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eRetail Europe - Benedikt Schmaus - Booz and company

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eRetail Europe - Benedikt Schmaus - Booz and company

  1. 1. Retail Innovation From Cross-Channel Management to sustainable retail innovation
  2. 2. 5 years old… benefiting from our 99 year legacy of pioneering in the consulting business Recent acquisitions to deepen offering in an integrated approach Deep Consumer & Retail expertise  Digital Business Strategy & Technology  Go To Market Strategy  Innovation  Category Management  Organisation, Change & Leadership  Logistics Strategy Number 1 consulting thought leader
  3. 3. Key messages The market will continue to shift to digital - everywhere Cross-Channel will move from differentiator to qualifier Building sustainable retail innovation capabilities is key
  4. 4. There is motion in the ocean … Chinese online auctions >800 mn items listed >500 mn registered users Gross merchandise volume >RMB 1 trillion (120 bn €) 5.1 bn own Mobile Phone 4.2 bn own Toothbrush Most popular camera: iPhone Recently announced store closures: Thalia: planned 20 stores Karstadt: > 30 stores sold (total 117 left) Görtz: planned 14 stores 2008 2012 Share of online vs. offline book purchases in Germany Source: Internet Research, Booz & Company analysis; Die Welt
  5. 5. … and consumer spending is under pressure in Europe 15% YoY % Change of Personal Disposable Income 10% BRIC Countries 5% North America 0% Western Europe -5% 2002 2004 Source: The Economist Intelligence Unit 2013 2006 2008 2010 2012
  6. 6. Changing customer behavior leads to new desires Technology Drivers Always on Social Media  Regional  Global  Groups  Individuals Behavior shifts  Purchase  Rental  Marketing  Referral  Functional  Emotional  Paid  Free Smart Devices, Cloud Real-time data Zero tolerance Price transparency Loyalty erosion Seamless experience
  7. 7. Online players try to address these desires Retail Sales Footprint 2012 vs. 2020 Source: Booz & Company analysis based on Euromonitor historics and external benchmarks 6
  8. 8. Several options exist on how to react … ONLINE CATEGORY KILLER OFFLINE SHOPPING EXPERIENCE PRICE CROSS-CHANNEL SHOPPING EXPERIENCE UNIQUE PRODUCT CUSTOMER SERVICE DIGITAL PRODUCTS & SERVICES CUSTOMIZER
  9. 9. … or become Amazon ONLINE CATEGORY KILLER OFFLINE SHOPPING EXPERIENCE PRICE CROSS-CHANNEL SHOPPING EXPERIENCE UNIQUE PRODUCT CUSTOMER SERVICE DIGITAL PRODUCTS & SERVICES CUSTOMIZER
  10. 10. Brick-and-mortar can offer unique customer experience
  11. 11. Building a true Cross-Channel model is complex Booz & Company Cross-Channel Framework Analytics & Customer Insight Information Technology Customer Experience Product & Pricing CustomerCentric Strategy Operating Model Brand Management Supply Chain Mgmt. & Logistics
  12. 12. Once cross-channel becomes a “qualifier”, Innovation is key to maintain differentiation R&D Spending Company Perceived as innovative 2011 $US Bil. Rank 1 Apple $2.4 53 2 Google $5.2 26 3 3M $1.6 86 4 Samsung $9.0 6 5 GE $4.6 30 6 Microsoft $9.0 5 7 Toyota $9.9 1 $2.0 72 $6.3 17 $2.9 48 8 P&G Tie 8 IBM 10 Amazon Source: Booz & Company Global Innovation Study 2012 Actual R&D Spend
  13. 13. Innovation can take many faces Product Product to Service Channel Insight / Big Data Format Customer Service Supply Chain / Speed Store Operations Cost / Price
  14. 14. Building a sustainable innovation capability is crucial – few retailers have it Innovation Processes (Ideation to Market) Innovation Strategy (Leader, Follower?) Innovation Capabilities (Analytics, Online) Innovation Mindset (Fast, Test, Scale) Innovation Funds (Internal, M&A) Innovation Operating Model (Central or Decentral?) Innovation Network (External Partners)
  15. 15. Wrap-Up The market will continue to shift to digital - everywhere   Digital is the future in all categories, but high-street will remain relevant Unique consumer experience is crucial to differentiate Cross-Channel will move from differentiator to qualifier   Understand the role and relevance of cross-channel to differentiate If you do it, do it right! Building sustainable retail innovation capabilities is key   Embed innovation fundamentally in your retail operating model (organization, processes, budgets, people, information) Innovation principle: Think big ! Test small ! Fail or scale fast !
  16. 16. THANK YOU www.booz.com www.boozdigital.com Booz & Company GmbH Benedikt Schmaus Bockenheimer Anlage 44 60322 Frankfurt am Main benedikt.schmaus@booz.com +49-170-2238-437

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