The Future of Retail - The World Beyond Recession

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Patrick Rodmell's highly visual, interactive and provocative look at:

1) The prominent trends that will influence what tomorrow's customers will buy, how they will buy it and where they will shop;

2) The role insights and shopper marketing play in defining the path to purchase;

3) Innovations that have been developed in response to these trends that are currently being tested in the retail industry; and

4) A hindsight look at the predictions Rodmell made in 2007, and how many have come to fruition.

Published in: Design, Business, Career
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The Future of Retail - The World Beyond Recession

  1. 1. The Future of Retail:The World Beyond RecessionGlobalshop 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. The Integrated Retail Agency 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:1.  Smaller stores with more streamlined product mix2.  More stores and brands that are aligned with environmental and wellness values3.  New technology playing a greater role in information and transactions4.  Reduced store traffic, as consumers buy more online and get home delivery 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;-  Too many stores and product options-  Shrinking middle class-  Demographics…. www.wattisretail.com
  9. 9. Trends that will shape the Future of Retail:Trend 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. All we can do is learn everything we can about them www.wattisretail.com
  13. 13. The brands/products we buy The places we buy them Who’s calling the shots now? www.wattisretail.com
  14. 14. Make no mistake – the Shopper is now in charge!…and it’s only going to get worse… or better! www.wattisretail.com
  15. 15. www.wattisretail.com
  16. 16. Understanding shopper perceptions is key… www.wattisretail.com
  17. 17. …and understanding how they shop is essential www.wattisretail.com
  18. 18. Trends that will shape the Future of Retail:Trend Shopper + Consumer Insights go mainstream 1.  Women: Chief Purchasing Officers www.wattisretail.com
  19. 19. Women: Chief Purchasing Officers 1.  Women make;Trend - 93% of over-the-counter pharmaceutical purchases, - 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
  20. 20. Marketers still aren’t getting it 1.  59% of women feel misunderstood byTrend food marketers 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
  21. 21. Women value authenticity, community, connectedness and quality of life.Does your brand and retail experience exhibit these qualities? www.wattisretail.com
  22. 22. The Dove ads celebrated “authenticity” and self-esteem… and drove up soap sales 600%! (Unilever) www.wattisretail.com
  23. 23. Harley DavidsonToday, women ridersconstitute roughly 12%of Harley sales, up from2% in 1995.
  24. 24. Trends that will shape the Future of Retail:Trend Shopper + Consumer Insights go mainstream 1.  Women: Chief Purchasing Officers 2.  Perdido en la traducción www.wattisretail.com
  25. 25. 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
  26. 26. Papa John’sA greater proportionof Hispanic customersplace orders usingcellphones.http://espanol.papajohns.com
  27. 27. Trends that will shape the Future of Retail:Trend 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:1.  Be more brand loyal than consumers are today2.  Demonstrate about the same loyalty as consumers do today3.  Be more likely to switch brands4.  Have few, if any, real brand relationships. www.wattisretail.com
  30. 30. Trends that will shape the Future of Retail:Trend 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 Economic Instability changes the value equation 1.  It’s smart to save 2.  Buy American www.wattisretail.com
  34. 34. Trends that will shape the Future of Retail:Trend Economic Instability changes the value equation 1.  It’s smart to save 2.  Made in America 3.  The rationalization of retail www.wattisretail.com
  35. 35. 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
  36. 36. Smaller Store FormatsSmaller Store Formats•  Walmart will open its first Express store this year•  Best Buy Mobile, Office Depot and Staples are all coming out with small format models
  37. 37. Gap •  Away from stand-alone: The Gap is gradually reverting to nesting its Baby Gap and Gap kids offerings within its Gap store
  38. 38. Trends that will shape the Future of Retail:Trend 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
  39. 39. Private Label Unit Share Economic Growth Recession Post Crisis Norm Pre Recession Norm2005 2006 2007 2008 2009 2010 Source; Nielsen www.wattisretail.com
  40. 40. Trends that will shape the Future of Retail: Trend Conscious Consumption becoming a decision driver 1.  Environmental Distress www.wattisretail.com
  41. 41. Marks & Spencer‘Sustainable Learning’ store•  Harvested rainwater will supply all the toilets•  Heated by expelled heat from its refrigeration units•  Electric car charging points will be available in the car park•  Goal – to be the world’s most sustainable major retailer by 2015
  42. 42. P&G Compacted DetergentsCould help saveup to 22 millionpounds of totalpackaging inNorth Americaeach year
  43. 43. Wine Self-Service Kiosk… in France!
  44. 44. Electric CarsCharging Stations at Retail
  45. 45. Trends that will shape the Future of Retail: Trend Conscious Consumption becoming a decision driver 1.  Environmental Distress 2.  Social Concern www.wattisretail.com
  46. 46. Social1.  Human Rights2.  Fair Trade3.  Philanthropy4.  Diversity www.wattisretail.com
  47. 47. The website has received over 3million “Likes” on Facebook
  48. 48. Which of the following technologies do you think will deliver themost value to your business within the next five years1.  Connecting with customers through cellphones/smartphones2.  In-store media3.  Internet e-commerce4.  In-store interactive media www.wattisretail.com
  49. 49. Adaptation of Technology: putting control in thehands of the shopper
  50. 50. 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
  51. 51. Game-changers:1.  Location-based Marketing2.  Mobile Self-checkout POS - no price tags; personalized pricing - reduced in-store labor
  52. 52. QR Codes and Barcodes
  53. 53. Levi’sThe Facebook “Like” button:when will it start showing up in stores?
  54. 54. Mobile AppsLoopt and Neer’s location-triggeredreminder appsLoopt: limited-time perishable-inventory deals close to their real-time location.Neer: link tasks to retailers andsends a reminder message whenthe user is close by.
  55. 55. 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.
  56. 56. What people love about the virtual world;1.  Limitless Horizons2.  Personalization3.  Connectedness4.  Engagement5.  EntertainingHow can you deliver this through physical retail?
  57. 57. 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.
  58. 58. rewardssocial PRX Personal Retail eXperience access entertaining
  59. 59. If you asked your customers, they would tell you that it’sexciting to shop your store1.  Absolutely2.  Somewhat3.  Not really4.  Not at all
  60. 60. 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
  61. 61. AdidasThe new touch-screen interactive adiVerseFootwear Wall displays as many as 8,000shoes for shoppers to view. The wall rendersproducts in 3-D, and allows a shopper to spinand zoom in on the shoes, and call upspecs.
  62. 62. 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 the product’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-store register, with the rest of their in-store purchases.
  63. 63. WalgreensVirtual makeover booth at Walgreensfeatures a built-in camera for customers totake their picture and experiment withvarious looks while in store.
  64. 64. Intel Interactive ScreenThe informational overlay onto the physical spacebehind is similar to augmented reality.
  65. 65. Step 1:It’s NOT about a retail experience; it’s about experience retail.
  66. 66. What kind of retail is this?
  67. 67. Arche Shoe Store, Las Vegas
  68. 68. Hollister (Toronto)
  69. 69. IKEAPop-Up StoresIKEA – Created displays in dense urban locations toreach their target market (New York City, DowntownToronto, Subway Terminals).
  70. 70. Self-Service Vending Machines
  71. 71. What makes this an “amazing retail experience”? Products, People and energy!
  72. 72. As virtual experiences and the physicalworld collide, the need for integration of all brand touchpoints becomes even more critical
  73. 73. Rogers
  74. 74. Rogers
  75. 75. Trader Joe’s
  76. 76. The Future of Retail is being shaped by; Shopper + Consumer Insights going mainstream - Rewarding Shoppers will be price of entry - Women and Ethnic sensitivity – Authenticity and character - The M-Powered Generation Economic Instability changes the value equation - Redefined value equation – it’s fun and smart to save - “Buy American” - More private brands Conscious Consumption becoming a decision driver - Cause Marketing - Packaging innovation - Game change at gas/convenience 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
  77. 77. Thanks for your time! prodmell@wattintl.com www.wattisretail.com . . . Insight Strategy Creative

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