Col-LAB-oration Retail Meets Research in Laboratory Conditions to Create LP Solutions
By John Wilson, Executive Editor
Great retail ideas are seldom created in a vacuum, especially in the country that introduced the flat-pack furniture revolution to the rest of Europe. Sweden, the home of IKEA, the world's largest self-assembly furniture store since 2008, and fast-fashion and value clothing multinational H&M (Hennes & Mauritz) has been at the vanguard of the quiet evolution in ergonomic design's so-called "Scandi-chic" based around stark and stripped-back minimalism's for many years.
All Things in Moderation
Such understated designs for life are part of the national psyche. The Volvo car is probably Sweden's greatest export. Now quietly stylish with oodles of modern gadgetry, the Volvo with its giant bumpers was historically marketed as the safe rather than the most exciting choice, and the brand proudly made this USP into a national virtue. The Swedish word lagom means "in moderation" and describes a cautious and scientific approach to bringing great ideas to the fore and the celebration of the ordinary and everyday. The concepts may begin small, but for these twenty-first century Vikings, their global impact continues to be as keenly felt as it was for the invading Norsemen 1,000 years ago.
There is a universal saying that you cannot judge a book by its cover, but the Swedes go one stage further with an ancient Norse poem dating back 1,000 years that states, "Praise not day until evening, no wife until buried, no sword until tested, no maid until bedded, no ice until crossed, no ale until drunk." Modern-day Swedes live in the moment and in the eye of the building storm in that they require, above all else, proof of concept. It is a more scientific approach to posit the hypothesis and test it under the most exacting of standards before allowing it to become part of the Swedish way of doing things. Indeed, most of Sweden's greatest exports have been grown in a creative petri dish before they percolate into the rest of Europe or, like their ancestors, storm across the North Sea.
Being cautious is a national trait explored on the first page of Modern-Day Vikings (2001). Labelled as "a practical guide to interacting with the Swedes," the words chime with the ordinariness of the everyday and advice for living and survival. "Historically, being cautious has worked," said author Lisa Werner Carr. "Swedes don't have a very compulsive culture; you see that in everyday life today's just think about the way meetings are run."
She continued, "Meetings are expected to commence at the agreed time, and will normally start and end with a handshake. Being on time is important not only in business life but socially as well. Punctuality symbolises respect and efficiency in Sweden. Swedes are keen to make plans and schedules, so it is not surprising to see deadlines set during meetings."
Sweden is also recognised as one of Europe's most liberal nations and one at the vanguard of taking in thousands of migrants from the Middle East and North Africa, which has triggered its own social issues and concerns about criminality and catapulting the cause of strong, far-right and anti-immigrant sentiment.
It is also no coincidence that over the last decade, Scandinavian crime fiction has dominated global bestseller lists. Renowned for its simple prose, dramatic plots, and social criticism, "Nordic noir" has developed into a multi-million-kronor industry. From The Girl with the Dragon Tattoo trilogy to The Bridge, authors like Stieg Larrson and Jo Nesbo trawl the darker recesses of the Swedish cultural identity in a forensic portrayal of sex and brutality, which is given a colder edge when set against the monochrome Scandinavian landscape.
In short, Swedes take comfort in exploring the black, white, and grey areas of life in the Baltic regions. Crime is given the same scientific airtime as business operations. So it is little wonder that retail academics at some of Sweden's most prestigious educational institutions are taking a deep interest in studying the motivations of both legitimate customers and those non-paying store visitors.
In general, it is part of a movement that is taking a more empirical approach to business solutions by recreating customer behaviours in lab conditions in order to understand their motivations to not only buy but also steal.
The Swedish Institute for Innovative Retailing (SIIR) at the University of Boras provides important resources and a unique research environment in the form of a retail lab to assist companies and the broader community to contribute to innovative and sustainable commerce.
SIIR involves researchers and research teams from a number of research areas at the University of Boras, such as data science, marketing, textile management, IT, and service management. The common denominator for the researchers is interest in the retail field. Retail research helps to foster creative meetings at the crossroads of research, industry, and society and develops new knowledge and approaches. Researchers use proven research methods and contribute to industry development. The centre's activities are mainly focused on research and contract research but also on the dissemination of knowledge in different forms.
SIIR is one of the university's research efforts in the form of a centre and it works closely with the business community. Its latest project is targeted research looking at eye-level tracking for both those who shop and those who prefer to shoplift. They can follow the shopper around the store, study what they are studying, and interrogate the findings afterwards.
In essence the user wears eye-tracking glasses when they enter a store. As part of the controlled experiment, the glasses or headsets show exactly what the wearer is seeing and, more specifically, what they are looking at as they make their way around the aisles. What they dwell on from a merchandising and design perspective provides the big data the bricks-and-mortar retailers require to enhance the shopping experience in a world that appears more and more to move towards online and omni-channel.
Engagement is king at a time when the self-alienation of the shopper has been driven by tablet or smart-phone choices. The answer therefore lies in researchers being able to reconcile the two worlds and prove that they are not mutually exclusive.
UK and European countries currently have click and collect, but will the evolution involve drive-through pick-up locations as some shoppers will move away from large stock-up shopping trips to more targeted, time-efficient, needs-based trips? Will businesses be offering showrooms that enable the customer to interact with or try out products, as well as engage with sales associates and other customers (both physically and remotely)?
Research in the US and Europe is already focusing upon more immersive experiential centres as technology continues to enable shoppers to control their shopping experience. These stores will be venues for collaboration and experiences that cannot be provided online.
We could also be at threshold of the birth of brand stores that focus more on promoting the values associated with their marque rather than on selling merchandise. This is taking the brand outside of the high street or shopping centres and into our homes and communities as the next generation of engagement in an almost subliminal way.
Another example of this will be found in the growth of community stores. Retailers will provide services that local communities can no longer afford to offer and will locate stores within or near community facilities such as libraries or recreation centres and as has already been trialled in the UK through brands such as the Co-op even police stations in stores. Such community involvement will not only help promote sales, but also generate an aura of safety and security and encourage greater, community-wide engagement.
In the world of retail operations, such developments are near-future concepts. But what here-and-now research all but climbs into the skin of today's shopper?
Research for the Here and Now
Back in Sweden, the research being carried out by the University of Boras would prove invaluable for providing data on dwell time and the psychology of shopping so as to determine what shelf-edge and merchandising needs to look like in order to successfully convert sales. Subverting that image, the eye-tracking 3D glasses take a look through the eyes of the shoplifter or prolific store thief's. Reformed retail criminals were used as part of the controlled experiments around the store. The researchers saw exactly what the sample participants saw in real time as they looked through the eyes of both the shopper and the shop thief.
"We wanted to see what both consumers and store thieves think and what they look at as we follow them around the store," said Anita Radon, PhD, academic director at the University of Boras. "We began with a small sample just looking at a catalogue to see what they looked at to understand why before we developed the research and said to the participants," Right, just go and steal something."
The approach will resonate with many evolving retail trends including Amazon Go, the experimental convenience shopping method for grocery where existing Amazon customers in the US can literally enter the store, select the food they want, and leave the transaction being completed seamlessly through a downloadable Amazon app.
Advocates of the app say it is "no fuss, no queues, no seriously," but the security community, already struggling to reconcile losses at existing self-scan tills created to help reduce the costs of ever-expensive store staff, believe the experiment is a loss prevention nightmare rather than a convenience dream. They argue that until technology can address these and other challenges created by a "grab and go" shopping experience, customers are unlikely to see the end of the supermarket checkouts anytime soon.
"Amazon Go is a really interesting and disruptive element, and I think it's going to be important, but I don't think you're going to see it transforming everything that's happening in grocery," said Randy Burt, a partner in the retail practice of global strategy and management consulting firm A.T.Kearney.
But Amazon sees an opportunity to exploit what it has built online to disrupt traditional brick-and-mortar retails and no other corporation seems even close to being able to follow its lead.
Back to the Future
The Metro Group Future Store in Dusseldorf was the nearest European example of a retail nirvana. The initiative set new technological standards for the consumer goods industry and, during the 1990s and early noughties, was heralded as the key driving force for the modernisation process in retailing.
Under the guidance of Metro Group, more than seventy-five partners developed and tested new concepts and technologies in a real working store of the future, with a view to providing customers with a more convenient, exciting, and informative shopping experience. Before its demise in 2003, each participating company brought something different to the project, depending on its sector and area of expertise. Some made innovative shelf-edge technology while others tested the technology in practice. On top of that, all partners worked in collaboration to offer their expertise on managing processes more efficiently and improving services in the retailing sector.
Back in Sweden, the work begun by Metro Group is once again seeing the light of day through the team built at the University of Boras.
"We have researchers working in business administration, IT, psychology, and textiles, and we work with the retail companies who want us to test how innovative their products are or want to know what consumers really think," said SIIR Director Pia Johansson. "Using small groups, we then wanted to understand how they went around the store. Legitimate customers see things very differently to a shoplifter, particularly in crowded stores. Whereas an operations team would want to understand the interaction with the merchandise and other customers, store thieves are more interested in not standing out and avoiding crowds and confrontation."
"With ordinary customers we are studying what they are looking at in terms of merchandise, where their eyes travel to which will be interesting for the retailer. However, for the shoplifter they are looking at opportunities to steal, studying the guards, the CCTV, and the changing room."
"We will hopefully in the future be working with reformed criminals who served jail time for store theft to see how they behave compared to ordinary customers. This forms the next part of the study as does putting guards outside the door wearing the technology to see what they see when they look at customers and how they make risk assessments based upon those impressions - are they wearing suspicious long coats or carrying foil-lined bags, for example."
The importance of the tests is that the researchers are looking at the key focus of the sample rather than their peripheral vision. "We have to keep an open mind at all times. We try not to make assumptions, so there may be some surprise findings, although any pre-assumptions could easily be disproved." One of the other tests the glasses are being used for is counterfeit detection or rather, more specifically, understanding the psychology behind the wearer's analysis of fake or suspicious products. "If there were any pre-assumptions about counterfeit, it would be that they would look more favourably upon the luxury brand and scrutinise the counterfeit in more detail," said Dr. Radon, who presented some of the findings of the research at the ORIS Forums annual Risk Summit held at Chessington World of Adventures in the UK in May.
This could be more to do with the paradoxical need to want to see almost greater authenticity in the counterfeit items so that purchasers, who may have suspected it to be fake all along, do not feel cheated or lose face when it is proved not to be bona fide.
The appetite for avatar learning is therefore compelling. The technology and small sample analysis makes it cheaper to run qualitative research to arrive at compelling evidence, which could help change the way retailers display merchandise or deploy staff around the store, both to deter criminals and encourage customer engagement. If the appliance of science cannot prove the hypothesis, it has not squandered thousands of krona or euros to learn basic and potentially painful lessons on store layout, security, and staff deployment. If, however, it can draw meaningful data to support the store, the participating retailer has given itself a very cost-effective competitive advantage.
Modest and unassuming, this Swedish experiment could be on the threshold of the next Viking invasion and one that extols the virtues of lagom, with just the right amount of fanfare and flat-packed aspiration.