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The All Channel Experience
DRIVING VALUE FOR YOUR CUSTOMERS AND YOUR BUSINESS
Ben Gilchriest & Antoinette Ienco
Digital Transformation Lead, Retail Sector Industry SME
Capgemini Consulting, Australia
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
Australian retail sector challenges (briefly!)	
  
HowdoyourealiseaDigitalAdvantage?
The danger of the “in between”
Digital Maturity Matters
62% active in mobile shopping
On-Line Mobile Social Media
Adoption of mobile as a payment
channel growing rapidly C
Smartphone adoption
Growing subscriber base
High household broadband
coverage A
A leader in internet penetration
5th highest
internet
penetration
in the world
73%
73%
Australia USA
36%	
  	
  
51%	
  
9.74	
  
10.33	
  
11.12	
  
9.50	
  
10.00	
  
10.50	
  
11.00	
  
11.50	
  
Dec	
  
2010	
  
Jun	
  
2011	
  	
  
Dec	
  
2011	
  
Millions	
  
73%
A major part of people’s on-line
time
Facebook is still the #1
social media site
A significant channel for generating
and finding opinions
Leading the world
in social media
usage @7hrs /
month
Nearly half of all
Australian’s on-line
are active in social
mediaA.
Majority are
seeking other’s
opinions
read reviews &
discuss brands
3%	
  
4%	
  
8%	
  
9%	
  
97%	
  
Other	
  
Myspace	
  
Twi@er	
  
LinkedIn	
  
Facebook	
  
*% of Australian social media
users visited
LinkedIn in
growing rapidly;
+99% growth in
2011 d
A -domestic connections., 2011
B – business & domestic broadband connections.
C - PayPal figures – purchases via mobile, 2010 - 2011
% of on-line users that are active in social media
71%
Mobile transactions growing at
430% year on year
20%
Australians with an
Internet
connectionB
90%
Australians >16
years active on-line
81%
48%
0%	
  
10%	
  
20%	
  
30%	
  
40%	
  
<5	
  min	
   5-­‐30	
  min	
   30-­‐60	
  	
  
min	
  
over	
  an	
  
hour	
  
no	
  
shopping	
  
20%	
   26% 11% 5%
38%
Australian consumers are leaders in internet and smartphone
adoption and social engagement
2011 2012
The Australian retail sector is facing several challenges
§  Pure play online retailers.
§  International retailers with efficient business models.
§  Traditional channels extension with online
§  Innovative Apps (combining online, user data,
mobility.
§  Shrinking square footage.
§  Technology leveraged in-store to provide
outstanding customer service and increased
personalization;
§  Kiosks;
§  Mobile payments;
§  QR Codes.
§  Supply chains need to accommodate and fulfill
individual customer orders.
§  Collaborative supply chain technology and practices
like shared warehouses are critical for realizing
improvements.
§  Production is based on predictive and actual
demand from consumers.
•  More content is generated outside the company –
unstructured.
•  Combination of loyalty data and unstructured data
to respond to customer expectations.
•  Affinity analysis;
•  Sentiment Analysis.
Changing	
  Marketplace	
   Supply	
  Chain	
  Op4misa4on	
  
New	
  Store	
  Formats	
   Data	
  Availability	
  
Retail	
  
New technology (digital) is both part of the challenge and the
solution.
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
CUSTOMERCHANNEL
MODEL
INTERACTION
MODEL
Australian shoppers’ expected a dramatically different
experience and they are becoming more vocal in demanding it
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
Yesterday Today
IN THE DARK
Information poor.
Limited choice.
Retail store the preference.
INSIDE-OUT
Call centre centric.
Retail store centric.
“TELLING”
Mass marketing.
Outbound blast marketing.
Reactive, inbound.
INFORMED, EMPOWERED
Benchmark on trust, social responsibility
Constantly changing & sharing.
High trust in peer review.
across industries and geographies
OUTSIDE-IN
Integrated cross-channel.
Customer experience driven design.
“CONVERSING”
Embrace social (P2P).
Co-creation.
On-line at the core.
CUSTOMERCHANNEL
MODEL
INTERACTION
MODEL
However, many companies are struggling to catch-up with
rapidly evolving customer demands
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
Yesterday Today
IN THE DARK
Information poor.
Limited choice.
Retail store the preference.
INSIDE-OUT
Call centre centric.
Retail store centric.
“TELLING”
Mass marketing.
Outbound blast marketing.
Reactive, inbound.
INFORMED, EMPOWERED
Benchmark on trust, social responsibility
Constantly changing & sharing.
High trust in peer review.
across industries and geographies
OUTSIDE-IN
Integrated cross-channel.
Customer experience driven design.
“CONVERSING”
Embrace social (P2P).
Co-creation.
Personalisation at the core.
The “in-
between”
“TALKING”
Loyalty and reward schemes.
Social media largely outbound
(minimal integration into org.)
MULTI-CHANNEL
Multiple offerings,
not integrated
Despite many attempts, Australian retailers struggle to
bridge the gap to address evolving shopper behaviour
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
§  ABS show $258 billion spent on retail and 9% is estimated
to be on-line with overall growth of 12%.
§  On-line retail sales are expected to reach $18 billion in
2013 and forecasted to grow 39% to $25 billion by 2015.
§  28% of goods bought by Australians online were from
overseas sites. Down from 43% in 2011,
§  Multiple overseas companies have launched dedicated
Australian sites (e.g. ASOS, Saks, TM Lewin, Nordstrom,
Gap, Wiggle etc.).
§  Companies are introducing experiences developed in
other markets to Australia (e.g. ASOS scan-to-shop)
§  Of the top 15 online retailers, only two have a bricks-and-
mortar offering…..
§  In the US, 13 of the top 15 online retailers had physical retail
outlets.
§  Only 8% of companies use mobile to transform the
customer experience and 14% for operational processes
§  Limited functionality and basic fulfilment
On-line Retail is expected to
grow to $25b by 2015
Australians are
benchmarking their digital
experience against
established overseas brands
Australian retailers are
struggling to respond
Digital maturity is a combination of “what” and
organisation does and “how” they approach it
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
Digital Intensity
(the “WHAT”)
Transformation Mngt Intensity
(the “HOW”)
Technology-enabled initiatives in:
•  Customer Experience
•  Internal Operations
	
  
Leadership capabilities including:
•  Vision
•  Governance
•  Engagement
•  IT-Business Relationships
	
  
‘Beginners’ may be carrying out some experiments though are
largely skeptical of value of digital
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
DIGITALINTENSITY
WHAT	
  is	
  the	
  
organisa3on	
  
doing	
  	
  
(digital	
  
investments	
  &	
  
assets)	
  
TRANSFORMATION MANAGEMENT INTENSITY
HOW	
  is	
  the	
  
organisa3on	
  
doing	
  it	
  
(vision,	
  governance	
  
&	
  roadmap)	
  	
  
BEGINNERS
This is not for us!
‘Conservatives’ have a digital vision and strong governance
though have few advanced digital features
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
DIGITALINTENSITY
WHAT	
  is	
  the	
  
organisa3on	
  
doing	
  	
  
(digital	
  
investments	
  &	
  
assets)	
  
TRANSFORMATION MANAGEMENT INTENSITY
HOW	
  is	
  the	
  
organisa3on	
  
doing	
  it	
  
(vision,	
  governance	
  
&	
  roadmap)	
  	
  
BEGINNERS
This is not for us!
CONSERVATIVES
Analogue focus
‘Fashionistas’ have many advanced digital features though
they’re run in silos and there is no over-arching vision
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
DIGITALINTENSITY
WHAT	
  is	
  the	
  
organisa3on	
  
doing	
  	
  
(digital	
  
investments	
  &	
  
assets)	
  
TRANSFORMATION MANAGEMENT INTENSITY
HOW	
  is	
  the	
  
organisa3on	
  
doing	
  it	
  
(vision,	
  governance	
  
&	
  roadmap)	
  	
  
BEGINNERS
This is not for us!
CONSERVATIVES
Analogue focus
FASHIONISTAS
Digital
Digital
Digital
Digital
Digital
‘Digirati’ have a strong vision, and governance with many digital
initiatives generating business value in measurable ways
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
DIGITALINTENSITY
WHAT	
  is	
  the	
  
organisa3on	
  
doing	
  	
  
(digital	
  
investments	
  &	
  
assets)	
  
TRANSFORMATION MANAGEMENT INTENSITY
HOW	
  is	
  the	
  
organisa3on	
  
doing	
  it	
  
(vision,	
  governance	
  
&	
  roadmap)	
  	
  
BEGINNERS
This is not for us!
CONSERVATIVES
Analogue focus
FASHIONISTAS
Digital
Digital
Digital
Digital
Digital
DIGIRATI
Growth; +9%
Profit; +26%
Digitally-mature companies have significantly better financial
performance.
Digirati have a common Digital DNA, they invest 100% in the “how”
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
Digital
Service Unit
VISION
IT/
BUSINESS
GOVERNANCE
ENGAGEMENT
•  Transformative Vision
•  Shared Vision
•  Digital Tsar
•  Digital Units
•  Investment Committees
•  Promoting Change
•  Employee Participation
•  Investing in Skills
•  Shared understanding between IT and
business executives on role of IT
Chief Digital
Officer
Digital Year
“The IT Team (...) now work hand in
hand with the Creative Media team.”
..and they make strategic investments on where to excel
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
FOCUS
INVESTMENTS
on where they
Choose to
Excel Digitally
COMBINE
DIGITAL
CAPABILITIES
to Exploit
Synergies
+
Customer
Experience
Social
media
Mobile
channel
In-store
Online
Unified Processes/ Integrated Data
Process
Excellence
Supply-chain
Integration
Centralized
Ordering New biz.
models
Customer
experience
Unified Processes/ Integrated Data
Analytics
capabilities
Personalized Customer
experience
Unified Processes/ Integrated Data
On-premise
Online
BURBERRY
ASIAN PAINTS
CAESARS ENTERTAINMENT
As a Digirati, Burberry have demonstrated how a balanced approach on
the “what” and “how” drives real business results
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
There are ‘Digirati’ in every sub-sector
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
In Australian retail the challenge is that the ‘Digirati’ is often an
overseas company.
* Digital maturity of 391 companies in our sample
DIGITALINTENSITY
TRANSFORMATION MANAGEMENT INTENSITY
BEGINNERS CONSERVATIVES
FASHIONISTAS DIGIRATI
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
DIGITAL MATURITY MATTERS
IT MATTERS IN EVERY SUB-SECTOR
ANY COMPANY CAN BUILD DIGITAL DNA
TAKE ACTION NOW TO
CREATE YOUR OWN DIGITAL ADVANTAGE
Transform to the power of digital
Copyright © 2013 Capgemini. All rights reserved.
QUESTIONS?
@BenGilchriest

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Australian Retail and the Digital Advantage

  • 1. The All Channel Experience DRIVING VALUE FOR YOUR CUSTOMERS AND YOUR BUSINESS Ben Gilchriest & Antoinette Ienco Digital Transformation Lead, Retail Sector Industry SME Capgemini Consulting, Australia
  • 2. Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. Australian retail sector challenges (briefly!)   HowdoyourealiseaDigitalAdvantage? The danger of the “in between” Digital Maturity Matters
  • 3. 62% active in mobile shopping On-Line Mobile Social Media Adoption of mobile as a payment channel growing rapidly C Smartphone adoption Growing subscriber base High household broadband coverage A A leader in internet penetration 5th highest internet penetration in the world 73% 73% Australia USA 36%     51%   9.74   10.33   11.12   9.50   10.00   10.50   11.00   11.50   Dec   2010   Jun   2011     Dec   2011   Millions   73% A major part of people’s on-line time Facebook is still the #1 social media site A significant channel for generating and finding opinions Leading the world in social media usage @7hrs / month Nearly half of all Australian’s on-line are active in social mediaA. Majority are seeking other’s opinions read reviews & discuss brands 3%   4%   8%   9%   97%   Other   Myspace   Twi@er   LinkedIn   Facebook   *% of Australian social media users visited LinkedIn in growing rapidly; +99% growth in 2011 d A -domestic connections., 2011 B – business & domestic broadband connections. C - PayPal figures – purchases via mobile, 2010 - 2011 % of on-line users that are active in social media 71% Mobile transactions growing at 430% year on year 20% Australians with an Internet connectionB 90% Australians >16 years active on-line 81% 48% 0%   10%   20%   30%   40%   <5  min   5-­‐30  min   30-­‐60     min   over  an   hour   no   shopping   20%   26% 11% 5% 38% Australian consumers are leaders in internet and smartphone adoption and social engagement 2011 2012
  • 4. The Australian retail sector is facing several challenges §  Pure play online retailers. §  International retailers with efficient business models. §  Traditional channels extension with online §  Innovative Apps (combining online, user data, mobility. §  Shrinking square footage. §  Technology leveraged in-store to provide outstanding customer service and increased personalization; §  Kiosks; §  Mobile payments; §  QR Codes. §  Supply chains need to accommodate and fulfill individual customer orders. §  Collaborative supply chain technology and practices like shared warehouses are critical for realizing improvements. §  Production is based on predictive and actual demand from consumers. •  More content is generated outside the company – unstructured. •  Combination of loyalty data and unstructured data to respond to customer expectations. •  Affinity analysis; •  Sentiment Analysis. Changing  Marketplace   Supply  Chain  Op4misa4on   New  Store  Formats   Data  Availability   Retail   New technology (digital) is both part of the challenge and the solution. Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved.
  • 5. CUSTOMERCHANNEL MODEL INTERACTION MODEL Australian shoppers’ expected a dramatically different experience and they are becoming more vocal in demanding it Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. Yesterday Today IN THE DARK Information poor. Limited choice. Retail store the preference. INSIDE-OUT Call centre centric. Retail store centric. “TELLING” Mass marketing. Outbound blast marketing. Reactive, inbound. INFORMED, EMPOWERED Benchmark on trust, social responsibility Constantly changing & sharing. High trust in peer review. across industries and geographies OUTSIDE-IN Integrated cross-channel. Customer experience driven design. “CONVERSING” Embrace social (P2P). Co-creation. On-line at the core.
  • 6. CUSTOMERCHANNEL MODEL INTERACTION MODEL However, many companies are struggling to catch-up with rapidly evolving customer demands Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. Yesterday Today IN THE DARK Information poor. Limited choice. Retail store the preference. INSIDE-OUT Call centre centric. Retail store centric. “TELLING” Mass marketing. Outbound blast marketing. Reactive, inbound. INFORMED, EMPOWERED Benchmark on trust, social responsibility Constantly changing & sharing. High trust in peer review. across industries and geographies OUTSIDE-IN Integrated cross-channel. Customer experience driven design. “CONVERSING” Embrace social (P2P). Co-creation. Personalisation at the core. The “in- between” “TALKING” Loyalty and reward schemes. Social media largely outbound (minimal integration into org.) MULTI-CHANNEL Multiple offerings, not integrated
  • 7. Despite many attempts, Australian retailers struggle to bridge the gap to address evolving shopper behaviour Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. §  ABS show $258 billion spent on retail and 9% is estimated to be on-line with overall growth of 12%. §  On-line retail sales are expected to reach $18 billion in 2013 and forecasted to grow 39% to $25 billion by 2015. §  28% of goods bought by Australians online were from overseas sites. Down from 43% in 2011, §  Multiple overseas companies have launched dedicated Australian sites (e.g. ASOS, Saks, TM Lewin, Nordstrom, Gap, Wiggle etc.). §  Companies are introducing experiences developed in other markets to Australia (e.g. ASOS scan-to-shop) §  Of the top 15 online retailers, only two have a bricks-and- mortar offering….. §  In the US, 13 of the top 15 online retailers had physical retail outlets. §  Only 8% of companies use mobile to transform the customer experience and 14% for operational processes §  Limited functionality and basic fulfilment On-line Retail is expected to grow to $25b by 2015 Australians are benchmarking their digital experience against established overseas brands Australian retailers are struggling to respond
  • 8. Digital maturity is a combination of “what” and organisation does and “how” they approach it Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. Digital Intensity (the “WHAT”) Transformation Mngt Intensity (the “HOW”) Technology-enabled initiatives in: •  Customer Experience •  Internal Operations   Leadership capabilities including: •  Vision •  Governance •  Engagement •  IT-Business Relationships  
  • 9. ‘Beginners’ may be carrying out some experiments though are largely skeptical of value of digital Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. DIGITALINTENSITY WHAT  is  the   organisa3on   doing     (digital   investments  &   assets)   TRANSFORMATION MANAGEMENT INTENSITY HOW  is  the   organisa3on   doing  it   (vision,  governance   &  roadmap)     BEGINNERS This is not for us!
  • 10. ‘Conservatives’ have a digital vision and strong governance though have few advanced digital features Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. DIGITALINTENSITY WHAT  is  the   organisa3on   doing     (digital   investments  &   assets)   TRANSFORMATION MANAGEMENT INTENSITY HOW  is  the   organisa3on   doing  it   (vision,  governance   &  roadmap)     BEGINNERS This is not for us! CONSERVATIVES Analogue focus
  • 11. ‘Fashionistas’ have many advanced digital features though they’re run in silos and there is no over-arching vision Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. DIGITALINTENSITY WHAT  is  the   organisa3on   doing     (digital   investments  &   assets)   TRANSFORMATION MANAGEMENT INTENSITY HOW  is  the   organisa3on   doing  it   (vision,  governance   &  roadmap)     BEGINNERS This is not for us! CONSERVATIVES Analogue focus FASHIONISTAS Digital Digital Digital Digital Digital
  • 12. ‘Digirati’ have a strong vision, and governance with many digital initiatives generating business value in measurable ways Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. DIGITALINTENSITY WHAT  is  the   organisa3on   doing     (digital   investments  &   assets)   TRANSFORMATION MANAGEMENT INTENSITY HOW  is  the   organisa3on   doing  it   (vision,  governance   &  roadmap)     BEGINNERS This is not for us! CONSERVATIVES Analogue focus FASHIONISTAS Digital Digital Digital Digital Digital DIGIRATI Growth; +9% Profit; +26% Digitally-mature companies have significantly better financial performance.
  • 13. Digirati have a common Digital DNA, they invest 100% in the “how” Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. Digital Service Unit VISION IT/ BUSINESS GOVERNANCE ENGAGEMENT •  Transformative Vision •  Shared Vision •  Digital Tsar •  Digital Units •  Investment Committees •  Promoting Change •  Employee Participation •  Investing in Skills •  Shared understanding between IT and business executives on role of IT Chief Digital Officer Digital Year “The IT Team (...) now work hand in hand with the Creative Media team.”
  • 14. ..and they make strategic investments on where to excel Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. FOCUS INVESTMENTS on where they Choose to Excel Digitally COMBINE DIGITAL CAPABILITIES to Exploit Synergies + Customer Experience Social media Mobile channel In-store Online Unified Processes/ Integrated Data Process Excellence Supply-chain Integration Centralized Ordering New biz. models Customer experience Unified Processes/ Integrated Data Analytics capabilities Personalized Customer experience Unified Processes/ Integrated Data On-premise Online BURBERRY ASIAN PAINTS CAESARS ENTERTAINMENT
  • 15. As a Digirati, Burberry have demonstrated how a balanced approach on the “what” and “how” drives real business results Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved.
  • 16. There are ‘Digirati’ in every sub-sector Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. In Australian retail the challenge is that the ‘Digirati’ is often an overseas company. * Digital maturity of 391 companies in our sample DIGITALINTENSITY TRANSFORMATION MANAGEMENT INTENSITY BEGINNERS CONSERVATIVES FASHIONISTAS DIGIRATI
  • 17. Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. DIGITAL MATURITY MATTERS IT MATTERS IN EVERY SUB-SECTOR ANY COMPANY CAN BUILD DIGITAL DNA TAKE ACTION NOW TO CREATE YOUR OWN DIGITAL ADVANTAGE
  • 18. Transform to the power of digital Copyright © 2013 Capgemini. All rights reserved. QUESTIONS? @BenGilchriest