Many commentators predicted that the advent of online shopping would spell the demise of the bricks-and-mortar store.

However, physical shops are still very much alive, though the rise of e-commerce has forced them to re-think their approach.

Over the next few years, the role of the retail store is likely to be redefined, improving the way they work through the application of new technologies.

Between the growth of online shopping, the appearance of futuristic stores without sales assistants, such as Amazon Go, and the introduction of robots, it’s clear that the retail business is in a radical transition phase right now. And over the next few years there is little doubt that the shop as we know it is set to undergo a profound transformation. However, if you want to predict what’s coming in the future it’s often useful to take a look into the past.

The retail business has seen three major innovations in recent years. The expansion of the drive-through phenomenon, which originated with fast food outlets in the United States some 50 years ago, to grocery stores, saw the foundation in France over a decade ago of the pioneering Chronodrive, which enables customers to order online and then drive to the store to have their groceries packed in the car boot while they remain at the wheel.  Meanwhile back in the US, Amazon set up two Amazon Fresh Pickup grocery outlets this year, with retail giant Walmart following suit in Oklahoma City.  The second phenomenon has been the come-back, in opposition to the hypermarkets and ‘shopping malls’, staged by local shops where customers can make their purchases without having to take their car along and then search between endless rows of shelves. The third revolution has been the rise of online shopping, which began in the apparel and electric appliances segments but has since spread to groceries and fast-moving consumer products, as illustrated by the Amazon Fresh concept. 

Re-thinking the role of the bricks-and-mortar store

Matthieu Jolly, Service & Innovation Manager at the Echangeur, an Innovation meeting-point run by BNP Paribas Personal Finance, underlines that this triple revolution has been driven by the retailers’ desire to adapt to the changing expectations of their customers, notably for greater efficiency.  “The customer wants to save time,” he points out, adding: “However, this new reality raises a fundamental question: if nowadays the customer wants to spend as little time as possible inside shops, what are the shops going to do about it?” Does that mean they’ll simply disappear? Jolly argues instead that sales outlets will have to introduce new formats and take an approach that goes beyond the purely utilitarian, with three main areas for improvement. “The first is about turning the shop into a venue for new experiences, a place where you can be amazed, where you can have a good time,” he says. This might well mean giving customers greater freedom. For instance, the Nike store in the SoHo neighbourhood of New York City offers customers the chance to try out its gear in realistic situations, shooting a few basketball hoops or going into a full sprint. Similarly, US store Pitch, which specialises in luxury furniture and appliances, everything in the shop can be tested out – for example taking a shower or drying your hair on the premises.

Another option involves using Virtual Reality (VR) and Augmented Reality (AR) technologies. Given that the cost of these technologies is still rather high for the general public, brands will be able to vaunt their dramatic effect, offering customers a truly immersive experience. For instance, during a promotional campaign in Autumn 2015, The North Face store in Seoul, South Korea rolled out an initiative whereby it invited customers to sit on a dog sled, put on an Oculus Rift headset and experience for a few moments the life of a ‘musher’, being pulled through a snowy landscape by huskies. In the meantime, a sales assistant attached real live huskies to the sled, and when the customer took off the headset the dogs took off on a real race through the store. Similarly, in November 2016, Chinese e-commerce giant Alibaba invited its customers to put on a VR headset and be teleported to Macy’s store in New York. This kind of dramatic spectacle gives stores a ‘raison d’être’, creating a meeting-point where you can have new, fun experiences. “We’re moving from a transactional mode to an approach based on experiences,” explains Nicolas Diacono, Digital Project Manager at the BNP Paribas Personal Finance Echangeur.

A place for interaction and socialising

The second area for improvement actually goes in the opposite direction, concentrating on what is unique about shopping in a bricks-and-mortar store – i.e. the material aspect, the customer’s ability to see and touch. “A store is also a place where you go to get hands-on contact with a product, to feel how it works,” Jolly underlines. He does not think that the general public has yet been entirely won over by e-commerce. Retail stores therefore still have a strong hand to play if they focus on their specific features. The recently-announced partnership between US startup Casper and nationwide discount retailer Target is a telling move. The hypermarket chain has invested $75 million in Casper, a high-end, exclusively online, direct-to-consumer mattress business. As a result of Target’s financial injection, Casper’s mattresses can now also be bought at Target hypermarkets. Despite enjoying fast growth, Casper has struggled to attract buyers beyond a rather select circle of people who are happy to buy expensive items online without first trying them out. Partnering with Target opens the door to a wider potential clientele, while Target benefits from having attractive products at its premises. Customers like to try them out in-store, and they now have a reason to go to the Target store to do so. Similarly, French home appliance and multi-media store Boulanger is setting up areas within its stores where customers can try out all its products.

The third area for development is turning the store into a place for interaction and socialising. “Many people go shopping as a way of getting out of the house. Shopping malls in the United States are now widely used as a place where young people can meet up,” points out Matthieu Jolly. Amazon showed that it has fully understood this phenomenon when it acquired natural and organic food company Whole Foods Market, a brand known for its community feel and its pleasant stores where people enjoy walking around, up and down the aisles. 

“However, making customers feel welcome isn’t enough, you also have to teach them something", argues Jolly. Carrefour’s store in Villiers en Bière, in the Greater Paris region, now offers classes in cooking, wine-making and make-up. 

Meanwhile French postal service La Poste provides premises for would-be drivers to take the written part of their driving test, and other companies are setting up co-working facilities. 

The Virgin Megastore in London has combined these three trends. Customers are hailed in the street by a hologram of Richard Branson, and then welcomed inside the stores by hostesses. They can then go downstairs where they’ll find a bar, a café, a piano, a relaxing space with armchairs, TV screens, and even a real-life Virgin Atlantic business premium cabin where they can watch the sky go by through the porthole windows. Children can play on the consoles at the video games space. You can even rent part of the premises for events, and every Friday evening a film is screened.

More efficient, better-managed stores

The store of the future will therefore play a different role from the one we know today and will moreover provide customers with a more efficient shopping experience. In the medium term, there will no doubt be many AR-based experiences on offer. Using a future version of Google Glass or the Oculus headset, tomorrow’s consumers will be able to navigate around the supermarket aisles and see the products they are interested in highlighted in front of them. These might be food items corresponding to a diet – vegetarian, gluten-free, stone-age diet, and so on – or the products they need for a cooking recipe, suggested by their personalised virtual assistant, depending on what they already have in their connected refrigerator. Also highlighted might be the wines that go well with the dish a customer intends to cook. “We’re entering the era of ambient shopping, where everything will be interactive,” predicts Nicolas Diacono, who sees the advent of this technology in ten to fifteen years’ time.

Yet another area for potential improvement is the checkout process. “The checkout queue remains today the least enjoyable part of the in-store experience. Streamlining this process, reinventing the payment procedure, will be one of the most important innovations,” stresses Nicolas Diacono. This means allowing customers to leave the shop without first having to go through the checkout. The items in their trolley would be recognised and tallied up on the customer’s smartphone app. Says Diacono: “This is for instance what Amazon is aiming for with Amazon Go, but the technology isn’t yet sufficiently mature. The costs are still too significant for this to be a profitable approach for a shop.” So the right system still needs to be developed. Explains Matthieu Jolly: “There already exists a technology that enables a retailer to automatically recognise the items in your basket when you pass the checkout – RFID, which is used by for example Nespresso. So it’s technically feasible to scan your selected articles, pay with your smartphone and leave the shop. However, for this to work, all the products on sale would need to be fitted with an RFID chip, which is still far too expensive for all the items purchased at a grocery outlet.”

Lastly, the store of the future will be optimally organised through the use of advanced technologies. It will be equipped with robots set up to answer basic questions – this is what Pepper does already – or to direct customers to the products they are looking for, while human sales assistants focus on giving more sophisticated advice and on building the customer relationship. Robots will also no doubt have a role to play at the store’s warehouses. Supplying and restocking will be made easier through the use of AI and image recognition technology. As they move along the shelves, robots will be able to scan products and identify those that are out of stock, a task that could equally be carried out by connected trolleys equipped with cameras. Overall, sophisticated data management will enable retailers to get a better grip on what lies ahead. Nicolas Diacono foresees: “The store will be optimised by drawing on a threefold data input based on the customer’s needs, the environment – i.e. the weather, events that are taking place in the town, etc. – and the store itself. They will thus be able to make more accurate stock forecasts, taking into consideration seasonal factors, and will therefore be more efficient at restocking. A Decathlon store would for example be able to predict three or four days in advance how many bicycles it will sell during the coming weekend.”. So at the end of the day, this well-established social institution that we know as a ‘retail store’ still appears to have a bright future.

Source: L’Atelier

A recently commissioned survey by BNP Paribas Fortis on mobility found that this remains a major challenge for the coming years. The bank is determined to play its part.

A survey among 2,000 people, and representative of the Belgian population, on mobility shows that the switch to electric driving is slowing. Almost 80% of those surveyed still drive a diesel or petrol vehicle, and more than a third of them have no intention of trading in their cars for a more environmentally friendly model any time soon. And yet almost 50% want to be driving electric by 2029. But before that switch, some hurdles first need to be cleared. According to two-thirds of respondents, the bank needs to take a proactive role in the transition to sustainable mobility.

• Only 10% of cars on the streets today are electric, hybrid or run on hydrogen. Users of these vehicles confirm they are very satisfied. Though most have their own charging station, public charging stations are a bottleneck.
• While fighting climate change remains the main argument for switching, changing mobility habits isn’t so easy. The switch to electric is slow, and more incentives are needed, such as new tax measures, and above all, a commitment from the government. Prices also need to come down. It is clear that the practical issues of driving and charging times mean people hesitate to make the switch.
• As a result, enthusiasm about new mobility initiatives is rather muted. Although, especially in big cities, an app that combines mobility options has good chances of success.
• Mobility and work are strongly linked. One in three people spend at least an hour a day travelling to/from work. It turns out that teleworking is a solution for only 50% of the people, and that the other half of the population don’t have the opportunity to work from home.
• More awareness needs to be created around new mobility. Not everyone is familiar with shared cars, bikes and charging stations yet.

Mobility partner

BNP Paribas Fortis is determined to contribute to more sustainable mobility and be a mobility partner for both professional and private customers. We are doing this by informing audiences of all the advantages of an environmentally friendly switch. And also by offering support through financing, insurance and leasing. Our goal is to provide a global response to tomorrow's mobility needs through innovative services.

More and more people are cycling to work. Mobility solutions expert Philippe Kahn explains how and why.

People are changing the way they travel to limit their environmental impact: behaviours are starting to shift, and the use of bicycles is rising, including and especially for travelling to and from work. We spoke to Philippe Kahn, Mobility Solutions Expert at Arval BNP Paribas Group, about these developments. 

Two out of three Belgians use soft mobility, mainly bicycles

According to Profacts’ “Mobility Tomorrow & Beyond” survey, two out of three Belgians have adopted soft mobility. "But the biggest change is the increasing use of bicycles for business travel and commuting. People are also using bicycles more on the school or nursery run, facilitated by the arrival of electric cargo bikes on the market," says Kahn.

A favourable regulatory framework

But what are the reasons for the increased use of bicycles for business travel?  “Let’s first take a look at how the regulatory framework has changed," says Kahn. "In Belgium, the creation of the federal mobility budget has made alternative ways of travelling attractive for all employees. The budget makes it possible to choose a comfortable company bicycle as part of a tax-friendly salary package. Moreover, this mobility budget can even be used to cover housing costs if you work from home more than half the time or if you live within 10 km of your place of work. So instead of having a company car, people can choose to have a combination of an electric bicycle and a contribution to their housing costs. Furthermore, two measures effective from 1 May 2023 should reinforce this trend: the bicycle allowance for commuting is increasing to €0.27 net per km travelled, and all Belgian employees will be entitled to this allowance. In practical terms, this means that those who choose to cycle for these journeys will be substantially rewarded.”

Investment in public infrastructure is paying off

Another important factor in the increased use of bicycles is the development of road infrastructure.

Philippe Kahn: "One factor that can convince people to cycle to work is the certainty of a safe journey. A few years ago, cycling to work in Brussels, for example, could be dangerous. But today, cycling infrastructure is making these journeys increasingly safe, in particular thanks to the cycle motorways on which only bicycles can travel. Infrastructure investments are now also happening in the rest of Belgium, not just Flanders and its major cities. In recent years, Brussels has undergone significant changes, and things are also starting to move in Wallonia.”

Half of all Belgians live within 15 km of their place of work

Distance from the workplace is also crucial in determining how attractive cycling is. "One in two Belgians lives within 15 km of their workplace, a distance that you can easily cycle," adds Kahn. "Along with the Improved infrastructure, this means that cycling to work is a realistic option for many Belgians. And the €0.27 per kilometre allowance will be an added incentive for them to make the change.”

78% of leased company bicycles are electric

To meet the needs of companies and their staff, Arval is now offering bicycle leasing. This full-service lease covers maintenance, breakdown assistance, insurance and repairs, as is traditionally the case for a car. Philippe Kahn points out some very significant trends in this area: "60% e-bikes and 18% speed pedelecs: in total, 78% of our leased company bikes are electric.

High-end bicycles costing several thousand euros, such as electric cargo bikes, are also highly successful, which is probably due to opportunity: the mobility budget or employer “cafeteria plan” benefits packages are making it possible for people to acquire these bikes. But it may also be a consequence of Belgium’s specific tax regulations: the more expensive the bicycle, the more significant the tax incentive. Another interesting observation is that when a  bicycle replaces a car, it’s usually the family’s second car. So we’re not yet seeing any radical replacement of cars by bicycles, but the emergence of the company bicycle is definitely reducing the total number of kilometres travelled by car.”

Digital applications: shifting up a gear

Lastly, Kahn points to another factor that could encourage more people to take up cycling to work. "I think that technology, and in particular digital applications, can make a big difference. We can expect strong growth in the market for apps dedicated to commuting by bike. The business model for on-the-go electric bike rental is already based on a smartphone app. So imagine the success of an application that gives you a safe and bicycle-friendly route for travelling to and from work, and the boost that this could give to this type of travel," concludes Kahn.

Producing biogas through fermentation of agricultural waste? That is exactly what they do at Biomethane du Bois d'Arnelle, Belgium's largest production facility in Hainaut.

You can spot the three large grey domes and a cone-shaped roof from a distance in the countryside around Frasnes-lez-Gosselies. This is a biogas production unit. It took its creator and CEO, Jérôme Breton, 12 years to complete this project due to the lack of a legal and administrative framework. But today, the unit is operational, producing 70,000 MWh of energy.

Turning food waste into biomethane

"We recycle food waste and agricultural materials, livestock manure, straw, beet leaves, peelings, etc. from farmers in a 15-km radius around the site", says Jérôme Breton. "We work with 100 farmers for whom this represents additional income. In digesters, i.e., concrete tanks that are heated to 40°C, bacteria digest the material and produce biogas, consisting of 45% CO₂ and 55% CH₄ methane. We recover this biomethane through filtration, before injecting it into the natural gas distribution network. Fermented matter or digestate, a black liquid that is rich in organic matter, which is very nutritious for crops, is spread as a fertiliser in the surrounding region, where it is used to permanently store CO₂ in the soil and completely replaces chemical fertilisers."

Unrivalled performance

About 15% of the biogas is converted into electricity and heat, half of which is used for the unit’s own needs. The remaining 85% is purified and transformed into biomethane. Once it has been injected into the grid, this biomethane can be used as fuel or as a raw material for petrochemicals. It can also be used to power turbines, and the heat generated can be recovered, just like in a car engine. “While a cogeneration engine, which produces electricity and heat simultaneously, has a total efficiency of between 40 and 80%, our system allows 99.5% of the biogas produced to be injected into the grid”, the young entrepreneur explains. "The pressure varies in a distribution network. That way, the infrastructure can absorb injections without the need for additional investments to store them."

Growing to valorise

The company also grows maize, beets and cereals to valorise them as biogas: "We made a deliberate choice to grow 600 hectares of energy crops to offer farmers a complementary diversification pathway. This accounts for 30% of our raw materials. These crops are stored to allow us to 'smooth' the inflows into our digesters, which depend on agricultural and food activity, on a seasonal basis."

BNP Paribas Fortis, the only bank with such advanced skills

Jérôme Breton says the project would not have been possible without the support of BNP Paribas Fortis. "We would not have gotten funding if it wasn't for the work of their expert. It is the only bank to have such high-level skills in-house. All the other partners also benefited from the analyses and information that he provided to us! A strong, lasting relationship of trust has developed as a result. In my model, I didn't want to rely on public financing for what I do. At the same time, I wanted to produce at the right prices. We produce and sell our biomethane at 100 euros per megawatt hour, while market prices were close to 350 euros last August."

Entrepreneurial success

At BNP Paribas Fortis, we are particularly proud to be supporting passionate, inspiring entrepreneurs. Because building the entrepreneurship of the future together is also an example of Positive Banking!

Elessent EMEIA is on a mission to make the chemical industry more environmentally friendly and sustainable through innovative methods and cleaner production processes.

"We strive to create cleaner, carbon-free production processes for our customers. Innovation is at the heart of what we do", says Sara Alvarez, Finance Manager at Elessent EMEAI. "We suggest less polluting alternatives to traditional industrial methods, allowing our customers to continue to develop products that are essential to our daily lives while significantly minimising their impact on the environment, particularly in terms of pollutants and CO₂ emissions."

4 key technologies

The metals, fertiliser, chemical and refinery industries make up the majority of the company’s customers, with Elessent EMEAI able to deliver complete turnkey production sites. Tjaart Van Der Walt, Director of Elessent EMEAI: "We have four flagship technologies. The first concerns the manufacture of a compound that is widely used in industry, from fertiliser manufacturers to pigment plants, namely sulphuric acid. This is obtained by burning sulphur. We have 90 years of expertise in site design – we have delivered more than a thousand sites – and process and energy recovery. These processes will be key to producing cleaner batteries."

Increased quality and yield

The company also has alkylation technologies (a reaction that is commonly used in organic chemistry) which is used to produce high octane fuels, for more efficient engines. These compounds are valuable for the petrochemical and refinery industries. "We operate at more than 100 alkylation sites around the world", continues Van Der Walt. "And 25 hydrocarbon hydrotreating sites. This is a crucial step in the refining process, during which some elements are removed from the oil. This includes reducing sulphur and nitrogen content to improve stability. Our proprietary soft hydrocracking technology allows us to recover more value from crude oil."

In addition to these processes, which optimise the quality and yield of hydrocarbons, the company also has “wet scrubbing” technologies, which are very effective in fume treatment.

Financial support and real industry expertise

"Our business is growing on a global scale. For our international expansion, we need the constant support of our bank, BNP Paribas Fortis, which, in addition to assisting us with the financial aspects, contributes its in-depth expertise in our industry", Sara Alvarez explains. "This cooperation is crucial in Morocco, Tunisia, India and South Africa, for example. For our long-term investments in these countries, we benefit from our bank’s advice, particularly in terms of resources and guarantees of payment: secured transactions, letters of credit, etc. The same goes for hedging currency risk, which is essential in the context of volatility. This partnership allows us to continue our international expansion."

Entrepreneurial success

At BNP Paribas Fortis, we are particularly proud to be supporting passionate, inspiring entrepreneurs. Because building the entrepreneurship of the future together is also an example of Positive Banking!