Why Brick & Mortar Are the "New Black"

UNDERSTAND TODAY. SHAPE TOMORROW.
WHY BRICK &
MORTAR ARE THE
“NEW BLACK”
LHBS // WHY BRICK & MORTAR ARE THE “NEW BLACK”
1
The Near Future of Retail:
How technology can transform the in-store shopping experience.

INTRODU
CTION.
Many experts and industry pundits are predicting the demise of
retail in the face of digitalization. But the notion of ‘Pure Play’ has
failed. Digital only and brick and mortar only retailers are on the
decline, many purely e-retailers going out of business altogether.
The largest retailer in the world, Amazon, is investing in
traditional brick and mortar outlets. The fact is, stores are the
‘new black’.
One of the biggest opportunities for traditional retailers of all
types is creating a unique and sought after customer experience.
Customer experience can be applied to better, quicker and more
efficient processes or to immersive, truly experiential events
enabled by exciting newly emerging or maturing technologies.
LHBS is a marketing & innovation firm with offices in Berlin and
Copenhagen. We help clients to understand today's emerging
customer expectations and to shape their business offerings for
tomorrow.
! http://www.lhbs.com
Olivia Köhler
Consultant at LHBS
lhbs.com | ok@lhbs.com
INTRODUCTION
2

More and more online only retailers are
investing in brick-and-mortar stores
3Source: Statista
LHBS // WHY BRICK & MORTAR ARE THE “NEW BLACK” INTRODUCTION
Amazon Google Warby Parker Birchbox Rent the Runway

55%
45%
UNDERSTAND TODAY. SHAPE TOMORROW.Source:
of consumers still
prefer to shop at
physical stores versus
online
4
15%
85%
85%
Source: The State of Retail 2015 - TimeTrade

55%
45%
of consumers, however,
say in-store technology 
is important to them
when making a
purchase
5
47%
53%
53%
Source: Digital ShopperRelevancy Report - Capgemini

55%
45%
of consumers say
digital makes
shopping in-store
easier
6
55%
45%
45%
Source: Navigating the new digital divide - Deloitte Digital
+20%
Consumers that 
use digital when
shopping in-store
convert at a 20%
higher rate
shoppers say they
spend more when
they use digital as
part of their
shopping process
67%
33%
One-
in-
three

CONTENT.
ADDED-VALUE
SERVICES
IN-STORE
ENTERTAINMENT
IMPROVED
TRANSACTIONS
CONTENT
7
" " "
Chapter 1 Chapter 2 Chapter 3

IMPROVED TRANSACTIONS
In-store technology is enabling the speed, efﬁciency and seamlessness
of online, to facilitate the traditional brick-and-mortar shopping
experience.
UNDERSTAND TODAY. SHAPE TOMORROW. 8
Chapter 1

Normann
Copenhagen’s Fluid
Shopping Process
! Explore the Sign
The brand’s new experimental and artistic showroom
takes visitors on an inspiring journey of discovery.
The full shopping experience has been optimised to be a
fluid, efficient process by fusing the brick-and-mortar
store and the online shop. Customers can make
purchases while sitting comfortably in the chair they are
about to order with the mobile checkout and can have
the purchased items delivered right to their door.
Learning: Technology can help to create a fluid shopping
experience by making online shopping features available
in-store
9
LHBS // WHY BRICK & MORTAR ARE THE “NEW BLACK” IMPROVED TRANSACTIONS

Retail Robots in Lowe’s
Stores
! Explore the Sign
Home improvement chain Lowe’s is introducing
service AI to its California stores.
In order to stay relevant in an e-commerce
dominated marketplace, Lowe’s partnered with
Silicon Valley based tech ﬁrm, Fellow Robots, to bring
technology into its retail stores, introducing retail
robots in 11 locations. The LoweBots make the
shopping experience easier and help customers
locate items instantly.
Learning: Technology can support and assist
customers during their shopping and therefore free up
staff resources
10

Robots Now Sell
Cellphone Plans
! Explore the Sign
SoftBank Corp will now staff their telecommuni-
cations store in Tokyo, Japan with Pepper robots.
Pepper humanoid robots will be responsible for
giving directions to customers, offering advice,
ﬁnalizing cellphone plans including contracts signing,
as well as engaging customers in small talk.
Learning: Smart technology can enable customers
better experience self serve, which is often a preferred
experience
11

LHBS Put the Title of the Report hereUNDERSTAND TODAY. SHAPE TOMORROW.
E-Ink Price Labels
British supermarket chain Sainsbury’s is experimenting
with e-ink pricing devices in an effort to reduce wasteful
paper labels and to free up labor time spent on changing
them. The company wants to explore quicker and more
efficient digital pricing. 
! Explore the Sign
Learning: Technology can help save manpower and the
environment benefiting both the retailer and the
customer
RetailNext In-Store Analytics
The company provides e-commerce-style metrics for
brick-and-mortar stores using sensors that track the
physical activity of actual human shoppers. The sensors
include video cameras, point-of-sale systems, payment
cards, weather sensors, and even guest Wi-Fi networks. 
! Explore the Sign
Learning: Technology can be used to provide and analyse
relevant real-world data equivalent to online traffic data
allowing retailers to optimize their customers’ shopping
efficiency
IKEA In-Store Companion
The retailer built an app to ensure that digitally savvy
customers can bring along their tablet or mobile devices
while shopping for inventory in its brick and mortar
locations. It caters towards the time-strapped consumers
that demand efficiency and an easy way to access
current offers, item locations and stock availability.
! Explore the Sign
Learning: Technology, made available for mobile devices,
increases shopping for the customer
12

Macy's AI Shopping Assistant
The department store worked together with IBM
Watson to create Macy's On Call, an in-store shopping
assistant powered by artificial intelligence. The cognitive
mobile web tool answers natural language questions
regarding specific products, departments, services and
facilities, and gives a customized response.
! Explore the Sign
Learning: Technology can assist customers who are more
likely to turn to their smartphones than to shop associate
Getting Info from Mannequins
VMBeacon lets store mannequins transmit information
to shoppers’ smartphones about the clothing on display.
When a shopper comes within a 100m range they will
receive an automatic alert with information on prices and
links to easily purchase the items. 
! Explore the Sign
Bricks-And-Clicks Experience
Walgreens is piloting a shopper marketing platform that
uses Google’s 3D augmented reality technology. The
gamified shopping experience will let shoppers search
for and navigate product locations while receiving
instant and relevant product details and promotions that
display on their screens via AR.
! Explore the Sign
Learning: Technology makes detailed and immediately
relevant information more easily accessible
Learning: Technology can enable faster, easier navigation
of relevant offers and products
IMPROVED TRANSACTIONS
13

ADDED-VALUE SERVICES
With the help of in-store technology, retailers are able to deliver unique,
personalized services that add substantial value to overall shopping
experience.
Chapter 2

55%
45%
is the increase of  
in-store digital
devices over the next
three years
LHBS // WHY BRICK & MORTAR ARE THE “NEW BLACK” ADDED-VALUE SERVICES
15Source: Digital ShopperRelevancy Report - Capgemini
+53%

Interactive Shop
Windows
! Explore the Sign
Ameria, a German marketing tech company, blends
outdoor advertising, point of sale and digital to
attract consumers into stores.
The interactive system for retail venues has already
been installed in drug stores, shops of mobile
provider and in a perfumery. The posters can “call”
customers and interact with them via an animated
ﬁgure on the store windows. The customer can then
communicate with gestures and explore an
interactive menu with products and services of the
store.
Learning: Interactive installations can result in an
increase of attention, store visits and revenue
16

NYX’s Digitally Enabled
Tutorials
! Explore the Sign
NYX Professional Makeup company has recently
opened their ﬁrst brick and mortar store fully
equipped with unique digital features.
The Los Angeles store debuts with a new set-up
where consumers can try products as well as adopt
ideas from inﬂuencers and professional makeup
artists. This self-learning environment is perfect for
the NYX crowds that often are self-taught artists.
The shop features interactive elements that carry
tutorials and inspiration.
Learning: Digital technology lets customers access
additional ideas and information that allow a better
experience with purchased products
17

Interactive, personal
shopping experience
! Explore the Sign
North Face is working together with Fluid and IBM
to fulﬁll customers’ individual needs through a
cognitive computing system.
The Fluid Expert Personal Shopper, which is available
to North Face customers in stores, harnesses IBM
Watson’s AI language processing. Customers are
asked a series of questions, IBM’s Watson interprets
the answers and leads shoppers to products that
meet their individual needs.
Learning: AI creates a personalized shopping
experience
18

Minkoff's Connected Flagship
The New York store is bringing a touch of online shopping to
the offline, brick-and-mortar shopping experience. The
store’s fitting room features a touchscreen mirror from
which customers can alter the lighting or call a shop
assistant to ask for fitting advice. Each session can be saved
so items can be easily purchased later online.
! Explore the Sign
Learning: The online and offline worlds get seamlessly linked through technological innovations. Technology improves and simplifies the shopping process in-store and additionally adds online shopping elements.
Digital Mirror Helps Shoppers
MemoMi’s smart MemoryMirror is combining aspects of
online shopping with visits to brick-and-mortar stores.
The mirrors take 360-degree videos and photos of
shoppers in new outfits. This lets the consumer see items
from different angles, do a side-by-side comparison as
well as get feedback through social media.
! Explore the Sign
Next Generation Pop-Up Stores
WithMe creates fully portable retail stores that combine
online and offline shopping experiences. The concept is
enriched by an app which acts as a personal shopper and
by smart fitting rooms that are filled with the items the
shopper scans while walking through the store. WithMe
stores also offer express, self- and concierge check-out.
! Explore the Sign
19

Ferrari’s AR Showroom
Ferrari's Australasia dealerships are now offering an
augmented reality application that allows potential
customers to immediately customize the sports cars.
Customers will be able to see the car in different colors,
with certain extras like rims and other options. They will
also be able to see detailed car component information.
! Explore the Sign
Learning: Technology helps customers to imagine and visualise options and customization. This caters towards the very individual needs of each consumer.
A New Way of Experiencing Cars
Tesla Motors created rich, interactive shopping spaces
engaging people in the Tesla-experience. They are aiming
towards a conversation with potential customers and
educating them in a less formal environment. The stores
are rich in all kinds of technological enhancements and
interactive stations designed to draw people inside.
! Explore the Sign
Digital In-Store Product Advisor
The sportswear brand 'Asics' has unveiled a new
interactive digital product advisor, which brings a digital
technology to a physical retail environment. Consumers
are matched to their recommended product in line with
their individual preferences and running habits, by
answering a series of questions through the iPad.
! Explore the Sign
20

IN-STORE ENTERTAINMENT
Technology is playing an increasing role in the physical store, especially
when aiming to create a more experiential space driven by
entertainment and emotion.
Chapter 3

55%
45%
of consumers agree
they will use stores
increasingly as
showrooms rather
than purchase
destinations
LHBS // WHY BRICK & MORTAR ARE THE “NEW BLACK” IN-STORE ENTERTAINMENT
22
52%
48%
48%
Source: Digital ShopperRelevancy Report - Capgemini

55%
45%
of consumers are
more likely to visit a
store that offers
entertainment
23
20%
80%
80%
Source: Frontier(less) Retail - JWT Intelligence

Sonos Opens Flagship
NYC Shop
! Explore the Sign
Sonos is preparing to launch its first flagship retail
location in New York City.
Early impressions of the new Sonos store in New
York City are very positive. Because so much of its
interest in its speakers come from people
experiencing it in the homes of their friends, Sonos
has put in place seven acoustically sealed "pods" that
let people forget the outside world and experience
the wifi enabled sound systems in five different home
settings.
Learning: A mix of digital and non digital, can allow
customers to experience products as they would at
home, after purchase
24

AT&T’s Grandiose New
Store
! Explore the Sign
The location is packed with technology, including a
48-foot-wide curved video screen that reinforces
AT&T’s idea of being an integrated provider.
On the main ﬂoor, the usual phones, gadgets and
accessories are displayed. The mezzanine is devoted
to experiences, such as smart home gadgets, a smart
bike that lets the driver watch scenes of San
Francisco and a living room area to show of AT&T’s
DirectTV service.
Learning: Retailers can entertain, inspire and create
new, unique ways to interact and engage with
products
25

Samsung Store Without Products
Samsung's store, which is not focused on retail at all,
features a three-story digital screen composed of
Samsung's 55-inch visual displays, a 90-seat theater, a
portable demo kitchen, an art gallery, a multimedia studio
and a café. The company plans to use the space to host
events such as ﬁlm screenings, book launches or DJ sets.
! Explore the Sign
Learning: As more and more purchases are made online where
customers have less opportunity to experience the product,
stores can act as a destination that allows customers to better
engage with the brand before purchase
A Store All About Experience
Razer invites gamers to play as long as they want in their
funky new electronics store in San Francisco’s Westﬁeld
mall. The focus of the store lays on customer experience
rather than immediate sales. “We wanted to create a
place that our fans, gamers and anyone interested in our
products can just hang out”.
! Explore the Sign
Fashion Shoot in Burberry Booth
Burberry has made it possible for the public to
participate in their new, festive campaign with the use of
the "Burberry Booth”. The public is enabled to capture
footage of themselves in a special video booth powered
by Google. The footage is later edited into a personalized
video of a Burberry's campaign.
! Explore the Sign
Learning: Raising brand awareness through a
technologically enabled store that focuses on experience
only
Learning: Technology enables customers to engage with
the brand on an entertaining and personal level
26

VR Cruise Vacation Experience
AT&T, Samsung and Carnival Corporation launch a fully
immersive virtual reality cruise experience in selected
stores. AT&T store visitors can walk up to the Gear VR
demo, put on the headset and be surrounded by the
sights and sounds of a warm and sunny cruise vacation. 
! Explore the Sign
Learning: To experience a product through VR opens a
new dimension for the customer to create desire
Innisfree’s “Jeju Flying Bike”
The Korean beauty brand Innisfree let’s the customer
travel to the island Jeju, the source for the brand’s
natural ingredients. Visitors pedal around the island on
the in-store bicycles collecting empty bottles with eye-
tracking software which they use to gather ingredients. 
! Explore the Sign
A Future Fashion Experience
Westﬁeld is leveraging several high tech tools to add
dimensions to shoppers’ experiences. Their event, Future
Fashion. uses a combination of virtual reality, social
media, and user-generated content. Through VR one can
see themselves as digital avatars in a conceptual fashion
journey through a virtual shopping world.
! Explore the Sign
Learning: VR has the potential to transport customers
through unique and immersive brand worlds
Learning: Technology can enable buyers to get a totally
new and enhanced experience of what it feels like to use
the brand
27

IMPLICATIONS.
28

ONE
Focus on designing the
complete customer
experience.
Consumers don’t distinguish between business models such as online and in-store sales. They
judge the complete experience and retailers need to develop an integrated eco-system of
brick and mortar fused with technology to deliver meet and exceed expectations.
IMPLICATIONS

TWO
Integrate technology to
eliminate pain points and
enrich the experience.
Learn and understand the E2E customer journey from search to service. Learn from
customers' best ever experiences and pain-points in order to: 1) focus on eliminating
hassles and friction through the help of tech and 2) develop new ‘smart wow’ experiences
for customers - ‘smart' in terms of cost effective means of scaling digital tools and ‘wow’ in
terms of satisfying strong emotional needs.
IMPLICATIONS

THREE
AI is no longer the stuff of
science ﬁction.
Embedding artiﬁcial intelligence (AI) and cognitive technologies in-store is the next major
step in engaging customers in a personal and interactive way. It allows companies to
provide relevant and intuitive product recommendations, often at considerably lower costs.
IMPLICATIONS

FOUR
This is just the beginning.
The technological innovations are just being explored and tested in one or a few stores of
some progressive companies. It will still take some time until these examples are standards.
Nevertheless, other companies shouldn’t wait too long to catch up. They should develop
pilots and agile teams to create an environment for experimentation.
IMPLICATIONS

Discover
ABOUT
LHBS. Define Develop Deliver
We are an unconventional strategy firm that helps clients to
better understand today and successfully shape tomorrow. LHBS
has extensive experience & expertise in business development,
brand building and customer experience. The firm works across all
major industries for clients from the FT Global 500, German
Mittelstand and fast growing startups.
ABOUT
We work with legacy organisations to adapt their customer value
proposition to meet emerging customer expectations. Together with our
clients we discover business opportunities and deliver integrated customer
offers for products, services, experiences and communication.

LHBS Put the Title of the Report hereUNDERSTAND TODAY. SHAPE TOMORROW.
INSPIRATION
-HUB
LHBS // WHY BRICK & MORTAR ARE THE “NEW BLACK” INSPIRATION HUB
34
This report is powered by the LHBS Inspiration-Hub.
The LHBS Inspiration-Hub is a digital platform that brings customized
insights and inspiration to the heart of your organization. It is a digital
platform that tracks changes in people, markets and technology.
! https://inspiration-hub.com/

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die ganze oder teilweise Vervielfältigung sowie jede Weitergabe an Dritte ist nicht gestattet.
LHBS Consulting Berlin GmbH
Köpenicker Straße 154
10997 Berlin Germany
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Why Brick & Mortar Are the "New Black"

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