Beyond the integration of physical stores and e-commerce: The future of shopping experiences

As the shift to online accelerates across all industries, bringing significant changes to consumers' values and purchasing processes, there is now a demand for new shopping experiences that seamlessly connect online and offline.

In February 2021, the Dentsu Group in Japan launched " dentsu SX" (※1 ), a project to design new "shopping experiences" for the OMO (Online Merges with Offline) era. The name SX embodies both "Shopping Transformation" and "Shopping Experience." Through a powerful partnership with frog design inc., one of the world 's leading design firms, we leverage technology and creativity to provide one-stop support—from strategy and implementation to operation—for new shopping experiences tailored to the coming era.

This series examines the changes occurring across five industries—"Cosmetics," "Finance," "Fashion," "Consumer Goods," and "Home Appliances"—and explores future prospects.

For the first installment, we interviewed three individuals: Naoki Mori from Dentsu Inc., Tsuyoshi Kaminaga from Dentsu Live Inc., and Yumiko Yasuda from Dentsu Digital Inc. They discussed the prevailing trends and challenges that led to the launch of dentsu SX, as well as the future the project aims to achieve.

*1 dentsu SX
A project by seven domestic Dentsu Group companies designed to create integrated online-offline purchasing experiences aligned with the OMO era from the customer's perspective, contributing to corporate business growth in the retail sector. It integrates the Dentsu Group's accumulated business expertise with the insights of frog design inc., participating as a strategic partner. By combining Dentsu Inc.'s proprietary customer behavior data and cutting-edge technologies like AI and cloud computing with creativity that captures customer insights, it creates unique shopping experiences for brands from the customer's perspective. ( See the release for details )

 

The Value of Real-World Experiences: Reexamined in Today's Digital Shift

──First, could you tell us about the background and challenges that led to the project's launch?

Mori: As consumer purchasing experiences rapidly evolve alongside technological progress, more companies were challenging themselves with new initiatives like DX and D2C Inc. Within the Dentsu Group, we have numerous companies capable of approaching this trend with cutting-edge solutions in digital, data, space development, and elemental technologies. We believed integrating these capabilities could provide clients with even more valuable shopping experiences.

Kaminami: One case that personally inspired me deeply was Nike's "House of Innovation 000," opened in New York in 2018. Its store design integrated with the Nike official app, allowing users not only to request fittings and make payments via the app but also to receive personalized, high-end services based on their personal data.

Based on trust between customer and brand, customers provide personal data to receive better service, while the brand delivers sophisticated, tailored services to each individual.

This convinced me that OMO holds potential far beyond simply bridging physical stores and e-commerce; it can deepen customer-brand relationships and create new experiences.

Yasuda: While the digital shift accelerates, more companies are re-examining the value of real-world experiences. The key lies in "experiences available only here and now" and the "emotional impact" unique to physical settings. The OMO concept is gradually gaining traction, but its practical implementation remains limited. Now more than ever, we need customer experiences that blend digital/technology with creativity that moves people.

What is the "shopping experience" that makes brand engagement part of daily life?

── The phrase "shopping experience" is quite striking. Could you elaborate on the meaning behind it?

Mori: While DX (digital transformation) is being rapidly promoted, partly due to COVID-19, it's not simply about digitizing everything. We need to reinvent the purchasing experience itself—one that enhances branding and loyalty in a seamless online-offline environment. In other words, what's needed is a "shopping experience" that encompasses not just the act of purchasing, but also deepening the relationship afterward.

Kaminami: The term "shopping experience" carries positive connotations like "exciting," "fun," and "enriching." For consumers, whether it's online or offline isn't the main point; what matters is how comfortably, conveniently, and enjoyably they can shop.

That's precisely why we shouldn't stop at a single purchase. We should foster repeat business, build loyalty, and ultimately achieve such a strong connection that the brand becomes intertwined with the consumer's own identity.

Mori: "Integration into daily life" is a crucial element of the shopping experience, right? While a brand's entry point might be "novelty" or "interest," we want to design a path where the brand experience becomes firmly embedded in consumers' daily routines.

Kishina: In other words, it's about designing for mid-to-long-term corporate benefits, not just short-term gains. This project aims to transform and drive the brand's business itself, centered around a new shopping experience.

Flexibly designing the "optimal solution" tailored to each client is crucial.

── You mentioned that "many companies aspire to OMO but haven't yet put it into practice." Given this reality, what unique value can dentsu SX provide?

Yasuda: Three key points: "User Understanding," "Execution Capability Beyond Conceptualization," and "Technology Integration."

Dentsu Inc. has long focused on advertising communication to "move people." The vast user insights and experience cultivated through this work are incredibly powerful assets when designing shopping experiences.

Furthermore, we believe our strength lies in our ability to provide an end-to-end solution: not just conceptualizing ideas, but actually creating physical stores and spaces, and then executing detailed, nuanced initiatives beyond mere creation.

Another advantage is our ability to propose the optimal technology combination tailored to the desired experience, without being constrained by specific technologies or cloud services.

Mori: dentsu SX is a gathering of companies and talent with unique capabilities, so I think a major strength is our flexibility to adapt the solutions we provide based on the client's situation. Sometimes digital technology implementation is needed, other times consulting, or perhaps UX design, creative work, or space solutions – the approaches required to solve challenges vary. We can propose the "optimal solution" for the client without being limited to a specific framework.

Kaminami: As mentioned earlier, we're moving beyond simple integration of physical stores and e-commerce. A world of always-on connectivity is emerging, encompassing new touchpoints like pop-up stores, virtual shops, and apps. To meet the demand for more multifaceted and comprehensive solutions, we aim to combine the capabilities of various Dentsu Group companies and respond as one team.

──What specific challenges or concerns can you address?

Mori: Since this is an area requiring reconstruction to align with consumers' new values and lifestyles, we encourage companies eager to challenge new approaches around "shopping" or "purchasing," or those facing specific challenges, to feel free to reach out.

Yasuda: For instance, we can assist from the ground up—whether you're considering new shopping services beyond e-commerce, seeking to fundamentally rethink your current store formats, or exploring novel purchasing experiences.

Kishina: We can offer not only full-service support from strategy to implementation and operation, but also small-scale starts focused on solving immediate, smaller challenges. We'd be delighted if you would consult with us.

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dentsu SX welcomes inquiries and questions from companies. If you're interested, please contact us via our official website.

Next time, we'll explore changes in shopping experiences within the cosmetics industry and the actions companies should take moving forward.

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