For MRM Paris @ « Retail’s Big Show »Executive Summary, 31/03/2011
What’s the RBS?- Annual convention and expo in NY, 09.-12.01.2011- Held for the 100th time this year, since 1911- 22.000 retail professionals from 82 countries- Largest delegations from Brazil, Canada, France, UK and Mexico- Organized by the NRF – the National Retail Federation- The world’s largest retail organisation 2
Key-Topics1. Shopper Centric Retailing2. Customer Experience3. The Mobile Shopper4. Multichannel5. Sector Challenges
Why we talk about this Once upon a time the BRANDS were king in the shops and it was THEM driving the customers in the shops. It was a manufactureres world. 5
Why we talk about this In the 80s/90s a power shift took place: retail consolidation for growth, discounting as new phenomenon, new power in negotiations with the producers, development of own promotions, then own brands and finally own relationships with the customers
Why we talk about this Today the manufactureres and the dealers are in a conflict against each other and fight for the relationship with the poor consumer
What is SCR?- Focus on the shopper – not on the conflict between manufacturer and retailer- Joined forces, combined capabilities, collaboration!- share learnings, create single basis and team up for activation 8
What is SCR?« Given how savy today’s shoppers are and theirshifting priorities, it is essential for retailers andmanufacturers to work together to intelligentlydeliver targeteg solutions! » 9
What is SCR?Shopper Activation RelevanceInsightsRight productsLoyalty cards +! Promotion Merchandising =! Power Loyaltyor credit card Marketing Salesinfo Operations Profit= retailers = supplierinput collaboration 10
Tesco plc (LSE: TSCO) is a global grocery and general merchandisingretailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues (after Wal-Mart andCarrefour) and the second-largest measured by profits (after Wal-Mart).It has stores in 14 countries across Asia, Europe and North America and isthe grocery market leader in the UK (where it has a market share ofaround 30%), Malaysia, the Republic of Ireland and Thailand. Case: Tesco 11
Case: Tesco- The Tesco card: « What scares me is that you know more about my customers after three months than I know after 30 years », says a manufacturer- Who are my shoppers, where when at what do they buy?- Sharing the data, knowledge and technology with the suppliers to develop relevant promotions together 12
Target Corporation (simply known as Target) is an Americanretailing company that was founded in Minneapolis, Minnesota in1902.Target is the fourth largest discount retailer in the United States,behind Walmart. The company is ranked at number 30 on theFortune 500 as of 2010. On January 13, 2011, Target announced itsexpansion into Canada. Case: Target 13
Case: Target- Target is a discounter « expect more, pay less »- Call their customers « guests » (ex. Contagious Magazin: « people – formally known as consumers »)- Wanna know their guests und understand their diversity- What influences their shopping behaviour (e.g. repeated purchase)- And develop tangible and meaningsful actions for their teams to execute- What counts is their wants and needs, building guest categories to drive relevancy in offers, e.g. healthy living (implicarion on products, in what locations, etc.)
Macys is a U.S. chain of mid-to-high range department stores in New York. Inaddition to its New York flagship store, the company has designated additionalregional flagships in several other major urban centers and as of January 30, 2010operates a total of 800 stores in the United States. In addition, Macys operateseSpot ZoomShops kiosks in over 300 store locations, selling consumer electronics.The company produces the annual Macys Thanksgiving Day Parade, a notedparade which has been held in New York City annually since 1924. The companyalso sponsors the citys annual Fourth of July fireworks display, beginning in 1976.The chain competes with Belk, Nordstrom, Dillards, Sears, J. C. Penney and Kohls. Case: Macy’s 15
Case: Macy’s- Discussion about the marketing departments taking more responsibilities for its own technologies- Integration of « Marketing Technologists » in the marketing teams- Objective: gain a 360 degree view of the consumer- Owning the insights- Handling and profiling of own database- Replacing 10 different mailings with 30.000 versions of one single direct mail piece, in order to be more relevant 16
6 Keys to Success1. Right objectives – it’s not about monetizing data but creating more targeted approach2. Single shopper view – retailer and manufacturere, same data, same shopper, same target3. Insights AND activation – build relevant promotions based on the insights4. Executive commitment – this is not bottom up5. Organizational change6. Effective collaboration
Start Consumer Centric- Shopper Centric Retail is the strong focus of this years RBS- Of course also the development of a consumer experience in retail starts here- What do the consumers want? 19
Need 1: ValueIt is not the price only >>>Make consumers believe that theproduct is worth more than theypaid for.
Need 2: DiscoveryDiscovery = creating wow experiences for consumers ready tobuy expensive gadgets like the iPad or the Kindle >>>There is fashion in everything.There is fashion in tyres.There is fashion in refridgerators.
Mood in FoodSupermarkets are amongst the first tohaving understood how a recreation oftheir POS will influence theirpositioning, allow them to fightdiscount and insist on higher prices
Mood in FoodAnd there areuntraditional retailmodels
Carrefour S.A. (Euronext: CA) (French pronunciation: [ka fu ]) is a Frenchinternational hypermarket chain. Headquartered in Levallois-Perret, France, Carrefour is the one of the largest hypermarket chains in the world (1395hypermarkets at the end of 2009, this is nearly a half of the quantity of US-located Wal-Mart hypermarkets), the second largest retail group inthe world in terms of revenue and third largest in profit after Wal-Mart andTesco. Carrefour operates mainly in Europe, Argentina, Brazil, China,Colombia and in the Dominican Republic, but also has shops in North Africaand other parts of Asia, with most stores being of smaller size thanhypermarket or even supermarket. Carrefour means "crossroads" in French. Case: Carrefour 30
Case: Carrefour- Hypermarkets are losing share to small shops and the internet, better prices and better assortment- How to make the hypermarket visit an experience?- What differentiates the visit versus the internet is the senses, look/feel/touch need to play a key role in the creation of an offline experience- Introducing baby sitting, hair cut and technology (e.g. shopping consultants) 31
Idea: PartnershipsGuideline: Do what you can dobest and involve others to to thingsyou don’t know doing. 32
supermarkets invite chefs to cook for their clients 33
Carrefour does entertainment corners with Virgin 34
JCPenny gains ground on cosmetics with Sephora 35
ClarityAbout what you stand for, the right positioningWhole Foods‘ customers are passionate ambassadors andthe retailers’ well-defined positioning, helps them stayrelevant in the marketplace. The brand stands forsomething that’s of high value to their targeted customerand this ensures lasting value.
Conveniencethe right location and channels, available anytime andanywhere according to their needsWalgreens get this right by being close to their customersanytime, anyplace. They’re available whenever, wherever,and however, through all channels, including their drivethrough drugstores.
Choicethe right selection, manage assortment according to needsCrate&Barrel, with their great merchandise selection andtheir appealing presentation of that merchandise, check thechoice box. At the same time their pricing and value isalways appropriately communicated – making getting‘choice’ right, look effortless. It’s fantasy of ownershipdelivered.
Communicationsthe right design and layout, leverage every touchpoint tostay engaged with your consumersCovering all the bases and touching all the senses –Williams Sonoma gets full marks for easy store navigation,great signing at multiple levels and great store design.Furthermore, their clear product signing means customersare clearly communicated with.
CastThe right people/team to deliver on the promise of thebrandThe Container Store hires and develops brand zealots, wholive the lifestyle and love the product. They invest heavilyin training and hire, and coach their team to deliver to thehighest of customer expectations.
ControlIt is the CONSUMERS who need to be able to be in controlof relationship and processGiving customers the option to have their meal made toorder, customized online and picked up in store is a keystrength of Chipotle.
Consistencyacross time, place and channelUsing exceptional precision across all functions andchannels of customer experience and organization, J.Crewgets consistency right.
ConnectionMaintaining the engagement after the transaction to builda lifetime experience and to start the right relationshipSephora uses events, mobile apps, and social networks tostay front of mind with their customers. 47
Some DatamCommerce in the US is at2,2 Mrd USD in 2010 49
Some DataDriven by smartphonecoverage, currently at ca. 50% 50
Some DataIn contrary only 4,8% of retailershave mobile shopping sites 51
Some Data73% of mobile shoppers favourusing their smartphone to handlesimple tasks in stores 52
Some DataVersus only 15% who prefer theinteraction with an employee 53
Some DataReason for not mShopping:limited awareness of what myphone can do, 300k apps at AppleApp Store plus mobile sites …
What do they do?- Looking up store address- Reading reviews- Sharing product photos- Tweeting prices- Using virtual shopping tools (AR, etc.) to visualize product- Whatch their bid on eBay- Download online coupons on mobile for instore use- Check instore availability- Use gift guides- Geolocalisation (like 4square)- Find support
Connecting WorldsOnline B&M#1 source ofinformation <! >! Big influencer No consumer knowledgeConsumers become whatsoevermore informed thanthe sales person = Knowledge transfer POS consultant
One Result:The path to purchase is dead.Now there are many. 57
Metro AG (FWB: MEO) is a diversified retail and wholesale/cash and carry groupbased in Düsseldorf, Germany. It has the largest market share in its home market,and is one of the most globalised retail and wholesale corporations. It is the 3rdlargest retailer in the world according to Deloitte  and Reuters. In English itoften refers to itself as Metro Group. It was established in 1964 by Otto Beisheim.The company operates the following sales divisions:Metro and Makro Cash and Carry Real: A hypermarket operator. 265 stores inGermany and 34 elsewhere as of early 2005. Media Markt and Saturn: consumerelectronics company, Galeria Kaufhof: A department store chain. As of 2007 it hasadded the former Wal-Mart Germany stores to the Real chain. Case: Metro 68
« standard » multi-channel: mobile, online, TV, stores 69
FUTURE STORE: « experience the future of retail today » 70
REAL DRIVE: order online and pick it up, warehouse, McDrive like 71
LuminAR bulb: light bulb equipped withcamera, projector and wifi. You show it theproduct you’re interested in and it will supplyinformation, reviews, specs, prices, manuals oroffer to live chat with expert 76
Technology- Cloud computing Cloud computing can be compared- Predictive modeling to the supply of electricity and gas,- Tap to pay or the provision of telephone,- Geo fencing television and postal services. All of these services are presented to- SEO the users in a simple way that is- Mobile easy to understand without the- Social networking >>> users needing to know how the services are provided. 78
Technology- Cloud computing Predictive modelling is used extensively in analytical- Predictive modeling customer relationship- Tap to pay management and data mining to- Geo fencing produce customer-level models- SEO that describe the likelihood that a- Mobile customer will take a particular action. The actions are usually- Social networking >>> sales, marketing and customer retention related. 79
Technology- Cloud computing- Predictive modeling- Tap to pay- Geo fencing- SEO Citi Tap and Pay helps you make- Mobile payments for purchases by simply- Social networking >>> tapping your Tap and Pay Nokia mobile phone at the payment counter. 80
Technology A radius around a store or point- Cloud computing location. When the location-aware- Predictive modeling device of a location-based service- Tap to pay (LBS) user enters or exits a geo-- Geo fencing fence, the device receives a generated notification. This- SEO notification might contain- Mobile information about the location of- Social networking >>> the device. The geofence notice might be sent to a mobile telephone or an email account. 81
Technology- Cloud computing- Predictive modeling Search engine optimization- Tap to pay (SEO) is the process of improving- Geo fencing the visibility of a website or a- SEO web page in search engines via the- Mobile "natural" or un-paid ("organic" or "algorithmic") search results.- Social networking >>> 82
Technology- Cloud computing- Predictive modeling- Tap to pay- Geo fencing- SEO- Mobile- Social networking >>> 83
Technology- Cloud computing- Predictive modeling- Tap to pay- Geo fencing- SEO- Mobile- Social networking >>> 84
Social Networking- technology driven social projects, based on listening = new responsibility for brands today, aggregation and moderation- This is where marketing-technologists play a role in consumer-driven messaging- It is the brands job to empower the consumer to do what they believe in- Managing this is a full day job – « you have to be out there and be visible! » 85
Taking SM to change your instore experience- How can I make the poeple stay in the store longer?- How can I potentially get them to shop?- How can I create a better experience, less stressful?- Through geo-localisation- Tagging products- Closed WIFI for additional info access- Sharing, forum, discussions- Instore kiosques, push applications via media server 89
Leaders for 2020 are …- The ones who transform challenges into opportunities- Good to their people and consumers by taking care of them- Engendering their poeple’sand customers’ loyalty- Create an environment that leads to the kind of human interaction that consumers will respond to and retailers will benefit from 92