Article

21.09.2017

How will retail stores look in the future?

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

Article

11.03.2024

We’re all set up to fast-track businesses, including SMEs

A strong ESG (Environmental, Social, Governance) performance is becoming a competitive factor. And SMEs are increasingly aware of this. A good thing, according to Didier Beauvois, Head of Corporate Banking.

How do you explain this acceleration in awareness among SMEs?

Under the CSRD (Corporate Sustainability Reporting Directive), listed companies and companies with more than 250 employees have been subject to ESG performance reporting obligations since 2022. This means that they have made commitments to their customers, investors, banks, employees and shareholders. To meet their ESG requirements, they are increasingly giving preference to suppliers (often smaller ones) that adopt and can demonstrate virtuous practices. In addition, SMEs will also be subject to the CSRD from 2026.

So, has the transition become a must for all companies?

If you want to continue working with customers of a certain size, for example in the retail sector, you no longer have a choice. Good ESG performance is becoming a competitive factor. In fact, we encourage all SMEs to communicate their efforts. A credible policy is a guarantee of viability, because a virtuous company will be in a much better position to attract investors or obtain good financing terms.

How is the bank helping SMEs make the transition?

Based on our experience of working with larger companies, we're ready to help them every step of the way. We have the expertise, the partners and the solutions, which we are gradually making available to smaller companies. 

Our relationship managers have access to a wide network of in-house experts. For example, they can call on our Sustainable Business Competence Centre or the Low-Carbon Transition Group, a BNP Paribas network of 200 experts around the world who can help customers make the transition to a low-carbon future. 

How do you support them in practice?

Our relationship managers, in collaboration with our experts and external partners, offer our customers a way forward. Let's take the example of a small supplier to a large retailer. Once they've understood the risks and opportunities associated with ESG, we help them make a diagnosis – what can they do about it? – and advise them on the actions they need to take. For example, making their vehicle fleet less polluting, improving the energy efficiency of their buildings, producing some of their own energy, making their production processes more circular, adapting their corporate governance, achieving a better gender balance in their management team, and so on.

We then look at the financing required to implement these actions and propose the solutions best suited to the company’s situation, size and sector. We've developed a wide range of transition-related products that we offer either directly or through partners.

Can you give some examples?

We offer specific loans that can be used to purchase insulation, solar panels, high efficiency boilers or electric vehicles. Large SMEs can also access a credit line (of at least EUR 10 million), with the interest rate linked to the achievement of ESG targets, which are verified by independent experts. For example, we have financed a lime producer by linking the interest rate of its loan to the reduction of its CO2 emissions, and a car park operator by linking the interest rate to the level of particulate emissions. We're also developing factoring solutions linked to ESG commitments, where we finance the payment of invoices for SMEs of all sizes.

Article

08.03.2024

Businesses stand to benefit from switching to electric and multimodal mobility

BNP Paribas Fortis is ready for the mobility of tomorrow. And Laurent Loncke, General Manager Retail Banking and member of the bank’s management committee confirms this when he says “We do much more than lease electric vehicles”.

How can companies leverage mobility as part of their transition?

"If we look at vehicle usage alone, switching from fossil fuels to electric energy can reduce CO2 emissions by a factor of four. This transition is being encouraged in our country more than ever by tax incentives and tax breaks. From 2035, the European Union will also ban the sale of cars with combustion engines. Whether it’s for the company fleet or company cars for employees, electric driving is the way forward, alongside other forms of mobility."

Are all businesses aware of this?

"These days, two out of every three new vehicles are company cars. And 80% of those orders are electric vehicles, a trend that is also apparent at our partner Arval."

So companies are playing a pioneering role in this transition?

"Certainly. First and foremost because former company cars find their way to the second-hand market at some point, making electric driving more accessible for everyone. Secondly, by choosing an electric car, you can encourage your friends and family to follow your example. Our recent Profacts survey (only in Dutch and French) showed that 85% of electric vehicle owners are satisfied to very satisfied that they switched to an electric vehicle. However, 42% of Belgians are still reluctant. Half of them are worried their battery will run out before they can get to a charging point."

Is their fear justified?

"Not really. Most drivers only feel comfortable with a range of 500 kilometres, even if they only drive a few dozen kilometres a day. It’s true the charging network does need to be developed further. Many people, especially those living in cities, cannot install a charging point at home. BNP Paribas Fortis is contributing to the expansion of the charging network through its participation in Optimile. This Ghent scale-up offers software solutions for charging electric cars and is developing strategic partnerships for the installation and maintenance of charging points."

Can an electric car be part of each employee’s remuneration package?

"Today, there are already less expensive vehicles on the market, making electric driving an option for middle and lower-management. The Total Cost of Ownership of an electric car is the most important factor, however. And this is still much lower than that of a vehicle with a combustion engine. Leasing is often the best solution. We have a comprehensive, tailor-made offering for all companies, regardless of their size and needs."

What exactly do you mean by a 'comprehensive offering'?

“In addition to leasing, we are able to offer charging solutions at home or at work, a charging card for public networks, the automatic reimbursement of electricity consumption at home, an app to find charging stations, and electric driving training through our many partners.”

So a complete ecosystem?

"We want to contribute to the mobility of tomorrow. By financing it, through credits or leasing, and with insurance, but also by working with partners outside our traditional activities. Like Optimile, and Touring, an organisation that is synonymous with reliability."

But mobility isn't just about cars, is it?

"We believe we need to rethink our relationship with the car. Given the climate targets and the increasing scarcity of resources, it is simply not possible to replace every internal combustion engine with an electric car at the moment. Arval offers its extensive expertise to companies considering a different approach to mobility. We help them analyse their needs, propose alternatives to the car, establish a mobility budget or draw up a mobility policy. We offer bicycle leasing, sometimes in combination with car leasing. We strongly believe in multimodality and mobility-as-a-service solutions: the option to combine different transport modes and pay for them without too much hassle. This is also one of the specialities of our partner Optimile."

Are companies and their employees open to this idea?

"The idea of employees no longer saying 'I have this amount for my car in my salary package', but rather 'I have this amount for my mobility'  is gaining traction. People are already paying for use rather than ownership in gyms or for streaming services. Mobility is going down the same route, with car-sharing and flat-rate subscriptions, making costs more predictable for businesses and private individuals. But the pace of change will also depend on the success of the federal mobility budget. For now, uptake is slow."

 

BNP Paribas Fortis SA/NV – Montagne du Parc/Warandeberg 3 – 1000 Brussels – VAT BE 0403.199.702 – RPM/RPR Brussels

Optimile SA/NV – Sassevaartstraat 46 bus 204, 9000 Ghent – RPM/RPR Ghent – VAT BE 0648.837.849 – www.optimile.eu – BNP Paribas Fortis SA/NV holds a greater than 10% stake in Optimile SA/NV.

Arval Belgium NV, Ikaroslaan 99, 1930 Zaventem – Brussels Register of Companies – VAT BE 0436.781.102.

Touring SA/NV, Koning Albert II-laan/Avenue Roi Albert II 4 B12, 1000 Brussels – Brussels Register of Companies – VAT BE 0403.471.401, is registered under this number with the FSMA, Rue du Congrès/Congresstraat 12-14, B-1000 Brussels, and acts as an associated agent on commission for AG Insurance SA/NV. AG Insurance SA/NV owns a greater than 10% stake in Touring SA/NV.
Article

08.03.2024

Has your company also locked in its energy prices?

The price of energy has experienced both high highs and low lows in recent years. This yo-yo behaviour is a worry to many entrepreneurs. Once again, BNP Paribas Fortis is here to offer you stability.

Controlling the price of energy: it’s an issue that’s almost impossible to avoid, or one that has been a recurring concern in your company over the past few years? We come from a time when energy prices were very volatile, with both high highs and low lows. These fluctuations have worried many entrepreneurs and, in some cases, caused huge additional costs. There is, however, a less well-known way for entrepreneurs to carry out risk management in this area. BNP Paribas Fortis is here to advise you.

Pendulum movement

Energy prices have been on a volatile ride in recent years. After the invasion of Ukraine, they rose to unprecedented levels. Gas prices rose to EUR 300 per MWh, while in previous years they had been around EUR 10-15 per MWh. Electricity prices rose to over EUR 600 per MWh. In previous years, the price was barely EUR 50 per MWh.

Crisis management

"As a result, BNP Paribas Fortis has received an increasing number of enquiries in recent years from companies looking to financially lock in their energy prices. Typically as a company you pay a variable price to the energy supplier. While you fix the price with the bank via a financial swap. Such financial swaps are also used to hedge other commodities (metals, oil products, etc.)." 

Mattias Demets, Commodity Derivatives Sales at BNP Paribas Fortis

The energy crisis of 2022 sent shock waves through the economy. Especially in energy-intensive sectors such as metallurgy or chemicals, it became clear how much affordable energy was crucial to the survival of many companies. Those that were self-sufficient in their energy needs weathered the storm better than others. The energy crisis also highlighted the importance of risk management. Companies wanted, as the legislator put it, to act like "prudent and reasonable persons" - the former "good householder principle". They fixed their energy prices and came out of the crisis virtually unscathed. While others could only hope that energy prices would come down again.

'Never waste a good crisis' is a regularly heard truism. For this energy crisis, we can use this expression once again. It’s fascinating to see companies now taking charge of their own energy supply. The rise of PPAs – Power Purchase Agreements – is particularly remarkable. A PPA is an electricity purchase agreement between a power producer and a customer.

Risk management

Companies are also making great strides in risk management. In the past, it was often up to management to lock in energy prices. They saw it as an additional responsibility to negotiate with energy suppliers. But since the energy crisis, we have seen companies become much more professional. Managing energy prices is today a job in itself. Companies are increasingly thinking about the right strategy to manage their energy costs so that their energy prices come down. How and when they lock in energy prices has become more of an informed decision than ever before, allowing them to protect their margins in the event of rising prices.

As a result, BNP Paribas Fortis has received an increasing number of enquiries in recent years from companies looking to financially lock in their energy prices. Typically as a company you pay a variable price to the energy supplier. While you fix the price with the bank via a financial swap. Such financial swaps are also used to hedge other commodities (metals, oil products, etc.). A financial swap may seem a bit complex at first, but it’s actually not such an intricate transaction. Of course, other structures are also available, depending on your needs.

This is where the “prudent and reasonable person” returns to assess what lies ahead. After all, whether you’re looking for smart investment opportunities or advice on ways to control your energy costs, it ultimately boils down to two sides of the same coin. BNP Paribas Fortis not only thinks about investing with you as an entrepreneur, but also about ways to help you smartly and safely manage important expenses  such as energy costs.

Permanent drop?

Regardless of how companies choose to fix their energy prices, the current market context is very interesting at the moment. Industry in Europe is going through tough times. Nevertheless, the economy is experiencing a soft landing – a slowdown, without a real recession. This is currently leading to lower gas and electricity prices. We have also had a mild and windy autumn and winter. As a result, energy producers have generated a historically high amount of electricity from renewable sources in recent months.

And there’s nothing to suggest that prices won't continue to fall. Europe is importing more LNG from the United States than ever before. Indeed, both the price of US gas and the cost of transporting it have fallen dramatically in recent months. However, elections are coming up in more than 65% of the developed world, and the geopolitical situation (Ukraine, Israel, Taiwan) could again cause volatility.

Prudence

Gas and electricity prices have not been this low for two years and the market is currently stable. But the 2022 energy crisis has shown that we must always be on our guard. Locking in your energy price is not only the most cost-effective tactic, but it will also protect you, as a business owner in times of increasing volatility.

For more information, please contact your relationship manager.

Article

01.12.2023

Investment grants for your business

Belgium’s three regions provide a range of grants for companies and self-employed people making investments. Our experts can help you make sense of the situation and submit your application.

The terms and amounts of investment grants vary greatly from one region to another. The applicable rules depend on the location of the operational entity making the investments. The company’s registered office is not relevant and can be located in any country. You should also bear in mind that applying for a grant is still a fairly cumbersome administrative process. That’s why our experts take care of all the steps, from submitting the grant application to collecting the grant money.

Flanders: a range of grants

Various types of grants are available in Flanders, the most important of which are support for strategic transformations, the ecology bonus, strategic ecological support, the SME e-wallet and the SME growth subsidy.

Each type of support targets different types of investment and different companies. Subsidy levels also vary widely, from 8% for a strategic investment by a large company to 50% for consultancy fees paid by an SME.

Our experts can help you identify subsidy opportunities and then arrange for you to meet a specialist from VLAIO, the Flemish Agency for Innovation and Entrepreneurship, who will then help you with the rest of your application.

Wallonia: traditional and ecological aid

In Wallonia, investment grants are reserved for companies operating in a limited number of eligible sectors. Excluded activities include retail, transport and the liberal professions.

The terms and conditions also differ according to the size of the company. Small businesses must invest a minimum of €25,000. Large companies need to reach higher thresholds and invest in a development zone.

Examples of eligible business investments include buying/building a property, buying land and buying new business equipment.

The basic grant varies from 4% to 6%, but can be higher if the applicant creates jobs, takes an innovative approach or diversifies abroad, for example. A larger grant, up to 20%, may be obtained for projects that promote the sustainable use of energy and environmental protection.

Please note that it is essential to submit the request before any firm investment commitment is made: investments for which you have already accepted a quote can no longer be subsidised.

Our experts can guide your company through the entire process.

Brussels: the most generous

The Brussels subsidy for investments in goods, property or works is open to most sectors. In total, around 80% of the capital's economic activities are eligible for grants. The two main exceptions are education and real estate.

To qualify for a grant, the investment project must be worth at least €10,000 for a start-up business and at least €15,000 in other cases, depending on the size of the business. In addition, it must aim to develop or improve an existing activity: simple replacement expenditure does not qualify.

The aid can amount to up to 30% of the investment, although the average is 12.5%. The level of subsidy depends on a number of criteria, such as whether the company is a start-up and whether the investment will increase the number of people employed by more than 30%.

Over the course of 2024, reforms to the aid system will increase incentives for sustainable and circular economy projects.

Please note that it is essential to submit the request before any firm investment commitment is made: investments for which you have already accepted a quote can no longer be subsidised.

Our experts can guide your company through the entire process.

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