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Beyond transactions: Building a compelling retail experience

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Beyond transactions: Building a compelling retail experience is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The …

Beyond transactions: Building a compelling retail experience is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Sylvia Helm as the author. Mike Kenny was responsible for layout and design.
Our thanks are due to all of the executives who responded to the survey.

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  • 1. Beyond transactionsBuilding a compelling retail experienceAn Economist Intelligence Unit white paperSponsored by SAP
  • 2. Beyond transactions Building a compelling retail experience Preface Beyond transactions: Building a compelling retail experience is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Sylvia Helm as the author. Mike Kenny was responsible for layout and design. Our thanks are due to all of the executives who responded to the survey. October 20091 © Economist Intelligence Unit Limited 2009
  • 3. Beyond transactions Building a compelling retail experience Contents Introduction 3 Key findings 4 Conclusion 7 Appendix 1: Overall survey results 8 Appendix 2: Americas survey results 13 Appendix 3: Asia-Pacific survey results 18 Appendix 4: Europe Middle East and Africa survey results 232 © Economist Intelligence Unit Limited 2009
  • 4. Beyond transactions Building a compelling retail experience Introduction Global recession, the accompanying fall in demand and the proliferation of shopping choices have combined in the last year to make retailing a tough business in which to succeed. Shoppers can buy the same goods from any number of interchangeable sources, including competing chains and multiple web commerce sites. They can use their mobile phones to scan bar codes and instantly obtain a list of stores and website where the product is available and how much it costs at each. They can reject a retailer for any number of reasons: a price that may be only pennies higher than competitors, the level of convenience, the friendliness of the sales staff, even the store’s décor. When products are delivered to the door at a low price with a click of the mouse, there is no reason to even leave the house. To differentiate in this environment, retailers need to provide something special—something informed by the qualities that the customer values. If it is not price, the key is customer experience. Regardless of channel, the retailer needs to provide a consistently enjoyable and convenient shopping experience, ensuring that everything—from the feel of the store or website to the return and exchange policy and the promotions extended to the customer—is carefully matched with the traits that the customer values. In this difficult economy, retailers would be well-advised to focus on the elements within their control, especially building customer loyalty among the most valuable customers who account for the bulk of the revenues and profits. Getting these customers to keep coming back requires gathering information from customer transactions, sharing that information across customer-facing units, and ultimately measuring and taking actions based on the value of each customer. About the survey Survey respondents spanned the globe, with 34% from the Asia-Pacific region, 32% from the Americas and 34% from EMEA. Respondents’ annual revenue ranged In September 2009, the Economist Intelligence Unit from less than US$500m to more than US$10bn. The surveyed 89 executives of retail organisations on the level of seniority of respondents was high: 31% were challenges of getting customer-facing departments C-level or board members and another 17% were VPs or to work together more consistently and effectively. heads of business units.3 © Economist Intelligence Unit Limited 2009
  • 5. Beyond transactions Building a compelling retail experience Key findings Estimating customer lifetime value Most retail organisations in the survey consider customer loyalty their strong suit. Despite the recession, 65% say they have greatly strengthened customer relationships over the past 12 months. What they have not done is figure out a way to measure the lifetime value of their customers and use that information to prioritise their sales and marketing efforts. Regardless of industry or region, very few executives can honestly say that their companies can quantify the value of their best customers—or any customers, for that matter. Measuring the value of customers (% of respondents who agree minus % who disagree) Disagree Agree Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months My organisation has an accurate way to estimate the lifetime value of customers My organisation has an accurate way to estimate the lifetime value of customers -30 -20 -10 0 10 20 30 40 50 Source: Economist Intelligence Unit survey, September 2009. Targeting the customers As to which customer-related areas need to be improved the most, the number-one response is targeting the right customer to meet sales goals. Retailers point to segmenting and profiling shoppers, reducing the cost of sales and cross-selling or upselling shoppers as areas in need of improvement. They also mention enhancing their ability to drill down to the individual sales level to understand what each customer is likely to buy, estimate how much revenue will be produced, and what to promote or cross sell each4 © Economist Intelligence Unit Limited 2009
  • 6. Beyond transactions Building a compelling retail experience customer. To do this, retailers have moved beyond traditional demographic criteria to frequency and size of purchases, lifestyle information and the last product bought. For instance, the US women’s clothing retailer Coldwater Creek—which sells through retail stores, a web site and direct-mail catalogs—recently announced the launch of the “Onecreek” loyalty program aimed at the top 5% of the company’s active customers. It offers early peeks at new merchandise, a personal shopper, free shipping on returns and a gift on the customer’s birthday. Eligible customers are those who purchase three times as frequently and spend four times as much as an average customer. “The program is designed to improve retention and overall spend within this very important and profitable segment of our customer base,” said Dennis Pence, the company’s CEO, in a press release. Targeting resources Survey respondents say big benefits can be gained from integrating marketing, sales and service activities. If all customer-facing service units share the results of every customer interaction, they should receive a detailed picture of shopper behavior from all angles. Then resources could be prioritised based on total value of each customer over the life of the relationship. Many companies, including Sony Ericsson, Bell Canada, Samsung, Apple and Amazon have distinct customer service numbers for so-called “executive” customers—those whose spending surpasses a certain level, whether for their companies or on their own behalf. These customer service agents have information on each customer at the touch of a button, and are empowered to offer discounts and provide extras on depending on the value of the relationship. Top three benefits from integrating marketing, sales and service activities? (% respondents) Developing and sharing a detailed picture of shopper behavior and preferences Making each unit aware of how the others have interacted with a given shopper Prioritising resources directed towards shoppers by total value over the life of the relationship 0 5 10 15 20 25 30 35 40 Source: Economist Intelligence Unit survey, September 2009.5 © Economist Intelligence Unit Limited 2009
  • 7. Beyond transactions Building a compelling retail experience How the three regions differ The three regions surveyed—the Americas, Asia-Pacific and EMEA –all give themselves top marks for excellent customer service. All pride themselves on the loyalty of their customers. And all admit that their organisations cannot accurately measure the value of—or even identify, in many cases—their most profitable customers. The challenges faced in each region include the following. Americas Reducing the cost of sales—necessary to keep margins low and prices competitive—is a top priority for Americas retail organisations. In the Americas, customer feedback tends to be filtered through the less expensive e-commerce channels, rather than from direct response feedback (as is the case in the two other regions). Asia-Pacific Asia-Pacific retail organisations get most of their customer feedback in stores, through retail sales staff, and at the point of sale. They are the lowest users of e-commerce, and call centers are used by only 17% of respondents. EMEA Of all regions surveyed, EMEA retail organisations are the least able to gauge the lifetime value of customers. Most in need of improvement: profiling, targeting, and cross selling or up selling existing customers. EMEA retailers use call centers the least and direct response (direct mail, e-mail) the most.6 © Economist Intelligence Unit Limited 2009
  • 8. Beyond transactions Building a compelling retail experience Conclusion Few survey respondents say they can accurately measure the value of customers. Faced with challenges they cannot control—global economic trends, rapid shifts in product demand, commoditization of the retail channel—they have to focus on what they can control, working to understand the customer and provide a pleasant and convenient retail experience. Retailer organisations should consider how to: l Do a better job of analysing the customer base and measuring the value of individual customers. l Share and act on customer information in all customer-facing units, making sure to improve the weak links. l Differentiate customers by products purchased, services used and revenues generated. l Provide distinct service to high-value customers, building their trust, increasing their loyalty, and generating more revenues.7 © Economist Intelligence Unit Limited 2009
  • 9. Appendix 1 Beyond transactionsOverall survey results Building a compelling retail experience Appendix: Overall survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service: Providing superior service to customers 65 Operational excellence: Creating highly efficient processes 15 Product innovation: First to market with groundbreaking new products or services 12 Other 8 Each of the organisation’s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns 6 8 26 30 27 3 Executing promotions/campaigns 5 9 19 36 27 3 Measuring effectiveness of promotions/campaigns 6 16 20 40 16 2 Developing and launching new products 2 16 21 34 21 6 Analysing and segmenting shoppers 5 23 26 33 8 6 Gauging shopper satisfaction 3 22 25 33 16 1 Responding to shopper demands or complaints 1 9 28 40 20 1 Incorporating shopper feedback into products/services 7 11 30 39 11 1 Other 9 9 3 13 668 Economist Intelligence Unit 2009
  • 10. Appendix 1 Beyond transactionsOverall survey results Building a compelling retail experience Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business with my organisation, price is the single most important factor most shoppers consider 27 70 3 Compared to our competitors, my organisation’s shoppers are more loyal 64 20 16 My organisation has an accurate way to estimate the lifetime value of customers 34 49 17 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 34 52 14 We are currently developing a social media strategy 36 41 23 My organisation has more flexibility than its competitors in pricing its products 60 31 9 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 65 25 10 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 52 40 8 Shoppers view my organisation’s products and services more as commodities now than five years ago 51 30 19 Our margins are higher than the margins of most of our competitors 40 46 13 If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 76 17 7 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Targeting the right shoppers to achieve sales volume and revenue objectives 43 Developing and sharing a detailed picture of shopper Segmenting and profiling shoppers behavior and preferences 34 40 Reducing the cost of sales Making each unit aware of how the others have 34 interacted with a given shopper Cross-selling or upselling shoppers 31 33 Prioritising resources directed towards shoppers by total Measuring/optimising effectiveness of marketing and promotional campaigns value over the life of the relationship 28 30 Maximising repeat purchases and building loyalty among shoppers Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales 28 27 Gathering shopper intelligence in the course of providing service Establishing common definitions, assumptions and data 27 26 Measuring the satisfaction of shoppers Helping each function find and act on ways to support the others 26 25 Generating promotions/campaigns Integrating tracking of shoppers from initial contact 18 through to post-sales service Involving shoppers in product/service development (eg, co-creation) 22 18 Presenting shoppers with a consistent picture of the organisation Building long-term relationships with store management 20 13 Our company sees no need to integrate our marketing, Ensuring that shopper complaints are resolved quickly sales and service activities 10 4 Creating effective collateral Other 8 0 Other Don’t know/Not applicable 0 4 Don’t know 09 Economist Intelligence Unit 2009
  • 11. Appendix 1 Beyond transactionsOverall survey results Building a compelling retail experience Which of the following trends have had the greatest impact on In which of the following ways does your organisation your business over the past 12 months? Select up to three. empower shoppers? Select all that apply. (% respondents) (% respondents) Global economic downturn Offering additional value along with products (eg, in-store service, 71 merchandising improvements, sustainable packaging) Changing needs of shoppers 52 40 Improving usability, search and navigation of shopper-facing websites Significant demand shifts for our products/services 44 28 Creating educational forums for shoppers (eg, online content, Emergence of new competitors in-store content, communities of interest, direct-to-consumer outreach) 27 38 Finding access to credit/capital Building or supporting online communities of shoppers 17 27 Emergence of new markets for our products and services Other 15 2 Focusing on sustainability efforts Dont know 13 9 Disruptive technology developments 10 Accessing key components or resources through our supply chain 9 What avenues of customer feedback is your organisation best Changing needs of store management and worst at collecting and using to improve the experience of 9 shoppers? Other Select up to three from each column. 0 (% respondents) Don’t know We are best at collecting and using 0 We are worst at collecting and using Point of sale feedback 49 20 In which of the following ways does your organisation In-store sales staff 47 empower store management? Select all that apply. 17 (% respondents) Our own e-commerce site(s) 27 Improving online or self-service support tools for store managers 29 31 Third-party e-commerce sites Making prices and sales terms more transparent for easy 10 comparability by store management 30 28 Phone order interaction Improving usability, search and navigation of store-facing websites 24 15 27 Direct response feedback Investing in self-service tools for store employees across 34 multiple channels (web, mobile devices, e-mail) 4 27 Call center customer service interactions Building or supporting online communities 21 20 19 Other Targeted focus groups 3 22 21 Don’t know/Not applicable Online social media efforts 26 2 35 Other 1 1 Don’t know 6 1110 Economist Intelligence Unit 2009
  • 12. Appendix 1 Beyond transactionsOverall survey results Building a compelling retail experience How well is information from all sources used to accomplish the following goals? (% respondents) 1 Consistently and systematically 2 3 4 5 Not at all Don’t know Empower salespeople 11 40 26 16 6 1 Empower customer service 22 36 27 11 21 Create effective marketing campaigns 17 31 34 12 2 3 Refine product development process 13 33 31 12 3 8 Forecast demand 16 27 33 18 3 3 Improve service to shoppers 19 40 24 16 1 Improve retail offerings and selections 19 38 21 16 3 2 Adjust pricing 26 33 22 14 5 1 My organisation’s greatest challenges in using information In which region are you personally based? from store management employees and shoppers to improve (% respondents) the customer experience are: Select up to three. Asia-Pacific (% respondents) 34 Western Europe Putting recommendations into action 27 45 North America Persuading shoppers to share experiences, both positive and negative 26 33 Latin America Persuading store employees to share feedback from shoppers, 6 both positive and negative Middle East and Africa 27 4 Synthesising information from retail outlets into coherent recommendations Eastern Europe 26 3 Distinguishing relevant from irrelevant shopper information 25 Monitoring the results of actions in terms of shopper behaviour and marketing metrics Who are your organisation’s primary customers? 25 (% respondents) Synthesising information from customer service into coherent recommendations 22 Dealing systematically with extremely high volumes of information from stores Individuals 18 (eg, retail) 64 Demonstrating to shoppers that their comments are being addressed Businesses or other 17 organisations (eg, Synthesising information from online channels business-to-business) 15 into coherent recommendations 3 An equal mix of both 21 Other 0 Don’t know 611 Economist Intelligence Unit 2009
  • 13. Appendix 1 Beyond transactionsOverall survey results Building a compelling retail experience Which of the following best describes your title? What are your main functional roles? (% respondents) Please choose no more than three functions. (% respondents) Board member 2 General management CEO/President/Managing director 50 15 Strategy and business development CFO/Treasurer/Comptroller 22 5 Sales CIO/Technology director 22 5 Customer service Other C-level executive 20 5 Finance SVP/VP/Director 18 9 Marketing Head of Business Unit 17 8 IT Head of Department 13 16 Operations and production Manager 10 31 Information and research Other 9 6 Human resources 9 Supply-chain management 7 What are your organisation’s global annual revenues Procurement in US dollars? 5 (% respondents) Risk 2 R&D $500m or less 46 2 Legal $500m to $1bn 9 0 $1bn to $5bn 17 Other 1 $5bn to $10bn 8 $10bn or more 2012 Economist Intelligence Unit 2009
  • 14. Appendix 2 Beyond transactionsAmericas survey results Building a compelling retail experience Appendix: Americas survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service: Providing superior service to customers 64 Operational excellence: Creating highly efficient processes 18 Product innovation: First to market with groundbreaking new products or services 11 Other 7 Each of the organisation’s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns 7 4 25 29 29 7 Executing promotions/campaigns 4 7 15 26 37 11 Measuring effectiveness of promotions/campaigns 7 18 18 39 14 4 Developing and launching new products 7 11 21 21 29 11 Analysing and segmenting shoppers 4 30 19 37 11 Gauging shopper satisfaction 7 25 21 25 21 0 Responding to shopper demands or complaints 11 33 30 22 4 Incorporating shopper feedback into products/services 7 11 29 43 11 0 Other 7 13 13 6713 Economist Intelligence Unit 2009
  • 15. Appendix 2 Beyond transactionsAmericas survey results Building a compelling retail experience Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business with my organisation, price is the single most important factor most shoppers consider 36 61 4 Compared to our competitors, my organisation’s shoppers are more loyal 63 15 22 My organisation has an accurate way to estimate the lifetime value of customers 41 37 22 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 26 56 19 We are currently developing a social media strategy 44 30 26 My organisation has more flexibility than its competitors in pricing its products 61 21 18 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 59 30 11 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 50 43 7 Shoppers view my organisation’s products and services more as commodities now than five years ago 44 30 26 Our margins are higher than the margins of most of our competitors 43 46 11 If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 74 19 7 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Targeting the right shoppers to achieve sales volume and revenue objectives 46 Developing and sharing a detailed picture of shopper Reducing the cost of sales behavior and preferences 43 39 Measuring/optimising effectiveness of marketing and promotional campaigns Helping each function find and act on ways to support the others 39 32 Gathering shopper intelligence in the course of providing service Prioritising resources directed towards shoppers by total 29 value over the life of the relationship Segmenting and profiling shoppers 32 25 Making each unit aware of how the others have Maximising repeat purchases and building loyalty among shoppers interacted with a given shopper 25 29 Cross-selling or upselling shoppers Establishing common definitions, assumptions and data 18 25 Measuring the satisfaction of shoppers Integrating tracking of shoppers from initial contact through to post-sales service 18 25 Involving shoppers in product/service development (eg, co-creation) Measuring the probability that shoppers will turn into buyers, 14 and using these scores to guide sales Generating promotions/campaigns 25 11 Presenting shoppers with a consistent picture of the organisation Creating effective collateral 21 11 Our company sees no need to integrate our marketing, Ensuring that shopper complaints are resolved quickly sales and service activities 11 4 Building long-term relationships with store management Other 7 0 Other Don’t know/Not applicable 0 4 Don’t know 014 Economist Intelligence Unit 2009
  • 16. Appendix 2 Beyond transactionsAmericas survey results Building a compelling retail experience Which of the following trends have had the greatest impact on In which of the following ways does your organisation your business over the past 12 months? Select up to three. empower shoppers? Select all that apply. (% respondents) (% respondents) Global economic downturn Offering additional value along with products (eg, in-store service, 71 merchandising improvements, sustainable packaging) Significant demand shifts for our products/services 50 36 Creating educational forums for shoppers (eg, online content, Emergence of new competitors in-store content, communities of interest, direct-to-consumer outreach) 32 50 Changing needs of shoppers Improving usability, search and navigation of shopper-facing websites 29 43 Finding access to credit/capital Building or supporting online communities of shoppers 14 25 Disruptive technology developments Other 14 0 Emergence of new markets for our products and services Dont know 11 7 Changing needs of store management 11 Focusing on sustainability efforts 11 What avenues of customer feedback is your organisation best Accessing key components or resources through our supply chain and worst at collecting and using to improve the experience of 4 shoppers? Other Select up to three from each column. 0 (% respondents) Don’t know We are best at collecting and using 0 We are worst at collecting and using Point of sale feedback 50 21 In which of the following ways does your organisation In-store sales staff empower store management? Select all that apply. 39 21 (% respondents) Our own e-commerce site(s) 36 Improving online or self-service support tools for store managers 29 43 Third-party e-commerce sites Making prices and sales terms more transparent for 18 easy comparability by store management 32 32 Phone order interaction Improving usability, search and navigation of store-facing websites 18 29 21 Investing in self-service tools for store employees across Direct response feedback multiple channels (web, mobile devices, e-mail) 14 11 21 Call center customer service interactions Building or supporting online communities 36 14 25 Other Targeted focus groups 7 21 Don’t know/Not applicable 25 14 Online social media efforts 4 46 Other 4 0 Don’t know 7 1115 Economist Intelligence Unit 2009
  • 17. Appendix 2 Beyond transactionsAmericas survey results Building a compelling retail experience How well is information from all sources used to accomplish the following goals? (% respondents) 1 Consistently and systematically 2 3 4 5 Not at all Don’t know Empower salespeople 11 37 26 11 15 Empower customer service 26 30 26 11 7 Create effective marketing campaigns 18 25 39 14 4 Refine product development process 12 19 38 15 15 Forecast demand 11 29 36 18 4 4 Improve service to shoppers 14 29 32 25 Improve retail offerings and selections 14 32 39 11 4 Adjust pricing 30 22 30 19 My organisation’s greatest challenges in using information In which region are you personally based? from store management employees and shoppers to improve (% respondents) the customer experience are: Select up to three. North America (% respondents) 82 Latin America Persuading store employees to share feedback from shoppers, 18 both positive and negative Asia-Pacific 46 0 Putting recommendations into action Eastern Europe 36 0 Synthesising information from retail outlets into coherent recommendations Western Europe 32 0 Persuading shoppers to share experiences, both positive and negative Middle East and Africa 29 0 Synthesising information from customer service into coherent recommendations 29 Monitoring the results of actions in terms of shopper Who are your organisation’s primary customers? behaviour and marketing metrics (% respondents) 25 Distinguishing relevant from irrelevant shopper information 21 Dealing systematically with extremely high volumes of information from stores Individuals 21 (eg, retail) 64 Demonstrating to shoppers that their comments are being addressed Businesses or other 14 organisations (eg, Synthesising information from online channels into business-to-business) 18 coherent recommendations 7 An equal mix of both 18 Other 0 Don’t know 416 Economist Intelligence Unit 2009
  • 18. Appendix 2 Beyond transactionsAmericas survey results Building a compelling retail experience What are your main functional roles? Which of the following best describes your title? Please choose no more than three functions. (% respondents) (% respondents) Board member General management 0 46 CEO/President/Managing director Strategy and business development 4 21 CFO/Treasurer/Comptroller Finance 7 18 CIO/Technology director Customer service 4 18 Other C-level executive Operations and production 11 14 SVP/VP/Director Marketing 14 14 Head of Business Unit Sales 7 14 Head of Department IT 18 11 Manager Risk 32 7 Other Procurement 4 7 Supply-chain management 7 Human resources What are your organisation’s global annual revenues 7 in US dollars? Information and research (% respondents) 4 R&D 4 $500m or less 39 Legal 0 $500m to $1bn 4 Other $1bn to $5bn 25 0 $5bn to $10bn 14 $10bn or more 1817 Economist Intelligence Unit 2009
  • 19. Appendix 3 Beyond transactionsAsia-Pacific Building a compelling retail experiencesurvey results Appendix: Asia-Pacific survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service: Providing superior service to customers 70 Operational excellence: Creating highly efficient processes 13 Product innovation: First to market with groundbreaking new products or services 10 Other 7 Each of the organisation’s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns 3 3 40 27 27 0 Executing promotions/campaigns 3 13 20 37 27 0 Measuring effectiveness of promotions/campaigns 7 13 13 47 20 0 Developing and launching new products 13 20 43 17 7 Analysing and segmenting shoppers 3 17 27 33 13 7 Gauging shopper satisfaction 20 23 37 17 3 Responding to shopper demands or complaints 23 57 20 0 Incorporating shopper feedback into products/services 3 10 27 43 13 3 Other 10 10 20 6018 Economist Intelligence Unit 2009
  • 20. Appendix 3 Beyond transactionsAsia-Pacific Building a compelling retail experiencesurvey results Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business with my organisation, price is the single most important factor most shoppers consider 23 73 3 Compared to our competitors, my organisation’s shoppers are more loyal 67 17 17 My organisation has an accurate way to estimate the lifetime value of customers 30 47 23 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 37 43 20 We are currently developing a social media strategy 40 43 17 My organisation has more flexibility than its competitors in pricing its products 63 33 3 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 77 17 7 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 60 30 10 Shoppers view my organisation’s products and services more as commodities now than five years ago 47 30 23 Our margins are higher than the margins of most of our competitors 40 43 17 If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 73 20 7 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Targeting the right shoppers to achieve sales volume and revenue objectives 37 Developing and sharing a detailed picture of shopper Cross-selling or upselling shoppers behavior and preferences 37 50 Measuring the satisfaction of shoppers Making each unit aware of how the others have 37 interacted with a given shopper Generating promotions/campaigns 30 27 Measuring the probability that shoppers will turn into buyers, Segmenting and profiling shoppers and using these scores to guide sales 27 30 Maximising repeat purchases and building loyalty among shoppers Prioritising resources directed towards shoppers by total value over the life of the relationship 27 30 Gathering shopper intelligence in the course of providing service Establishing common definitions, assumptions and data 27 20 Measuring/optimising effectiveness of marketing and promotional campaigns Integrating tracking of shoppers from initial contact 20 through to post-sales service Building long-term relationships with store management 20 20 Helping each function find and act on ways to support the others Reducing the cost of sales 17 20 Presenting shoppers with a consistent picture of the organisation Involving shoppers in product/service development (eg, co-creation) 13 20 Our company sees no need to integrate our marketing, Ensuring that shopper complaints are resolved quickly sales and service activities 13 3 Creating effective collateral Other 7 0 Other Don’t know/Not applicable 0 7 Don’t know 019 Economist Intelligence Unit 2009
  • 21. Appendix 3 Beyond transactionsAsia-Pacific Building a compelling retail experiencesurvey results Which of the following trends have had the greatest impact on In which of the following ways does your organisation your business over the past 12 months? Select up to three. empower shoppers? Select all that apply. (% respondents) (% respondents) Global economic downturn Offering additional value along with products (eg, in-store service, 60 merchandising improvements, sustainable packaging) Changing needs of shoppers 60 53 Improving usability, search and navigation of shopper-facing websites Emergence of new markets for our products and services 37 23 Building or supporting online communities of shoppers Significant demand shifts for our products/services 33 23 Creating educational forums for shoppers (eg, online content, Emergence of new competitors in-store content, communities of interest, direct-to-consumer outreach) 20 33 Focusing on sustainability efforts Other 17 7 Accessing key components or resources through our supply chain Don’t know 10 13 Finding access to credit/capital 7 Disruptive technology developments 7 What avenues of customer feedback is your organisation best Changing needs of store management and worst at collecting and using to improve the experience of 3 shoppers? Other Select up to three from each column. 0 (% respondents) Don’t know We are best at collecting and using 0 We are worst at collecting and using Point of sale feedback 50 10 In which of the following ways does your organisation In-store sales staff empower store management? Select all that apply. 60 7 (% respondents) Our own e-commerce site(s) 20 Improving usability, search and navigation of store-facing websites 33 33 Third-party e-commerce sites Making prices and sales terms more transparent for easy 3 comparability by store management 23 27 Phone order interaction Improving online or self-service support tools for store managers 30 23 7 Building or supporting online communities Direct response feedback 20 40 3 Investing in self-service tools for store employees across multiple Call center customer service interactions channels (web, mobile devices, e-mail) 17 20 17 Other Targeted focus groups 3 27 Don’t know/Not applicable 20 37 Online social media efforts 3 33 Other 0 3 Don’t know 3 1720 Economist Intelligence Unit 2009
  • 22. Appendix 3 Beyond transactionsAsia-Pacific Building a compelling retail experiencesurvey results How well is information from all sources used to accomplish the following goals? (% respondents) 1 Consistently and systematically 2 3 4 5 Not at all Don’t know Empower salespeople 13 40 37 10 Empower customer service 27 37 33 3 Create effective marketing campaigns 17 30 37 10 3 3 Refine product development process 14 45 24 3 7 7 Forecast demand 17 37 23 20 3 0 Improve service to shoppers 27 43 17 13 Improve retail offerings and selections 23 40 13 23 Adjust pricing 20 37 17 17 10 0 My organisation’s greatest challenges in using information In which region are you personally based? from store management employees and shoppers to improve (% respondents) the customer experience are: Select up to three. Asia-Pacific (% respondents) 100 Latin America Putting recommendations into action 0 47 North America Persuading shoppers to share experiences, both positive and negative 0 40 Eastern Europe Monitoring the results of actions in terms of shopper 0 behaviour and marketing metrics Western Europe 30 0 Synthesising information from retail outlets into coherent recommendations Middle East and Africa 23 0 Dealing systematically with extremely high volumes of information from stores 20 Demonstrating to shoppers that their comments are being addressed 20 Who are your organisation’s primary customers? Persuading store employees to share feedback from shoppers, (% respondents) both positive and negative 17 Distinguishing relevant from irrelevant shopper information Individuals 17 (eg, retail) 64 Synthesising information from customer service into coherent recommendations Businesses or other 17 organisations (eg, Synthesising information from online channels into business-to-business) 14 coherent recommendations An equal mix of both 21 3 Other 0 Don’t know 321 Economist Intelligence Unit 2009
  • 23. Appendix 3 Beyond transactionsAsia-Pacific Building a compelling retail experiencesurvey results Which of the following best describes your title? What are your main functional roles? (% respondents) Please choose no more than three functions. (% respondents) Board member 3 General management CEO/President/Managing director 52 17 Customer service CFO/Treasurer/Comptroller 28 3 Marketing CIO/Technology director 24 10 Sales Other C-level executive 24 3 Finance SVP/VP/Director 17 7 IT Head of Business Unit 17 3 Strategy and business development Head of Department 14 10 Operations and production Manager 14 31 Human resources Other 14 10 Information and research 7 Supply-chain management 7 What are your organisation’s global annual revenues Risk in US dollars? 0 (% respondents) R&D 0 Procurement $500m or less 50 0 Legal $500m to $1bn 14 0 $1bn to $5bn 25 Other 0 $5bn to $10bn 4 $10bn or more 722 Economist Intelligence Unit 2009
  • 24. Appendix 4 Beyond transactionsEMEA survey results Building a compelling retail experience Appendix: Europe Middle East and Africa survey results In your view, which of the following best represents the core strength of your overall business? Select only one. (% respondents) Customer service: Providing superior service to customers 61 Product innovation: First to market with groundbreaking new products or services 16 Operational excellence: Creating highly efficient processes 13 Other 10 Each of the organisation’s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to 5. (% respondents) 1. No coordination; 2. Ad hoc coordination; 3. Some procedures 4. Procedures 5. Broad, systematic and Don’t know units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns 6 16 13 35 26 3 Executing promotions/campaigns 6 6 23 45 19 0 Measuring effectiveness of promotions/campaigns 3 16 29 35 13 3 Developing and launching new products 23 23 35 19 0 Analysing and segmenting shoppers 6 23 32 29 10 0 Gauging shopper satisfaction 3 23 29 35 10 0 Responding to shopper demands or complaints 3 16 29 32 19 0 Incorporating shopper feedback into products/services 10 13 35 32 10 0 Other 14 14 7123 Economist Intelligence Unit 2009
  • 25. Appendix 4 Beyond transactionsEMEA survey results Building a compelling retail experience Do you agree or disagree with the following statements? (% respondents) Agree Disagree Don’t know In chosing to do business with my organisation, price is the single most important factor most shoppers consider 23 74 3 Compared to our competitors, my organisation’s shoppers are more loyal 61 29 10 My organisation has an accurate way to estimate the lifetime value of customers 32 61 6 My organisation prioritises sales and marketing resources based on each customer’s lifetime value 39 58 3 We are currently developing a social media strategy 26 48 26 My organisation has more flexibility than its competitors in pricing its products 55 39 6 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 58 29 13 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 45 48 6 Shoppers view my organisation’s products and services more as commodities now than five years ago 61 29 10 Our margins are higher than the margins of most of our competitors 39 48 13 If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 81 13 6 In your view, which of your organisation’s activities are most Which of the following would provide the biggest benefits in in need of improvement? Select up to four. integrating your organisation’s marketing, sales and service (% respondents) activities? Select up to three. (% respondents) Segmenting and profiling shoppers 48 Making each unit aware of how the others have interacted Targeting the right shoppers to achieve sales volume and revenue objectives with a given shopper 45 35 Cross-selling or upselling shoppers Establishing common definitions, assumptions and data 42 32 Reducing the cost of sales Developing and sharing a detailed picture of shopper 39 behavior and preferences Maximising repeat purchases and building loyalty among shoppers 32 32 Prioritising resources directed towards shoppers by Measuring/optimising effectiveness of marketing and promotional campaigns total value over the life of the relationship 26 29 Gathering shopper intelligence in the course of providing service Presenting shoppers with a consistent picture of the organisation 26 26 Measuring the satisfaction of shoppers Helping each function find and act on ways to support the others 23 26 Involving shoppers in product/service development (eg, co-creation) Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales 19 26 Generating promotions/campaigns Integrating tracking of shoppers from initial contact 16 through to post-sales service Building long-term relationships with store management 23 13 Our company sees no need to integrate our marketing, Creating effective collateral sales and service activities 6 6 Ensuring that shopper complaints are resolved quickly Other 6 0 Other Don’t know/Not applicable 0 3 Don’t know 024 Economist Intelligence Unit 2009
  • 26. Appendix 4 Beyond transactionsEMEA survey results Building a compelling retail experience Which of the following trends have had the greatest impact on In which of the following ways does your organisation your business over the past 12 months? Select up to three. empower shoppers? Select all that apply. (% respondents) (% respondents) Global economic downturn Improving usability, search and navigation of shopper-facing websites 81 52 Changing needs of shoppers Offering additional value along with products (eg, in-store service, 39 merchandising improvements, sustainable packaging) Finding access to credit/capital 45 29 Creating educational forums for shoppers (eg, online content, Emergence of new competitors in-store content, communities of interest, direct-to-consumer outreach) 29 32 Significant demand shifts for our products/services Building or supporting online communities of shoppers 26 23 Accessing key components or resources through our supply chain Other 13 0 Changing needs of store management Don’t know 13 6 Focusing on sustainability efforts 13 Emergence of new markets for our products and services 10 What avenues of customer feedback is your organisation best Disruptive technology developments and worst at collecting and using to improve the experience of 10 shoppers? Other Select up to three from each column. 0 (% respondents) Don’t know We are best at collecting and using 0 We are worst at collecting and using Point of sale feedback 48 29 In which of the following ways does your organisation In-store sales staff empower store management? Select all that apply. 42 23 (% respondents) Our own e-commerce site(s) 26 Investing in self-service tools for store employees across 26 multiple channels (web, mobile devices, e-mail) Third-party e-commerce sites 39 10 Improving online or self-service support tools for store managers 35 29 Phone order interaction Building or supporting online communities 23 26 16 Making prices and sales terms more transparent for Direct response feedback easy comparability by store management 45 0 26 Call center customer service interactions Improving usability, search and navigation of store-facing websites 13 19 16 Other Targeted focus groups 0 19 Don’t know/Not applicable 19 26 Online social media efforts 0 26 Other 0 0 Don’t know 6 625 Economist Intelligence Unit 2009
  • 27. Appendix 4 Beyond transactionsEMEA survey results Building a compelling retail experience How well is information from all sources used to accomplish the following goals? (% respondents) 1 Consistently and systematically 2 3 4 5 Not at all Don’t know Empower salespeople 10 42 16 26 3 3 Empower customer service 13 42 23 19 3 Create effective marketing campaigns 16 39 26 13 3 3 Refine product development process 13 32 32 16 3 3 Forecast demand 19 16 39 16 3 6 Improve service to shoppers 16 48 23 10 3 Improve retail offerings and selections 19 42 13 13 6 6 Adjust pricing 29 39 19 6 3 3 My organisation’s greatest challenges in using information In which region are you personally based? from store management employees and shoppers to improve (% respondents) the customer experience are: Select up to three. Asia-Pacific (% respondents) 0 Latin America Putting recommendations into action 0 52 North America Distinguishing relevant from irrelevant shopper information 0 35 Eastern Europe Persuading shoppers to share experiences, both positive and negative 10 29 Western Europe Synthesising information from retail outlets into coherent recommendations 77 23 Middle East and Africa Synthesising information from customer service 13 into coherent recommendations 23 Persuading store employees to share feedback from shoppers, both positive and negative Who are your organisation’s primary customers? 19 (% respondents) Monitoring the results of actions in terms of shopper behaviour and marketing metrics 19 Demonstrating to shoppers that their comments are being addressed Individuals 16 (eg, retail) 65 Dealing systematically with extremely high volumes of information from stores Businesses or other 13 organisations (eg, Synthesising information from online channels business-to-business) 13 into coherent recommendations An equal mix of both 23 0 Other 0 Don’t know 1026 Economist Intelligence Unit 2009
  • 28. Appendix 4 Beyond transactionsEMEA survey results Building a compelling retail experience Which of the following best describes your title? What are your main functional roles? (% respondents) Please choose no more than three functions. (% respondents) Board member 3 General management CEO/President/Managing director 52 23 Strategy and business development CFO/Treasurer/Comptroller 29 3 Sales CIO/Technology director 26 0 Finance Other C-level executive 19 0 Information and research SVP/VP/Director 16 6 Customer service Head of Business Unit 16 13 Marketing Head of Department 13 19 IT Manager 10 29 Procurement Other 6 3 Supply-chain management 6 Human resources 6 What are your organisation’s global annual revenues Operations and production in US dollars? 3 (% respondents) R&D 3 Risk 0 $500m or less 48 Legal $500m to $1bn 10 0 $1bn to $5bn 3 Other 3 $5bn to $10bn 6 $10bn or more 3227 Economist Intelligence Unit 2009
  • 29. Whilst every effort has been taken to verify the accuracy Cover image: Shutterstock of this information, neither The Economist Intelligence Unit Ltd. nor the sponsors of this report can accept any responsibility or liability for reliance by any person on this white paper or any of the information, opinions or conclusions set out in the white paper.28
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