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Digital transformation in the retail sector

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Digital transformation in the retail sector

  1. 1. Copyright © Econsultancy September, 2016 Digital Transformation in the Retail Sector: Trends, Data and Case Studies
  2. 2. Who am I? 2 Seán Donnelly Senior Research Analyst sean.donnelly2@mail.dcu.ie @seanog1982 “if we knew what is was we were doing, it wouldn't be called research”
  3. 3. • 20,000 customer journeys / 1,000 brands. • Digital touchpoints - 20% annual increase. • ‘Zero moment of truth’. • Delivering the right message, right time, right channel. Challenges connecting to digitally empowered consumers 3 Source: Brand success in an era of Digital Darwinism, McKinsey Quarterly, February 2015
  4. 4. 4 Big themes • Customer-centricity • Solution focused • Keep it simple • Mobile • Digital to enhance physical • Personalisation • Blending digital/physical • Cultural transformation • Data-driven marketing https://econsultancy.com/reports/digital- transformation-in-the-retail-sector/
  5. 5. Single most exciting opportunity in 2016 04 February 2021 5 1% 2% 4% 4% 5% 6% 8% 10% 11% 20% 29% 0% 20% 40% None of the above Video to increase brand engagement Location-based services that add place and time to the customer relationship Internet of Things / connected devices Social marketing Using marketing automation to increase efficiency and yield Reaching and understanding mobile customers Creating compelling content for digital experiences Cross-channel marketing Data-driven marketing that focuses on the individual Optimising the customer experience Source: Econsultancy/Adobe Digital Trends Survey 2016
  6. 6. Contextualising Customer Experience 04 February 2021 6
  7. 7. Competing on Customer Journeys 04 February 2021 Source: https://hbr.org/2015/11/competing-on-customer-journeys 7
  8. 8. “If I knew I was going to be so lucky being nice to customers I would have done it sooner!” 04 February 2021 8
  9. 9. 04 February 2021 9
  10. 10. Personalisation 04 February 2021 10
  11. 11. Top digital priorities for 2015 versus 2016 04 February 2021 11 Source: Econsultancy, Quarterly Digital Intelligence Briefing: 2016 Digital Trends (Retail Split)
  12. 12. Personalised advertising 04 February 2021 12 https://econsultancy.com/blog/67606-how-o2-achieves-creativity-through-data/
  13. 13. Social Media 13
  14. 14. Content optimization - Segmenting nervous and confident buyers Source: Real-Time Marketing Report Econsultancy econsultancy.com/transformation 23
  15. 15. Segmenting nervous and confident buyers Source: Real-Time Marketing Report Econsultancy econsultancy.com/transformation 24 On average there is a 26% uplift in conversion rate coming from real time marketing
  16. 16. Blending digital / physical 04 February 2021 17
  17. 17. More than £150bn of retail sales are now influenced by digital, and that retailers whose services don’t meet customers’ expectations could lose more than £12bn a year.
  18. 18. 19 Customer ‘journey’ and ‘touchpoint’ maps are crucial – multi-channel
  19. 19. AO.com adopting a customer centric approach • Source: https://econsultancy.com/blog/66768-ao-com-the-best-ecommerce-experience-available-online • Source: https://www.econsultancy.com/blog/67942-how-ao-com-succeeds-by-focusing-on-people-culture-customer-service 20
  20. 20. AO.com taking a customer centric approach • “We put you, our customers, at the heart of everything we do……” • Strong voice of the customer programme • Customer service proposition • Internal processes • Optimised UX • Multi device experience • Trust signals • Customer control • Bespoke delivery • Package tracking • Price match promise • Contextual multi device experience Econsultancy https://econsultancy.com/blog/66768-ao-com-the-best-ecommerce-experience-available-online 17
  21. 21. Audiences are agile 04 February 2021 22
  22. 22. 04 February 2021 23
  23. 23. 24 Blending physical and digital E-receipts Becoming more widespread and working well. Mothercare: within 6 weeks of e-receipt launch stores became a bigger source of customer data than the website. In 6 mths built a database of 650,000 active loyalty club members who’ve given a due date/child DOB.
  24. 24. Blending physical and digital Made.com showroom Tablets to enhance physical; personalised look-books 25
  25. 25. Blending physical and digital L'Oréal Magic mirror app Lets user see what they look like without applying the products. 26
  26. 26. 27
  27. 27. Communicating mannequins 04 February 2021 28
  28. 28. 29 The evolution of omnnichannel customer experience 1. Join up data and systems, then… 2. Deliver experiences that are consistent, synced and responsive across devices/channels, then… 3. Make them personalised, proactive and contextual 4. Clear ownership of omnichannel “The era of living services” FJORD
  29. 29. Cultural transformation Digital transformation – the teenage years 04 February 2021 30
  30. 30. 31 Digital Transformation • The journey towards being a digital organisation • “Digital” means: • Focusing on the customer experience irrespective of channel • Having a digital culture
  31. 31. Source: Econsultancy, Organisational Structures and Resourcing Best Practice Guide • 2,899 Chief Digital Officers globally (LinkedIn) • 2,150 Chief Customer Officers globally (LinkedIn) Redefining culture – who is in charge?
  32. 32. Who is in charge? 04 February 2021 33 9% 7% 9% 8% 29% 30% 28% 33% 27% 28% 29% 28% 26% 24% 25% 23% 9% 11% 9% 8% 2015 2016 2015 2016 We have the analysts we need to make sense of our data We have a good infrastructure in place to collect the data we need Strongly disagree Disagree Neutral Agree Strongly agree
  33. 33. The importance of culture The Zappos Family Core Values • Deliver WOW Through Service • Embrace and Drive Change • Create Fun and A Little Weirdness • Be Adventurous, Creative, and Open-Minded • Pursue Growth and Learning • Build Open and Honest Relationships With Communication • Build a Positive Team and Family Spirit • Do More With Less • Be Passionate and Determined • Be Humble AO Core Values • Bold - We have the courage to try. We think in an unconstrained way to go beyond conventional limits. • Caring - Genuine people make the difference. You can’t pay people to care. • Driven - We are relentless - we deliver what others can’t. We don’t give up and do whatever it takes. • Fun - If you enjoy what you do, you do it better. Work is serious and we do it with a smile on our face. • Smart - We find the best way. We are smart through understanding and innovation. 34 “Culture eats strategy for breakfast.” - Peter Drucker https://econsultancy.com/blog/67942-how-ao-com-succeeds-by-focusing-on-people-culture- customer-service/
  34. 34. 04 February 2021 35 Data-driven marketing a key focus for the future
  35. 35. Disparate data sets a key challenge • Only 29% of marketers claim to have a Single Customer View (SCV). • Only 17% of marketers claim they are fully capable of understanding customer journeys. 36 Source: Econsultancy, Quarterly Digital Intelligence Briefing: Multichannel Reality, September 2015
  36. 36. Most exciting opportunity in 5 years time 04 February 2021 37 0% 2% 2% 4% 5% 8% 9% 9% 13% 21% 27% 0% 20% 40% Other Video to increase brand engagement Cross-channel marketing Social marketing Location-based services that add place and time to the customer relationship Using marketing automation to increase efficiency and yield Reaching and understanding mobile customers Creating compelling content for digital experiences Internet of Things / connected devices Optimising the customer experience Data-driven marketing that focuses on the individual Source: Econsultancy/Adobe Digital Trends Survey 2016
  37. 37. 38 https://econsultancy.com/reports/the-multichannel-reality Campaign integration is a challenge
  38. 38. Proportion of company respondents saying they’re confident in their ability to measure these 04 February 2021 39 20% 23% 29% 31% 41% 43% 18% 21% 29% 30% 42% 41% Return on offline ad spend Return on investment for offline marketing programs Return on investment for mobile marketing programs Return on mobile ad spend Return on investment for digital marketing programs Return on digital ad spend Econsultancy / Adobe Quarterly Digital Intelligence Briefing 2015 2016
  39. 39. Looking ahead 04 February 2021 40
  40. 40. Internet of things - the new eyes and ears of customer experience • 26BN (Gartner) • .. 50BN (Cisco) • ….200BN (Intel) 41
  41. 41. For Marketers, IoT may seem geeky at first…. 04 February 2021 42 Source: HBR Nov 2014, Michael E. Porter “How Smart, Connected Products Are Transforming Competition”
  42. 42. …but scary at the end. 04 February 2021 43 Source: HBR Nov 2014, Michael E. Porter “How Smart, Connected Products Are Transforming Competition”
  43. 43. 04 February 2021 44
  44. 44. Artificial Intelligence 04 February 2021 46
  45. 45. 47 Realtime (synchronous), contextual (location aware etc), personalised, natural language, image recognition, responsive... AKA A conversation.
  46. 46. 04 February 2021 Facebook M
  47. 47. 04 February 2021 1-800 Flowers – order from Facebook Messenger
  48. 48. 04 February 2021 50 Human skills https://econsultancy.com/reports/skills-of-the-modern-marketer/
  49. 49. The next frontier in all marketing
  50. 50. Final thoughts • Customer experience is the big focus for at least a few years to come • Optimising customer journeys across channels will be a big part of this • Right data • Right place • Right time • Lasting relationships • More sophisticated organisations will be enhancing experiences through personalisation and data-driven marketing / marketing automation • “Always be on the lookout for the next thing that could kill you……” 04 February 2021 52
  51. 51. All rights reserved. No part of this presentation may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2014. Thank you sean.donnelly2@mail.dcu.ie @Seanog1982

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