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Startups & The Retail Opportunity
 

Startups & The Retail Opportunity

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Retail remains the undisputed leader in consumer spending, despite the continued velocity in the digital retailing space. So how, then, what should startups know about retail and retailers? And how ...

Retail remains the undisputed leader in consumer spending, despite the continued velocity in the digital retailing space. So how, then, what should startups know about retail and retailers? And how does user-centered design play a role in unlocking the tremendous opportunity? This was the subject of a two-hour talk give an Denver Startup Week in September, 2014.

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    Startups & The Retail Opportunity Startups & The Retail Opportunity Presentation Transcript

    • Startups and the Retail Opportunity Designing Experiences That Work Rich Bowen | Terry Logan Denver Startup Week | September 18, 2013
    • Retail is Dead: Long Live Retail
    • Retail is Dead: Long Live Retail • Overall US retail sales in August 2013: $381B USD • e-Commerce sales in August 2103: $22B USD $360B spent in retail stores Source: US Dept of Commerce April Trade Report (http://www.census.gov/retail/)
    • Influence Beyond Retail It is too difficult to measure ROI in a traditional sense against digital and eCommerce investment vs. a specific line of transaction data. Omni-channel is not complicated, its Commerce. Transactions by Channel of Influence – Total Retail $5.0T Online to Online $6.2T CAGR 8% Online to Store 12% (11-19%) Traditional Channels to Store -3% Sources: Forrester, Morgan Stanley, US Census
    • Retail is Dead: Long Live Retail • • The essential dynamic is the interplay between retailers, CPG brands, and the consumer Knowing how these three constituencies effect one another will give you a competitive advantage when bringing solutions to market
    • Actionable Insight (Lean in here) • Retailers rely on CPG brands (and the agencies that support them) to bring consumer-driven solutions to market
    • Who’s In Play?
    • The Playing Field: The Basics • • Retail decisions are influenced before store trips, at the shelf, and then reinforced post-purchase We define this as Pre-Tail, Retail, and Post-Tail
    • So Where’s the Opportunity? • It’s all in providing value • Does value = $$$ ?
    • Personalization is the Future of Retailing Increasing efficiency 3.0 Personalization 2.0 • Supermarkets • Super Centers • Chain drugstores 4.0 • Localization • Personalization • Customization • Small grocers • Neighborhood drugstores Size of retailers 1.0 • Specialty shops • General store Transactions become de-coupled from the retail experience 1880’s 2014+ Increasing choice Personalization used to be inversely dependent upon the size of retailer - now in an unprecedented time they actually work in correlation.
    • Retail is Evolving Language Consumer Behavior Retailer Enablement Multi-channel Consumer shop across different channels which function independently of one another In-store, e-commerce, call-center channels function in technology and operational silos Cross-channel Same consumers shop across channels and perceive these channels as part of the same brand Omni-channel Consumer does not perceive channels at all, simply a brand In-store, e-commerce, call-center and mobile channels are connected through integration of varying sophistication and reliability All channels served by common set of technology services, single set of data, and visibility beyond the individual retailer
    • Shoppers Depend on Different Tools to Meet Different Needs Check out 72% Look up product information 66% Locate a Store 72% Look up product information 66% Look up/Compare pricing 61% Look up/Compare pricing 66% Look for coupon/promotions 65% Check user ratings/Reviews 57% Look up product information 58%
    • How? • Provide the right experience at the right time • It’s not enough to focus on features. Why not?
    • “If I had asked people what they wanted, they’d have said faster horses.” -Henry Ford
    • “It’s really hard to design by focus groups. A lot of times, people don’t know what they want until you show it to them.”
    • Retail? Think Mobile First • Do we need to talk about mobile device penetration rates? • (We hope not)
    • SHOPPERS RELY ON MULTIPLE APPS TO MEET THEIR NEEDS What Today’s Shoppers Rely On: Which types of shopping apps have you downloaded? Mass online retailers 61% Barcode scanners 48% Coupon or deal services 48% P2P marketplaces 42% Specific store brands 38% Price comparisons Consumer reviews NEXT-GEN RETAIL: MOBILE AND BEYONDº 37% 22% 28
    • Shoppers Expect Mobile to Improve Their In-Store Experience HAVE YOU EVER USED YOUR TABLET WHILE SHOPPING IN A STORE? 33% Yes 44% No, but I might be interested to 23% No, and I probably wouldn’t be interested to SHOPPERS EXPECT MOBILE TO IMPROVE THEIR IN-STORE RETAIL EXPERIENCES 77% of shoppers are interested in the possibility of having digital content (e.g., product recommendations, videos, simulations and so on) delivered to their mobile phones while in-store. Offer Expertise, Not Just Information Shoppers are already using their mobile devices to look up product information, run price comparisons, and even make online purchases while shopping in a store. Retailers have an opportunity to leverage these behaviors by providing the information themselves that people are already looking for—or don’t even know they want yet. With mobile, retailers can offer people the expertise that traditional, face-to-face customer service provides, but in a more personalized, real-time way. This might include an app that recommends other items in a store that would pair well with a specific piece, or one that already knows your personal preferences and provides a list of products (available in-store) based on that. Seventy-nine percent of shoppers are interested in the possibility of having digital content—product recommendations, demo videos, virtual “try on” simulations, and so on— delivered to their mobile phones while shopping in a store. In fact, 77% of dual owners have already used or would be interested to use their tablets while shopping in a store. *Data displayed for tablet owners only. NEXT-GEN RETAIL: MOBILE AND BEYONDº 20
    • People Feel:
    • How Do We Get From... This To This
    • Focus on Outcomes designing around human-focused outcomes uncovers empathetic cues
    • Outcomes, Looking Backward, Tell Stories the happy user gives substantial guidance to successful digital product design
    • The User-centered Design Process in Eight Easy Steps -Build user personas from demographic and psychographic data -Write stories that begin with pre-conditions and move to post- conditions -Identify key points in the story (ask yourself this question: Were I to illustrate my story, which moments would make the most sense? -Sketch those interactions (screens, human interactions, etc) -Iterate on the screen interactions -Prototype the sketches -Iterate on the prototypes -Build, test, rebuild
    • Design Resources These three books provide a quick read for designing, and building, great digital products: Mobile First, Luke Wroblewski Tapworthy, Josh Clark Designing for Emotion, Aaron Walter
    • What Comes Next? • Lean in to trends, consumer insights, and technologies • Apply a user-centered design process • Iterate, and iterate some more
    • Mobile “Future Requests” For Physical Retail 82% 79% View similar products bought by others 92% Receive a list of a store’s most popular items 95% 94% Compare products 79% Tap “smart” posters for coupons Watch demo videos Self-scan items for check-out 87% 86% 79% Be alerted when near a store with sought-after items Virtually “try on” clothes 72% Access store maps to locate products See if items’ colors match *Data represents the percentage of people who would be interested in each offering (n=909).
    • The Big Win? • Payment & e-Wallets: Earning a place inside the consumer’s wallet dominates the conversation among huge players in the space (Visa, AmEx, Walmart, Walgreen’s, Google, and the list goes on)