Deborah Weinswig's presentation for Entertainment Experience Evolution Conference on Feb. 25, 2016

1. 1
Deborah
Weinswig
Execu4ve
Director,
Fung
Global
Retail
&
Technology
deborahweinswig@fung1937.com
US:
917.655.6790
HK:
852.6119.1779
CN:
86.186.1420.3016
@debweinswig
Retailtainment
Driven
Trends

2. 2
Agenda
• About
Fung
Business
Intelligent
Centre
(FBIC)
• Top
16
Global
RETAIL
Trends
for
2016
• Stores
are
the
New
Engagement/Retailtain-­‐me!

3. 3
Fung
Business
Intelligence
Centre
(FBIC)
• Established
in
2000
and
headquartered
in
Hong
Kong
• FBIC
serves
as
the
knowledge
bank
and
think
tank
for
the
Fung
Group
– Collects
and
analyzes
market
data
on
sourcing,
supply
chains,
distribu4on
and
retail
– Provides
thought
leadership
on
technology
and
other
key
issues
• New
York–based
Global
Retail
&
Technology
team
– Follows
broader
retail
and
technology
trends
– Provides
advice
and
consultancy
services
to
colleagues
and
business
partners
of
the
Fung
Group
– Builds
collabora4ve
knowledge
communi4es

4. 4
Futureproofing
• An4cipa4ng
future
trends
and
developments
• Plan
for
future
value
and
avoid
obsolescence
– What
problem
are
you
trying
to
solve?
– How
will
it
be
used?
– How
robust
does
it
need
to
be?
• Ensure
flexibility
to
manage
changing
formats
and
deployment
pagerns

5. 5
Our
Partnership
With
Accelerators
Alchemist Accelerator is an accelerator exclusively for startups whose revenue comes from
enterprises, not consumers.
CoCoon is a coworking space where entrepreneurs, creative talent, successful leaders and
investors meet, collaborate and deliver results together. Member companies get access to
networking opportunities, work space, a photography studio and mentors.
Entrepreneurs Roundtable Accelerator (ERA) provides participant companies with an
intensive four-month program, with the goal of helping early-stage companies progress
rapidly into exciting, viable businesses.
New York Fashion Tech Lab is an accelerator that is a result of a collaboration between the
Partnership Fund for New York City, Springboard Enterprises and major fashion retailers. It
focuses on early- and growth-stage companies.
Plug and Play is a global innovation platform. It connects startups to corporations, and
invests in over 100 companies every year. Its 360° ecosystem allows for remarkable innovation
to take shape on an international scale.

6. 6
Fung
Capital/FBIC
Commerce
Technology
Landscape

7. 7
1. Smart
Malls
2. Silver
Economy
3. Luxury
Retail
Landscape
in
Asia
4. Online
Fashion
Resale
5. Sharing
Economy
6. One-­‐Child
Policy
in
China
7. Social
Media
Sways
Shopper
8. Home
Improvement
Market
9. Growth
of
E-­‐Commerce
10. The
Store
Gets
a
Makeover
11. Athleisure
12. Where
to
Find
Growth:
Off-­‐Pricers
13. Caring
Economy
14. Customer
Loyalty
15. Amazon
Becomes
a
Force
in
Omni-­‐Channel
16. Experience
Economy
RETAIL
TRENDS
FOR
2016

8. 8
1. Smart
Malls
2. Silver
Economy
3. Luxury
Retail
Landscape
in
Asia
4. Online
Fashion
Resale
5. Sharing
Economy
6. One-­‐Child
Policy
in
China
7. Social
Media
Sways
Shopper
8. Home
Improvement
Market
9. Growth
of
E-­‐Commerce
10. The
Store
Gets
a
Makeover
11. Athleisure
12. Where
to
Find
Growth:
Off-­‐Pricers
13. Caring
Economy
14. Customer
Loyalty
15. Amazon
Becomes
a
Force
in
Omni-­‐Channel
16. Experience
Economy
RETAILTAINMENT
DRIVEN
TRENDS

9. 9
1.
Shopping
Malls
Gejng
“Smarter”
• In
2014,
44%
of
all
the
new
shopping
malls
opened
globally
were
in
China,
satura4ng
the
market
• Social
media
-­‐
Shanghai’s
Cloud
Nine
and
Shenzhen’s
SEG
Plaza
are
using
WeChat
to
reach
shoppers
directly
with
news
and
loyalty
programs
• Mobile
apps
-­‐
Wanda
has
partnered
with
Baidu
to
create
the
one-­‐stop-­‐shop
app
“Feifan”
for
in-­‐mall
use
• Holis[c
Data
Analy[cs
-­‐
Senzhen
Rainbow,
Xientendi
use
retail,
shopping
mall
(beacon),
and
search
engine
data
to
analyze
shopping
behavior
and
deliver
personalized
promo4ons
Source:
FBIC
Pressure
from
e-­‐commerce
and
oversupply
in
some
markets
will
make
malls
“smarter”
Selected
features
of
the
“Feifan”
App

10. 10
1.
Shopping
Malls
Gejng
“Smarter”
• Wespield
operates
Wes^ield
Labs
–
a
Silicon
Valley-­‐based
unit
which
designs
and
experiments
with
retail
innova4ons
– Malls
include:
touchscreen
displays,
electronic
parking
assistance,
free
Wi-­‐FI
• HGTV
partnered
with
Macerich
shopping
malls
to
launch
virtual
and
hand-­‐on
technology-­‐based
experiences
– Traffic
at
those
[10]
malls
was
up
45%
• RetailNext
formed
strategic
alliance
with
StepsAway,
an
in-­‐mall
mobile
retail
solu4on
provider
offering
shoppers
smartphone
access
to
hyperlocal
in-­‐store
deals
– Timely,
relevant
promo4ons
that
measure
the
redemp4on
and
conversion
rate
– If
data
shows
that
shoppers
frequent
healthy
food
op4ons,
it
can
drive
the
opening
of
health-­‐food
restaurants
in
mall’s
food
court
Pressure
from
e-­‐commerce
and
oversupply
in
some
markets
will
make
malls
“smarter”

11. 11
7.
Social
Media
Sways
Shoppers
• In
2015
Pinterest
introduced
“Buy
it”
bugon,
and
Instagram
expanded
its
ad
program
• Twiger,
Facebook
and
Youtube
also
becoming
more
commerce-­‐friendly
and
are
experiment
with
buy
bugons
• Fashion
bloggers
are
becoming
more
influen4al
than
celebri4es
when
it
comes
to
influencing
buying
decisions
in
the
US
• In
China,
“verified”
Key
Opinion
Leader
with
over
one
million
fans
on
the
microblogging
plaporm,
Weibo,
are
used
by
brands
such
as
Burberry,
Tommy
Hilfiger,
Gucci,
and
Diane
von
Furstenberg
with
great
effec4veness
Social
media
will
become
more
commerce-­‐driven
and
the
impact
of
influencers
will
increase
Source:
Pinterest
Peter
Xu
Weibo
Profile:
Gucci
Pinterest:
Buyable
Pins
Source:
SocialBrnadWatch

12. 12
7.
Social
Media
Sways
Shoppers
• WeChat
leads
the
way
in
social
selling
-­‐
“B2C2C”
model
(recommended
purchase
by
friends)
is
the
most
advanced
form
of
social
commerce
• WeChat
allows
content
distribu4on,
targeted
campaigns,
in-­‐
app
payment,
friend/influencer
recommenda4ons
• Before
Singles’
Day
in
China,
brands
and
retailers
engaged
shoppers
ac4vely
on
WeChat
via:
– Reward
vouchers
for
fans
who
post
a
branded
message
or
share
it
directly
to
with
their
friends
– Sharable
WeChat
s4ckers
:
The
Cambridge
Satchel
Company
partnered
with
Chinese
KOL
and
ar4st,
Zang
Xiaobai
to
launch
themed
Singles’
Day
illustra4ons
“Social
selling”
will
reach
a
new
level
of
importance
Coach
Handbags:
Marke[ng
and
Selling
on
WeChat
Red
Envelope:
Viral
Sharing
Lifestyle
Content:
57,161
view
Source:
WeChat

13. 13
9.
Growth
of
E-­‐Commerce
• We
expect
US
retailers
to
increase
spending
on
technology
to
expand
e-­‐commerce
and
omni-­‐channel
capabili4es
• Walmart
improved
app
and
their
website’s
checkout
process,
cujng
checkout
load
4me
from
7.2
to
2.9
seconds,
increasing
conversions
by
2%
• Home
Depot
is
comple4ng
an
Ohio
fulfillment
center,
allowing
them
to
ship
to
90%
of
US
customers
within
two
days
• Amazon
added
Prime
Now
to
eight
metro
areas
in
3Q
2015,
allowing
for
free
2
hour
delivery
and
paid
1
hour
delivery
in
17
loca4ons
worldwide
Strong
Growth
in
E-­‐Commerce
Channels
Propels
More
Retail
Tech
Spending
Source:
Company
Reports
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
CVS
Home
Depot
JCPenney
Kohl's
Macy's
Nordstrom
Sears
Target
TJX
Companies
Walmart
Capex/Sales
USD
Bil.
2014
Tech
Capex
2015
Tech
Capex
2014
Capex/Sales
(Right
Scale)
Total
CAPEX
for
Major
Retailers

14. 14
9.
Growth
of
E-­‐Commerce
• Millennials
prefer
mono-­‐brand
brick-­‐and-­‐mortar
stores,
and
they
shi{
between
online
and
offline
along
the
shopping
journey
• Warby
Parker:
Targe4ng
millennials
– Started
exploring
offline
with
pop-­‐ups
and
a
showroom
in
its
NYC
office;
now
expanding
to
over
20
ci4es
in
the
US
– Warby
Parker’s
stores
make
more
than
$3,000
per
sq.
{.,
pujng
the
retailer
in
an
elite
category
with
companies
such
as
Tiffany
and
Apple
– Offline
feeding
ecommerce
:
more
than
85%
of
store
shoppers
will
later
visit
the
website,
increasing
the
chances
for
further
orders
E-­‐Commerce
players
go
offline
Retailer # of Stores
1
1
20
26
Source:
Company
Websites

15. 15
10.
The
Store
Gets
a
Makeover
• “Retailtainment”
is
being
added
to
stores
by
incorpora4ng
interac4ve
components
in
the
customer
experience
• Urban
Oupigers,
Club
Monaco
and
Kohl’s
are
part
of
a
trend
of
retailers
that
are
opening
coffee
shops
and
restaurants
in
their
stores.
– In
2015,
Urban
Oupigers
acquired
Vetri
Family
group
of
restaurants
• Rebecca
Minkoff
and
Tommy
Hilfiger
have
provided
shoppers
with
VR
headsets
to
re-­‐experience
runway
shows
• Prolifera4on
of
mobile
apps
to
improve
in-­‐store
experience:
– customizable
shopping
list,
loca4on-­‐relevant
promo4ons,
and
product
and
inventory
informa4on
Stores
will
make
the
shopping
experience
more
fun
and
entertaining
to
drive
traffic
Tommy
Hilfiger
VR
experience,
Source:
New
York
Times
Urban
OuIiJers
Coffee
Shop,
Source:
parhamsantana.com

16. 16
12.
Where
to
Find
Growth:
Off-­‐Pricers
• Off-­‐price
chains
sell
high-­‐profile
brands
and
designer
goods
for
20-­‐60%
less
than
department
and
specialty
stores
– T.J.Maxx
and
Marshalls
pump
out
roughly
$304
in
sales
per
square
foot,
on
average,
and
Ross
generates
about
$288
in
sales
per
square
foot
versus
JCPenney,
$101
sales
per
square
foot,
and
Macy’s
about
$158
(eMarketer)
• Sales
will
increase
by
6%
to
8%
over
the
next
five
years
in
the
US,
outpacing
the
apparel
sector
by
4%
(Moody’s)
Off-­‐price
will
con4nue
to
be
a
big
source
of
sales
growth
1950
1972
1976
2015
2010
Nov
2015
1973
1995
1956

17. 17
• Ross
Stores
plans
to
double
its
store
count
from
the
1,210
Ross
Dress
for
Less
stores
it
currently
operates
• Nordstrom
Rack
opened
27
new
stores
in
2015,
and
plans
to
exceed
300
stores
by
2020
• Macy’s
launched
Backstage
concept-­‐plans
for
50
stores;
Kohl’s
unveiled
Off-­‐Aisle
concept
• Primark
launched
in
the
US
in
September
2015
and
will
be
a
driving
force
in
the
market
12.
Where
to
Find
Growth:
Off-­‐Pricers
Off-­‐price
will
con4nue
to
be
a
big
source
of
sales
growth
Nordstrom
and
Nordstrom
Rack
Store
Count
2010–2015
Source:
Company
Reports
117
117
117
116
119
108
120
143
176
194
50
80
110
140
170
200
2011
2012
2013
2014
2015
Full-­‐line
Stores
Nordstrom
Rack

18. 18
14.
Customer
Loyalty
• Customer
loyalty
has
become
increasingly
difficult
to
generate
and
maintain
in
the
omni-­‐channel
world
• Walmart
launched
Savings
Catcher
in
2014
to
give
customers
the
difference
in
price
if
a
product
is
cheaper
elsewhere
• American
Express
launched
Plen[,
allowing
customers
to
earn
rewards
points
from
AT&T,
ExxonMobil,
Hulu,
Macy’s,
among
others
• Smartphone
apps
are
becoming
more
prominent
in
loyalty
programs,
likely
to
replace
plas4c
cards
more
in
the
years
ahead
More
retailers
will
facilitate
personalized
experiences
for
customers
via
loyalty
programs

19. 19
16.
Experience
Economy
• According
to
a
Harris
Poll
survey
in
2014:
– 78%
of
millennials
prefer
to
spend
money
on
an
experience
than
goods
– 69%
of
respondents
said
they
believe
agending
live
experiences
helps
them
connect
beger
with
friends,
community
and
people
around
the
world
• Mintel
expects
vaca4ons
and
tourism
to
beat
out
all
other
categories
between
2014
and
2019,
at
27%
• Startups
have
entered
the
scene
to
capitalize
on
the
experience
economy:
IfOnly,
Zaptravel,
Gigzolo
We
expect
the
experience
economy
to
grow
significantly
during
2016
Source:
Company
Websites

20. 20
STORES
ARE
THE
NEW
ENGAGEMENT
Retailtain-­‐me!

21. 21
Shopper
Engagement
Is
Key
For
Brick
&
Mortars
Retailers
must
engage
shoppers
in
a
new
and
personal
way
• Use
social
media
and
digital
experience
to
build
big
data
to
personalize
consumer
journey
and
promo4on
– iBeacons
to
launch
personal
deals
– Full
roll
out
of
CRM
– Apps
• Retailtainment
– Ar4ficial
Intelligence
– Robo4cs
– Augmented
/
Virtual
Reality

22. 22
Retailtainment
• Disney
stores
transport
consumers
to
a
magical
wonderland
• 45%
of
Cabela
store
space
is
devoted
to
entertainment
features
and
displays
• Loblaw
has
cooking
classes;
Lululemon
offers
yoga
classes
• Burberry
creates
a
seamless
experience
integra4ng
mul4media
technologies
– Full
length
interac4ve
screens
&
magic
mirrors
– Live
streaming
hubs
– RFID
tags
– Customiza4on
Room

23. 23
Augmented
/
Virtual
Reality
• 360
degree
video
technology
allows
consumers
to
learn
more
about
products
before
going
to
the
store
• The
Line,
a
luxury
bou4que,
has
experiments
with
this
using
the
Samsung
Gear
VR
headset
– Allows
customers
to
explore
the
store
– Clear
descrip4on
(and
price
tag)
appear
when
an
object
catches
customer’s
agen4on
• The
Samsung
Gear
VR
headsets
hit
stores
next
year
• Widespread
adop4on
of
VR
in
the
retail
space
is
expected
in
as
ligle
as
three
years
• Industry
even
has
a
new
term
for
selling
through
VR:
V-­‐Commerce

24. 24

25. 25

26. 26
Augmented
/
Virtual
Reality
• Tommy
Hilfiger
first
major
retailer
to
adopt
VR
– Using
Samsung
Gear
VR
Headset,
offers
shoppers
a
virtual
trip
to
their
fall
show
in
New
York
“These
days,
you
can’t
just
wait
for
people
to
come
into
the
store
and
try
on
your
jackets.
You
have
to
provide
entertainment.”
–Daniel
Grieder
ceo,
Tommy
Hilfiger
“Through
virtual
reality,
we’re
now
able
to
bring
our
one-­‐of-­‐
a-­‐kind
fashion
show
to
the
retail
seWng.”
–Tommy
Hilfiger

27. 27
Robo4cs
• Advances
in
technology
are
improving
capabili4es,
decreasing
cost,
and
making
robots
easier
use
• Lowe’s
piloted
the
OSHbot
in
2014
in
San
Francisco
• Alibaba
and
Foxconn
invest
roughly
$118
million
in
So{Bank
Robo4cs
Holdings,
maker
of
Pepper
• AI-­‐powered
digital
assistants:
Messenger
M,
Cortana,
Siri,
IBM
Watson

28. 28

29. 29
Robo4cs
Increasing
Use
of
Robots
• Advances
in
technology
are
improving
capabili4es,
decreasing
cost,
and
making
robots
easier
to
install
and
use
• Robots
can
li{
payloads,
load
pallets
and
bring
goods
to
fulfilment
agents
• Amazon
spent
$775
million
to
acquire
robot
maker
Kiva
systems
for
an
expected
savings
of
$400–$900
million
per
year
• Venture
capital
investment
increased
24%
last
year
to
$239
million
(excluding
drones),
driving
future
innova4on

30. 30
Robo4cs
• Suitable
Technologies
opens
store
staffed
solely
with
robots
However,
in
Suitable
Technologies
showroom,
salespeople
appear
only
as
robots
• Target
teams
with
Techstars
to
improve
shopper
experience
and
will
test
robot
workers
at
its
upcoming
concept
store

31. 31
3D
Prin4ng
Inside
Retail
Stores
• UPS
launched
in-­‐store
3D
prin4ng
service
in
2013
• Macy’s
new
millennial
floor
at
its
NYC
flagship
store
has
a
3D
prin4ng
shop
• Staples
has
offered
3D
prin4ng
services
in
stores
since
2014

32. 32
Shopper
Engagement
Is
Key
For
Brick
&
Mortars
Example:
Starbucks
Mobile
Ordering
• Mobile
Order
&
Pay
allows
customers
to
locate
the
nearest
store,
select
and
customize
their
food
and
drink
items,
receive
an
es4mate
of
when
the
order
will
be
ready,
and
prepay
• Mobile
payments
now
account
for
20%
of
the
transac4ons
in
its
stores
(nearly
9
million
transac4ons
per
week
are
mobile)
• Loca4on
based
promo4on,
Star
Reward,
Skip
the
line

33. 33
The
Seamless
Shopping
Experience
Example
Digital
Integra4on
in
• At
London
flagship,
Burberry
has
successfully
integrated
mul4media
technologies
to
create
a
seamless
shopping
experience
– Full-­‐length
screens
with
audio-­‐visual
content
– Live
streaming
hubs
– Magic
mirrors
that
allow
customers
to
explore
products
they
see
models
wearing
– RFID
tags
on
apparel
and
beauty
products
– Portable
point-­‐of-­‐sale
systems
– Customiza4on
Room
where
shoppers
can
design
their
own
garment
and
share
it
social
media
• Burberry
Kisses
– With
Google
technology,
Burberry
Kisses
allows
users
to
capture
and
send
a
kiss
to
anyone
in
the
world

34. 34

35. 35
Target’s
Connected
Home
Store
• Target
gets
into
the
connected
home
with
a
new
retail
concept
and
an
experimental
store,
in
San
Francisco
• Experimental
store
to
figure
out
the
challenge
of
selling
the
smart
home
to
mainstream
consumers
• Demonstrates
how
customers
can
bring
together
their
new
devices
and
make
them
work
in
their
lives
• Highlight:
Interac4ve
Tables,
Devices
Usage
Monitoring

36. 36

37. 37
Home
Automa4on
and
Connected
Home
Store
• Big
box
retailers
such
as
Lowes’
and
Staples
have
launched
their
own
line
of
home
automa4on
and
connected
home
products
• Home
Depot
signed
a
partnership
with
Wink,
while
also
promo4ng
products
such
as
the
Nest
thermostat,
Rachio
sprinklers,
and
products
from
other
startups.
• Best
Buy
is
crea4ng
new
in-­‐store
Connected
Home
departments
to
help
customers
understand
and
compare
their
op4ons,
as
well
as
improve
home
security,
save
energy
costs
and
simplify
the
management
of
their
homes.

38. 38
The
Omnishopper
• She
is
your
new
best
shopper,
using
technology
everywhere
to
discover,
compare
and
learn.
Hungry
for
informa4on.
Diversity
of
opinions
and
sources
of
info
drive
an
‘in-­‐charge’
feeling
of
confidence
• The
store
is
the
center
of
gravity.
The
omnishopper
goes
to
stores
for
entertainment
value,
superior
inventory
and
social
interac4on
• The
omnishopper
is
comfortable
with
stores
she
knows
• Omnishoppers
visit
fewer
stores
and
focus
research
on
extensive
product
knowledge
• Omnishoppers
are
not
a
path
to
the
bogom.
Their
path
to
purchase
discovers
real
value
in
deeper
product
knowledge,
the
more
informa4on,
the
more
comfortable
they
are
making
the
purchase
• Promo4ons
are
important
to
only
18%
of
Omnishoppers

39. 39
Deborah
Weinswig
Execu4ve
Director,
Fung
Global
Retail
&
Technology
deborahweinswig@fung1937.com
US:
917.655.6790
HK:
852.6119.1779
CN:
86.186.1420.3016
@debweinswig
THANK
YOU!