers are in a favourable position, providing that they manage to skilfully combine the best of all these worlds and thus optimise every sales channel. In particular, optimisation means personalisation – in other words, responding to what individual customers are really interested in. Increased advertising pressure meant that advertisements needed to be even more relevant if they wanted to have any chance of success, said Dr Andrée. That is why Tchibo carefully tailors its email newsletter to almost every one of its seven million recipients.
But what is possible online also works in print; this point was demonstrated by Susan Fulczynski, digital printing specialist at fashion company bonprix. In her presentation, she showed the audience a selection of personalised printed materials that her company produces in order to make it stand out in the flood of advertising. For example, the cover of the catalogue features personalised purchase recommendations, which are derived from customers’ online shopping behaviour using algorithms. Written copy is tailored to customers’ personal interests. Increased demand has shown that the effort is well worth it, said Susan Fulczynski. Thanks to improvements in printing technology and data processing software, the time-to-market is now much shorter and the effort involved has become manageable, explained Tino Wägelein from technology firm Canon and Uwe Bünning from software manufacturer Quadient.
Protecting data while also using it profitably
The use of big data – or, more accurately, smart data, as Klemens Skibicki referred to it – also has a downside, however. “The more data that is collected and stored centrally, the greater the loss if there is a data breach, such as an attack by cyber criminals,” said Holger Klindtworth from consulting firm Ebner Stolz. Data scandals in the past have already demonstrated this. That is also the reason why lawmakers are responding and tightening regulations relating to the use of personal data. The EU’s General Data Protection Regulation will come into force on 25 May 2018. What needs to be considered here? How should companies prepare for it? What are the main areas of risk? Holger Klindtworth and Dr Björn Alex, also from Ebner Stolz, spoke about these topics. They saw the priority as raising awareness of the relevance of this issue. Their message: “Data protection is a CEO matter,” said Dr Björn Alex. Anyone breaching the regulation risks a penalty of up to four percent of their global turnover, not to mention the reputational damages to their image.
All of the presentations provided plenty of material for discussion during the breaks, which the participants used for networking. The day came to an end in the Penthouse Elb-Panorama with breath-taking views of Hamburg at sunset – also an experience that is much more enjoyable in the real world than digitally.