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Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
Retailers that Connect Hearts and Minds Win Business from Showroomers
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Retailers that Connect Hearts and Minds Win Business from Showroomers

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Retailers that …

Retailers that
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  • 1. Retailers that Retailers that Connect Hearts Connect Hearts and Minds Win and Minds Win Business from Business from Showroomers Showroomers In-store, at home,and on the go In-store, at home,and on the go Valeria Maltoni Valeria Maltoni Senior Director ofof Strategy Senior Director Strategy EPAM Empathy Lab EPAM Empathy Lab The path to purchase is no longer linear, The path to purchase is no longer linear, nor is itit one-dimensional. Multi device nor is one-dimensional. Multi device ownership is aareality1.1.Smartphones and ownership is reality Smartphones and tablets are changing our behaviors by tablets are changing our behaviors by putting an ever-increasing abundance of putting an ever-increasing abundance of options at our fingertips, including when options at our fingertips, including when and how to make aapurchase. and how to make purchase. 101 East 8th Ave, Suite 201, Conshohocken, PA 19428 101 East 8th Ave, Suite 201, Conshohocken, PA 19428 ©2013, AllAll Rights Reserved. EPAM Empathy Lab ©2013, Rights Reserved. EPAM Empathy Lab
  • 2. 59 96 % % % % TOP FOUR FOUR ONLINE ONLINE Most sought features online: Most sought features online: low prices, product variety low prices, product variety Beauty and personal care is the fourth largest category purchased online Beauty and personal care is the fourth largest category purchased online in North America at 59% in North America at 59% Finding the specific product is the most important attribute when shopping Finding the specific product is the most important attribute when shopping online–96% online–96% Top four channels: Amazon, 28%; Sephora, 18%; major drug stores/mass Top four channels: Amazon, 28%; Sephora, 18%; major drug stores/mass retailers, 11%; brand direct (17 brands), 10% retailers, 11%; brand direct (17 brands), 10% & While we do most of our research at home on desktops While we do most of our research at home on desktops or tablets, mobile devices continue to drive purchase or tablets, mobile devices continue to drive purchase decisions in the store. This isn’t just for large ticket items, decisions in the store. This isn’t just for large ticket items, but for everyday products, too. The beauty industry but for everyday products, too. The beauty industry offers a good example of this trend. offers a good example of this trend. According to a March 2012 survey of online buyers According to a March 2012 survey of online buyers in North America conducted by A.T. Kearney, people in North America conducted by A.T. Kearney, people spent 33% to 45% of their monthly beauty and personal spent 33% to 45% of their monthly beauty and personal care budgets online. Shoppers are using both etailers care budgets online. Shoppers are using both etailers and brick-and-mortar stores to purchase these types of and brick-and-mortar stores to purchase these types of products. products. Brands need to step up their multichannel marketing Brands need to step up their multichannel marketing efforts to reach customers wherever they are buying. efforts to reach customers wherever they are buying. 11 EPAM Empathy Lab EPAM Empathy Lab Most sought features in store: Most sought features in store: tactile experiencew/products, tactile experiencew/products, interaction w/staff interaction w/staff However, for retailers, unlocking new opportunities to However, for retailers, unlocking new opportunities to influence and persuade customers to buy is not just about influence and persuade customers to buy is not just about integrating new tools. It is about understanding people. integrating new tools. It is about understanding people. While retailers have always specialized in getting to While retailers have always specialized in getting to know their customers, the increased availability of know their customers, the increased availability of communication and transaction channels is posing some communication and transaction channels is posing some unique challenges. unique challenges. Where do customers go to find out about products? Where do customers go to find out about products? What roles do search, content, reviews and recommenWhat roles do search, content, reviews and recommendations, and access/speed play in the customer journey? dations, and access/speed play in the customer journey? How does a retailer create a single view into customer How does a retailer create a single view into customer interactions across different touch points? interactions across different touch points? comScore, April 2012 ––Nearly 1 in 4 U.S. Smartphone users also has a tablet comScore, April 2012 Nearly 1 in 4 U.S. Smartphone users also has a tablet 2 2 IN-STORE IN-STORE
  • 3. Why attention alone is not enough Attention may be the currency of the Web. However, it alone does not translate into action. People spend more time online, visit more Web pages, and click on more links than ever before, yet all this isn’t necessarily leading to more transactions. Today, a Web or in store visit from a mobile user is almost certainly less likely to convert into a purchase just from a click. Brand tweets are seen by ten times as many people, yet they are only half as likely to get clicked on as they used to be. While attention online seems to go up fast, the amount of interaction it leads to is not increasing at the same rate. Browsing doesn’t equate action, and action doesn’t scale as quickly as browsing. This is why designing experiences that support what your customers are trying to do is more important than ever. Starting with an understanding of who buys from you and tailoring your approach to their needs. User-centric view Start by assessing consumer needs – how are people researching your products? Where and from which devices does your site get the most traffic? Develop and utilize personas – who are your customers? What are they trying to do? Create experience themes that tie to your customers’ desire for self-expression and their sense of identity. Help them take center stage by encouraging frictionless and easy actions through design and content. Bridging online, in-store, and on-the-go experiences also requires a shift in mindset. Retailers with a traditional website with a mobile version need to shift to develop a product that is responsive across screens, speaks to the market in real time, and is adaptive. The solution needs to learn from the people who use it. Sample : Mobile commerce strategy and tactics for fashion/apparel 3 EPAM Empathy Lab
  • 4. Translating your brand Translating your brand messaging and user messaging and user experience across screens experience across screens An increasing number of people are An increasing number of people are using up to five different devices and using up to five different devices and can spend up to one week researching can spend up to one week researching and price-comparing before making a and price-comparing before making a purchase in many product categories – purchase in many product categories – beauty and fashion being one of them. beauty and fashion being one of them. Pre-purchase research is conducted on Pre-purchase research is conducted on brand and retailers’ Web sites in about brand and retailers’ Web sites in about equal percentages, followed by equal percentages, followed by recommendations and reviews on social recommendations and reviews on social sites to glean information on product sites to glean information on product performance. performance. With more options available, buyers are With more options available, buyers are more open to choices and (potentially) more open to choices and (potentially) less loyal to brands than they used to be. less loyal to brands than they used to be. The phenomenon known as showrooming The phenomenon known as showrooming has stirred a major disruption in retail has stirred a major disruption in retail as mobile enters the brick-and-mortar experience. as mobile enters the brick-and-mortar experience. [ ] With more options available, With more options available, buyers are more open to buyers are more open to choices and (potentially) choices and (potentially) less loyal to brands than less loyal to brands than they used to be. they used to be. Many U.S. consumers have come to rely on their Many U.S. consumers have come to rely on their smartphones to assist with their in-store shopping, smartphones to assist with their in-store shopping, looking to make sure they are purchasing the right looking to make sure they are purchasing the right product at the best available price. Mobile is, in fact, product at the best available price. Mobile is, in fact, the new store end cap. the new store end cap. This behavior is putting significant economic pressure This behavior is putting significant economic pressure on retailers with physical operations. According to on retailers with physical operations. According to a recent comScore report22, ,the retail industry is being a recent comScore report the retail industry is being disrupted as eCommerce grows at a 4x rate faster than disrupted as eCommerce grows at a 4x rate faster than traditional retail, while accounting for 1 out of 10 traditional retail, while accounting for 1 out of 10 retail dollars. retail dollars. The best vantage point to uncover opportunities The best vantage point to uncover opportunities to translate your brand message into a compelling to translate your brand message into a compelling experience in an omni-channel environment is by experience in an omni-channel environment is by placing the customer at the center. As high-speed placing the customer at the center. As high-speed mobile connectivity becomes the norm, long-term mobile connectivity becomes the norm, long-term 22 survival for retailers is dependent upon a strong a survival for retailers is dependent upon a strong a combination of content and data. combination of content and data. Whether she’s researching, shopping, buying, picking Whether she’s researching, shopping, buying, picking up or returning an item, or seeking service, a single view up or returning an item, or seeking service, a single view of the customer will help personalize her experience of the customer will help personalize her experience in store, on the desktop, or on the go based upon her in store, on the desktop, or on the go based upon her preferences and purchase history. preferences and purchase history. Customer profiles and loyalty accounts allow retailers to Customer profiles and loyalty accounts allow retailers to gain insights into what delights her, the make or break gain insights into what delights her, the make or break moments, as well as how data can help deliver better moments, as well as how data can help deliver better experiences tailored to her needs as she researches, experiences tailored to her needs as she researches, evaluates products, and shops. evaluates products, and shops. Bridging online and physical locations creates a very Bridging online and physical locations creates a very powerful value proposition for shoppers who are used to powerful value proposition for shoppers who are used to viewing and sharing information across devices, at home, viewing and sharing information across devices, at home, and on the go. Successful execution is not limited to and on the go. Successful execution is not limited to providing digital tools like iPads, kiosks, and intelligent providing digital tools like iPads, kiosks, and intelligent product bar codes or social mirrors to customers. product bar codes or social mirrors to customers. To be the most effective, digital displays still need to be To be the most effective, digital displays still need to be integrated in the in-store experience and be right for integrated in the in-store experience and be right for the customer, not just the store. Are installations well the customer, not just the store. Are installations well maintained and visible in-store? Is the content available maintained and visible in-store? Is the content available through tablets and kiosks useful, unique, and simple through tablets and kiosks useful, unique, and simple to access? to access? Additionally, to make the experience lean and effective, Additionally, to make the experience lean and effective, point of sale (PoS) solutions and order management point of sale (PoS) solutions and order management systems (OMS) need to be integrated to CRM tools to systems (OMS) need to be integrated to CRM tools to empower sales associates as they service customers. empower sales associates as they service customers. comScore, February 2013 ––smartphones driving showrooming, tablets driving purchase comScore, February 2013 smartphones driving showrooming, tablets driving purchase 4 4 EPAM Empathy Lab EPAM Empathy Lab
  • 5. Omni channel customer behavior STEP 2 VE ACTI E VA LU AT I O N LOYA LT Y LO O P STEP STEP 1 3 $ $ Initial Consideration Set Moment of Purchase STEP POS T P URC 4 N HASE EXPERIE CE 1 2 3 4 RESEARCH SHOP BUY SERVICE Browse Catalog Visit Retail Store, Kiosk Buy Online Buy Online Web Search Product Info Chat, Place Order Call to Research Accessories Comparison Site Read Reviews Comparison Site Troubleshoot On Community Fan Sites 5 EPAM Empathy Lab Online Chat Rooms
  • 6. Cross-platform services and transactions speak to market Along with segmentation by customer type, smart retailers test scenarios in a multichannel environment. Are customers able to return or exchange items, pay in-store for an existing order, or pick up a paid for order in-store instead of having it mailed to their homes? In a recent interview, Julie Bornstein, SVP Sephora Direct, said the company has been testing iPads with customized apps in-store. Customers can use the tablets to watch instructional videos, read online reviews, and sign up for the loyalty program. Sephora’s newsletters lead with exclusive offers and discounts, online and in-store, encouraging repeat purchases while collecting unique customer data to store in the company’s CRM system. Sephora’s Loyalty Program, VIB, creates multiple opportunities for the retailer to upsell and encourage customers to try new products through free samples. A personalization engine drives both product page recommendations as well as after-purchase product reviews requests, which the beauty retailer then integrates on the company Web site. A passionate customer community has gathered around product use and contributes regular recommendations and reviews. Customers get what they want, while the company learns what converts. Case Study: Leading Global Beauty Retailer Cross Integration Case Study: Sephora’s s Cross Channel Channel Integration Key Mobile Statistics: $300 million in annual eCommerce sales 300% increase over the past year in mobile shopping 70% of its mobile traffic comes from iOS devices 3 million in iOS App downloads 1.5 million annual visitors per month ONLINE ON THE GO Sephora.com through The digital experience carries from the retailers website A next generation iOS app gives customers the most percustomers the most per- to mobile mobile and social media initiatives, including through toand social media initiatives, including an active sonalized experience ever seen in the beauty industry, and the beauty industry, Facebook page, a thriving online community, Beauty Talk, an active Facebook page, a thriving online community, connects customers with the clients beautyin ways thatways Sephora experts experts in are a mobile site, mobile site, and an Beauty Talk, a and an iPhone App. iPhone App. mostare most relevant to them. that relevant to them. IN STORE The app allows shoppers to tap or scan products while in Scentsa and Skincare IQ touchscreen In-store responsive touchscreen kiosks offer customers an kiosks offer customers products, email research products, entry point to research an entry point toit or scan the QR email it or scan the QR code with their phone. available code with their phone. Beauty Studio iPads areBeauty Studio iPads are available along vanity mirrors to tips, along vanity mirrors to view how-to videos, accessview as how-to videos, access tips, as well as a menu of in-store well as a menu of in-store services and social content. services and social content. 6 EPAM Empathy Lab store and run price and item comparisons, access product ratings and reviews, save products to a wish list, receive sales and discounts notifications, check in when near a store, order, and pay.
  • 7. Omni channel means responsive, social, and data-driven available everywhere, responsive design enables reach in the form of broader adoption. The rapid changes in customer adoption of mobile and social are strong reasons to re-evaluate ecommerce strategies. Customers are used to starting a task on one device and completing it on another, and there is a renewed focus on retailers’ supporting user tasks and fulfilling orders across channels. Retailers need to provide a compelling experience across multiple devices and screen sizes. Designing for individual experiences without taking into account the power and scale of the connected customer relegates an in-store or app experience to novelty, without it ever tipping over into necessity. To move up the ladder of social behaviors retailers need to support in-store digital experiences. How is this achieved? By building an experience that goes responding to specific need inputs at the very bottom of the scale, to giving sales associates the data necessary to make personalized recommendations and helping customers make informed decisions tailored to their specifications. Responsive Design in Brief CSS ME DIA QUE RIE S Fluid grid Flexible media CSS Media Queries Benefits Challenges One codebase to manage Limited access to device features Speed to Market on new devices An interim solution are the iPad displays at Kate Spade Saturday’s micro-store in Japan. They serve the dual purpose of stimulating deeper product discovery and connection to the brand, and help the retailer make frequent changes and updates as they are available without incurring additional costs. Slower performance than naitive Another example of novelty interactive experience in store is the Adidas Mobile search visibility Mobile browser fragmentation social mirror. It engages customers Updates pushed via browser New Design process through content and the connected Unified user experience world. The social mirror and the new storefront window the company rolled out as part of a six-week pilot test at the Adidas NEO Label store in Nürnberg both elevate Tips for retailers to stay ahead customer engagement to the next level. Enhance and personalize the in-store experience to inspire conversion – can customers access additional product information and tailored recommendations using their phones while in store? Bring social to shopping– are ratings and reviews integrated with your mobile site? Can shoppers check social media buzz about your products? Unlock the power of digital in-store– are kiosks and tablets used to create real-time, localized experiences that save customers time and money? Can shoppers access deals while in-store? Be omni-present– are your digital assets optimized to work across platforms? Is data empowering your sales associates to assist customers? Designing for devices is a zero-sum game – it’s unsupportable, too expensive, and takes too long to complete. Given that digital products need to be 7 EPAM Empathy Lab Allowing customers to customize products, share fitting sessions with their social circles, and providing easy access to product information via kiosks or iPads while in store enhances the experience and encourages conversion. More sophisticated, high touch digital experiences tailor merchandizing based on interests and preferences. beauty retailer case study demonstrates the view The Sephora case study demonstrates the single single view of the customer within a connected ecosystem. Because social conversation has become a primary driver of content engagement, responsive design is part of the answer. Extending the view of the funnel into the social channels to allow this conversation will be vital to understanding the customer at this step of the process.
  • 8. Measure what matters Over time, your shoppers are interacting with you via more devices and touchpoints, whether at home, on the go, and in-store. Their engagement with the brand will be direct (engaging with your products and experiences) and indirect (e.g., interacting with other shoppers through social channels, purchasing through other marketplaces). The lines between these experiences will continue to blur as shopping continues to shift from in-store and standard ecommerce in coming years. This is driven by the increase in people with the ability to shop, compare prices, and transact over smartphones and tablets. goals, but provide the most relevant and correct feedback, will allow you to measure what matters. Developing the business competency that enables your team to measure what matters accurately (not precisely) nurtures team members who can nimbly convert data [ into insight, and focusing on taking action based on data will position you to interact with your customer more effectively. Insight from data drives innovation NOSE ITERATIVE IMP RO VE ME NT D E P LO Y As more channels and experiences produce more data for your organization, it is becoming more difficult, not easier, to focus on the critical few metrics that define success and to constructively act on your data. Organizations that master the skill of efficiently using data properly to make decisions will compete at a higher level than those who don’t. Selecting key performance indicators and identifying benchmarks that are not just aligned with business 8 EPAM Empathy Lab This competency is about more than buying the right tools – this is about acquiring experience, knowledge, and facility with analysis that will help accelerate the development of insights that will drive business growth. TEST MEASURE D I AG ] Organizations that master the skill of efficiently using data properly to make decisions will compete at a higher level than those who don’t. In addition, a cultural shift is required; there is no right answer, no best answer that is not supported by the right data. Retailers have always lived by data – but many multichannel retailers have struggled to apply their understanding of the data that informs the store merchandising experience to the digital realm, especially as digital channels continue to evolve.
  • 9. Reinventing the buying experience with digital at the center Customers are the driving force behind the increasing need for retailers to integrate digital tools and technologies. The good news for brands with physical stores is that while online has surpassed offline when it comes to researching products, the traditional store still retains primacy for completing the purchase. According to a recent survey by Forrester3, the modern shopper uses multiple channels to research products and cares more than ever about value and savings. While the store’s physical location and Web site were ranked equally helpful to fill this need, the store is still king when it comes to closing the sale. Retailers should use digital to drive customers to the store and improve the in-store experience. While customers use smartphones when on the go to access location-based and coupon applications, as well as document and share what they see and experience, these platforms still play a minor role in product research and conversion. 3 9 The traditional store still retains a strong appeal for shopping, particularly for beauty products, and categories like apparel and footwear. Digital displays, sales associates with iPads, and kiosks to check inventory and access coupons and rewards have proven to generate a positive impact on customers while in brickand-mortar locations. In addition to leveraging customer demographics for segmentation, marketers must combine customer lifecycle behavior with point-of-sale data to create buyer personas and then optimize messaging by persona. Gathering and using richer cross-channel data allows retailers to identify the most loyal customers and target specific rewards and content to those groups online, in-store, and on the go. North America Technographics Consumer Deep Dive: Investigating the Customer Life Cycle (Buy Phase) Survey, Q1 2012, Forrester EPAM Empathy Lab
  • 10. About the Author Valeria Maltoni, Senior Director of Strategy, EPAM Empathy Lab Valeria has been helping organizations develop strategies to connect brands and customers through content, community, and commerce in digital and social for more than 20 years. She has worked with Fortune 500 clients and fast growth organizations in five industries, including Target, Allstate, GE Appliances, Anheuser-Busch InBev, SunGard, Willis International, and the Project Management Institute (PMI). more For More information visit: epam.com/empathylab epam.com/empathylab EPAM Empathy Lab is a digital strategy and experience design firm with a global user experience development team. We build products. Our work is based on: Meeting the needs of end users by understanding what they are trying to do through behavioral research; Achieving business objectives by supporting client Contact us michelle_pack@epam.com David_Larkins@epam.com programs through strategic consulting. Plus, translating data into insights that inform measurement and tactics through experience planning and optimization; Delivering world-class software engineering by shaping products in code through experience development. 10 EPAM Empathy Lab ©2013, All Rights Reserved. Us Follow us twitter.com/EmpathyLab twitter.com/EmpathyLab

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