Shopping Today 2013 - Martin Newman presentation

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What will retail look like in 2020? Practicology's CEO Martin Newman walked delegates at the Shopping Today conference through some of the likely changes. Presented on the 26th September 2013 in The Netherlands.

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  • These are the kind of figures businesses in the UK are talking about now
  • 93% of the population uses the internet in the Netherlands says Eurostat. It’s 87% in the UK. More than 50% use mobile internet in the Netherlands too. All the data in the graph is from Eurostat.Forrester figures and backed up by the ONS for the UK. Forrester estimates Netherlands web sales will be 7.2% of the total by 2015 so 20% is a conservative estimate.
  • Figures from PwC Multichannel Myths report Dec 2012
  • Supermarket Albert Heijn collection point for cars and a service point for Bol.com in an Albert Heijn store (both retailers owned by Ahold)
  • By 2020 many more businesses will have moved to the top left
  • Light In The Box if based in Beijing and sells everything from prom dresses to electricals often vastly undercutting local competitors in the markets it is targeting. http://www.internetretailer.com/2013/04/29/chinese-e-retailer-seeks-go-public-us
  • http://www.thinkwithgoogle.com/insights/emea/library/studies/our-mobile-planet-Netherlands/ is where smartphone penetration and usage figures came from
  • WalmartAsda’s Chosen By You range involves consumers in the product development processBarclaycard’s US credit card brand Ring uses online community forums to shape potential new product launches, and choose which charities it will donate funds to as part of its Giveback scheme.Modcloth Be The Buyer scheme
  • Refrigerated locker in Japan…. But UK premium grocer Waitrose is trialling similar
  • The UK’s top click and collect performers:32% of Argos’ total sales are through Reserve & Collect proving the appeal of multichannel shopping journeys90% of Halfords’ online sales are through Click & Collect
  • 5. Driven by a desire to stay in shoppers’ minds and build loyalty with customers, digital brands will adopt more pop-up strategies that invite exploration. EBay, for example, opened a pop-up store in London’s Covent Garden for a weekend in the run-up to Christmas when online orders traditionally peak.6. Retailers will develop 24-hour, self-service collection lockers in high-traffic locations. In Australia, supermarket chain Coles is trying out refrigerated lockers where online shoppers can retrieve their order by way of a pin number. Waitrose is doing similar in the UK.7. With retail space no longer dedicated purely to sales per square metre, play and storytelling will be a stronger means to educate and entertain shoppers. Adidas NEO stores in Germany bring social media into the store with elements such as ‘Share Your Look’ mirrors.8. Many stores will become ‘brand playgrounds’ that prompt people to dream about lifestyle possibilities, while the buying process is completed online. Nike’s FuelStation at Boxpark in East London with its treadmills, motion-sensor digital walls and interactive mirrors is less concerned with selling product and more focused on creating a rich brand experience.9. The blurring of daily routines and the squeeze on free time will continue to heighten the appeal of vending machines offering much more than just snacks. In the US Best Buy has used vending machines for electronics such as iPods in airports to serve customers day and night.10. Innovative retailers and local authorities will help the high street regain its role as a community space where people are encouraged to meet and socialise. KitKat in Holland has offered shoppers a moment of downtime with its tongue-in-cheek offer of ‘No Wi-Fi Zones’. Mobile signals are jammed in the seating area allowing people to socialise and relax. Similarly, Selfridges has created a Silence Room where people can go to unwind.
  • The picture shows the thought that has gone into Kiddicare’s stores to ensure that customers want to visit even if they also shop online – including Mother & Child toilet cubicles.
  • Shopping Today 2013 - Martin Newman presentation

    1. 1. Be inspired: Predictions for the evolution and revolution in B2C channels in the next decade Martin Newman – CEO Practicology
    2. 2. Why I‟m speaking today…
    3. 3. • I‟ve worked in multichannel retail for 25 years - for businesses such as Harrods, Ted Baker and Burberry – and had responsibility for stores, online, kiosks, DM and call centre channels • I now run Practicology a multichannel consultancy based in London & Sydney serving international clients • I‟m on the Advisory Board to etailer Wiggle, and am the Digital & Multichannel Retail Advisor to the charity Breast Cancer Care • This year I was included in the British Interactive Media Association‟s Digital Hall of Fame Hot 100
    4. 4. Do I have all the answers? No. If I did, I‟d be sitting on this boat!
    5. 5. A shameless plug…
    6. 6. Deep experience of the team: We’ve all been at the coal face!
    7. 7. We‟re all retailers: We‟ve owned the eCommerce P&L for the following brands:
    8. 8. What Practicology does Strategy Development Commercial Planning Technology Selection Organisational Change Analytics & BI Conversion Rate Optimisation Customer Insight UX & Usability Site Design Digital Marketing Trading Services
    9. 9. Who we do it for
    10. 10. You can‟t afford to be only thinking about today and next year…
    11. 11. You really can’t afford to take your eye off the ball…as things are changing so quickly
    12. 12. The customers of 2020… today
    13. 13. Two concepts that will be crucial to any business that engages with consumers in 2020…
    14. 14. Businesses in 2020 • Anything, Anytime, Anywhere • If you were a customer service business that just happened to sell… …how would you treat customers?
    15. 15. Prediction 1 – Web penetration What % of your sales or interactions with customers do you expect to take place on the web by 2020? • Non-grocery retail – 50%? • Grocery retail – 20%? • Travel/tickets – 80%? • Retail banking – 80%? • It‟s hard to predict exact numbers but we all know we are yet to reach saturation point
    16. 16. Don‟t think the web is only for the young
    17. 17. Prediction 1 – Web penetration Web shopper 1996 Web shopper 2020
    18. 18. The majority of older customers are buying online and we‟re seeing this with an ever-increasing % of orders online
    19. 19. Prediction 1 – Web penetration • 93% Internet usage • 50% mobile web • Forrester estimates 6% retail sales were online in 2012 • If it hits 10% by 2020 that‟s the same as the UK figure today
    20. 20. Prediction 1 – Web penetration • No product category is immune from this evolution (Figures from PwC Multichannel Myths report Dec 2012)
    21. 21. Prediction 2 - Multichannel • Multichannel shopping behaviour means the web will be the driver of most purchase decisions by 2020 – even if the transaction is not completed online and/or delivered • Supermarket Albert Heijn collection point for cars and a service point for Bol.com in an Albert Heijn store
    22. 22. Prediction 2 – Multichannel By 2020 many more businesses will have moved to the top right Click and collect
    23. 23. Prediction 2 - Multichannel
    24. 24. Prediction 2 - Multichannel • A single view of the customer is crucial so you can serve them across multiple channels • Businesses will be increasingly channel-agnostic • Allowing customers to start and finish journeys in the channel of their choice
    25. 25. Prediction 3 - International • Consumers will be global and 24X7 • Whether your offer is competitive will depend on offering local sites, ranges and customer service • At the same time your competition will no longer be purely local
    26. 26. Say hello to the Chinese…
    27. 27. • Chinese etailer Light In The Box sold $200 million to 17 countries in 2012 – half to European consumers • In June 2013 it raised $79 million in a US stock offering – businesses like this are gaining credentials consumers will trust
    28. 28. Prediction 3 - International • Consumers in developed markets are beginning to transact with online retailers in developing markets • PayPal says 16% of all online shopping in the UK, USA, Australia, Germany, Brazil and China is cross-border, and worth $105 billion in 2013 • PayPal predicts that by 2018 there will be 130 million cross-border shoppers spending over $300 billion
    29. 29. Prediction 3 - International • Emerging market businesses will begin to open stores in Europe • And could buy up European brands too • Chinese fashion retailer Bosideng opened a store in Central London • Global brands also attract global tourist spend – do you accept China UnionPay in store?
    30. 30. Prediction 4 - Mobile • Your customers will use mobile as part of a large percentage of their shopping journeys • They will make purchases not just on tablets but on smartphones and hybrid devices too • Biometric technology will likely do away with the need to input payment details • The majority of web sales will be on mobile (tablets and smartphones) • Mobile - revolution not evolution
    31. 31. Prediction 4 - Mobile • Most adults will own a smartphone (43% now) and all will use it to access the internet everyday in the Netherlands (now 64%) • In the UK, already 23% of online sales are on mobile devices, up from 11.6% a year ago and 34% of site visits are from mobile devices, up from 21% a year ago, says IMRG
    32. 32. Prediction 4 - Mobile Sites will be built with responsive design principles as a matter of course by 2020
    33. 33. Prediction 5 – Consumer behaviour • Multitasking/multiscreen – mobile shopping while commuting, watching TV while banking on a tablet etc: Never really offline • More loyal to retailers and brands that offer something unique or added value services • Less loyal to retailers and brands who don‟t have a differentiated offer • And will consider international online competitors if the only difference to base their decision on is price
    34. 34. Prediction 6 – Consumer expectations • Consumers will expect to be entertained and inspired when they come to your stores and branches – must add value to the transaction • They will expect etailers and brands to have a physical presence too – even if it is pop-up – or a collection/returns point for online • Consumers will expect marketing, promotions and interactions to be personalised whatever the channel • Tthey will expect you to make good use of the customer data they likely already provide you with
    35. 35. Prediction 7 – Customer-centricity • Chief Customer Officer, VP Customer or Customer Director… • Every customer-focused organisation will have a senior member of staff tasked with championing the customer • The most forward-thinking businesses will have taken this concept further and embedded a culture where all staff champion the customer • What will this mean for the way businesses treat their customers…?
    36. 36. Prediction 7 – Customer-centricity • Bad customer feedback via social media and other channels will be a core KPI • If a product or service you sell gets consistently poor feedback it will quickly be removed from sale or re-engineered • Consumers will also inform product and service development
    37. 37. Prediction 7 – Customer-centricity • Quality is already important to consumers in the Netherlands • Price is important to consumers everywhere. Convenience is the third crucial factor • You will allow customers to get their hands on their purchases when it suits them, not you
    38. 38. Prediction 7 – Customer-centricity Personalisation will be more important. Products • Marketing – timing and channel as well as actual content • Offers and discounts – based on location and other triggers
    39. 39. Prediction 8 – Company structures • Which executive job roles will be crucial to a successful business in 2020 apart from the Chief Customer Officer? • Ecommerce will become commerce • Marketing, IT, Ecommerce, Buying & Merchandising roles will all begin to merge • A need to harness data will see staff with analysis and actionable insight skills in demand • The CEOs of 2020 are the Multichannel, Ecommerce and Digital Directors of today
    40. 40. Prediction 9 – Town centres • It‟s not as bleak as it may first look… The UK’s top click and collect performers: 32% of Argos’ total sales are through Reserve & Collect proving the appeal of multichannel shopping journeys 90% of Halfords’ online sales are through Click & Collect
    41. 41. Prediction 9 – Town centres
    42. 42. • Digital brands will adopt more pop-up strategies that invite exploration • EBay, for example, opened a pop-up store in London‟s Covent Garden for a weekend in the run-up to Christmas when online orders traditionally peak • Retailers will develop 24-hour, self-service collection lockers in high-traffic locations • In Australia, supermarket chain Coles is trying out refrigerated lockers where online shoppers can retrieve their order by way of a pin number. Waitrose is doing similar in the UK • Play and storytelling will be a stronger means to educate and entertain shoppers • adidas NEO stores in Germany bring social media into the store with elements such as „Share Your Look‟ mirrors
    43. 43. • The blurring of daily routines and the squeeze on free time will continue to heighten the appeal of vending machines offering much more than just snacks… • In the US Best Buy has used vending machines for electronics such as iPods in airports to serve customers day and night • Innovative retailers and local authorities will help the high street regain its role as a community space where people are encouraged to meet and socialise • KitKat in Holland has offered shoppers a moment of downtime with its tongue-in-cheek offer of „No Wi-Fi Zones‟. Mobile signals are jammed in the seating area allowing people to socialise and relax. Similarly, Selfridges has created a Silence Room where people can go to unwind
    44. 44. Prediction 9 – Town centres • Three years ago Kiddicare was an online retailer with one showroom at its DC • It‟s begun to open “destination” stores that give online shoppers reasons to visit – cafes, antenatal and baby classes etc – and shows what stores need to offer in order to compete with online
    45. 45. Prediction 10 – Marketplaces go multichannel How long until Amazon has an offline presence?
    46. 46. 2020 is not about…
    47. 47. Thank You! Please email me at: Martin@Practicology.com Or follow us on Twitter at: @MartinNewman @Practicology

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