Innovation & Experimentation Story

Explorium – A Playground for

The Future of Retail

There is something that a great business mind and a child’s mind share: They explore. They experiment. They try. They fail and they try again. That’s the way they learn and grow.

-more-

-

--more----

Explorium, a collaboration between Fung Retailing and the Fung Academy that engages all

the business units of the Fung Group, operates with a similar mindset. A laboratory for the

rapid testing of omnichannel business strategies, Explorium is akin to a playground for

visitors, participating retailers and fellow creators. But what makes this playground

distinctively fun and fruitful is the boundless creativity and sophisticated methodology behind

the concept.

Explorium’s nearly 60,000 sq ft mall-like environment in the heart of Shanghai is specially

designed for experiments no different from real-life shopping experience – only more

innovative. With designated interactive exhibition space and workshop area, the omni lab’s

use of space is conceived in collaboration with Pico Group, leading player in exhibition and

event management. The design encourages participation of the visitors and serious play of

the inventors. “It’s partly entertainment, it’s partly research and it’s partly retail,” describes

Simeon Piasecki, Director of Explorium.

Retailing today is not only about transaction but also experience. Sometimes, the latter

matters much more. Moreover, technology is revolutionizing what, where, when and how

people purchase. With the next billion of tech-savvy, vibrant consumers emerging, China is

the ideal place to test out new possibilities and grasp retail trends online and offline.

“Everything in China is moving so quickly and changing so rapidly that what we experiment

and learn today is really history tomorrow,” says Simeon. Witnessing new ideas, new

technologies and new relationships being created daily, Simeon considers the present

‘fantastically exciting time’, which fill consumers with endless awe and wonder. Yet, it also

gives brands and retailers a challenge in finding out which one of their initiatives is

sustainable for the longer term.

No one knows what lies in the future of retail. While the future cannot be predicted, its

potential can be explored and validated by observation, interaction and analysis. Creating a

climate of experimentation, the Fung Academy plays the role of an igniter to inspire creators

and retailers and come up with daring ideas. Like an inquisitive child, we ask questions, we

doubt assumptions and we welcome the unexpected.

-more-

Every force has an opposite equal force and so if you do something and you make it happen, other things will change around it.

-

-more-

The Art and Science of Retail

Like any schools of science, the science of retail in Explorium bears no preconceived ideas.

This allows the Fung Academy to aid retailers to discover untapped possibilities when

formulating hypotheses. At the same time, the Fung Group’s knowledge of current trends

and expertise in various channels help conduct minimum viable experiments and devise

meaningful metrics. This enables retailers to perform bold experiments with minimal risk.

It is almost counter-intuitive to test out something that is fated to go out of date soon after it’s

created. However, that’s what makes the whole game exciting and rewarding. “Every force

has an opposite equal force and so if you do something and you make it happen, other

things will change around it.” Simeon thinks what matters, despite the unpredictability, are to

understand what those changes will be. “That’s what makes omnichannel in retail so

dynamic across the whole of the supply chain. Something that happens for the consumers

at the far end has an impact on the factory that is making the product. The whole thing is so

much more connected now; it’s very difficult to see things individually. It’s the whole chain

reaction.”

Explorium’s visitors are more than just consumers. While they are welcome to purchase,

they are also here to look for a unique retail experience for themselves and their family.

Explorium runs an exclusive membership by referral, which means members are already

interested in what they are going to see. While visiting members are interacting

enthusiastically with the environment, their activities and purchase behavior are traced. The

data are analyzed in detail with IBM’s pioneer retail technology. With the aid of the social

media, Explorium’s membership is expanding organically from the families of the Fung

Group to the middle-class families around Shanghai and beyond.

-more-

More Than a Child’s Play With China’s long history of a one-child policy and the newly implemented two-child policy, the child has always been the focus of the family in the eyes of the parents, as well as both pairs of grandparents.

It came rather naturally that Explorium’s initial target sector is children and families. With

China’s long history of a one-child policy and the newly implemented two-child policy, the

child has always been the focus of the family in the eyes of the parents, as well as both

pairs of grandparents. Creating an imaginative retail experience for the young audience is

as fun as it is challenging. After all, a child’s reaction never lies.

For instance, you seldom hear children begging their parents to bring them to a kids’ fashion

store; it’s even rarer to see children dragging their parents into the fitting room – simply

because trying on clothes is no fun. To most parents, getting their children to try on a

garment without stepping into a fitting room is a pipe dream. But Fung Kids begs to differ.

-more-

A retail partner of Explorium, a premium children fashion maker has created virtual mirrors,

‘Catlook’, to enable visitors to ‘try on’ their products virtually in all the available colors within

seconds.

“Catlook is an interactive experience that makes fitting easy and fun. By just waving their

little hand, children can ‘try on’ the latest fashion from Toonsland and Petit Bateau (brands

under Fung Kids). While appealing to children, this can also relieve parents of concern

about their children being unwilling to try on clothes,” explains Nelson Fang, Fung Kids

Managing Director in China. Catlook also allows relevant product recommendations to

create more opportunities to upsell. Children are also able to share their images in the latest

fashion on social media. “We discovered that through technology-based interactive games,

children are more willing to try on the shoes and clothes than they used to. They in turn get

more interested in the brands and the products of Fung Kids,” says Nelson.

Another successful experiment of Fung Kids is ‘Stride Rite Kiki Moves’. The Fung Academy

helped transform a retail experience from pure consumption to participation by creating an

environment where families can co-create a sense of accomplishment: children play a

dance game when they are trying on a pair of shoes. The interactive experience gives

children incentives to try on Stride Rite’s shoes when they pass by the store. “We

discovered that through technology-based interactive games, children are more willing to try

on the shoes and clothes than they used to. They in turn get more interested in the brands

and the products of Fung Kids,” says Nelson.

-more-

Part of our philosophy is to experiment quickly, take the learning and then move forward. So Explorium allows us to do that in a controlled environment, which is absolutely synergistic with our thinking and how we operate.

Before developing hypotheses for the experiments, the Explorium team had spoken with

many Chinese families from various backgrounds to understand their needs and concerns.

The potential customers consist of both tiger parents and panda parents. The former would

see play as evil, whereas the latter would pamper their children with toys. Hence, one of the

questions asked is: how might we change the stigma that toys are only a reward mechanism

for learning and development rather than a means for learning and development?

The question has given birth to ‘Creative Learning Zone’ for a major toy retailer, turning

entertainment into edutainment. Toys from the retailer are curated according to different

types of learning, from creativity to math. In this environment, children can develop life skills

through play, whereas parents can learn about their children’s hidden talent or interests.

From the experiment, we learned that parents welcome the support and appreciate a place

that enables them to become better parents through bonding. “The retail is just a backdrop

to this,” says Simeon. “What I particularly enjoy is the opportunity to see the parents and the

children doing things together, learning things together and us providing that sort of stage

for them to do it.” The retailer shares similar vision with Explorium. “Part of our philosophy is

to experiment quickly, take the learning and then move forward. So Explorium allows us to

do that in a controlled environment, which is absolutely synergistic with our thinking and how

we operate. It now gives us a great platform to structure our

experiments and measure the results,” says Jo Hall, Regional General Manager,

Merchandise and Marketing of the account for Greater China and Southeast Asia.

-more-

The Significance of Rapid Prototyping and

Customization

Simeon sees the key role of Explorium as supporting people to rapid prototype. He adds,

“People shouldn’t be intimidated by this. People hear the word ‘experiment’ and think it’s got

to be complicated. But actually, people can do the simplest, easiest experiment for one hour,

one day, and one week and get enormous benefits from it.”

One of the major contributors to the prototyping in Explorium’s experiments is Studio 8020,

a joint project with LF Products, which conducts Fung Academy’s manufacturing research.

-more-

Studio 8020 informs and inspires businesses to explore new manufacturing opportunities in

the digital age. Founded with the belief that we are moving into a world where 80% of

products within the supply chain are mass-produced and 20% are made customized and on-

demand. Their studio inside Explorium is their first consumer-facing experience where they

offer a platform for product customization while making experiments cheaper, easier, faster

and better.

The studio is the creator behind Explorium’s best-seller: a customizable remote-controlled

go-kart. In general, people are positively surprised to see a maker culture in a retail setting,

which enables them to shift from buying the ordinary to creating something truly unique and

meaningful.

-more-

The Future of Explorium I don’t know where Explorium will be in 10 years’ time. All I know is that the speed and the pace of change and new initiatives will continue as long as we can see.

More often than not consumers are not aware of what they want or what they might like until

they see something new or different. Hence, it’s the job of the Academy and Explorium to

show consumers better options, which would otherwise be considered nonexistent.

So, where does the Director of Explorium see the omnichannel lab in 10 years from now? “I

can’t answer that. I don’t know where Explorium will be in 10 years’ time. All I know is that

the speed and the pace of change and new initiatives will continue as long as we can see,”

says Simeon. “Technology in retail is only at the very starting point. And therefore, the

requirement to have somewhere to test and research these new technologies will carry on

being an important part of a retailer’s R&D. I can see no end of that change.” Hence, we

must keep experimenting and stay as curious as a child.”

-end-