Philipp Hartmann is Marketing & Retail Leader at Microsoft for the DACH region. Before moving to the IT consumer environment in 2014, he drove the development of brands for more than 10 years, especially in the sports & fashion retail sector. With his versatile experience in the areas of brand, marketing, and distribution strategy as well as go-to-market & customer journey at well-known sports fashion brands like adidas, Puma & Odlo and the current tasks in the consumer electronics environment, he is optimistic and sees a lot of opportunities for the future.
“Omni-channel was already a topic when brands discovered eCommerce for themselves as a direct sales channel – it’s just that 15 years ago nobody knew how to go about it, but it made sense to mention it in their strategy plans,” he grins in retrospect. “It’s only in the last 5 years that there’s not only the technological maturity, but also the understanding at the decision-maker levels of what profound, strategic changes a frictionless shopping experience across channels means. Covid-19 figuratively now still stood in the room as Chief Innovation Officer for many retailers when making decisions. Nevertheless, the development of the last few months is only the testing phase in many retail areas – but it is a trend-setting accelerator for the future of retail.”
You have been in Channel Marketing for some time. And you have seen many trends come and go. From the beginning of your career to today: What has changed most positively in retail, what needs to happen in the next years for retail to be able to thrive?
It is difficult to look at this objectively, because there are of course so many perspectives to consider: those of retailers, those of partners and manufacturers, but above all those of consumers. From a growth and distribution perspective, the development of digital commerce has certainly had the greatest positive impact on the entire retail landscape and will continue to have a significant influence on it in the future. Personally, however, I see as a positive development above all that trade is no longer just the exchange of goods and money but seeking relationships and becoming more diverse again.
For the future, I see it as crucial that there must be more togetherness – more networking, in order to make courageous decisions together for innovations and creativity within a primarily digitally networked trade. Retail will always be successful, because people love to shop – the only question is: Where will retail take place in the future? And in an all-mobile & digital environment, it’s about drawing these consumers into the centers – so it’s no longer just about product or brand equity, but consumer equity.
But more flexibility and new impulses or even concepts for the retail infrastructure will certainly be needed. We have to ask ourselves whether our city centers, self-contained premium malls, and poor connectivity are still in keeping with the times.
Let’s talk about Brand Ambassadors: In the past, any Retail Salespeople were not the best experts, that is why many leading players were relying on Brand Ambassadors in the stores. Now, with Covid 19 and even after Covid 19, what is the future of Brand Ambassadors from your point of view?
My feeling is that people need people… No matter if expert or brand ambassador – they are usually the first and only personal touch point of a brand or a product in a buying process. The use of so-called brand ambassadors in retail often has the primary purpose of making brands or manufacturers feel more secure. More secure that potential customers are also advised; more secure that your product benefits or brand values are also transported. It gives security that the consumer gets knowledge of the brand and product.
In fact, however, the consumer may not make any reference to the brand at all since you are in an appropriate retail environment. Much more important seems to be the question of an individual experience within the purchase process and whether the ambassador listens, removes doubts, or even offers a corresponding service.
Covid-19 has influence only on the acceleration in the questioning of a purchase consultation at the physical store. If necessary, there remains a reluctance to make personal contact – but I am convinced that the search for honest, empathetic advice at the moment when the customer needs an opinion is valued and remains important. The question of what the future of brand ambassadors looks like depends above all on the agility and flexibility of their deployment: for example, if an ambassador was measured in the past by the number of sales, should he or she be measured in the future, if necessary, by how often the customer consults him or her? Is the ambassador only on the sales floor, or is he also an influencer who ensures that at least as many products are sold through his social media channels? Or maybe the brand ambassador becomes more of a community manager or your personal style or tech advisor. No journey is linear – so flexibility in the use of brand ambassadors is crucial.
Modern technology would allow to really have an omnichannel experience. For example, looking at products in AR at home, video calling a sales consultant, and to get the product delivered within a very short timeframe from a store next door. What are your thoughts on these options?
It definitely makes for more unrestricted and fresh thinking – because so many hurdles can be overcome these days to deliver convenience and experience to consumers. But technologies also need to be used in a purposeful way – anything that helps retailers learn more about consumers or build lifetime value is more important than ever.
Omni-channel means nothing more than a seamless shopping experience. That’s why I think work needs to be done on linking information and insights about buying behavior even better. This is where I see the biggest challenge, but also opportunity, for manufacturers and retailers to work together.
Will physical retail turn from best price into best experience? Will stores change to brand experience centers? And how would you foresee such a change / evolution of retail?
This should not be a question for the future – the change has already begun, or we are in the middle of it. I’m observing the facts and figures, and it’s safe to say that a corresponding user or consumer experience decides much more quickly whether I remain loyal to a brand or whether I want to shop there again than I did a few years ago. In many cases, price plays a not insignificant role in the decision-making phase. However, Covid also showed us even more clearly that availability, delivery speed, and security aspects (payment processing or other aspects) are more important decision-making factors than the best price.
But looking to the future, every D2C brand, wholesale brand or retailer needs to ask themselves “What do I stand for? What do I want to convey?” and then consider what information is needed to offer the best experience in that context for the consumer. Even the best price can then be an individual experience, if necessary, if one knows what the customer is willing to pay at a certain point in time. Physical retail may and will therefore have to do a lot of trial and error, iterate, and remain constantly flexible. In the pandemic, the relationship to retail and consumption has also changed significantly once again, and young Generation Z and Alpha in particular will be looking for retail partners or brands that stand up for values and missions and also take social challenges such as sustainability and fair working conditions into account.
I have three theses about the evolution of physical retail. First, the store space will sooner or later not become a space of unknown encounters. As in the eShop, it’s about knowing the shopper so well that fairly accurate predictions can be made about why they’re here today, what they’re looking for, or what they might like. Second, brick-and-mortar retail is an extension of ecommerce to provide a place for digital communities to interact face-to-face and meet all the key omni-channel service levels. And third, the space is not dominated by an endless selection of products but offers a carefully selected assortment and maximum convenience.
How is social media and social selling affecting offline retail in your opinion?
Everyone should already be feeling the effects. All social media trend reports show high growth rates on purchases after social media campaigns. We see clearly growing live commerce formats, cooperations with influencers and – due to the pandemic – decreasing marketing budgets, which in 2021 will be set primarily at the bottom of the social media funnel. Again, it’s important not to see the threat, but the opportunity. Another exciting influence for retailers is unadulterated content and the possibility of direct dialog with customers. In the future, messenger and voice commerce will also ensure that social channels are considered as important growth channels in any sales strategy.
Do you think, video salespeople would be a solution during or even after Covid 19, or virtual chatbots, where consumers speak to for example a robot/animated character?
Of course, some Covid-19 trends will disappear again, but the sales consultant via video has the potential to survive in the long term. As with question 1, however, it is also important here what role this can play in a particular journey – as a building block for products that require explanation, for example, interpersonal contact is a valuable addition. I also believe in this, as social distancing will not disappear overnight, and the generations are living much more digitally of course. Virtual chatbots still need to mature and certainly robots will come into play. But there are two things that no machine can achieve: empathy and conveying emotions, which is why I believe in the video sales consultant solution even in the post-Covid era.
Service and installs are more and more important. For example, when buying a complex smart home setup, consumers do not just need an install service to mount a TV to the wall, but also a complete setup service until the products are connected, programmed, and 100% functional, why does nobody offer these kinds of services? What is your take on this? Should retail stores offer that or the manufacturers? Would consumers pay extra for that or should that be part of an excellent service?
You may be referring heavily to the CE environment here, but no matter the area – any service, content or other added-value can make the difference of a long-lasting, positive experience that a consumer needs to be loyal or even act as an influencer. I’ll try to answer the many questions coherently, but start with a counter question: How much will the consumer be worth to retailers or manufacturers in the future? Outstanding business models can be developed from service and content, which in themselves are more valuable than the product sold itself. An important KPI of the future is no longer just product profit, but consumer profit. Consequently, convenience and service are above all opportunities which – used smartly – generate a certain willingness to pay, but also serve to build a customer relationship which literally “pays off” in the long term.
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