Retail as a Service: No Sales, Just Experiences [5 Reading Tips]

People keep saying stationary retail is dead. But that’s not really the case. True to the motto »Transform or die!«, the role of branch locations is being redefined and promoted through innovative store concepts. Stationary businesses are no longer seen as just a sales instrument, but they are increasingly developing into service points.

The focus is therefore no longer solely on selling at any price, but to quench the thirst for information typical of the discovery phase and to arouse curiosity. For this, new branch concepts rely on a lot of technology and a small, frequently changing product range.

It is even desirable that customers come to the store, look at products there and try things out before they finally go back without having bought anything. The thought behind this? If the experience remains positive, the purchase will eventually be made through any channel.

All of this promises and enables a new concept, which is becoming more and more prevalent, especially in the United States: Retail as a service. What’s behind it, which success stories are paving the way, and why this approach for manufacturers and brands can be so attractive, will be clarified for you in this article.

Retail as a service: Manufacturer as a retailer?

Everyone wants a direct route to their own customers, including manufacturers. After all, distributing through intermediaries and retailers means they have no connection with the end customer and have little data on customer behaviour.

Would not it be wonderful for some manufacturers if there was a branch that could be rented on demand (flexibly for certain periods of time)? A store that gathers data relevant to integrated technologies to translate an online commerce advantage into the physical world?

In order to give producers as well as pure players the opportunity to be present in the physical world without losing control, the American start-up b8ta was founded in 2015. Since then, nine flagship stores and 70 pop-ups have been opened in the US.

Retail as a service. This is the creed of the retail chain, where revenue is secondary and customer service, product presentation, and technology are the focus of experience rather than on sales. But how is this model holding up?

Retail as a service: How does it work as a business model?

b8ta charges manufacturers a monthly placement fee based on store size and location. The start-up does the rest: Check-out, inventory, point of sale, inventory management, staff scheduling, and more. What’s more important: The brands retain 100 per cent of their turnover.

In this way, manufacturers can test new products and refine their product development with the gained customer feedback.

» For most brands, the costs are quite reasonable. […] I’ll say that it’s at least 50 per cent cheaper than doing it yourself.

Vibhu Norby, CEO b8ta «

With »Built by b8ta« brands and manufacturers can even rent a flagship store exclusively for themselves. Here, too, b8ta offers everything from a single source for a monthly flat rate.

Another example of retail as a service concept is the start-up LEAP from Chicago, which opened the first store for the high-end sneaker manufacturer Koio. Unlike b8ta, the brand does not pay a monthly free here. But Leap receives a sales commission, which further reduces the risk for the manufacturer.

This trend is also influenced by traditional department stores: Fourpost, for example, offers »Studio Shops« retail space in within shopping centres in North America.

Retail as a service: Technology as a basis for excellent experiences

In order to create added value, the branches are technologically highly equipped – for example, 24 high-resolution 3D cameras are suspended in a b8ta store.
Important key figures can be tracked accordingly.

Length of stay: How long do customers spend time with the products?
Products: Which products are especially interesting?
Interaction: How do customers interact with the products?

Tablets are also actively used by employees. And not only in customer service but also as a documentation tool. In addition, customers can use them to inform themselves about the products. Compare prices, read reviews and order: everything is possible – just like a web store.

In contrast to traditional retailers, manufacturers at b8ta have access to all data via a platform and can follow live via chatbot how many customers in which store are interested in their product. Leap also provides a platform with omnichannel technology. As a result, insights are delivered daily on a daily basis, allowing data-based decisions to be made about product development, design, and marketing.

Retail as a service: The future is about experiences

You should take a closer look at concepts such as retail as a service. The new generation of retail concepts is more about experiencing and discovering than about actually buying products. Classic retailers, therefore, need to thoroughly rethink their role in order to remain relevant.

Multi-brand concept or pop-up stores already show what counts in the future: rousing, small-scale boutiques, eye-catching product presentation, cosy atmosphere and plenty of opportunities to interact with the environment. Macy’s pop up experiences shows that even big brands are increasingly seeing potential in such concepts.