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Industry trendswebex 033014vii

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Critical Industry Trends And What To Do About The Right Now. For link to complete Webex audio, email jkramer@rocktenn.com

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Industry trendswebex 033014vii

  1. 1. March, 2014 Critical Industry Trends And What To Do About Them
  2. 2. ON-SITE INSIGHTS Collabora'on  
  3. 3. ON-SITE INSIGHTS Collabora'on   Crea'on  
  4. 4. ON-SITE INSIGHTS Collabora'on   Content  Sharing   The Effect of Change on Retail Displays & Marketing Webinar Crea'on  
  5. 5. ON-SITE INSIGHT kmcgowan@rocktenn.com
  6. 6. WHAT WE’LL DISCUSS Critical Trends Facing The Industry •  Retail •  Consumer •  Shopper
  7. 7. WHAT WE’LL DISCUSS Critical Trends Facing The Industry •  Retail •  Consumer •  Shopper Implications For The Business •  Logistics •  Technology •  Marketing A Vision For Tomorrow •  What it will take •  What you can do right now
  8. 8. CRITICAL TRENDS FACING THE INDUSTRY Multiculturalism MillennialsSeniors Big Data Mktg MobilePersonalization Digitization of Products
  9. 9. DRIVERS OF CHANGE Retail Future 2020
  10. 10. DRIVERS OF CHANGE Retail Future 2020 Political Economic Social TechnologyIndustry
  11. 11. DRIVERS OF CHANGE •  Deferral of major life stage decisions – Marriage, kids, home ownership •  Low population growth •  Multi-cultural àAcculturation Social
  12. 12. DRIVERS OF CHANGE •  Deferral of major life stage decisions – Marriage, kids, home ownership •  Low population growth •  Multi-cultural àAcculturation •  Aging… absolute size of 55+ •  Ex-urbanization •  Health & Wellness – Active vs. Inactive •  Home Ownership – Rental Society •  DIFM vs. DIY – More services Social
  13. 13. IMPLICATIONS •  Low Shopper base growth •  Smaller Households •  Decline of Mass Marketing Social
  14. 14. IMPLICATIONS •  Low Shopper base growth •  Smaller Households •  Decline of Mass Marketing •  Increased services – esp. health, financial, digital •  Proximate /local vs. Destination stores •  Essential vs. Discretionary mix •  Increased focus on diet/nutrition Social
  15. 15. DRIVERS OF CHANGE •  Significant Wildcards •  Low economic growth •  Improved full time workforce/Part Time grows Economic VISUAL
  16. 16. DRIVERS OF CHANGE •  Significant Wildcards •  Low economic growth •  Improved full time workforce/Part Time grows •  Declining Middle and Growing Higher income •  “Real Inflation” outpacing wage growth.. •  Inter-generational workforce Economic VISUAL
  17. 17. IMPLICATIONS •  Retail focus on customer retention vs. acquisition •  Marketing depth vs. breadth? Economic
  18. 18. IMPLICATIONS •  Retail focus on customer retention vs. acquisition •  Marketing depth vs. breadth? •  Pricing & Mix vs. unit growth •  Services critical Economic
  19. 19. DRIVERS OF CHANGE •  Addressable market size, engagement and spend •  Availability •  Speed •  Devices Technology
  20. 20. DRIVERS OF CHANGE •  Addressable market size, engagement and spend •  Availability •  Speed •  Devices •  App integration •  Analytics (big data/targeting) •  Payment options •  Economics, Assortment, Logistics Technology
  21. 21. IMPLICATIONS •  Digital engagement •  New consumer behaviors •  Retail Apps will emerge Technology
  22. 22. IMPLICATIONS •  Digital engagement •  New consumer behaviors •  Retail Apps will emerge •  Keep best shoppers out of search §  Personalization •  New business models drive new revenue streams and competencies Technology
  23. 23. IMPLICATIONS Mobile & Digital List Management Will Drive Grocery Online Source: Retail Net Group 2014
  24. 24. IMPLICATIONS Mobile & Digital List Management Will Drive Grocery Online Source: Retail Net Group 2014
  25. 25. IMPLICATIONS Mobile & Digital List Management Will Drive Grocery Online Source: Retail Net Group 2014
  26. 26. IMPLICATIONS Price Comparison Store Navigation Mobile Checkout Mobile Payments “Check-in” Product Search & Availability List Management Mobile Offers
  27. 27. IMPLICATIONS Price Comparison Store Navigation Mobile Checkout Mobile Payments “Check-in” Product Search & Availability List Management Mobile Offers Walgreens 3rd party app Aisle411 item locations Walmart List Management & Navigation
  28. 28. rce: Retail Net up 2014 Content + Commerce are Blurring
  29. 29. Mobile Apps Second Screens Where-to-Buy Tweet to Buy Shoppable AdsBuy from Video Image-Base Discovery rce: Retail Net up 2014 Content + Commerce are Blurring
  30. 30. "In the future, app development is going to be just as important as property development," Phil Clarke, CEO Tesco
  31. 31. DRIVERS OF CHANGE •  Low Organic Growth •  Small Box and Digital growth •  Productivity Drain on SBR= store based retail by Digital Industry
  32. 32. DRIVERS OF CHANGE •  Low Organic Growth •  Small Box and Digital growth •  Productivity Drain on SBR= store based retail by Digital •  “Channel” Re- Balancing §  Proximity/Store Size more relevant than products carried •  Consolidation/competitive intensity •  Segmentation to find & Scale Opportunities Industry
  33. 33. IMPLICATIONS •  Shopper Retention Focus •  Smaller Boxes •  Regeneration of Big Boxes – services, new models Industry
  34. 34. IMPLICATIONS •  Shopper Retention Focus •  Smaller Boxes •  Regeneration of Big Boxes – services, new models •  Fewer Sell To Points with more varieties to plan for •  No net new stores •  Segmentation Industry
  35. 35. DRIVERS OF CHANGE •  Trust •  Policy •  The Fed Political
  36. 36. DRIVERS OF CHANGE •  Trust •  Policy •  The Fed •  Record revenue, spending & debt •  Entitlements (over 70 income related programs) •  Municipal and state regulation and taxation Political
  37. 37. IMPLICATIONS •  Progress tempered •  Complexity increased •  Tax rates to increase to and through 2020 Political
  38. 38. IMPLICATIONS •  Progress tempered •  Complexity increased •  Tax rates to increase to and through 2020 •  Changes in government support spend directly impacts •  State/local governments require more bailouts.. Political
  39. 39. SUMMARY Social & Demographic Change Retail Industry Consolidation More “Savvy” Shopper
  40. 40. SUMMARY Social & Demographic Change Retail Industry Consolidation More “Savvy” Shopper Need For Customization Downsizing Of Stores The “Game” Has Changed
  41. 41. IMPLICATIONS FOR OUR BUSINESS
  42. 42. IMPLICATIONS FOR OUR BUSINESS Source: Retail Net Group 2014 Logistics 25-40% will change Technology Apps & Analytics Investment Marketing Massive Re-Mix Merchandising 40% at Risk
  43. 43. IMPLICATIONS FOR OUR BUSINESS Services Grow to 30% of revenue 25% current store base @ risk Source: Retail Net Group 2014 Logistics 25-40% will change Technology Apps & Analytics Investment Marketing Massive Re-Mix Merchandising 40% at Risk
  44. 44. IMPLICATIONS FOR OUR BUSINESS LOGISTICS •  Customization by retailer vs. COT •  Customization SKU sort/region
  45. 45. IMPLICATIONS FOR OUR BUSINESS LOGISTICS •  Customization by retailer vs. COT •  Customization SKU sort/region •  Smaller runs •  Custom Packaging •  “Immediacy” (Amazon Effect) •  Increased complexity
  46. 46. IMPLICATIONS FOR OUR BUSINESS TECHNOLOGY •  App Integration accelerating •  Shopper requirements increasing
  47. 47. IMPLICATIONS FOR OUR BUSINESS TECHNOLOGY •  App Integration accelerating •  Shopper requirements increasing •  Multiple touch points •  Speed bumps on the road to retail •  Increased complexity
  48. 48. IMPLICATIONS FOR OUR BUSINESS MERCHANDISING •  Increased customization •  Smaller runs •  Variety of structures
  49. 49. IMPLICATIONS FOR OUR BUSINESS MERCHANDISING •  Increased customization •  Smaller runs •  Variety of structures •  Move to permanent •  Increased complexity •  Pressure on impulse
  50. 50. IMPLICATIONS FOR OUR BUSINESS MERCHANDISING •  Personalization Drives Activation and Reduces Mass Media Source: Retail Net Group 2014
  51. 51. IMPLICATIONS FOR OUR BUSINESS MERCHANDISING •  Personalization Drives Activation and Reduces Mass Media Source: Retail Net Group 2014
  52. 52. Evolving Manufacturer/Retailer Relationship Traditional Relationship Mfg. Marketing Mfg. Sales/Trade Retailer Marketing Shopper Consumer Retailer Merchandising IMPLICATIONS FOR OUR BUSINESS Source: Retail Net Group 2014
  53. 53. New Collaborative Relationship Mfg. Marketing Retailer Marketing Mfg. Sales/Trade Retailer Merchandising Shopper Insights Retail Store Experience Shopper Consumer Evolving Manufacturer/Retailer Relationship IMPLICATIONS FOR OUR BUSINESS Source: Retail Net Group 2014
  54. 54. IMPLICATIONS FOR OUR BUSINESS MARKETING •  Local vs. National •  Individual vs. Mass •  Customer specific
  55. 55. IMPLICATIONS FOR OUR BUSINESS MARKETING •  Local vs. National •  Individual vs. Mass •  Customer specific •  Shopper focused •  Technology enabled •  Increased complexity
  56. 56. WHAT YOU CAN DO RIGHT NOW BREAK PAGE WITH VISUAL
  57. 57. BRING THE FUTURE TO THE PRESENT
  58. 58. WHAT YOU CAN DO RIGHT NOW Organizational Imperatives Customer Collaboration and Insights
  59. 59. WHAT YOU CAN DO RIGHT NOW Organizational Imperatives Customer Collaboration and Insights Fail Fast, Fail Cheap
  60. 60. INNOVATION DRIVERS
  61. 61. INNOVATION DRIVERS Shopper Insights
  62. 62. INNOVATION DRIVERS Shopper Engagement Shopper Insights
  63. 63. INNOVATION DRIVERS Brand Equity Enhancement Shopper Engagement Shopper Insights
  64. 64. INNOVATION DRIVERS Shopper Insights • Understanding Shopper Behavior in-store learning lab § Not what they SAY they will do Powered by C.A.R. … but what they really DO do. •  Quantitative Analytics
  65. 65. Shopper Insights
  66. 66. INNOVATION DRIVERS Shopper Engagement
  67. 67. INNOVATION DRIVERS Shopper Engagement
  68. 68. INNOVATION DRIVERS Shopper Engagement
  69. 69. INNOVATION DRIVERS Shopper Engagement Personalization
  70. 70. INNOVATION DRIVERS Brand Equity Enhancement Visual
  71. 71. CONCLUSIONS
  72. 72. CONCLUSIONS Trends are happening faster than ever Change is a constant
  73. 73. CONCLUSIONS Trends are happening faster than ever Change is a constant Store of the future is here today Shopper behavior changing dramatically Technology as an enabler impacting shopping Requiring change in all business disciplines
  74. 74. ON-SITE INSIGHTS KMCGOWAN@ROCKTENN.COM QR Code Email To Kathy
  75. 75. March, 2014 Critical Industry Trends And What To Do About Them

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