More Related Content Similar to Insights on the shopping revolution (20) Insights on the shopping revolution1. I‟ll take it!
What we‟ve learned from the shopping revolution, and what‟s
coming next
July 2012
Slide 1 © Fjord 2012 | Confidential
2. 1890s: Stone‟s Store,
in Roselle Park, NJ,
becomes the first
shop to be lit by
Thomas Edison‟s
1916: Clarence Saunders opens
carbon filament light
bulbs Piggly Wiggly, the first self-service grocery
store, in Memphis, TN
1900: Mass-production of clothing
becomes commonplace as department
stores proliferate, selling ready-to-wear
items
The last shopping
revolution happened over
100 years ago.
Slide 2 © Fjord 2012 | Confidential
3. Shopping will never be the same.
The High Street is changing. Where the last 50 years have seen a transition from small
local merchants to chains and megabrands, the next decade will bring a massive shift in
the opposite direction.
• Services will become as important as objects
• Shared and Pop-up retail will become commonplace
• Up to 30% of retail space will permanently disappear… and even more will radically
change
Slide 3 © Fjord 2012 | Confidential
5. Why not „The Retail
Revolution‟?
Because that‟s not how people
think. And if businesses are to
survive the revolution, they need to
understand the human perspective.
Humans don‟t “visit retail
establishments.” Humans shop.
Shopping doesn‟t just happen in
shops, either. And in order to
identify opportunities, we need to
be able to see the whole picture of
what shopping is and can be.
Slide 5 © Fjord 2012 | Confidential
7. It‟s not a linear experience
give up
friends fit trends delivery
cool quality look wait support
price service returns
Slide 7 © Fjord 2012 | Confidential
8. Many variables = complex challenge
?
What I‟m buying Personal factors
Everyday purchases Cultural context
Big ticket items Age and social status
Long term investments Financial comfort and
Clothing and accessories confidence
Gifts
Slide 8 © Fjord 2012 | Confidential
10. 3 keys to understanding the revolution
@
Online vs. offline People pay for Changing
is a myth what makes them infrastructure is
feel good changing the
rules
Slide 10 © Fjord 2012 | Confidential
11. Thank you.
The online/offline
myth
Slide 11 © Fjord 2012 | Confidential
12. Online/offline: there is no such thing.
Online/offline has not been a meaningful distinction for some time.
Digital-ness is now ubiquitous - we carry the digital world around with us in our pockets.
We can access it all the time, in shops and at home and on the street.
@
Slide 12 © Fjord 2012 | Confidential
13. Nearly 50% of US smartphone owners use
mobiles in-store
60%
50%
40%
30%
20%
10%
0%
Call/text Compare Send Find Check Fill time in Check for Show Scan Check Not used
for advice prices picture of another product check out location item to product opening mobile in
product store reviews line deals personnel barcode times store
Source: GP Bullhound Research, Mobile Commerce, September 2012
Slide 13 © Fjord 2012 | Confidential
14. …and 53% have abandoned as a result
21%
Found a better
item online
30%
Found a better
NO YES price online
47% 53%
38%
Found a better
price in
another store
Source: GP Bullhound Research, Mobile Commerce, September 2012
Slide 14 © Fjord 2012 | Confidential
15. From 3D to 2D
Grocery shelves are displayed on
screens in subway& QR codes
Window-shopping stations. People
make purchases by scanning codes.
This “shop” is both online and offline – it
looks like the real, 3D thing; it‟s located
in a real, 3D place, and yet the
commerce all takes place over Internet
Protocol.
Slide 15 © Fjord 2012 | Confidential
16. The window is
the shop
eBay‟s Give-a-Toy shops enabled
shoppers to scan QR codes from the
shop window, to donate a toy to a child
in need. The window display, in this
case, is the shop.
Similarly, more and more retailers are
including QR codes in their window
displays, which enables people to make
a digital „wish list‟ from real-world items
in real-world places.
Slide 16 © Fjord 2012 | Confidential
17. Shop? Who needs
a shop?
Like the glassware at the restaurant?
Buy it. Fancy that dress Florence wore
at last night‟s gig? Have it delivered to
you today. The continued rise of
semantic metadata and interconnected
APIs mean that we‟ll be able to buy
things wherever we see them – in real
life, on television, anywhere.
Slide 17 © Fjord 2012 | Confidential
18. “Online”
During in the
real world
In-store bar code scanning
Customers in brick-and-mortar shops
use smartphones to do price
checks, look up reviews, add items to
gift registries, or even purchase the item
from another retailer and have it
delivered straight to their home.
Slide 18 © Fjord 2012 | Confidential
19. During “Online” in the
real world
All Saints in-store kiosk for online ordering
Some retailers, including the UK-based
chain All Saints, offer an in-store kiosk
(or in All Saints, iPad) where customers
can order articles that aren‟t in stock at
that location from their online store. This
takes advantage of the customer‟s in-
store urge to buy, and is far more
immediate and effective than sending
them to another location to make their
purchase. It also introduces brick-and-
mortar customers to the online property.
Slide 19 © Fjord 2012 | Confidential
20. During Augmented
merchandise
C&A has launched a pilot in Brazil of
their “Fashion Like” in-store concept.
Hangers contain a small display
showing how many times that garment
has been „liked‟ on facebook. Instead of
scanning a code or launching an
app, customers can see this data made
manifest where it is most relevant.
Slide 20 © Fjord 2012 | Confidential
21. During “Online” in the
real world
PayPal Here
Square PayPal Here, Sail and Square take online
payment methods into the brick and
mortar world (more on this later).
Slide 21 © Fjord 2012 | Confidential
22. Shopping goes
During
DIY
Apple now allows customers to shop in
stores without making any contact with
staff unless they want to. The concept
enables customers to explore the
merchandise for as long as they
like, make a decision (assisted or
not), find the item and pay for it, all on
their own. This gives the customer
unprecedented freedom in shaping their
own experience. Apple can do this
because they own every piece of the
system – the merchandise, the
shop, the payment.
Slide 22 © Fjord 2012 | Confidential
23. After Whenever, where
ver
Online purchases returned in-store
Many retailers allow customers to return
online purchases to brick-and-mortar
locations. This combines the
convenience of buying online without
the inconvenience of having to go to the
post office for returns.
Slide 23 © Fjord 2012 | Confidential
24. Whenever, where
ver
The idea of buying in-store and getting
home delivery is not new – appliance
dealers have been using this system for
decades. But the idea of buying
something online and picking it up in-
store is more recent, further blurring the
lines between „online‟ and „offline‟
Slide 24 © Fjord 2012 | Confidential
25. After Whenever, where
ver
Online registration & support for items purchased in brick & mortar shops
It has become commonplace for
consumer electronics, no matter where
they are bought, to be registered online.
Support, too, is delivered primarily
through online means, with phone
support often only available at a
premium.
Slide 25 © Fjord 2012 | Confidential
26. Thank you.
The feel-good
factor
“Money, if it does not bring you happiness, will at
least help you be miserable in comfort.”
- Helen Gurley
Slide 26 © Fjord 2012 | Confidential
27. There are some things money can‟t buy
Slide 27 © Fjord 2012 | Confidential
28. People pay for what makes them happy.
Some people are happy with simply getting the best deal, but many are willing to pay a
premium for better service
Recognition and Loyalty Follow-through and
recommendation Reward me for repeat support
Know who I am and custom Resolve my problems
what I like and address my
complaints
Slide 28 © Fjord 2012 | Confidential
29. Great technology experiences are in
demand
36%
Want
36% vouchers &
Find mobile location
purchasing based
frustrating, services
but do it
anyway
59%
Would purchase
more frequently 42%
if the experience Would use
were better mobile
42% checkout if
available
Are interested
in mobile
wallet services
40%
Want QR &
barcode
scanners
Source: GP Bullhound Research, Mobile Commerce, September 2012
Slide 29 © Fjord 2012 | Confidential
30. Before Nice to see
you again.
Amazon home page with recommendations
Amazon is perhaps the best-
known example of recognition
and recommendation – it is
definitely one of the most
widely cited examples in the
online world.
Slide 30 © Fjord 2012 | Confidential
31. Before Where everybody
knows your name
Messaging from local merchant/ brick & mortar store/ call from the lady at the DKNY
counter Personal service in local stores – for
example, the shop owner who gives you
a spontaneous 10% discount because
you choose to buy two items when you
only intended to buy one – can be quite
powerful in driving loyalty. Services like
Square, PayPal Here and Sail have the
potential to facilitate and support this by
giving merchants access to customers‟
purchase histories in their shops.
Slide 31 © Fjord 2012 | Confidential
32. Where everybody
During
knows your name
Local merchants taking 10% off when you buy 2 pieces (because you came in only
Local shop owners are also more likely
intending to buy 1)
to know their customers
personally, building trust relationships
that enable them to advise on
purchases – this makes both parties
feel better about the transactions, even
though the goods may cost more.
The best merchants will even call their
regular customers when new and
relevant merchandise arrives – this
makes customers feel like VIPs and
drives both store visits and loyalty.
Slide 32 © Fjord 2012 | Confidential
33. The Starbucks app is an excellent example of tying the full customer lifecycle together – from
locating a shop to ordering to payment to loyalty, all in one well-designed package.
Slide 33 © Fjord 2012 | Confidential
34. VIP service, VIP
After
status
Net-a-porter delivery service (guy in the suit, black boxes with ribbons, same day in
Net-a-porter offers same-day delivery
London)
by liveried staff – a luxurious personal
touch that makes customers feel better
about the price tag of their
merchandise.
Slide 34 © Fjord 2012 | Confidential
35. With you
everywhere
Uniqlo has extended its relationship
with customers through a widely-
loved alarm app, and encouraged
ongoing interaction by awarding
discounts to customers who tweet
about their products.
Slide 35 © Fjord 2012 | Confidential
36. Bridging the
expectation gap
20-40 year olds with less income than they‟d
hoped to have are bridging the gap between
expectation and reality by doing their
everyday shopping at discounters and putting
a large proportion of their disposable income
toward high-end designer accessories. These
are often purchased at outlet shops such as
TK Maxx.
Slide 36 © Fjord 2012 | Confidential
37. Thank you.
Portable
infrastructure
Slide 37 © Fjord 2012 | Confidential
38. Banks take a
backseat
As mobile alternatives such as
Square, Sail and PayPal Here gain
traction in the market, virtually anyone
can become a retailer. This enables
proliferation of microbusinesses and also
threatens more traditional infrastructure
providers (banks, credit card companies)
who have begun to fade into the
background as these OTT players take
the spotlight with consumers and
merchants alike.
This movement is reminiscent of the
challenge faced by Telcos over the past
half a decade, as manufacturers and OTT
providers have captured customers‟
hearts through high-value services.
Slide 38 © Fjord 2012 | Confidential
39. The great equaliser
A street market vendor can suddenly be
equal to a high street brand like Topshop –
access to affordable payment infrastructure
enables the quality conversation to
dominate, rather than the power lent by
superior infrastructure and presence.
Slide 39 © Fjord 2012 | Confidential
41. Customer or
merchant?
The distinction between customer and
merchant is also blurred by this new
infrastructure – anyone can be a consumer
by day and a merchant by night, or vice
versa.
Slide 41 © Fjord 2012 | Confidential
42. Reach out and touch someone
Traditional traffic drivers like vouchers and coupons have also moved into the mobile domain, with
location based services like Groupon and Foursquare, and social curation tools such as Pinterest.
Slide 42 © Fjord 2012 | Confidential
43. More choice, more pressure
There is now a far greater range of payment choices for retailers as well as individuals.
This puts further pressure on traditional service providers to innovate to drive value.
Slide 43 © Fjord 2012 | Confidential
44. Thank you.
What do we do
now?
Slide 44 © Fjord 2012 | Confidential
45. Beautiful seams, not
“seamlessness”
Some new shopping experiences are
unnerving for customers – the absence of
the “the altar of commerce” that is the till is
confusing, leaving people wondering
whether they‟ve actually paid for their
purchases or not.
This new behaviour could also cause other
problems, as customers grow so
accustomed to skipping the till that they do
it even when there is no other technology in
place.
We must mitigate this by ensuring that
customers are aware of the transitions as
they take place. Total “seamlessness” is
not ideal here – while the transitions should
be smooth and not jarring, it is critical that
customer/users always know what‟s
happening and where they stand.
Slide 45 © Fjord 2012 | Confidential
46. Beware the uncanny valley
This is a well-known concept in the
robotics world, but it also applies to
“smart” services.
The myth is that the better a service
knows me, the more conclusions it
draws, the better my experience will
be. But that‟s not true – beyond a
certain point, the service stops
being cool and starts to be creepy.
It takes a huge effort to pull the
service back out of the valley – and
you may never regain the trust
you‟ve lost.
Slide 46 © Fjord 2012 | Confidential
47. Where people are
concerned, why is more
important than what.
It‟s not enough to know
what your customers are
doing – in order to know
how best to respond, you
need to understand why.
Slide 47 © Fjord 2012 | Confidential
48. Why isn‟t everyone more engaged?
Less than 20% of mobile users engage with online retail. Why not more?
36% 23%
Credit card info
security concerns 48% Not easy to
view product
information
Awkward
shopping
experience 18%
Product
information
too limited
31% 20%
Slow connection
Takes too
long
Slide 48 © Fjord 2012 | Confidential
49. It‟s a balancing act
Single point of focus Focus on many
areas at once
Know „what‟ but
not „why‟ Confusion
The trick is to choose a framework of KPIs that work together to show
you not just what your customers are doing, but why they might be doing
it; not just how your business is performing, but where the opportunities
lie to improve.
Slide 49 © Fjord 2012 | Confidential
50. Look at the system (not just at one part)
For customers, the
whole ecosystem works
together to create the
experience they think of
as shopping.
Slide 50 © Fjord 2012 | Confidential
51. Look at the system (not just at one part)
Understanding how the
pieces of your
ecosystem work
together is the key to
creating the best
experience possible.
Slide 51 © Fjord 2012 | Confidential
52. When you put people first, great things
can happen for business.
Slide 52 © Fjord 2012 | Confidential
53. Thank you.
Opportunity
Spaces
“Entrepreneurs are simply those who understand
that there is little difference between obstacle and
opportunity and are able to turn both to their
advantage”
- Niccolo Machiavelli
Slide 53 © Fjord 2012 | Confidential
54. From Shop to
Showroom
While Apple‟s new ultra-DIY shops have
troubled some customers, they are
indicative of an interesting shift – from
„shop‟ environment to „showroom‟. The
focus is no longer only on selecting
product and paying for it; the focus is on
experiencing the products, with or without
assistance.
Technology has opened the door to
radical change in physical retail spaces.
Without the constraints of the
counter, the till, maybe even the
merchandise, we are free to invent
whatever kinds of space are best suited
to connecting people to things they will
love.
Slide 54 © Fjord 2012 | Confidential
55. My data earns me money
As customers become more savvy about their data, new opportunities open for merchants to barter discounts or
merchandise to access improved information. This means opportunity for deeper, more meaningful relationships with
customers.
Slide 55 © Fjord 2012 | Confidential
56. Let me take my
community with me
Location based technology, social
graphs and other metadata can be
combined to give customers more
control over who influences their
buying decisions – leaving
recommendations and reviews for
friends in specific locations, attached
to specific merchandise.
Or, customers could choose to follow
in the fashion footsteps of the stars
they want to emulate - literally, in the
physical world.
Slide 56 © Fjord 2012 | Confidential
57. Make it feel better to
buy
Many medium- and big-ticket items, from
car seats to washing machines, are
necessary but uninspiring purchases.
Anyone who can make a more satisfying
experience of these purchases will win a
good deal of trust and affection from
customers.
Slide 57 © Fjord 2012 | Confidential
58. Help me to aspire
There are collections of items – such as
home theatre or hi-fi equipment – that many
customers continually and incrementally
upgrade over longer periods of time. For
those who are less technology-savvy, this
can be a challenging process of reading
reviews and specifications and asking
friends and acquaintances for advice.
Anyone who can help customers remember
what they have and what it will work best
with will certainly gain trust and goodwill.
Slide 58 © Fjord 2012 | Confidential
59. Remember:
It‟s the
system, not the
part.
Slide 59 © Fjord 2012 | Confidential
Editor's Notes Photos: Light bulb: http://www.youtube.com/user/MrEdisonLightPiggly Wiggly: http://www.renaissanceconnection.org/Sweat shop: http://www.threadforthought.net/2011/03/29/fashion-factory-labor/Not since provisions moved out from behind the counter and the dawn of pret-a-porter with the dawn of the supermarket has there been so much change in the way people buy things. We have more choices than ever – not just goods and brands, but also ways and means of acquiring them. Digital, analog, pay now, pay later, keep it secret or make it public – all these and more have created a landscape that is far more complex and interesting than we could have imagined a mere decade ago. Imgsrc: http://blogs.courant.com/living_on_less/Target-BarcodeScanning2.JPG http://blog.ispira.com/upload/cf/cf004fdc76fa1a4f25f62e0eb5261ca3/f74ff295a261d0ccf56e97cee2d9c40d.jpg http://cdn.macworld.co.uk/cmsdata/features/3365591/29-06-AS-opener.jpg http://4.bp.blogspot.com/_hhQ_DybCZpA/TGV6CT9DeYI/AAAAAAAAAIQ/Kms8gBcqPJI/s1600/IMG00004-20100812-0852.jpg http://www.daniellefreni.com/wp-content/uploads/2012/05/thesource_helpsign.jpg http://luluabroad.files.wordpress.com/2011/12/store-b-vintage.jpg http://3.bp.blogspot.com/_KnEPc1aMbWA/TFSkr53Bc_I/AAAAAAAAEDM/c1bFIglMv_I/s1600/SDC15722.JPGhttp://2.bp.blogspot.com/_JL_Z4awEAic/TQkZyJ6qqzI/AAAAAAAADDo/aBG7Xmz2fIk/s1600/Aldi%2BHyde.jpg Pursuit of independent career paths and more fulfilling roles, people are turning to entrepreneurship to satisfy their professional needsConsumers want real, genuine and authentic interactions – reacting to the increase in technologySmall scale, finding new means of money – making, selling and raising funds - Etsy, Folksy, KickstarterMake money from what you have, - airbnb (rent your home)whipcar (rent your car)park at my house (rent parking space) Camp in my garden (rent your garden to campers) Monday to Friday (rent out your spare room) New attitudes toward work and taking the initiative to establish businesses as much to express their creative impulses as to make money . 75% of 20 – 30 year olds want to be entrepreneurs (according to BVA, French polling institute, 2010). Implications to Barclays Pursuit of independent career paths and more fulfilling roles, people are turning to entrepreneurship to satisfy their professional needsConsumers want real, genuine and authentic interactions – reacting to the increase in technologySmall scale, finding new means of money – making, selling and raising funds - Etsy, Folksy, KickstarterMake money from what you have, - airbnb (rent your home)whipcar (rent your car)park at my house (rent parking space) Camp in my garden (rent your garden to campers) Monday to Friday (rent out your spare room) New attitudes toward work and taking the initiative to establish businesses as much to express their creative impulses as to make money . 75% of 20 – 30 year olds want to be entrepreneurs (according to BVA, French polling institute, 2010). Implications to Barclays The ALTAR of payment Location remindersGoogle maps - Pull up a map when you need it, where you need itTranslate language, currency on the move, on the fly - whatever you need when you need it. Consumers value the services that allow them to do that. This behavior is boosted by a need for positive surprises, spontaneous discovery and relevance.Egg Drop – the smarter neighbourhood marketplace– bit like ebay but for your local area. Foursquare’s Radar alerts you if friends are getting together nearby, so you can meet upHyper local news platforms are emerging, with local papers in the UK and USA encouraging local people to submit news stories that would be missed by mainstream newsBakerTweet lets bakers tell the world that something fresh has just come out of the oven. Implications to Barclays