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Retail 4.0: Digitalization and the stationary trade – friend or foe?

In his lively keynote at the Consumer Goods Digital Day, digitalization expert Sanjay Sauldie discusses how bricks-and-mortar retail can only survive against the tech giants by working together. Local shops still have advantages over online traders – but this potential will disappear if potential synergies remain untapped.

Based on the concept of ‘transruption’ that he developed at MIT, Sanjay Sauldie provides a whole box of tools with which future-oriented concepts can be developed that keep bricks-and-mortar retail competitive and city centres alive.

 

Insights

  • Put customers centre stage
  • Create synergies with neighbouring stores
  • Involve and advance municipal authorities

Consumer Goods Digital Day: Further answers to questions for keynote speaker Sanjay Sauldie

The online offer can be comprehensive, but people still like to shop with people. Therefore, it means for the stationary trade to strengthen its strengths (proximity, contact, advice, competence) instead of concentrating on its weaknesses (online trade, competitive thinking). The city centres must create an offer that makes it easier for people to shop. Therefore, it is important that the city administration/city marketing works closely with external experts who do not traditionally work in urban development, but come from the industry and have a great deal of experience as well as new ideas.

For example, by making it easier to get into the city, otherwise people have everything delivered to their homes. Or through a better infrastructure to make shopping easier (see the example with the charging bus in my lecture). Also, offer attractive offers (not of a financial nature, but of a solidarity nature), for example through social media campaigns that emotionalise the experience of shopping in the city centre. Or think about joint online activities across cities to attract a sufficient number of visitors.

Basically these are good initiatives, unfortunately they only benefit the provider, neither the city centre profits from it (in the form of participation) nor the community (money flows into the group). If there is to be a "sell-out of city centres", then this is certainly one way to do it. It would be much better to represent the local character of a city digitally. And not just as an e-commerce platform, but as community trade.

Is there too little digitalisation know-how or the fear of buying horrendously inflated offers from an agency? There is a solution to exactly that. I recommend visiting the platform simplefair.org. There, it's less about selling and more about creating an inner-city community: people to people. Here, every city can already get in very cheaply and even get to know a new digital earning model for itself - and would remain independent of non-European providers. Otherwise, the income from initiatives does not flow to the city centres, but to a large corporation. I call on the cities to finally act quickly and digitally and to join forces with competent partners instead of being led like sheep to the digital scaffold by offers from the large international corporations.

Ideally, a marketplace should not cost the city marketing anything, hence the reference to simplefair.org. As long as someone thinks they know everything about their business and is not willing to learn, there can be no change. The madness is buried in expecting different results with the same actions. City marketing is not easy, that's for sure. But if only standard on-board means are used to try to build something digital instead of taking advice and looking at examples from industry and business and learning from them, a lot of taxpayers' money will go to waste.

City marketing does not need copying of existing possibilities (website, shop, social media), but discovering the individual charisma of the city and marketing it in a completely new way. So far, almost all city marketing concepts lack a vision from the perspective of the city centre visitor. Most concepts take care of the local traders, which I see as one of the reasons why city marketing fails. As long as we do not make it easier for the visitor to visit the city centres, to shop and to bring the shopping home well, city centres will lose even more of their attractiveness.

In addition, most city centres, especially in large cities, are already so standardised in what they offer that I can no longer tell whether I'm in Berlin, Hamburg or Munich by looking at the shopping street when I'm travelling. Here, city marketing also has the responsibility to support shops with local colour, for example through lower rents in A-locations. It is a naive assumption when cities make it so difficult for precisely these traders to individualise the city centres in the hope that the "big ones" will pay taxes. Unfortunately, these taxes often do not flow to the city at all, but to completely different countries through financial optimisation - and the local businesses do not get to pay good sales and thus more business taxes.

The belief that each city should make its own platform is one of the reasons for failure. Why not create a portal where all cities develop together? For this I recommend looking at the platform simplefair.org, the staff will be happy to help you.

We have to think about how we can all achieve something together as cities, because otherwise everyone on their own is a sitting duck for the big providers. Only by merging several municipalities and cities into a common concept, "STADTZON" for example, could enough visitors be attracted to the platform. This is where smaller cities fail with their platforms, for example, because without visitors the whole thing is doomed to failure.

Dear city marketers, when are we going to sit down at a joint conference and develop ONE joint platform with little investment but a high return on investment for all? Do we want to do it differently than the federal states did during the pandemic? Or will we focus on our own ego and then fail miserably against the "United Big Ones"? United we stand, united we fall - surely you know this statement. It is time to think and act beyond the silos of municipalities, cities and federal states. Incidentally, this is exactly what I have been doing very successfully for over 25 years in small and medium-sized enterprises. Breaking down departments ("silos") leads to a real transformation of any industry.

Yes, that would certainly be a heartfelt wish of mine, which I would also very much like to be a part of. I have many friends who have shops in city centres and complain more and more about the fact that we are still bumming around in the digital stone age. It's time and hopefully Corona was at least good for taking our future into our own hands and rethinking the world. Will we manage together to achieve the digital leap into the future for the benefit of all, or will egos that only think in the short term stand in our way? Decide!

Simply having a shop on the internet will no longer be enough. These venues are far too professional and heavily advertised for that. A shop that is not found by new prospective customers because search engine optimisation, social media etc. are at last year's level is worthless. Before a shop with products is put online, customer groups must be defined. By this I don't mean target groups or buyer personas, which are relics from the old days, but the behaviour of customers, for example their lifestyles, etc. For this purpose, I have developed an online meeting in which I demonstrate exactly this contemporary approach and develop it with the teams of the shop providers.

We have to ask ourselves whether we only want to attract known visitors or customers to the website or whether we want to attract completely new customers with their digital behaviours. This is what I would focus on when it comes to quickly and easily making my shop accessible to new prospects. Unfortunately, too many manufacturers focus only on the shop and the offers. This even triggers a downward price spiral for some.

My mentor taught me this: "When entrepreneurs run out of ideas, you have to lower the price. And with the less revenue, no ideas can be implemented." Surely you know that Amazon, for example, is far from being the cheapest provider in online commerce, but because it knows exactly the behaviour of its visitors, it has become No. 1? I would advise every manufacturer to become No.1 in the niche and never enter into partnerships - as tempting as they may be - with the big players.

Sustainability has been very important for generations, although right now there is an almost hysterical search for sustainable ways of doing things: green electricity, green cars, green housing, green city centres, etc. As long as we do not change people's behaviour towards more sustainability, stricter rules will only make it difficult for our domestic economy to prevail.

If a supplier from abroad entices you without sustainability but with much cheaper offers, the inhibition threshold to buy there is simply low. With Landhof Scout, I see the potential in changing people's behaviour to buy digitally, but sustainably, because the money ends up with the right people. Hardly anyone can talk about sustainability when a company writes "sustainable" on their products but then still holds every meeting in jets.

As long as we don't act as role models and change our lifestyles, all these sustainability ideas will be nipped in the bud, let's do the self-test: Will you buy an expensive mobile phone because it is produced sustainably? Will you pay double for milk, butter and bread because petrol and diesel prices have gone up? Will you buy a T-shirt cheaply or take the three times more expensive, more sustainable product? Stand outside a discount clothing store and ask their customers why they shop there. Will you gladly pay twice the electricity bill because it protects the environment, while your salary remains the same?

Sustainability will only prevail when an awareness is created that sustainability is important for our existence. And we need to do it now, not generations from now. This should also be the task of city marketing, but without tax increases or financial blockades for the economy, but by setting an example of sustainability. Why do I have to download a form from many cities online first, then print it out, fill it in, sign it, send it as a pdf in an email, only to be told that the paper must please be posted, so print it again, etc.? As long as cities function like this, sustainability projects will only be smiled at.  

One lever would be sponsorships for trees in city centres, just as cities have already done with seating in cities. Or the possibility of using crowdfunding for city centre projects. As soon as we deviate a little from the standard, many new possibilities are available to us through the new 24-hour digital technologies (transruption.org).

A shopping street without cars is much more pleasant to spend more time in. The FAZ writes about this "Despite all the debates about climate and mobility: German car owners continue to enjoy driving, and even feel mostly pleasure just seeing the car. And they spend more on car purchases than ever before." (Source: https://www.faz.net/aktuell/wirtschaft/auto-verkehr/umfrageergebnisse-die-deutschen-lieben-ihre-autos-immer-noch-16596635.html).

To ignore something like this just because it gives people pleasure to stay longer in the city because there are fewer cars is, unfortunately, a naive assumption. We have to ask ourselves the following question: Why does a customer order something online that he can also buy in town - and is even willing to wait one or more days for it instead of buying it at his local retailer, often even more expensive online than in stationary retail?

The answer to this is quite simple: If I sacrifice my parking space in my residential street to go shopping in the city and have to "do my rounds" because of a lack of parking space (has anyone ever measured how sustainable it is when cars spend a long time looking for parking spaces?) and then only get to the shop to find out that my desired product still has to be ordered? Then I drive home and can't find a suitable parking space and waste time again. Who wouldn't be tempted to do everything with three mouse clicks? And this in times when TIME is becoming more and more valuable, we people are chased from one online meeting to the next and are expected to be accessible to everyone everywhere.

As long as we do not understand the behaviour of people, we may lose many potential customers in the inner cities in the next few years through hysterical sustainability concepts and attract more of those who need the cosiest nest warmth of the cities as accommodation.

In order to boost trade in city centres, we must not only ensure that many people stay there longer (then we should remove all parking spaces and allow only one checkout in each shop - the queues ensure that people stay longer in the city), but that the need to shop runs in time - online retail has discovered and exploited this very well.

We have to make sure that as many people as possible can get to the cities easily and without complications and, in any case, also get larger purchases (such as TVs, lawnmowers, etc.) transported home easily. In my presentation, I mentioned solutions that are sustainable and intelligent: shopping offline, but having it sent home. Then I like to come into the city centre and instead of carrying shopping bags, I have my hands free for a delicious cappuccino and like to stay longer in the city.

As mentioned above, I also use the simplefair.org portal myself. You can get the free trainings on the marketplace where I have set up my own marketplace. Just click on https://simplefair.org/de/messe-frankfurt/ and then enter the code consumergoods.

Then you will get a completely free access to the learning platform. After you have registered, just click on Online Meetings in the menu on the left or directly on https://simplefair.org/de/alle-vortraege-simplefair/ and there you will find all the online training courses.
Especially the course (DE) TRANSRUPTION Masterclass should be interesting for you. I am looking forward to meeting you there again and also to accompany you in putting the ideas into practice.

I am happy to discuss with you. Just write to me at sauldie@gmail.com.

Sanjay Sauldie, rednerheld GmbH

Sanjay Sauldie is a multi-award-winning keynote speaker, digital business consultant and Director of the European Internet Marketing Institute EIMIA, Mannheim.