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When Apple first asked Tim Kobe to design a retail store, the company only had four products in its line-up. So Kobe created a store experience that revolved entirely around the consumer and served as a space for service and learning. That formula helped make Apple one of the world’s most successful consumer technology brands. (Apple and IBM are currently working together to bring enterprise AI to mobile.)
As the founder and CEO of the strategic design firm Eight Inc., Kobe has continued to create stores for some of the world’s biggest brands. A lot has changed in retail since Kobe started his firm in 1989, and technological disruption has been a big part of that. Technology, he said, will also be a big part of what comes next.
Exceed customer expectations with a new kind of retail.
On April 18, as part of World Retail Congress, Kobe will join the London College of Fashion’s Matthew Drinkwater and TheCurrent’s Rachel Arthur for “Store design + technology= future of customer experience,” a workshop on the power of cutting-edge technologies to create incredible customer experiences.
IBM spoke with Kobe over the phone about stores, technology and the future of retail. The conversation has been edited for length and clarity.
IBM: As e-commerce continues to boom, what role do stores play for retailers today?
Kobe: Their role is shifting but they’re also as important as they’ve ever been. When you look at retail today, good retail is not suffering, bad retail is—I’m talking about the people who haven’t decided to be competitive or work on solutions that impact the end user experience. It’s sort of a sorting out of the market. If you compare in America the number of stores per person to other parts of the world, we’re something like 10 times more saturated…In a way I think it’s a natural evolution but I think those who are more digitally savvy are those that are going to succeed rather than those who ride the old model.
IBM: Eight Inc. promises to design “meaningful human experiences.” What role does technology play in that?
Kobe: It’s about making sure you’re creating deeper meanings. Technology is just a tool to get to that. The human outcome is what should be the primary objective and then you use the right tool to achieve that outcome. It’s not about just checking the box and getting the latest technology. It’s one of those things where you have to be consistently evaluating what the human outcome is in order to have the business outcome.
Eight Inc. delivered a new experience for Lincoln customers at dealerships in China. Image via Eight Inc.
IBM: Do you think the Apple store has changed the way retailers have looked at their brick-and-mortar spaces?
Kobe: What the Apple work helped develop was making the store a brand tool that could convey aspects of the brand that were previously left to a communications role. You can feel what the Apple brand is by the experience you have in the space. Now more companies see their stores as brand touch points, rather than just a transaction space.
IBM: Some companies are taking that idea to an extreme, and choosing not to sell any products at their stores. What do you make of that?
Kobe: There’s probably some balance that has to happen there. I don’t know if in the near term you can just be an experience store and not sell anything. A few have tried it, but the idea that you could just do a brand store and not attribute any other values to it is a tough one for some companies to make work. The store is the point where you’re driving the highest emotional connections, and we know that tends to drive the most conversions. If you’re creating that emotional environment and not doing a conversion, then you’re kind of wasting that opportunity.
The Nissan Crossing Experience Center in Ginza, designed by Eight Inc., functions as a base for communicating Nissan Intelligent Mobility and showcasing future driving experiences to customers. Image via Eight Inc.
IBM: How might the role of the store change in the future?
Kobe: I think retail is very interesting because to me it’s one of the businesses where if you’re not refreshing your offer every five years you’re probably behind your competition. A lot of companies that haven’t been looking at disrupting themselves end up being beaten by someone who is. Retail is especially competitive, especially challenging and I think it’s quite complex when you think about the human psychology in addition to all the other functional parts that go into a successful retail program.
Looking to reinvent your store? Explore IBM stories and solutions for retailers.