Scalability, Efficiency and Profitability with Reactor Retail
With extensive experience in retail concept development, in-store graphics and digital transformation, Björn Drawfarc joined Reactor Retail in 2016 as Managing Director for its Swedish branch. MiND had the pleasure to have a face-to-face talk with Björn during the Stockholm Design Week about the role Reactor studio has within the retail industry in Scandinavia.
In Björn’s opinion, “a focus on scalability and efficiency to work profitably while using sustainable materials is the basic principle of Scandinavian design concepts”. Reactor’s focus on the Nordic market is due to their in-depth knowledge of the Scandinavian retail landscape and of their consumers’ behavior, shopping habits and preferences.
What is the reason behind the name ‘Reactor Retail’?
When the founders were about to start the company back in 2000, the initial name proposal could not be registered as a company name. So, they had to come up with something new very fast. Dag, our Chairman, happened to have the old Neil Young record “Re-act-or” on his desk – so there it was. Not much of a branding process.
What is the philosophy of Reactor Retail?
More or less all of our employees come from the retail operations, branding and concept development part of big retail. The founders, when Reactor started, shared their frustration with “design-by-committee” development processes calling it overcomplicated, fragmented and expensive. It ends up launching mediocre solutions that seldom changed the game of retail. Therefore, we set out to become the prime expert regarding the branding and concept development process, all the way from strategy to implementation. We really sell a process and provide in-house expertise and services to support that process. On the other side, we never add a service that does not support this specific process.
"Creativity is not necessary a group activity, but collaboration is smart."
As Managing Director, what, according to you, is the most difficult part of your role?
In our business, a managing director’s main task is to get out of the way of the experts and creatives, so they really can concentrate on their missions. They are the heroes and the core of our business. I’m just a support function.
Can you tell us more about ‘The box concept’ for Elgiganten that has been awarded ‘The Omni-channel Experience of the Year’?
The most important thing is the ability to transform insights to real life customer experiences. We’ve been arguing for years, and now I think it is an accepted common ground of understanding: brick-and-mortar stores drive online sales and vice versa. The better your online offer is, the more you drive traffic to stores. The more and better stores you build, the more traffic you have on your online part. It is not one or the other. It is both.
I think it is time to kill the omnichannel buzzword because it is two separate shopping journeys: the digital one, where you can go through the entire purchasing process without entering a physical store; and the physical journey, which is completely separate. They are separately designed and have their own unique way of moving the consumer forward in the purchasing process. The magic occurs when you are able to build bridges between the different universes – without messing up. You just have to try the ‘Elgiganten click & collect’ process once, and you’ll know how it adds value both for Elgiganten and their customers.
Reactor x Elgiganten.
In your opinion, what are the pillars/foundations of Scandinavian design concepts?
First of all, the scalability and efficiency to work profitably, even off the high street. Norway, Sweden and Finland are sparsely populated and commercial concepts must be able to adapt to that reality. In addition, staff wages are relatively high. Therefore, Scandinavian concepts often use materials and space creatively smart and with a high degree of technical sophistication and automation to save operational costs.
For example, from fast take away to sophisticated dine in, Panini Internazionale is a Stockholm based delicatessen with 28 restaurants, with 4-5 new ones added every year. Located in areas with many office workplaces, Panini specializes in convenient lunch dishes based on very carefully selected ingredients. The latest Panini in Isotopen is an extended version of the Panini concept with a different pace from the rest, where we mix classic Scandinavian design elements with continental European features and colors, creating a warmer and richer environment, inspiring guests to spend more time at the site.
How does Reactor Retail stand out from other Scandinavian design studios?
I cannot say anything about how other studios work, so I don’t know how we may stand out. However, our main interest is to create attractive and profitable commercial branded experiences, which can be efficiently formatted to and implemented in many different locations. Of course, we use high level creative skills as tools to achieve it. We only measure our success to the extent our clients decide to roll out the solutions we create. Nothing else matters. When a roll-out is under way and our clients start noticing return on their investments, then we celebrate. Spectacular one-offs and design awards? Could not care less.
Having worked in the retail business, what changes would you like to see in the retail industry?
First, for years we’ve argued that traditional retailers should stop complaining about online competition, because they would be even worse without the online competition. More people are searching for online products but shop in a physical store, than the opposite. It’s actually the online retailers that have larger need for establishing physical stores. Why? Because the conversion rate online is 2 – 4% but in a physical store is 20 – 40%. Yes, many physical retailers are getting bust, but it’s because of bad management, not because of online competition. Just look at a recent giant in the toy industry… they failed to realize that 10-year-old girls stopped playing with physical toys years ago because they now play with smartphones. That has nothing to do with online competition, just ignorance. The remedy is not new: retailers must know their customers better than themselves. They need to know how people’s lives are changing and be able to act accordingly. It’s not about big data and analyzing each movement of your customers. It’s about recognizing how megatrends in the society are influencing the daily lives of your customers.
Retailers must know their customers better than themselves.
Second, online retailers must realize that when they go physical, they have a lot of groundwork to do. Online brands don’t have the emotional depth and complexity as an everyday physical brand. Therefore, they must do some serious soul searching to be able to add the necessary richness to then translate their brand’s personality into a physical encounter with their customers. Furthermore, they must define clear and relevant roles for their physical stores. Remember that in this digital age, people are craving for human touch, and to experience things with all senses. But don’t think about amusement parks. Think about everyday relevant services that resonate also emotionally. Sounds complicated, but who said it would be easy?
How do you think that the store influences the satisfaction of the customers and the community?
As humans we’ve been buying our goods from the market for thousands of years. At the market we traded, gossiped, made friends. To meet other people and trade is in our genes. We need physical meaningful meeting points in our communities. In fact, even more so in the digital age, we need the human touch, a lot of passion and to experience the world through all our senses in order to remain healthy human beings. That will be the mission of markets, restaurants and stores in the future. The ones that can achieve that, with true PASSION, will be the winners of tomorrow.
Reactor x Elgiganten.
Who or what are some of your local or global inspirations?
We worked together with Andy Spade and Anthony Sperduti of Partners & Spade in a project for Target in the US a few years ago. Their holistic storytelling approach can do wonders for any brand. Their works for Shinola Detroit and Warby Parker are classics. Generation X is my other inspiration. They are younger than Millennials and they will probably be the generation determined to actually save the world. Them and their expectations on products and services are nothing like the world have seen so far. This will pose the greatest challenge for retailers and industry. Adapt or die.
"The Reactor team are a curious bunch, and fast to pick up changing consumer behaviour."
We see that Reactor Retail has majorly worked on projects in the Norwegian market. Why is that and do we see it moving into new territories?
It’s true that most of the cases you see on our web page are for Norwegian clients, who are commonly much more relaxed when it comes to letting us use our projects as showcases. Swedish clients are a bit more reluctant to let us do that. If you scroll through our client list, you’ll find a fairly large number of significant international clients we’ve worked with over the years. However, we are focusing on the Nordic market as our skills and experiences are primarily based on Scandinavian consumers, shopping habits and preferences. That, together with our in-depth knowledge of the retail landscape in Scandinavia, gives us a competitive advantage right here. Going into new territories not all experiences may be as relevant, so we’ll pick our battles carefully. Today we have two studios: one in Oslo and one in Stockholm, and that’s it for now.