Future of Retail - CACDS Conference 2011

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  • Q 05. If you spent $100 on grocery products at ______________ [PN: INSERT RESPONSE TO S Q8.], how much would you expect the same basket of grocery products to cost at each of the other stores listed below?
  • Target’s offering is at the value level, but its brand proposition is fun, clever, creative and fresh. You don’t have to be ugly to be cheap.Picture of Credit card, gift cardhttp://2.bp.blogspot.com/_EG2QBGQW7eQ/TK3GugNAW6I/AAAAAAAAFoA/va7EhXetmDQ/s1600/Target.PNGPhoto of Target buildinghttp://current.com/news/91118869_target-opens-26-new-stores-creates-5-000-jobs.htmTarget merchandising photohttp://www.nytimes.com/imagepages/2006/08/11/business/11shop_CA0.ready.html
  • Walgreens is following the mobile apps trend with a new app for most of the major platforms (iOS, Android, and BlackBerry. Sorry WP7!) that allows users to renew prescriptions by taking a photo of the barcode on a pill bottle using a smartphone, or by just keying in the prescription code.http://medgadget.com/2011/02/walgreens_mobile_apps_allow_prescription_renewal_via_phones_camera.htmlhttp://stevemackley.com/portfolio/walgreens-mobile/
  • The Facebook “Like” button on branded websites allows users to indicate their preference for a brand and share other information with their friends.Brands like Levi’s are gradually incorporating this feature into their sites on a per-item basis, creating interaction with each product.Jeanshttp://us.levi.com/product/index.jsp?productId=4085264&cp=3146849.3146880.3146898.11242224
  • In Japan, users of an iPhone app can catch virtual coupon butterflies on their phone. The butterflies appear as the consumer approaches one of the participating shopping centers. The shoppers must “catch” the butterflies in order to activate the coupons.CTV.ca, Catching iPhone butterflies leads to real savings for Japanese shoppers, Mar 6, 2010
  • This virtual makeover booth at Walgreens features a built in camera to take your picture, which is then positioned on the monitor for the shopper to experiment with various looksLocation: Highland Park, ILWalgreensPublished: August 2010 Source: In-Store Marketing Institute
  • ARA moving shoe fixture in the form of “a Rotisserie” manages to get our attention, stay longer to watch the display of Shoes and finally go in for more.
  • Holisters video wall, showing a live feed from the beach in California. They also have a juke box that allows their youthful customers pick the music to play in the store.
  • Conde Lumiares DrugstoreDesign Team: Mobil MLocation: Alicante, SpainPosted: October 2009http://travelwithfrankgehry.blogspot.com/2009/10/conde-lumiares-drugstore-by-mobil-m.html
  • An example of disconnected marketing – personalization gone wrong
  • An example of disconnected marketing – personalization gone wrong
  • New York City’s largest Duane reade store just opened in July 2011Features of the new store in NYC• A “Virtual Assistant” that utilizes holographic imaging to create the illusion of a real person who introduces consumers to all that the store has to offer; The new services will include• “Doctor On Premises,” an in-store clinic staffed by MDs;• An expanded beauty department with a LOOK Boutique offering before/after virtual makeovers;• Hair salons and nail salons;• Shoe shine;• Fresh food market including organic fruits and veggies, sandwiches, salads;• Juice and smoothie bar;• Starbucks coffee and bakery counterhttp://nyc.popsugar.com/Pictures-New-Largest-Duane-Reade-40-Wall-Street-NYC-18177956?page=0,0,0#9http://www.duanereade.com/NewStores.aspx?num=5
  • Duane Reade – some stores have a growler bar inside. http://www.duanereade.com/NewStores.aspx?num=5
  • This report is based on research conducted on behalf of the Private Label ManufacturersAssociation by Buxton, a leading provider of retail analytics. The survey was conducted via theinternet, drawing a sample of shoppers from participants in American Consumer Opinion,Decision Analyst’s global internet panel of over 8,000,000 consumers. To achieve a fully representativesample, Decision Analyst applied their advanced proprietary software (Icion®) to drawstratified quota samples from the online panel which match the distribution of U.S. householdsby geography and demography. Invitations were then sent via email for panel participants tovisit the company’s web server, complete the screener and, if qualified, complete the survey.Participants were screened to be 18 year of age or older and the household’s primary groceryshopper.A total of 1,170 interviews were completed, giving the data in this report a margin of errorof +/- 2.98%.
  • This report is based on research conducted on behalf of the Private Label ManufacturersAssociation by Buxton, a leading provider of retail analytics. The survey was conducted via theinternet, drawing a sample of shoppers from participants in American Consumer Opinion,Decision Analyst’s global internet panel of over 8,000,000 consumers. To achieve a fully representativesample, Decision Analyst applied their advanced proprietary software (Icion®) to drawstratified quota samples from the online panel which match the distribution of U.S. householdsby geography and demography. Invitations were then sent via email for panel participants tovisit the company’s web server, complete the screener and, if qualified, complete the survey.Participants were screened to be 18 year of age or older and the household’s primary groceryshopper.A total of 1,170 interviews were completed, giving the data in this report a margin of errorof +/- 2.98%.
  • Future of Retail - CACDS Conference 2011

    1. 1. The Future of Retail:The World Beyond RecessionCACDS Canadian Drugstore Conference 2011 Patrick Rodmell President + CEO Watt International prodmell@wattintl.com www.wattisretail.com
    2. 2. Watt International | Overview Integrated Retail Agency +40 years; +40 countries We help retailers and brands find ways to sell MORE things, to MORE people, MORE often. “Watt International is a unique group of talented people, encouraged to think beyond their specialty…” www.wattisretail.com
    3. 3. What We Do We work with our clients to uncover insights, define winning retail strategies,then bring them to life through products, actions, people and physical expressions. strategy Brand Positioning Marketing Strategies Channel Strategies Product + Merchandise Strategies Private Brand Architecture Business + Strategic Planning Management Consulting research creative Retail Design Trends + Innovation Reports Package Design Financial Analysis BrandvertisingTM Stakeholder Interviews Brand Name, Identity Consumer + Shopper Research Merchandising + POP SWOT + Best Practice Analysis Integrated Communications Need State + Path to Purchase Web, Mobile + Social Media Total Production Management Value Engineering www.wattisretail.com
    4. 4. www.wattisretail.com
    5. 5. Moderate Entertainment: Realtime Polling1. Read the question2. Select your answer by pushing the corresponding number3. Change your mind if you want to – you‟ll have 10 seconds4. We’ll see the results in real time! www.wattisretail.com
    6. 6. Predictions from 2007Engaging through in-store technology1. Energy expended through the course of our everyday lives will be captured and used as a major power supply2. Authenticity will be a key brand attribute in the new world of skepticism3. The potential to scan codes and obtain product information will soon be mainstream4. In a world of “accelerated adaptation of technology”, companies that look for “competitive edge” vs. “bleeding edge” will be the winners. www.wattisretail.com
    7. 7. YOUR turn to make a prediction:Ten years from now, the Biggest Change We Will See At Retail Will Be:200716% 0% 1. Smaller stores with more streamlined product mix20% 0% 2. More stores and brands that are aligned with environmental and wellness values47% 0% 3. New technology playing a greater role in information and transactions17% 0% 4. Reduced store traffic, as consumers buy more online and get home delivery 10 www.wattisretail.com
    8. 8. Conclusion:Consumer/Shopper behaviour and the retail landscape aregoing to change dramatically in the post-recession era.But don’t blame the recession.The recession is simply accelerating changes that were alreadyunderway due to other factors, for example;- Blurring channels- Shrinking middle class- Ethnic influences… www.wattisretail.com
    9. 9. Trends that will shape the Future of Retail:Trend 1 Shopper + Consumer Insights go mainstream www.wattisretail.com
    10. 10. Who „Owns” the Consumer?The brands/products we buy The places we buy them The game changer… Who‟s calling the shots now? But this only told us “what”; NOT “who” www.wattisretail.com
    11. 11. Then came rewards programs and the data started flowing… www.wattisretail.com
    12. 12. The brands/products we buy The places we buy them Who‟s calling the shots now? www.wattisretail.com
    13. 13. Make no mistake – the Shopper is now in charge!…and it‟s only going to get worse…or better! www.wattisretail.com
    14. 14. social media and mobile connectivity havechanged the Path to Purchase and dramaticallyincreased the importance of understanding the “Perception” of your brand www.wattisretail.com
    15. 15. Understanding shopper perceptions is key… www.wattisretail.com
    16. 16. …and understanding how they shop is essential www.wattisretail.com
    17. 17. Trends that will shape the Future of Retail:Trend 1 Shopper + Consumer Insights go mainstream 1. Women: Chief Purchasing Officers www.wattisretail.com
    18. 18. Women: Chief Purchasing Officers 1.Women make;Trend - 93% of over-the-counter pharmaceutical purchases, 1 - 93% of food purchases, - 92% of vacation buying decisions, - 66% of personal computer purchases... [Too Busy To Shop: Marketing to Multi-Minded Women] 2.Women influence 95% of all purchases and control 80% of all household spending [Marti Barletta, Marketing to Women] www.wattisretail.com
    19. 19. Marketers still aren’t getting it 1. 59% of women feel misunderstood byTrend food marketers 1 2. 66% of women feel misunderstood by health care marketers 3. 74% of women feel misunderstood by automotive marketers 4. 84% of women feel misunderstood by investment marketers [Source; Too Busy to Shop: Kelley Skoloda] www.wattisretail.com
    20. 20. The Dove ads celebrated “authenticity” and self-esteem… and drove up soap sales 600%! (Unilever) www.wattisretail.com
    21. 21. Harley DavidsonToday, women ridersconstitute roughly 12%of Harley sales, up from2% in 1995.
    22. 22. Women value authenticity, community, connectedness and quality of life.For everyone, the more „virtual‟ our life gets, the more we crave authentic experiences. Does your brand and retail experience exhibit these qualities? www.wattisretail.com
    23. 23. Trends that will shape the Future of Retail:Trend 1 Shopper + Consumer Insights go mainstream 1. Women: Chief Purchasing Officers 2. Perdido en la traducción www.wattisretail.com
    24. 24. Perdido en la traducción1. By 2015, Hispanic consumers will play a major role in contributing to the upsurge of retail spending2. Hispanics are adopting the internet twice as fast as the general market - 14 percent growth vs. 7 percent (Ethnic Technologies, 10/06/09) www.wattisretail.com
    25. 25. Papa John‟sA greater proportionof Hispanic customersplace orders usingcellphones.http://espanol.papajohns.com
    26. 26. How Canadians are Different – Female ImmigrantsIn 2006, international migration accounted for two-thirds of Canadian population growth and immigration issoon to be Canada‟s only source of population growth (due to low fertility and aging of the population). She’s Somewhat Older She’s More Educated She’s Arriving from South & East Asia – versus South & Central America NOTES: Data only includes individuals aged 25-54 and only new immigrants (no more than 5 years in the country) who were aged 25 or older at arrival. We‟re only showing females, trends for males were for the most part similar. www.wattisretail.com
    27. 27. Trends that will shape the Future of Retail:Trend 1 Shopper + Consumer Insights go mainstream 1. Women: Chief Purchasing Officers 2. Perdido en la traducción 3. Generation M. www.wattisretail.com
    28. 28. Generation M• Born after 1990: The coming consumer generation• Don‟t know life without the internet• Short attention spans• Don‟t trust advertising – look to their social network• Mobile technology is a commodity• Sensitive to our environment www.wattisretail.com
    29. 29. Pick the Statement That Most Accurately Reflects Your Opinion:Generation M (16-21 years old) will:200720% 0% 1. Be more brand loyal than consumers are today 6% 0% 2. Demonstrate about the same loyalty as consumers do today40% 0% 3. Be more likely to switch brands 4. Have few, if any, real brand34% 0% relationships. 10 www.wattisretail.com
    30. 30. Trends that will shape the Future of Retail:Trend 2 Economic Instability changes the value equation 1. It’s smart to save www.wattisretail.com
    31. 31. IKEA: from cheap to savvy
    32. 32. TargetSaving can be fun!. Same Store Sales - 2010 Source: AC Neilsen: Company press releases; latest monthly or quarterly report
    33. 33. Trends that will shape the Future of Retail:Trend 2 Economic Instability changes the value equation 1. It‟s smart to save 2. The rationalization of retail www.wattisretail.com
    34. 34. The Rationalization of Retail – Changing Retail Formats • Retailers are open to new options, such as becoming landlords to other retailers • Retailers are opening smaller format stores • Reigning in previously stand alone stores and nesting them in existing stores www.wattisretail.com
    35. 35. Smaller Store FormatsSmaller Store Formats• Walmart launches Express store format• Best Buy Mobile, Office Depot and Staples are all coming out with small format models
    36. 36. Trends that will shape the Future of Retail:Trend 2 Economic Instability changes the value equation 1. It‟s smart to save 2. Made in America 3. The rationalization of retail 4. The continued assent of private brands. www.wattisretail.com
    37. 37. Private Label Unit Share Economic Growth Recession Post Crisis Norm Pre Recession Norm2005 2006 2007 2008 2009 2010 Source; Nielsen www.wattisretail.com
    38. 38. Trends that will shape the Future of Retail: Trend 3 Conscious Consumption becoming a decision driver 1. Environmental Distress www.wattisretail.com
    39. 39. Marks & Spencer„Sustainable Learning‟ store•Harvested rainwater will supplyall the toilets•Heated by expelled heat from itsrefrigeration units•Electric car charging points willbe available in the car park•Goal – to be the world‟s mostsustainable major retailer by 2015
    40. 40. P&G Compacted DetergentsCould help saveup to 22 millionpounds of totalpackaging inNorth Americaeach year
    41. 41. Wine Self-Service Kiosk… in France!
    42. 42. Electric CarsCharging Stations at RetailWhat happens to gas stations?
    43. 43. Trends that will shape the Future of Retail: Trend 3 Conscious Consumption becoming a decision driver 1. Environmental Distress 2. Social Concern www.wattisretail.com
    44. 44. Social1. Human Rights2. Fair Trade3. Philanthropy4. Diversity www.wattisretail.com
    45. 45. PepsiThe Pepsi Refresh projectawards up to $1.2 million ingrants each month to fundcommunity projects. Visitors toPepsi‟s website or facebookpage vote for their favouriteidea.The website has received over4 million “Likes” on FacebookCheck it out:www.refresheverything.com
    46. 46. Which of the following technologies do you think will deliver themost value to your business within the next five years200718% 0% 1. Connecting with customers through cellphones/smartphones10% 0% 2. In-store media37% 0% 3. Internet e-commerce36% 0% 4. In-store interactive media 10 www.wattisretail.com
    47. 47. Trends that will shape the Future of Retail:Trend Adaptation of Technology: putting control in the hands of the shopper 4 www.wattisretail.com
    48. 48. Mobile Rules1. Mobile usage up: In December 2010, nearly 47% of mobile subscribers in the US accessed mobile media2. More than 64% of consumers want to receive information and notifications about shopper loyalty offers via email3. Redemption rates for mobile coupons are 10x that of paper coupons www.wattisretail.com
    49. 49. Walgreens iPhone and Android Apps• Express refills by scan or by entering your prescription number• Locate a store• Order photos• Get weekly ad• Create a shopping list www.wattisretail.com
    50. 50. Game-changers:1. Location-based Marketing2. Mobile Self-checkout POS - no price tags; personalized pricing - reduced in-store labor www.wattisretail.com
    51. 51. QR Codes and Barcodes1 2 34 6 5
    52. 52. Levi‟sThe Facebook “Like” button:when will it start showing up in stores?
    53. 53. Mobile AppsLoopt and Neer‟s location-triggered reminder appsLoopt: limited-time perishable-inventory deals close to their real-time location.Neer: links tasks to retailers andsends a reminder message whenthe user is close by.
    54. 54. Virtual CouponsVirtual butterflies appear on consumers phones as they approach one of the participating shoppingcenters. Shoppers must “catch” the butterflies in order to activate the coupons.
    55. 55. What people love about the virtual world;1. Limitless Horizons2. Personalization3. Connectedness4. Engagement5. EntertainingHow can you deliver this through physical retail? www.wattisretail.com
    56. 56. Since it‟s inception, the digital world has tried to emulate the positive features of the real world. It’s time to turn the tables. www.wattisretail.com
    57. 57. rewardssocial PRX Personal Retail eXperience access entertaining www.wattisretail.com
    58. 58. If you asked your customers, they would tell you that it’s excitingto shop your store2007 22% 0% 1. Absolutely 33% 0% 2. Somewhat 35% 0% 3. Not really 10% 0% 4. Not at all 10 www.wattisretail.com
    59. 59. Personal Retail Experience technologyEngaging through in-store (PRX) In a recent survey in the UK, 40% of respondents said they recommended retailers to friends as a direct result of a positive technology-enhanced experience at the store www.wattisretail.com
    60. 60. JCPenneySelf-Service Kiosk•View product availability•E-mail images and information•360-degree views and zoom features•Scan the bar code of an in-store item to learn more about theproduct‟s features•Provide product recommendations for complementary items•Online “dressing room – with directions•Print out a receipt and purchase an online item at an in-storeregister, with the rest of their in-store purchases.
    61. 61. WalgreensVirtual makeover booth at Walgreensfeatures a built-in camera for customers totake their picture and experiment withvarious looks while in store.
    62. 62. Step 1:It‟s NOT about a retail experience; it‟s about experience retail. www.wattisretail.com
    63. 63. What kind of retail is this?
    64. 64. www.wattisretail.com
    65. 65. Arche Shoe Store, Las Vegas
    66. 66. Hollister (Toronto)
    67. 67. www.wattisretail.com
    68. 68. www.wattisretail.com
    69. 69. What makes this an “amazing retail experience”? Products, People and energy!
    70. 70. As virtual experiences and the physicalworld collide, the need for integration of all brand touchpoints becomes even more critical www.wattisretail.com
    71. 71. Rogers “We appreciate your business” “Valued Rogers Customer” “These exclusive savings… are not available to everyone” “…a price reserved exclusively for you”
    72. 72. Rogers “Exclusive” deal is $30 more than the standard offer on their website
    73. 73. Trader Joe‟s
    74. 74. The Future of Retail is being shaped by:1 Shopper + Consumer Insights going mainstream - Rewarding Shoppers will be price of entry - Women and Ethnic sensitivity – Authenticity and character - The M-Powered Generation2 Economic Instability changes the value equation - Redefined value equation – it‟s fun and smart to save - More private brands Conscious Consumption becoming a decision driver3 - Cause Marketing - Packaging innovation - Game change at gas/convenience4 Adaptation of Technology putting control in the hands of the shopper - Smaller stores; pop-up stores - Personal Retail Experiences (customization, flexibility) - Flexible retail – including vending/Kiosks - Experience Retail – connected and engaged - Integration of all brand touchpoints – online and off www.wattisretail.com
    75. 75. Knowing all this,what does your future look like? Patrick Rodmell President + CEO Watt International prodmell@wattisretail.com www.wattisretail.com
    76. 76. Thanks for your time! Patrick Rodmell President + CEO Watt International prodmell@wattisretail.com www.wattisretail.com
    77. 77. DUANEreade – Largest DUANEreade in NYC www.wattisretail.com
    78. 78. DUANEreade www.wattisretail.com
    79. 79. www.wattisretail.com
    80. 80. All Retail Shoppers vs. Drug Store Shoppers Survey Conducted on behalf of PLMA by Buxton Consumer Research Survey of shopping behaviour - 2011Brands are often not specified on shopper’s lists.Q. Thinking of what you plan to buy, how often would you say you specify a particular brand name, such as Dove soap or Lipton tea bags? Occasionally on the list 38% Frequently on the list 30% Rarely on the list 18% Always or almost always on the list 9% Never on the list 5%Most drug store shoppers don’t put brands on their lists.Q. In general, when making out your list for the drug store, would you say that you most often write down brand names or list products only by type? List products mostly by type 78% Mostly list products by brand name 22% www.wattisretail.com
    81. 81. All Retail Shoppers vs. Drug Store Shoppers Survey Conducted on behalf of PLMA by Buxton Consumer Research Survey of shopping behaviour - 2011Drug store shoppers don’t rely on lists.Q. Thinking about other types of stores where you shop, do you also make a shopping list before going to the drug store? No 62% Yes 27% Don‟t shop at a drug store 12%In drug stores, shoppers compare prices and read labels.Q. When you shop in a drug store would you say you are more or less likely, as compared to shopping in the supermarket, to do the following?(Percent of those saying “more likely”) Compare prices 60% Read labels 42% Buy the retailer‟s store brand 32% Buy the national brand 19% Never 3%Most shoppers continue to buy health and beauty items at mass merchandisers.Q. Thinking of health and beauty products, at which of the following types of stores would you say you are most likely to buy them? Mass merchandiser 52% Drug store 18% Supermarket 12% Dollar store 7% Beauty specialty 4% Club store 3% Other 2% Don‟t know 2% www.wattisretail.com

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