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Transforming Retail into Social Commerce - Retail CEO Briefing - Strategy Boutique Thaesis

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In this Retail CEO briefing you will read about… ...

In this Retail CEO briefing you will read about…

1. trends in technology and consumer behaviour with relevance to you and your company;

2. the strategic impact of new media and technology on the retail value chain and it’s players;

3. opportunities for using mobile and social media to create better experiences and higher loyalty;

4. an essential characteristic of a winning retail strategy: clients come first, channels second;

5. the transformation of retail into social commerce over the next 10 years.

Five large and relevant retail trends for the next decade:

1. Mobile generation > Non-stop retail
2. Consumers build brands > Social media marketing
3. Internet creates transparancy > Dynamic revenue models
4. Information overload > New intermediaries in retail
5. Entry barriers disappear > Redifferentiate yourself

Ouke Arts
ouke.arts@thaesis.nl
+ 31 6 4226 6233
Skype oukearts

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  • Great presentation....if possible please mail a copy to sandeep.bandaru009@gmail.com
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  • Great presentation and overview of trends impacting Retail. I will really appreciate if you could share the deck to the following address
    jayaraj.parmeswaran@gmail.com
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  • plz if possible email me a copy of this at
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  • great presentation, widening my knowledge about future retails, please send to me at chandy.widiastara@sm.co.id
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  • great presentation. can i get a copy? Please sent it to haibarra@gmail.com
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Transforming Retail into Social Commerce - Retail CEO Briefing - Strategy Boutique Thaesis Transforming Retail into Social Commerce - Retail CEO Briefing - Strategy Boutique Thaesis Presentation Transcript

  • Transforming Retail into Social Commerce
  • Strategy Boutique Thaesis Retail CEO briefing July 26, 2010
  • In this Retail CEO briefing you will read about… 1. trends in technology and consumer behaviour with relevance to you and your company; 2. the strategic impact of new media and technology on the retail value chain and it’s players; 3. opportunities for using mobile and social media to create better experiences and higher loyalty; 4. an essential characteristic of a winning retail strategy: clients come first, channels second; 5. the transformation of retail into social commerce over the next 10 years. Like to stay informed? Follow @thaesisretail on Twitter to receive personal invitations to our other Retail CEO activities.
  • Contents 1. Opportunities and threats for retail in the 00's 0 06-12 2. Strategy of retail companies in the 00's 13-18 3. Design and effectiveness retail organizations in the 00's 19-24 4. Market and business alignment in the 00's 25-33 Trend. Internet penetration in 2010 (EU) 00-35 Trend. Number of 3G users and penetration (WW) 00-36 Trend. Number of internet users and online store customers (NL) 00-37 Trend. Average annual sum of transactions per online store customer (NL) 00-38 Trend. Age distribution for online store customers versus internet users (NL) 00-39 Trend. Age distribution for social media users (NL) 00-40 Trend. Social media interest groups (NL) 00-41 Trend. Media expenditure (NL) 00-42 Trend. Retail revenue offline : online (NL) 00-43 Trend. Internet activities and duration (NL) 00-44 Trend. Retail CFO’s agenda (WW) 00-45 1. Mobile generation Non-stop retail 48-54 2. Consumers build brands Social media marketing 55-62 3. Internet creates transparancy Dynamic revenue models 63-66 4. Information overload New intermediaries in retail 67-70 5. Entry barriers disappear Redifferentiate yourself 71-76
  • Retail in the 00’s THKV/20080218/Concept VERTROUWELIJK Photos: Thaesis/Flickr Creative Commons
  • 1. Opportunities and threats for retail in the 00's Rules of the game: - Behaviour Impact Retail and Brand - Society Strategy Opportunities and threats - Technology Design Economies: Effectiveness Alignment - Capital Retail Consumer - Size Organization Markets - Knowledge Adapted from: Strikwerda, J. (2007). PGO-MC college professional leadership. Amsterdam: Vrije Universiteit.
  • Consumers have indivual wishes
  • And shopping determines identity
  • Mobile phones are used for calling
  • And shopping remains a social act
  • But supply is still only an estimate
  • 2. Strategy of retail companies in the 00's Rules of the game: - Behaviour Impact Retail and Brand - Society Strategy Opportunities and threats - Technology Design Economies: Effectiveness Alignment - Capital Retail Consumer - Size Organization Markets - Knowledge Adapted from: Strikwerda, J. (2007). PGO-MC college professional leadership. Amsterdam: Vrije Universiteit.
  • Globalization and internet
  • Strategy predominantly geographic
  • Fixed assortment with one brand
  • Search, find, evaluate, buy, pay
  • Store opening hours on website
  • Price comparison difficult as ever
  • 3. Design and effectiveness retail organizations in the 00's Rules of the game: - Behaviour Impact Retail and Brand - Society Strategy Opportunities and threats - Technology Design Economies: Effectiveness Alignment - Capital Retail Consumer - Size Organization Markets - Knowledge Adapted from: Strikwerda, J. (2007). PGO-MC college professional leadership. Amsterdam: Vrije Universiteit.
  • Strong centralized focus on €/m2
  • Stock levels determine supply
  • Economies-of-scale + consolidate
  • Some retail chains disappear
  • Value Financial Intrinsic Capital Drivers Indicators Value Markets Value Examples Examples Examples Examples Market share ROIC DCF TRS R&D investments Growth (EBIT) Real Options MVA Cost per share Economic profit While other concepts flourish
  • 4. Market and business alignment in the 00's Rules of the game: - Behaviour Impact Retail and Brand - Society Strategy Opportunities and threats - Technology Design Economies: Effectiveness Alignment - Capital Retail Consumer - Size Organization Markets - Knowledge Adapted from: Strikwerda, J. (2007). PGO-MC college professional leadership. Amsterdam: Vrije Universiteit.
  • Focus on target customers
  • Difficult customer conversations
  • Customer - complaint - service
  • Marketing customer segments
  • Mass media, mass communication
  • Promotion often a one way street
  • Differentiation through volume
  • Which overwhelms the customer
  • Trends THKV/20080218/Concept VERTROUWELIJK Facts and figures: Thaesis/multiple sources
  • 89% Internet penetration in the Netherlands Internet penetration in 2010 (EU) 100% 89% 90% 80% 70% EU average 68% 60% 50% 40% 30% 20% 10% 0% RU CY GR BU PO IT PL MA LI HU SP SL TS IE LE SK AU ES BE GE UK FI LU DE NE SW Source: http://www.internetworldstats.com
  • 2010 year of inflection point for 3G breakthrough Number of 3G users and penetration (WW) 50% 3500 43% 3000 38% 40% 2776 33% 2500 Penetration 2348 reaches 30% 27% 2000 inflection point 1928 3G gebruikers (mln) 3G users (mln.) 21% 3G penetration 1503 3G penetratie 1500 20% 15% 1055 1000 11% 688 8% 10% 500 430 273 0 0% 2007 2008 2009E 2010E 2011E 2012E 2013E 2014E Source: Ovum Estimates, Morgan Stanley Research
  • 8.6 mln. number of Dutch online store customers in 2009 Number of internet users and online store customers (NL) 12 11,2 10,9 11,0 11 10,7 10,8 10,5 10,6 10,3 10 9,0 9 8,6 8,3 8,0 mln. 8 7,5 Actieve internetters Internet users Online koperscustomers Online store 6,8 6,9 7 6,6 6 5 4 2006-1 2006-2 2007-1 2007-2 2008-1 2008-2 2009-1 2009-2 Source: Blauw Research, Thuiswinkel Markt Monitor 2009-2
  • € 737 average annual sum of transactions per online store customer in 2009 Average annual sum of transactions per online store customer (NL) 800 737 700 655 585 600 500 450 412 423 400 381 346 gemiddeldsemi-annual sum Average per half jaar 326 gemiddeldannual sum Average per jaar 300 200 100 0 1 2 1 2 1 2 2007 2008 2009 Source: Blauw Research, Thuiswinkel Markt Monitor 2009-2
  • 25-34 age group in which a relatively large group buys at online stores Age distribution for online store customers versus internet users (NL) 60% 50% 40% 30% Internetbevolking Internet users Online kopers customers Online store 20% 10% 0% <25 25-34 35-44 >44 Source: Blauw Research, Thuiswinkel Markt Monitor 2009-2
  • 10-29 age group in which social media are relatively popular Age distribution for social media users (NL) 2.500.000 2.000.000 1.500.000 Hyves Facebook 1.000.000 LinkedIn 500.000 0 0-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65+ Undisclosed Geen leeftijd Source: Capgemini, LinkedIn
  • >50.000 number of members in social media interest groups for categories like fashion & style, music and sports Social media interest groups (NL) Number of members Source: hyves
  • online increasing category in a decreasing media expenditure market Media expenditure (NL) 6.000 5.000 4.000 overig (email, mobile, ingame) e-mail, mobile, in game € mln. classifieds 3.000 search display 2.000 media expenditure offline mediabestedingen 1.000 0 start of 2009 begin 2009 end of 2009 eind 2009 Source: Capgemini, LinkedIn
  • 40% percentage of retail revenue expected to be achieved through online stores in 2015 Retail revenue offline : online (NL) 100% 90% 80% 70% 60% 50% 40% Offline Online 40% 30% 27% 20% 10% 0% 2010 2015E Source: GfK Retail and Technology
  • +2 new types of online activities with significant duraction since 2008 Internet activities and duration (NL) 120 100 7 10 80 12 social media social media minutes / day 10 listening to audio radio luisteren 60 tv kijken video watching gamen gaming 36 e-mailen e-mailing 40 browsen e.d. others browsing and 20 29 0 2006 2008 2010 Source: SPOT, Trends in Tijdsbesteding
  • -38% difference between planned and realized growth strategies Retail CFO’s agenda (WW) Difference Verschil Measuring and monitoring bedrijfsresultaat Meten en monitoren van performance 86% 23% 63% Kostenreductie 79% Cost reduction 56% 23% Reeks3 Planned Aangewezen als belangrijk Identificeren en uitvoeren van groeistrategieën Growth strategies 77% Realized Daadwerkelijk uitgevoerd 39% 38% Continue proces- en bedrijfsverbeteringen 62% Continuous performance improvement 23% 39% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: IBM, Retail CFO Study
  • Retail in the 10’s THKV/20080218/Concept VERTROUWELIJK Cases: Thaesis/trendwatching.com
  • Five large and relevant retail trends for the next decade 1. Mobile generation Non-stop retail 2. Consumers build brands Social media marketing 3. Internet creates transparancy Dynamic revenue models 4. Information overload New intermediaries in retail 5. Entry barriers disappear Redifferentiate yourself
  • Five large and relevant retail trends for the next decade 1. Mobile generation Non-stop retail 2. Consumers build brands Social media marketing 3. Internet creates transparancy Dynamic revenue models 4. Information overload New intermediaries in retail 5. Entry barriers disappear Redifferentiate yourself
  • Shop anytime, anyplace, anywhere
  • Dynamic ‘omnichannel’ supply
  • Strategy is to respond adaptively
  • With location based services
  • And mobile payment solutions
  • Or relevant navigation support
  • Five large and relevant retail trends for the next decade 1. Mobile generation Non-stop retail 2. Consumers build brands Social media marketing 3. Internet creates transparancy Dynamic revenue models 4. Information overload New intermediaries in retail 5. Entry barriers disappear Redifferentiate yourself
  • Shopping is still a social activity
  • To discover, share and experiment
  • Media usage determines identity
  • And customer service goes social
  • Customers make or break brands
  • And conversations last forever
  • Personified and community driven
  • Five large and relevant retail trends for the next decade 1. Mobile generation Non-stop retail 2. Consumers build brands Social media marketing 3. Internet creates transparancy Dynamic revenue models 4. Information overload New intermediaries in retail 5. Entry barriers disappear Redifferentiate yourself
  • In-store and real-time price checks
  • Transparancy based pricing
  • With the community as safeguard
  • Five large and relevant retail trends for the next decade 1. Mobile generation Non-stop retail 2. Consumers build brands Social media marketing 3. Internet creates transparancy Dynamic revenue models 4. Information overload New intermediaries in retail 5. Entry barriers disappear Redifferentiate yourself
  • New and faster intermediaries
  • Actual ‘demand based’ supply
  • And customers buy collectively
  • Five large and relevant retail trends for the next decade 1. Mobile generation Non-stop retail 2. Consumers build brands Social media marketing 3. Internet creates transparancy Dynamic revenue models 4. Information overload New intermediaries in retail 5. Entry barriers disappear Redifferentiate yourself
  • Decentralized +unlimited niches
  • Differentiation asks for creativity
  • And focus on actual behaviour
  • Stores offer brands uniqueness
  • Quality+ low price + exclusiveness
  • Thank you ... for your attention. Discovered new opportunities? We can help you transform. Strategy Boutique Thaesis Kanaalweg 17L-A Ouke Arts Since 2006 3526 KL Utrecht ouke.arts@thaesis.nl http://www.thaesis.nl The Netherlands + 31 6 4226 6233 info@thaesis.nl +31 30 267 3514 Skype oukearts
  • We research trends and consult clients. We invest in our people. We are Thaesis. What we do Thaesis is all about strategy. We develop strategies for large companies, for example in publishing and retail. We challenge outdated assumptions that underly current business models. We understand changes in consumer behaviour. And we help companies redefine their raison d'être in today’s business environment. In the last year Thaesis has worked on strategies related to e-books, mobile, digital rights and social media. In formulating winning strategies, Thaesis combines financial analysis with business model design. In short: we translate tomorrow’s developments into today’s answers. And we do it precise and fast. Strategy Boutique Thaesis Kanaalweg 17L-A Ouke Arts Since 2006 3526 KL Utrecht ouke.arts@thaesis.nl http://www.thaesis.nl The Netherlands + 31 6 4226 6233 info@thaesis.nl +31 30 267 3514 Skype oukearts