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The Future of Services in Adidas Retail Empowering the Creator Through Co-Creative Service Experiences

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The Future of Services in Adidas Retail Empowering the Creator Through Co-Creative Service Experiences UNIVERSIDADE DA BEIRA INTERIOR Engenharia The Future of Services in adidas Retail Empowering the Creator through co-creative service experiences Tosca Devi Sepoetro Trabalho de Projecto para obtenção do Grau de Mestre em Branding e Design de Moda (2º ciclo de estudos) Orientador: Prof. Doutor Fernando Jorge Matias Sanches Oliveira Co-orientador: Prof. Doutora Liliana Simões Ribeiro Covilhã/Lisboa, Outubro de 2018 ii Acknowledgements First and foremost, I offer my gratitude to my supervisor and manager Patrick Schenck and to the Retail Innovation & Trends team at adidas. I am grateful for the opportunity to be part of this important project and to contribute to it in the frame of my master project. Thank you for your ideas, advice, support and your trust. Working with you turned this period of my life into an invaluable experience. Secondly, I would like to thank my supervisors Prof. Doutor Fernando Jorge Matias Sanches Oliveira and Prof. Doutora Liliana Simões Ribeiro for supporting me in undertaking this project with a company. Thank you for supervising me from the distance and for encouraging me during this period. Lastly, I owe my gratitude to my colleagues, friends and family who always gave me their unconditional support and always encouraged me to achieve my goals. iii iv Abstract The enhancements in digital technologies entail a shift in consumer behavior and expectations towards brands and retailers. Especially consumers belonging to Generation Z are enabled through digital means to self-control their consumer journey. While this benefits e- commerce channels, “brick-and-mortar” stores need to redefine their role to serve consumers with more meaningful value propositions that go beyond the purchase of tangible products. The reopening of the adidas brand flagship store in London in October 2019 gives cause for the design of a new service concept with the objective to harness the strengths of physical retail and to increase relevance for Gen Z consumers. An experiential service that empowers consumers during their journey towards self-actualization differentiates from the offerings of convenience-driven e-commerce channels and allows consumers to invest into their personal growth and to contribute to a higher purpose. In a participatory approach and in collaboration with internal and external stakeholders, the researcher designs an innovative service experience entitled Creator Hub that aims to empower adidas’ Creator consumers in their transformation journey through creative upskilling. The Creator Hub serves as a platform for collective and co-creative experiences and ties in the local cultural context and a more sustainable vision of consumption. The researcher and stakeholders create three services of different co-creation levels and creative complexity and visualize the involved people, processes and evidences in service blueprints. The Creator Hub is an example for a retail space where value is created not through physical consumption but through a service that has a broader impact on people’s lives. Keywords Services, Service Design, Co-Creation, Retail experiences, Retailing, Fashion Branding, Generation Z, Consumer Trends v vi Resumo O desenvolvimento das tecnologias digitais implicou uma mudança no comportamento do consumidor e expectativas para marcas e retalhistas. Especialmente os consumidores pertencentes à Geração Z, nativos digitais por natureza, têm um conjunto de capacidades que os permite para autocontrolar a sua jornada de consumo. Embora esta predisposição para fazer uso dos meios digitais beneficie os canais de comércio eletrónico, as lojas físicas precisam de redefinir o seu papel para ir ao encontro dos consumidores com proposições de valor mais significativas, que vão para além da compra de produtos tangíveis. A reabertura da flagship store da marca adidas em Londres, em outubro de 2019, dá origem ao projeto de um novo conceito de serviço, que pretende beneficiar dos pontos fortes do retalho físico e aumentar a relevância para os consumidores da Geração Z. Um serviço experimental que capacita os consumidores durante sua jornada rumo à autoatualização, diferencia-se das ofertas de canais de e-commerce movidos por conveniência e permite que os consumidores invistam no seu crescimento pessoal e contribuam para um propósito maior. Através de uma abordagem participativa, foi projetada uma experiência de serviço inovadora em conjunto com vários stakeholders, internos e externos, intitulada Creator Hub. Este serviço visa capacitar os consumidores Creator da adidas na sua jornada de transformação através do desenvolvimento de capacidades criativas. O Creator Hub serve como uma plataforma para experiências coletivas e cocriativas no que se associam ao um contexto cultural local e a uma visão de consumo mais sustentável. O investigador e as partes interessadas criaram três serviços com diferentes níveis de cocriação e complexidade criativa, e onde foi possível observar os participantes envolvidos, os processos e evidências no contexto do planeamento de serviços. O Creator Hub é um exemplo de um espaço de retalho, em que o valor não é criado por meio do consumo físico, mas através de um serviço que tem um impacto mais amplo na vida das pessoas. Palavras-chave Serviços, Design de Serviços, Co-Criação, Experiências no retalho, Retalho, Marcas de Moda, Geração Z, Tendências de consumo vii viii Table of Contents Acknowledgements iii Abstract v Resumo vii Table of Contents ix List of Figures xv List of Tables xix List of Acronyms xxi Chapter 1: Introduction 1 1.1 Problem Statement and Research Goal 1 1.2 Relevance of Research Topic 3 1.3 Overall Course of Research 4 Chapter 2: Exploration – Theoretical Framework 7 2.1 Adidas Group – The Company 7 2.1.1 Historical overview 8 2.1.2 Company strategy overview 8 2.1.2.1 Strategic pillar: Speed. 9 2.1.2.2 Strategic pillar: Cities. 9 2.1.2.3 Strategic pillar: Open source. 10 2.1.3 Reflection and synthesis 10 2.2 Building Strong Brands - Adidas as Creator Brand 11 2.2.1 Definition – Branding 11 2.2.2 Branding applied – Adidas brand architecture 12 2.2.2.1 Adidas and the Badge of Sport. 13 2.2.2.2 Adidas sub-brands and collaborations. 13 2.2.3 Definition – Brand personality 14 2.2.4 Brand personality applied – Adidas as Creator brand 15 2.2.4.1 Deriving brand personality by the mission statement. 15 ix 2.2.4.2 Deriving brand personality by user imagery. 16 2.2.5 Reflection and synthesis 18 2.3 Creating Value – Service Experiences 19 2.3.1 Context – Servitization thinking 19 2.3.2 Definition – Services 20 2.3.3 Services marketing mix 22 2.3.3.1 People. 22 2.3.3.2 Process. 23 2.3.3.3 Physical evidence. 24 2.3.4 Creating value in response to user needs 24 2.3.4.1 The value pyramid. 25 2.3.4.2 Services as convenience and services as experience. 25 2.3.4.2.1 Services as convenience. 26 2.3.4.2.2 Services as experience. 27 2.3.4.3 Consumer trend analysis. 29 2.3.4.3.1 Empowerment. 30 2.3.4.3.2 Co-creation. 31 2.3.5 Reflection and synthesis 33 2.4 Delivering Value – Retail Stores as Point of Experience 34 2.4.1 Context – Developments in the retail industry 34 2.4.2 Definition – Retail marketing and retailing 35 2.4.3 Definition – Relationship marketing 35 2.4.4 Delivering value in physical retail stores 36 2.4.4.1 Weaknesses and strengths of physical retail stores. 37 2.4.4.2 Omni-channel management. 38 2.4.4.3 The role of the physical servicescape in service experiences. 39 2.4.5 Reflection and synthesis 41 2.5 Consumer Experiences in adidas Retail Stores 41 2.5.1 Adidas consumer experience strategy 42 2.5.2 Consumer experience innovation and trends 43 2.5.3 Digital retail strategy 45 x 2.5.4 Physical servicescape in adidas retail 46 2.5.4.1 Format and concept strategy. 46 2.5.4.2 Retail design principles. 47 2.5.5 Implemented retail services in adidas Stadium brand flagships 49 2.5.5.1 Test & Create service experience. 49 2.5.5.2 Nutrition Advice service experience. 50 2.5.5.3 Miadidas Studio and Print Shop as customization service experiences. 51 Chapter 3: Key Insights and Recommendations 53 Chapter 4: Project Ideation – Preliminary Concept of the Service Experience 57 4.1 Part 1 – Researcher Ideates Initial Concept 58 4.1.1 The idea – Introduction into Creator Hub 59 4.1.2 The name 61 4.1.3 The narrative – “Hack Everything” 61 4.1.4 The concept 62 4.1.4.1 Activation format Toolkit. 63 4.1.4.2 Activation format Training. 64 4.1.4.3 Activation format Workshop. 65 4.2 Part 2 – Design Agency Develops Physical Evidences 66 4.2.1 Posters 67 4.2.2 Signage 68 4.2.3 Digital interface 69 4.2.4 Basic elements of the visual identity 69 4.2.4.1 Symbol. 70 4.2.4.2 Typeface. 70 4.2.4.3 Colors. 71 4.2.5 Fifth element 72 4.2.6 Servicescapes 73 4.2.6.1 Toolkit area. 73 4.2.6.2 Training area and gallery space. 74 4.2.6.3 Workshop area. 75 4.3 Reflection and synthesis of preliminary concept 77 xi Chapter 5: Project Creation – Final Concept of the Service Experience 79 5.1 Research Methodology 79 5.1.1 Research philosophy 81 5.1.2 Research approach 82 5.1.3 Research design 82 5.1.3.1 Methodological choice. 82 5.1.3.2 Research strategy. 83 5.1.3.3 Time horizon. 84 5.1.4 Techniques and Procedures 85 5.1.4.1 Data collection.
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