REimaginging the Retail Store: GlobalShop 2011 Presentation

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Alan Treadgold (Head of Retail Strategy for the Leo Burnett Group) and Bryan Gailey (Retail Design Director for Arc Worldwide) recently presented at GlobalShop 2011 in Las Vegas the headline findings from Leo Burnett / Arc's REimagining the Retail Store research program.

This keynote presentation was delivered to over 600 conference delegates, and was recognized as one of the most impressive presentations at the event.

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REimaginging the Retail Store: GlobalShop 2011 Presentation

  1. 1. REimagining The Shoppers Perspectivethe retail storeAlan Treadgold Director of Retail Strategy Leo Burnett GroupBryan Gailey Retail Design Director Arc WorldwideGlobalShop: The Retail Solutions Event
  2. 2. BEFORE Shoppers had to visit a store to make a purchase.© 2011 Leo Burnett and Arc Worldwide
  3. 3. NOW They shop when they want, where they want, however they choose.© 2011 Leo Burnett and Arc Worldwide
  4. 4. INCREASINGLY They are choosing not to go to stores at all. 33% are purchasing more online compared with a year ago* * Deloitte Survey May, 2010© 2011 Leo Burnett and Arc Worldwide
  5. 5. so we wanted to study from a shoppers perspective . . .© 2011 Leo Burnett and Arc Worldwide
  6. 6. What stores do shoppers like to visit and why? What makes stores interesting and inviting to shoppers? What are their expectations for personal service within the store? What role does the store visit play within the overall shopping process? What role does price play when shopping in a retail store? How synergistic does the store need to be with other shopping channels? How does the use of technology influence and enhance their store visit?© 2011 Leo Burnett and Arc Worldwide
  7. 7. The Research© 2011 Leo Burnett and Arc Worldwide
  8. 8. Quantitative Research 2200 US Adults Online Survey 40 Retail Brands June 2010© 2011 Leo Burnett and Arc Worldwide
  9. 9. Writing the obituary for the retail store is very premature.© 2011 Leo Burnett and Arc Worldwide
  10. 10. retailer product product website availability reviews However, manufacturer website a new shopper calculus in
stock
or requires retailers to visit store back
order have a NEW MINDSET. product reviews Facebook/ price read
blogs compare news
feed complete the
deal© 2011 Leo Burnett and Arc Worldwide
  11. 11. The relationship between retailer and shopper has changed. In the past, the store managed the shopperʼs experience. Now, the shopper manages her own shopping experience, in-store and beyond.© 2011 Leo Burnett and Arc Worldwide
  12. 12. Itʼs SHOPPERS, not retailers, who are in control of the buying journey.© 2011 Leo Burnett and Arc Worldwide
  13. 13. Access to technology and a recession mindset have prompted shoppers to seize power.© 2011 Leo Burnett and Arc Worldwide
  14. 14. Shoppers arrive at the store armed with information and some have already decided what it is they are going to buy. (or think they have)© 2011 Leo Burnett and Arc Worldwide
  15. 15. ! It is crucial for all retailers to understand the changed role of the physical retail store in a multi-channel Internet enabled world.© 2011 Leo Burnett and Arc Worldwide
  16. 16. Shoppers are creating their own retail experiences, using a variety of tools and resources retailer/manufacturer websites social network mobile store circulars & catalogs TV sales© 2011 Leo Burnett and Arc Worldwide
  17. 17. The web, while often used, is not necessarily preferred. Shoppers still prefer some aspects of the traditional bricks and mortar store. 50% Online alone just doesnʼt work. vs 17% I would prefer shopping online and never go into a store. 43% I like to touch and feel a vs 23% A storeʼs website is already a good product before buying it. substitute for going into the store itself. (Top-3 box agreement scores)© 2011 Leo Burnett and Arc Worldwide
  18. 18. 8 DYNAMICS in 3 territories Understanding Fixing Going beyond the shopper the basics expectations© 2011 Leo Burnett and Arc Worldwide
  19. 19. Understanding the shopper© 2011 Leo Burnett and Arc Worldwide
  20. 20. Key Finding Shoppers organize stores in terms of the experiences they want to have, 1 not just the merchandise they want to buy.© 2011 Leo Burnett and Arc Worldwide
  21. 21. These shopping experiences can be mapped by two dimensions. Buying Y: Are they in store to close the sale or to look around, gather ideas, immerse in a theme, and maybe purchase something? Self Retailer Directed Guided X: Are they handling their experience more or less on their own, in a self-directed manner or are they letting the store play a role guiding the purchase process? Browsing© 2011 Leo Burnett and Arc Worldwide
  22. 22. Shoppers organize their retail world by these two dimensions as well. Buying They group stores together, Convenience not by merchandise Strong value category, but by how they, as shoppers, interact with the store. Technology empowered Right brand and products Cell phone reasonable Friendly Returns Self Retailer Directed Me tailing Guided Retail Physical over virtual Integration Effective service Engaging ideas Experimental Environment Browsing© 2011 Leo Burnett and Arc Worldwide
  23. 23. A shopper-centric perspective is required for retailers to better deliver on the experiences desired by their shoppers.© 2011 Leo Burnett and Arc Worldwide
  24. 24. The way that shoppers cluster stores is very different from the way that retailers do.© 2011 Leo Burnett and Arc Worldwide
  25. 25. Shoppers distinguish 6 types of stores. Price Led All About Ease Low prices important, self service can help. Convenience and Convenient locations. Get what you need in time. May include good return policies. Store environment lacks inspiration. self-service. Dont tend to have good return policies. Dont offer Service can be lackluster. In-store experience doesnt offer much inspiration, but doesnt matter. High penetration and frequency that consumers cant find online. in physical store. Low web penetration. All About Atmosphere Ideas Led Extraordinary in-store experience. Fun for consumers, even if they A bit experimental. Have greater product selection than other dont buy. Dont tend to sell wide array of products. Prices thought cluster. Appealing displays. Offer fresh ideas and unique products. to be high. Price Plus Efficient Errands Good value on what they sell. interesting place to shop, but not Convenient locations with decent service. knowledgeable sales as much so as other clusters. Frequently add new merchandise. people. Lack interesting environment. Seen as pick-up places. Shoppers take their time. Offer a more seamless online and offline experience.© 2011 Leo Burnett and Arc Worldwide
  26. 26. How shoppers cluster stores. Buying Price Led Price Plus All About Ease Efficient Errands Self Retailer Directed Guided Ideas Led All About Atmosphere Browsing© 2011 Leo Burnett and Arc Worldwide
  27. 27. How shoppers cluster stores. Buying Price Led Neighborhood market by Walmart CVS Walmart Sears Target Best Buy TJ Maxx Self Retailer Directed Guided Best Buy: Price Led poster child Browsing© 2011 Leo Burnett and Arc Worldwide
  28. 28. How shoppers cluster stores. Buying Dollar General 7 Eleven Chase Bank Local Grocery Store McDonaldʼs Self All About Ease Retailer Directed Guided 7-Eleven: All About Ease poster child Browsing© 2011 Leo Burnett and Arc Worldwide
  29. 29. How shoppers cluster stores. Buying All About Self Atmosphere Retailer Directed Guided Tiffanyʼs: All About Atmosphere poster child Nordstrom Barnes and Noble Abercrombie Pottery Barn Williams Sonoma Tiffanyʼs Bass Pro Browsing© 2011 Leo Burnett and Arc Worldwide
  30. 30. How shoppers cluster stores. Buying Self Retailer Directed Guided Whole Foods: Hallmark/Goldcrown Ideas Led poster child Whole Foods Trader Joeʼs Ideas Led Browsing© 2011 Leo Burnett and Arc Worldwide
  31. 31. How shoppers cluster stores. Buying Costco B.B.&B Kohlʼs Self Retailer Directed Guided Kohlʼs: Nike Stores Price Plus poster child Price Plus Browsing© 2011 Leo Burnett and Arc Worldwide
  32. 32. How shoppers cluster stores. Buying Walgreens Autozone Loweʼs Verizon Home Depot Self Retailer Loweʼs: Directed Foot Locker Guided Efficient Errands poster child GAP Efficient Errands Browsing© 2011 Leo Burnett and Arc Worldwide
  33. 33. Implication Understand which retailers your shoppers are really judging you against. 1© 2011 Leo Burnett and Arc Worldwide
  34. 34. Key Finding 2 Itʼs not just about price, shoppers want everything else too.© 2011 Leo Burnett and Arc Worldwide
  35. 35. Price is important. And so are quality and experience. Price is the most important consideration in choosing a brand. 36% The most important thing when shopping is to find high quality products. 42% When it comes to stores, itʼs important to me to go to those that have high quality products and excellent service. 42%© 2011 Leo Burnett and Arc Worldwide
  36. 36. © 2011 Leo Burnett and Arc Worldwide
  37. 37. Implication Price competitiveness gets you an invitation to the 2 party, but price alone wonʼt get you a dance.© 2011 Leo Burnett and Arc Worldwide
  38. 38. Fixing the basics© 2011 Leo Burnett and Arc Worldwide
  39. 39. Key Finding Shoppers are disappointed in 3 retailersʼ inability to deliver the basics.© 2011 Leo Burnett and Arc Worldwide
  40. 40. What matters most to shoppers: Importance Convenient location 61% Great selection of products 59% Store I can trust 59% Items in stock 56% Has good value for the money 55% Right mix of products 55% Has a consistent online and in-store return policy 54% Makes shopping quick and easy 53% Good range of prices on the items I shop for there 53% Prompt service 52% Keeps prices lower than the competition 52% (Top-3 box agreement scores)© 2011 Leo Burnett and Arc Worldwide
  41. 41. What matters most to shoppers: Delivery Convenient location 47% 61% Great selection of products 47% 59% Store I can trust 50% 59% Items in stock 40% 56% Has good value for the money 39% 55% Right mix of products 43% 55% Has a consistent online and in-store return policy 42% 54% Makes shopping quick and easy 43% 53% Good range of prices on the items I shop for there 40% 53% Prompt service 38% 52% Keeps prices lower than the competition 33% 52% (Top-3 box agreement scores)© 2011 Leo Burnett and Arc Worldwide
  42. 42. Successful retailers are making sure they are delivering the basics their shoppers are demanding.© 2011 Leo Burnett and Arc Worldwide
  43. 43. Implication It may not be sexy, but thereʼs work to do – and 3 profit to be made – from making the basics better.© 2011 Leo Burnett and Arc Worldwide
  44. 44. Key Finding Shoppers are largely unimpressed with in-store service. Itʼs not just the delivery thatʼs weak 4 – itʼs the service proposition itself.© 2011 Leo Burnett and Arc Worldwide
  45. 45. Shoppers want more. Old school (Acknowledgement) New school (Relevance)© 2011 Leo Burnett and Arc Worldwide
  46. 46. They want real help to make better informed decisions. They want easily accessible information in the store 46% They want help when they need it, but to be acknowledged and left alone when they donʼt 40% They expect service personnel who are insightful and well informed 49% They donʼt want to wait 52% And stores can help shoppers with all of these, ! often without relying on store associates.© 2011 Leo Burnett and Arc Worldwide
  47. 47. Shoppers donʼt want to wait on service Apple store© 2011 Leo Burnett and Arc Worldwide
  48. 48. Shoppers want good information© 2011 Leo Burnett and Arc Worldwide
  49. 49. Shoppers want help when they need it, but to be acknowledged and then left alone when they donʼt© 2011 Leo Burnett and Arc Worldwide
  50. 50. Shoppers only need to interact with a person if that person is going to add value to the transaction. Sales associate at Shibuya 109, Tokyo© 2011 Leo Burnett and Arc Worldwide
  51. 51. Implication Reframe service from staff ʻjust being thereʼ to service being truly effective and delivered 4 by both staff and the store environment.© 2011 Leo Burnett and Arc Worldwide
  52. 52. Going beyond expectations© 2011 Leo Burnett and Arc Worldwide
  53. 53. Key Finding 5 Shoppers are promiscuous. They shop around. Their loyalty has to be earned every visit, not just bought with a card in their wallet.© 2011 Leo Burnett and Arc Worldwide
  54. 54. Loyalty to retailers is, for the most part, notably weak. Q Use the scale below to indicate how much you feel you need to go to that particular store or venue versus a competing store or venue. Loyalty is limited even among a storeʼs current shoppers. 52% 48% Definitely prefer to go to this store or a competing store. Donʼt have a strong preference.© 2011 Leo Burnett and Arc Worldwide
  55. 55. Loyalty programs can emphasize distinction and differentiation, setting you apart from your competition. The data collected can be analyzed to help retailers speak more distinctly to their shopper segments about what is important to that shopper . . . and itʼs often not just about price!© 2011 Leo Burnett and Arc Worldwide
  56. 56. Loyalty can be strengthened by a personalized experience. At Samʼs Club, shoppers print out a list of personalized special offers, and the check-out register recognizes them and rings up the discounted price. No coupon clipping required!© 2011 Leo Burnett and Arc Worldwide
  57. 57. Loyalty programs are great, but what really keeps a shopper interested is a new and fresh experience each time they visit.© 2011 Leo Burnett and Arc Worldwide
  58. 58. Implication Loyalty has to be truly earned by understanding 5 and delivering on the expectations of shoppers.© 2011 Leo Burnett and Arc Worldwide
  59. 59. Key Finding Eataly, NYC 6 Shoppers look to stores to deliver what the web cannot© 2011 Leo Burnett and Arc Worldwide
  60. 60. The store performs better than the web in some functional and emotional ways. The physical store is better than their website for… Average store Getting it 51% Stores excel at being pick-up points and time savers. Returning it 47% They do relatively poorly when it comes to stimulation and Saving time 42% learning. Stimulating or entertaining me 32% Learning about brands or products 26% Saving money 25%© 2011 Leo Burnett and Arc Worldwide
  61. 61. But physical stores can offer experiences beyond the reach of the web© 2011 Leo Burnett and Arc Worldwide
  62. 62. Stores can become meeting and gathering places for like-minded enthusiasts.© 2011 Leo Burnett and Arc Worldwide
  63. 63. Stores can offer learning and participation opportunities.© 2011 Leo Burnett and Arc Worldwide
  64. 64. Implication Dial up the attributes where stores can by creating more engaging, entertaining 6 and ideas-oriented environments.© 2011 Leo Burnett and Arc Worldwide
  65. 65. Key Finding Technology for technologyʼs sake is a low priority for shoppers and often undermines 7 the shopperʼs relationship with the store.© 2011 Leo Burnett and Arc Worldwide
  66. 66. In-store technologies are being used to deliver on basics,but at the expense of emotional engagement between the shopper and the retailer. Buying Quick and easy self- service checkout Welcomes, tries to enhance my cell phone use during A place to go pick up in-store shopping something Ive already learned about online Kind of store where I go on A store I can trust Has put lots of technology their website on my cell phone I can learn more about the merchandise in the store to improve my while Im in the store in the actual store than online or catalog information access Makes it easier to Has figured out how much or little order online & pick-up interaction I want with the sales products at the store staff & has gotten it right Self Retailer Directed Guided Allows me to shop online but return in-store When I leave the store, I always Itʼs easy to move between feel good - like I got something out their website and store - a lot of the experience above & beyond of synergy between them any products I may have purchased The kind of store where I go there more because I want to than because i have to Browsing
  67. 67. Technology can enhance a shopperʼs relationship with the store if it provokes a positive, emotional response. Technology for efficiency. Technology to deliver more enriching, engaging experiences.© 2011 Leo Burnett and Arc Worldwide
  68. 68. Technology can be used to help establish trust.© 2011 Leo Burnett and Arc Worldwide
  69. 69. Technology can be used to reinforce the breadth of selection. Adidas virtual footwear wall features 4000 styles of shoes, and links to Twitter and Facebook.© 2011 Leo Burnett and Arc Worldwide
  70. 70. Technology can help ease shopper pain points. Kohlʼs in-store kiosks will check stock inventory in other locations and ship product directly to shoppers, free of charge.© 2011 Leo Burnett and Arc Worldwide
  71. 71. Implication Use technologies in store and in the hands of shoppers to enhance the relationship between 7 retailer and shopper, not undermine it.© 2011 Leo Burnett and Arc Worldwide
  72. 72. Physical stores need to be made relevant Key Finding with the Internet. Itʼs not stores or Internet, itʼs stores and Internet. 8 +© 2011 Leo Burnett and Arc Worldwide
  73. 73. The shopping journey (toothbrush shopping) Dentist recommends a power toothbrush and offers purchase options.© 2011 Leo Burnett and Arc Worldwide
  74. 74. The shopping journey (toothbrush shopping) $ ® ® Loves her new toothbrush!© 2011 Leo Burnett and Arc Worldwide
  75. 75. Doll hair Dining salon for dolls Apparel for kids and dolls Web offer Movie/ theater Books© 2011 Leo Burnett and Arc Worldwide
  76. 76. Product email In-store support Web offer In-store sale Recycle email© 2011 Leo Burnett and Arc Worldwide
  77. 77. Shoppers want seamless integration Implication between the physical and the virtual. 8 Make sure that every touchpoint is speaking in the same voice, making the same offers, and projecting the same emotional experience.© 2011 Leo Burnett and Arc Worldwide
  78. 78. To conclude© 2011 Leo Burnett and Arc Worldwide
  79. 79. 8 DYNAMICS in 3 territories ers must und erstand in order to succe ed. ...that retail Understanding Fixing Going beyond the shopper the basics expectations© 2011 Leo Burnett and Arc Worldwide
  80. 80. Shoppers still want stores…© 2011 Leo Burnett and Arc Worldwide
  81. 81. … but retailers must be willing to REimagine and reinvent to stay relevant in the new shopper landscape.© 2011 Leo Burnett and Arc Worldwide
  82. 82. The paradox in the 21st century retailing: Playing safe might just be the riskiest plan of all.© 2011 Leo Burnett and Arc Worldwide
  83. 83. Winning retailers break conventions... IKEA Victoriaʼs Secret Zara Selfridge & Co. Apple© 2011 Leo Burnett and Arc Worldwide
  84. 84. and become more memorable and meaningful to their shoppers.© 2011 Leo Burnett and Arc Worldwide
  85. 85. ...their integration of physical and web experience. HOW? ...their use of technology. Winning stores are always REimagining... ...their in-store ...their shoppersʼ experience. expectations. ...their own service proposition.© 2011 Leo Burnett and Arc Worldwide
  86. 86. Thank youand good luck.Alan Treadgold Bryan GaileyLeo Burnett London Arc Worldwide Chicago+44(0)20 70711140 312 220 5959

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