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New Retail Day'14 - 6. maj - Lee Petersen, WD Partners

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  • 1. amazon can’t do THAT Lee Peterson EVP, Creative Services WD Partners wdpartners.com
  • 2. amazon can’t do that
  • 3. agenda Our sponsor
  • 4. agenda Our sponsor Why?
  • 5. agenda Our sponsor Why? Amazon
  • 6. agenda Our sponsor Why? Amazon Study Vitals
  • 7. agenda Our sponsor Why? Amazon Study Vitals Findings & Results
  • 8. agenda Our sponsor Why? Amazon Study Vitals Findings & Results BE the Store of the Future Video
  • 9. agenda Our sponsor Why? Amazon Study Vitals Findings & Results BE the Store of the Future Video Conclusion
  • 10. WD is a customer experience expert for global food and retail brands. Our mission is to deliver innovative solutions that will drive and shape the future of retail. 46 years 10 offices worldwide 350+ people
  • 11. What We Do insights & strategy design & brand digital services operations engineering architecture & engineering program management
  • 12. Thought Leadership Wiring the Customer Experience How Consumers Are Embracing Fast-Emerging Digital Technologies Retail's Next Generation How Millennials Will Change Shopping The New Killer App: Stores You Have Stores, Use Them! The Continuum of Cool How Successful Brands Stay Relevant Crossing the Generations Supermarket Showdown Leaders and Laggards in the Battle for Consumer Preferences in Physical and Digital Grocery Experiences The Fundamentals of Aisle Attraction Increasing Center-Store Traffic How In-Aisle Merchandising Attracts
  • 13. Our Partners BIG BOXCPG CONVENIENCEGROCERY SPECIALTY RETAILFOOD SERVICE
  • 14. why?
  • 15. nce upon a time... O
  • 16. Retail was simple.
  • 17. There was a customer, a list and a store.
  • 18. So we opened stores.
  • 19. And then we opened a lot of stores.
  • 20. And a lot more stores.
  • 21. Buy online ’96 BUY! Until one day it changed...
  • 22. MILLIONS OF STORES But we kept opening stores.
  • 23. Until someone had an even better idea.
  • 24. So what once looked like this only a short time ago...
  • 25. Now looks like this.
  • 26. What does this mean for retail?
  • 27. It means... Customers can buy anywhere.
  • 28. Anytime...
  • 29. THEY ARE ALWAYS SHOPPING!
  • 30. WE ARE ALWAYS SHOPPING!
  • 31. And a lot of it is being done like this...
  • 32. And less and less through these.
  • 33. More and more through these guys...
  • 34. the 900 pound gorilla
  • 35. Number 9 retailer in the US 2nd fastest growth retailer of the top 50 in the US Source: Stores.org, 2013 Top 100 Retailers
  • 36. Over the past year: 180 million customers, bought 3.5 billion items Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 37. Over the past year: $75+ billion sales in 2013 Source: The New York Times
  • 38. Over the past year: Added about 25,000 employees Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 39. Over the past year: Built several new warehouses across US & world Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 40. Over the past year: Hired 75,000+ part-timers for the holiday season Source: The Wallstreet Journal
  • 41. Over the past year: Integrated with Proctor & Gamble Source: The Wallstreet Journal, October 2013
  • 42. Over the past year: Sunday delivery with USPS Source: The New York Times, November 2013
  • 43. Over the past year: Planning a new 3.3 million-sq-ft headquarters Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 44. Over the past year: Near downtown Seattle, with biospheres Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 45. sales Amazon has reached a point where they surf a feedback loop of dominance. Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 46. sales profit Amazon has reached a point where they surf a feedback loop of dominance. Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 47. sales profit investment Amazon has reached a point where they surf a feedback loop of dominance. Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 48. Amazon has reached a point where they surf a feedback loop of dominance. sales profitexpansion investment Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 49. Source: fool.com, How Long Can Amazon.com Defy Gravity? 2005 2006 2007 2008 2009 2010 2011 2012 0% 10% 20% 30% 29.66% 29.34% 27.15% 4.19% 0.99% Apple Profit Margin Microsoft Corporation Profit Margin Google Profit Margin Wal-Mart Stores Profit Margin Amazon.com Profit Margin 40%
  • 50. The very concept of online shopping has become synonymous with Amazon. Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 51. Harris Interactive2013 Brand Equity Poll
  • 52. 2013 Brand Equity poll: Measured brand familiarity, quality perception and how likely consumers will buy Polled more than 38,000 US residents Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 53. The results put Amazon on top: Achieved the highest overall score in the survey’s 25-year history Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 54. The results put Amazon on top: More than half said Amazon was the first site they went to when shopping online Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 55. The results put Amazon on top: Nearly half said they were likely to have orders delivered to Amazon branded lockers Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 56. 2/3 among younger respondents Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 57. Amazon topped the Harris Interactive poll for companies that Americans trusted most. Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 58. AMAZON ISN’T A COMPANY YOU WANT TO HUG; IT’S A COMPANY THAT DOES EXACTLY WHAT IT SAYS IT WILL DO–EVERY TIME. Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 59. Since shopping has changed so much... Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
  • 60. Is Amazon the store of the future?
  • 61. Is Amazon the company of the future?
  • 62. study vitals
  • 63. Surveyed 1,700 consumers using a nationally syndicated panel Seven in-depth focus groups with three generations of shoppers: Millennials, Gen-X and Boomer Quantitative & qualitative shopper research
  • 64. 4% Mature 24% Millenial 31% Gen X 41% Boomer Hispanic 17% Caucasian 62% African-American 12% Asian 6% Other 3% Female 53% Male 47%
  • 65. Rankings based on the top two boxes, appeal and influence on purchase behavior.
  • 66. store strengths vs. online strengths This study isolates twelve experience attributes of shopping online vs. in-store as defined by consumers and redefined by us.
  • 67. Experience attributes Exclusive to online shopping
  • 68. One-click shopping Price comparison Suggestive selling Unlimited options Online reviews & recommendations online attributes
  • 69. One-click shopping Price comparison Suggestive selling Unlimited options Online reviews & recommendations online attributes
  • 70. One-click shopping Price comparison Suggestive selling Unlimited options Online reviews & recommendations online attributes
  • 71. One-click shopping Price comparison Suggestive selling Unlimited options Online reviews & recommendations online attributes
  • 72. One-click shopping Price comparison Suggestive selling Unlimited options Online reviews & recommendations online attributes
  • 73. Experience attributes Exclusive to in-store shopping
  • 74. Instant ownership Touch & feel Shopping with friends Store associates Store experience in-store attributes
  • 75. Instant ownership Touch & feel Shopping with friends Store associates Store experience in-store attributes
  • 76. Instant ownership Touch & feel Shopping with friends Store associates Store experience in-store attributes
  • 77. Instant ownership Touch & feel Shopping with friends Store associates Store experience in-store attributes
  • 78. Instant ownership Touch & feel Shopping with friends Store associates Store experience in-store attributes
  • 79. Experience attributes Shared online and in-store
  • 80. Ideas & inspiration Exclusive products & bargains shared attributes
  • 81. Ideas & inspiration Exclusive products & bargains shared attributes
  • 82. findings & results
  • 83. Stores are winning
  • 84. The top 2 features for physical shopping beat all online features.
  • 85. 79% 75% 68% 69% Appeal Influence on purchase Instant ownership Touch & feel Instant ownership Touch & feel Instant ownership Touch & feel Store experienceAggregated all consumers across three generations.
  • 86. i’ve been excited online, it’s just not the same thing as shopping in the store. – Millenial male
  • 87. Amazon still can’t compete with... I can just get in my car and get it...
  • 88. Amazon still can’t compete with: I can just get in my car and get it... Now.
  • 89. Appeal Rankings for online vs. in-store features
  • 90. Touch & feelOnline recom 79% 59% No. 1 in-store feature No. 1 online feature Rated reviews as very/ extremely appealing Rated instant ownership as very/extremely appealing
  • 91. Instant ownership Touch & feel Excl. products/bargains Reviews Price comparison Experience Unlimited options One-click shopping With friends Ideas & inspiration Associates Suggestive selling 79% 75% 65% 59% 57% 55% 48% 47% 42% 40% 31% 27% Appeal rankings In-store features are in orange. Online features are in blue. Shared features are in gray.
  • 92. Influence on purchase Rankings for online vs. in-store features
  • 93. 69% 53% No. 1 in-store feature No. 1 online feature Rated reviews as very/ extremely influential for purchase Touch & feelOnline recom Rated touch and feel as very/extremely influential for purchase
  • 94. Touch & feel Instant ownership Excl. products/bargains Reviews Price comparison Experience Unlimited options With friends Ideas & inspiration One-click shopping Associates Suggestive selling 69% 68% 57% 53% 48% 46% 36% 34% 32% 31% 24% 20% Influence on purchase rankings In-store features are in orange. Online features are in blue. Shared features are in gray.
  • 95. well, i don’t find anything exciting about shopping online. I just do it because i like to comparison shop. I like to find the best price, but it’s really not thrilling or exciting. it is very informative though. i like that part. – gen-x shopper
  • 96. for now, emotional benefits trump functional.
  • 97. But not for long The Millennial erosion
  • 98. millenials are different.
  • 99. Shopping anytime, anywhere, for anything they want is the cost of entry.
  • 100. I like the convenience of online shopping; you don’t have to get dressed. you don’t have to be social. i can still have my crazy kids running around and get just what i need while i’m multi-tasking. – millennial female
  • 101. You feel powerful. you feel like you can get anything you want. you feel like you can get any brand at any time. when you’re shopping in store, you feel like you have to settle for that brand because they don’t have anything else. – millennial male
  • 102. Most appealing to Millennials Rankings for online vs. in-store features
  • 103. Unlimited options Customer reviews Instant ownership Price comparison Touch & feel Excl. products/bargains One-click shopping Shop w/friends & family Suggestive selling Experience Inspiration & ideas Store associates 1 4 7 7 4 3 10 8 2 5 8 9 5 1 11 10 3 2 9 12 6 6 12 11 Millennials Most Appealing Boomers Most Appealing
  • 104. Millennials are more comfortable with mobile shopping overall. More than 3x more likely to buy than Boomers. Source: 2012 WD Partners study, Wiring the Customer Experience
  • 105. Millennials are more comfortable with mobile shopping overall. More likely than a Boomer or Gen-Xer to have made a purchase on Amazon. Source: 2012 WD Partners study, Wiring the Customer Experience
  • 106. Millennials are more comfortable with mobile shopping overall. 2x more likely as Boomers to make purchases on Amazon 2-3 times a month. Source: 2012 WD Partners study, Wiring the Customer Experience
  • 107. the vastness of just everything is right at your fingertips. you can look at macy’s. you can look at walmart. you can look at target. you can look at amazon. you can look at all your stores at once. – millennial female
  • 108. 70% Millenial Gen-X Boomer 64% 68% 60% 54% 45% Ranking online customer reviews as most appealing Ranking online customer reviews as influential for purchase Millennials value peer reviews and seek information from trusted sources before making purchases. Price comparison Unlimited options Online reviews & recommendations
  • 109. sometimes getting things in the mail is like christmas or something, it is exciting waiting for things to arrive at your door when you could go to the store and get it. – millennial female
  • 110. Millennials grew up with this
  • 111. the window of opportunity for retailers is closing fast, especially for retailers eager to capture the loyalty of millennials.
  • 112. So what was at the bottom?
  • 113. Store associates ranked 11th out of 12 features.
  • 114. Instant ownership Touch & feel Exclusive products & bargains Shopping with friends Inspiration & ideas Associates 79% 75% 65% 42% 40% 31% 68% 69% 57% 34% 32% 24% Ideas & inspiration Exclusive products & bargains ship Shopping with friends Store associates Appeal Influence on purchase ship Shopping with friends Store associates Ideas & inspiration Exclusive products & bargains Instant ownership Touch & feel Shopping with friends Store associates Store experience Instant ownership Touch & feel Shopping with friends Store associates Store experience
  • 115. I try to avoid stores because the customer service is so bad. – gen-x male
  • 116. in the past, store associates were knowledgeable about things but i think that’s gone away. most of the time you go into a store and they don’t know anything about anything. – boomer female
  • 117. retail crime of the century
  • 118. Invest in people Opportunity
  • 119. Customer service, customer focused 86% Factors that consumers consider of high importance when choosing small businesses Source: Web.com and Toluna, Consumer and Small Business Perception Survey, Sep 10, 2013
  • 120. Customer service, customer focused Personal, intimate, human, face-to-face86% 84% Factors that consumers consider of high importance when choosing small businesses Source: Web.com and Toluna, Consumer and Small Business Perception Survey, Sep 10, 2013
  • 121. Reinvent the role of your store employee.
  • 122. Think of...
  • 123. Think of...
  • 124. Think of...
  • 125. Think of...
  • 126. Think of...
  • 127. Think of...
  • 128. invest in the one asset online can never trump:
  • 129. invest in the one asset online can never trump: people.
  • 130. The emotional connectivity that a store associate brings is the ultimate differentiator between shopping online and shopping in-store.
  • 131. Summary (so far)
  • 132. 1 Stores are winning
  • 133. 1 2 Stores are winning But not for long
  • 134. 1 2 3 Stores are winning But not for long Employee status to consumer is deplorable
  • 135. store of the future
  • 136. stores must evolve and actually be something more in the minds of shoppers
  • 137. Be... The Store of the Future
  • 138. Be social
  • 139. Be open
  • 140. Be captivating
  • 141. Don’t be... The Store of the Past
  • 142. Don’t be... loud
  • 143. Don’t be... contained
  • 144. Don’t be... boring
  • 145. Don’t be... dis-engaged
  • 146. Don’t be... warehousesque
  • 147. Don’t be... cluttered
  • 148. Don’t be... horizontal
  • 149. Don’t be... littered with random technology
  • 150. Don’t be... terrifying
  • 151. Don’t be... conservative
  • 152. Don’t be... old-school
  • 153. Source: businessinsider.com, 7 Retailers That Are Closing A Ton Of Stores Barnes & Noble 226 To close between 2011-2021 To close by end of 2015 Closed in 2013 Closed in 2012 and 2013 To close by 2015 To close between 2014 - 2019 To close by May 2014 225 200 185 180 175 33 Staples GameStop The Gap Aeropostale JCPennyAbercrombie & Fitch 0 50 100 150 200 250 Hundreds of Retail Stores Are Closing US Retail Store Closings
  • 154. conclusion
  • 155. Our findings reflect a deep truth: Human beings are, and will always be, socially driven.
  • 156. however...
  • 157. Stores must invest to retain cultural relevance and gain next-generation loyalty.
  • 158. the closer you are to a physical amazon (warehouse), the more vulnerable you are to getting destroyed by...
  • 159. it’s easy to compete with us, just do what we don’t do. – SAM WALTON
  • 160. wdpartners.com How to get this study:
  • 161. he nd. Thank you... T E

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