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Consumer Decision Journeys

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Companies need to understand the full range of the multichannel consumer decision journey to understand how to best influence potential and current customers. Scenarios and data from this McKinsey presentation show how consumers are making their decisions today - particularly in the UK and France - and how brands can turn those insights into profits.

Published in: Business, Technology

Consumer Decision Journeys

  1. Shaping your multichannel Customers’ Decision Journey to maximize profits June 2013 Nicolo Galante, Director, McKinsey Eric Hazan, Principal, McKinsey McKinsey on Marketing & Sales – Slideshare Brief
  2. McKinsey & Company | 1 An ideal multichannel journey See an item you like
  3. McKinsey & Company | Savoir plus Acheter Savoir plus Acheter Savoir plus Acheter 2 An ideal multichannel journey Tap for more information
  4. McKinsey & Company | 3 An ideal multichannel journey Get friends’ opinions
  5. McKinsey & Company | 4 An ideal multichannel journey Personalize and tailor
  6. McKinsey & Company | Buy and deliver same day Rendez-vous Select a time to meet with a sales person 5 An ideal multichannel journey Buy it online or in-store
  7. McKinsey & Company | 6 An ideal multichannel journey Find nearest store
  8. McKinsey & Company | 7 An ideal multichannel journey Be “recognized” by sales staff
  9. McKinsey & Company | 8 An ideal multichannel journey Post opinion on social media
  10. McKinsey & Company | 9 An ideal multichannel journey Personal invite for the next product
  11. McKinsey & Company | The Consumer Decision Journey 10 Reaction to the purchase, interaction with the product and brand Experience Consumer’s initial set of brands and retailers Consider Selection of what to buy, where to buy, and how to be delivered Buy Evolution of the consideration set as the consumer gathers information Evaluate Selection of the same brand or retailer without reconsidering and reevaluating Loyalty SOURCE: McKinsey
  12. McKinsey & Company | The Consumer Decision Journey is already multichannel in France 11SOURCE: McKinsey iConsumer research 23% of consumers posted a comment or review on the retailers Facebook page Experience For 30% of electronics custo- mers, digital is the most influential touchpoint for having a brand in their initial consideration set Consider 31% of customers buy online, but pick- up in the store Buy 49% of customers check online to see if the store has an item available Evaluate Example: Amazon Prime members use Amazon for more than 50% of their online purchases Loyalty
  13. McKinsey & Company | The trend toward multichannel journeys is accelerating under the penetration of mature technologies… (1/2) 27 36 26 Voice Email & Msg Social Others 20122008 39 42 15 4 10 11 2008 PC Mobile Tablet 2012 56 33 78 22 0 12 Share of usage time Percent Share of communication time Percent, indexed in 2008 ▪ The share of mobile in the total usage time doubled over the last four years in the USA ▪ The share of voice in the total communication time tend to fall compared to social media, websites and apps SOURCE: McKinsey iConsumer research
  14. McKinsey & Company | The trend toward multichannel journeys is accelerating under the penetration of mature technologies… (2/2) Share of usage time Percent, 2012 Share of communication time Percent, 2012 13 5 PC 69 Mobile 26 Tablet 33 13 Voice 22 Email & Msg 32 Social Others ▪ In France, mobile devices already represent 31 % of connected devices ▪ Almost half of the communication time is spent on social media, websites and applications SOURCE: McKinsey iConsumer research
  15. McKinsey & Company | Less mature technologies will accelerate this trend 14 Near Field Com- munication (NFC) NFC technology enrich the use of mobile while in store (e.g. payments) Augmented Reality Augmented reality enables a real life experience while on line Radio Frequency Identification (RFID) RFID technology enables seam-less experience while in store SOURCE: McKinsey analysis
  16. McKinsey & Company |SOURCE: McKinsey iConsumer Research The importance of each touchpoint varies by categories Visited compe- titor’s websites Used a mobile coupon site/app Searched online for additional information 15 Type of research done while in store shopping as percent of buyers doing in store mobile research Health and beauty 11 Clothing 13 Electronics 27 8 7 9 41 29 32
  17. McKinsey & Company | Four trends shape the new consumer decision journeys From To A different CDJ for each channels An expectation that CDJ is seamless across channels Digital somewhat influences purchase behavior Digital is critical for engaging and converting customers Content and commerce are clearly separated Lines between content and commerce are blurring Customers are divided in macro segments Customers journeys are divided in micro segments and differ by category 16
  18. McKinsey & Company | Multichannel Consumer Decision Journeys represent a revenue growth opportunity… In-store shoppers Multichannel shoppers 191 224 83 116 110 64 152 87 +94% +119% +84% +72% 17 "How much do you spend by month at this retailer?" Spend per month per shopper, € Retailer 1 Retailer 3 Retailer 4 Retailer 2 ▪ Over four retailers analyzed in the UK, multichannel shoppers spend in average twice as much as in-store only shoppers SOURCE: McKinsey survey
  19. McKinsey & Company | More channels also means incremental costs ▪ Increased reach ▪ Loyalty/frequency ▪ Cross-selling/more products Incremental revenues ▪ Launch of channel costs ▪ Customer dissatisfaction costs ▪ Systems integration costs ▪ Training costs ▪ Delivery costs ▪ Level of cannibalization Incremental costs 18SOURCE: McKinsey analysis
  20. McKinsey & Company | … and there is a higher risk of customer dissatisfaction What do we observe today? Half of customers think "Integrating Stores/Online/Mobile" is where retailers need to improve shopping experience most Only 1/3 of customers indicate that shopping is "easy or very easy" on Mobile 2/3 of shoppers have stopped buying goods or services from a company after experiencing poor customer service 19SOURCE: Public data (press)
  21. McKinsey & Company | Shaping your multichannel Consumer Decision Journey to maximize profit Make tradeoffs between channels to drive profits "Don’t leave piles of money on the table" Understand each channel’s role in the Consumer Journeys 20SOURCE: McKinsey analysis Strategy Execution Insights
  22. McKinsey & Company | S E I Understand each channel’s role in the Consumer Decision Journeys 21 Magasin Catalogue Site Web Application mobile Consideration Purchase LoyaltyExperienceEvaluation APPAREL EXAMPLE
  23. McKinsey & Company | Don’t leave piles of money on the table" Consumer electronics example 1. Browsed/ searched Visited 2. Formed a cart 3. Started check-out 4. Purchased 63.7 9.0 5.4 3.9 64 14 60 71 100.0 74.2 9.6 3.1 1.1 74 13 32 35 100.0 79.2 9.1 2.4 0.5 79 12 27 23 100.0 Conversion ratexx 22 xx Percent of visitors SOURCE: McKinsey analysis Player 1 Player 2 Player 3 S E I
  24. McKinsey & Company | Average player Shelf ShelfAisle Shelf ShelfAisle Picking movement examples Best in class 60 - 90 -2 € Best observed average store picking speeds (items/hour) Basket profitability 155 2 € Don’t leave piles of money on the table" Cart Picker 23SOURCE: McKinsey analysis S E I
  25. McKinsey & Company | www.cmsoforum.mckinsey.comWWW @McK_CMSOForum www.youtube.com/McKinseyCMSOforum www.slideshare.net/McK_CMSOForum Stay connected: McKinsey’s Chief Marketing & Sales Officer Forum

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