David Murphy talks to Martin Wild, chief innovation officer at German consumer electronics retailer MediaMarktSaturn, about the company’s commitment to digital innovation.
MediaMarktSaturn is a leading European consumer electronics retailer, the equivalent of Curry’s PC World in the UK or Best Buy in the US. As such, you might expect it to be at the cutting edge of digital innovation, and indeed it is, but that hasn’t always been the case, as chief innovation officer Martin Wild explains.
“We began our online journey in 2011 with a transactional website for Saturn Germany,” he says. “This was our first entry into the multichannel world; we had been offline until then. So we started to go into the omnichannel business, looking at the channels – online, mobile, social, physical – and the connections between them, for example click and collect and enabling consumers to check in-store stock availability. This required us to invest in a tech platform, and although this investment is still ongoing, we have managed to establish ourselves as a leader in this area in Europe and win a lot of awards.
“When we started out on this journey, we wanted to be a disruptor, to come up with a completely new concept and change how retail was treated in Europe. Since we had more or less missed the online revolution, we wanted to lead in the future of retail. We have therefore developed all these new technologies because we believe the evolution of retail will become faster and even more disruptive for retailers. How we shop offline will change massively with the digitisation of the point of sale and everything happening in-store to give the consumer a more convenient and personalised shopping experience.”
So what sort of tech are we talking about? “There’s a whole range,” says Wild. “Augmented reality, robots, visual navigation. We also have a virtual reality experience, we have launched voice shopping on Google Home in Germany, and we are using mobile and video content as part of the in-store experience, where consumers can see a video review of products before they buy. We are trying to lead in innovation to give our customers the best shopping experience.”
The future of retail
Despite getting off to something of a slow start, Wild says the company’s experience has actually stood it in good stead. “Initially, we were forced to go online, forced to realise the opportunities of digitisation by pressure. Now though, things are different. We actively see and evangelise the upside of using the power of digitisation. It’s important for us to develop the future and to be an important part of the future of retail.”
Being at the cutting edge of stuff is all well and good, but it comes with an inherent danger that your customers – the very people you are trying to please – might not always like what you’re trying to do. The company’s experiment with robots, for example, has seen it put a robot sales assistant in four of its stores. The robot, named Paul, first appeared in the company’s Ingolstadt store in November 2016. His job is to welcome customers at the entrance and guide them to their desired products. In his first months in the store, Paul travelled more than 100,000 metres and interacted with customers around 7,000 times, answering their product queries and guiding them to the right part of the store to find what they were looking for. Cool in most people’s eyes, but not necessarily everyone’s.
The solution, Wild says, is to involve the customers. “With all our projects, we listen to the consumer,” he says. “We run a study to get their feedback. The robots for instance were in our Ingolstadt store for a year before we took them to three more stores, so it’s a long pilot programme, but it’s growing.”
In May last year, MediaMarktSaturn embarked on a 20-store ‘HoloTour’, enabling its customers to experience augmented/mixed reality for themselves using Microsoft’s HoloLens headset. Customers wearing the headset were greeted by a virtual assistant called Paula, who walked them through the store and gave them a detailed explanation of three products – the Samsung S8 smartphone, the Microsoft Notebook Surface Pro 4, and Dyson’s Big Ball Allergy vacuum cleaner. When they reached each of the products, Paula explained their key features and benefits, and additional graphical information was displayed on the HoloLens.
“In the course of the HoloLens tour, we gathered feedback from more than 3,000 people,” says Wild. “And we take all the feedback into account as we build the future of retail, so if a project isn’t well received, we adapt or kill it.”
In Innsbruck in Austria, MediaMarktSaturn created an Amazon Go-style Saturn Express cashierless store, again looking to get customers’ feedback as soon as possible to see what they made of the idea and what lessons could be learned. “I would say that 90 per cent of the projects we launch, we get feedback of good to very good,” says Wild.
So having rolled out initiatives embracing AR, VR, AI and robotics, which piece of tech does Wild think is most likely to succeed in retail?
“I can’t predict the future,” he says. “As you know, we are in the midst of a very big tech shift so there are many things under discussion. Some will take off, others will take 10 years. I’m a big fan of AR and as soon as we move from smartphones to head-mounted devices, it will change how we live and it will change retail.
“VR is the same. The channel was overhyped a few years ago after Facebook bought Oculus and now it’s in the Trough of Disillusionment, as the Gartner Hype Cycle calls it. It has picked up some speed, but it’s like online shopping in ’95, early days.
“Robots are coming closer. In a few years, there will be many social robots in our homes doing more than cleaning the windows or floors, such as helping kids with their homework, so it’s also relevant to be there. Equally, I’m sure the cashierless checkout will be an element of the future of retail. What we did in Innsbruck was the full version. We decided on purpose to build a store without a single cash register, but in the main, it will be a second option, so you will have a regular checkout line and an express, cashierless checkout line. Not everyone will change immediately, so we always have to offer our customers a choice.”
So what’s next on MediaMarktSaturn’s innovation journey? “There are always a lot of things, sometimes you just don’t know what will happen,” says Wild. “We will definitely do a lot more and try out a lot more. This year we launched the Voice Assistant in Germany, where you can order something by voice on Google Home. We are also evaluating the whole checkout area with some of the startups in our Retailttech Hub startup program, looking at things like video-based frictionless checkout without using a mobile device. We will also run a lot of projects around AI (artificial intelligence) to give a better personalised experience, and we are looking at some new concepts on what a future store could look like. We have also started to work on blockchain, which is another interesting technology with many different use cases.”
Having been slow to the online party, MediaMarktSaturn has set itself the task of leading the way in digital innovation in retail. So how much commitment to innovation does Wild see elsewhere in the industry?
Open to innovation
“We definitely see many retailers being open to innovation now,” he says. “Many of them have pilot or future stores. Our Retailtech Hub is about bringing together startups and retailers together and to jointly work together on innovation, because our goal is to take retail to the next level. We can’t do it on our own, we need others to join us. Startups as well as corporates. Working together, it will be more efficient and better for the consumer.
“Our biggest partner is Lidl. We work together on innovation. Not all of them will go as far as using robots, but that’s not important because we see ourselves as the leader, and because we sell consumer electronics, we feel we should lead this attack, but we see others picking up speed. We have many retailers talking to us, visiting us, and we are happy to share ideas, because we think we need to change this together and not each on their own, because no one will succeed alone."
This article first appeared in the September 2018 print edition of Mobile Marketing. You can read the whole issue here.