RETAILOMANIA THE END OF THE RETAIL WORLD AS WE KNOW IT,AND WHAT TO DO ABOUT IT
RETAILOMANIA SO THE FUTURE SEEMS A BIT DARK AT THE MOMENT? GLOBALIZATION HAS MADE THE WORLD INTERCONNECTED
RETAILOMANIA RECESSION OR NOT, WE NOW SEE TEOTRWAWKI GLOBALIZATION orld As We Know It) (The End Of The Retail W HAS MADE THE WORLD INTERCONNECTED
RETAILOMANIAToday’s retail business is a ba1leﬁeld and as on a modern military ba1leﬁeld, the enemy isn’t always visible or doesn’t ﬁght using the same methods. Fire, protec=on and movement remain GLOBALIZATION HASthe key principles of combat, but an enemy can also inﬁltrate the ba1leground, hide among civilians or plant IEDs to fool and unnerve his adversary. In the retail context this would MADE THE WORLDtranslate to small, fast growing and digital retailers challenging an established global giant on its home turf, or consumers joining together to create a secondhand market instead of always INTERCONNECTEDbuying the latest products from a store.
RETAILOMANIAOr even brands without a tradi=onal media budget, using social media and branded content to build a loyal customer base without a1rac=ng a1en=on from the compe==on. In short: The future is not what it used to be, but rather a ﬂickering, confusing place where the established marke=ng GLOBALIZATION HASmethodologies of the retail giants may well be undermined by their newer, MADE THE WORLDmore dynamic adversaries who are poten=ally be1er placed to fully meet the marke=ng challenges created by new and emerging markets. INTERCONNECTED
RETAILOMANIA In the new world of retail then, as on the modern ba1leﬁeld, size is not necessarily an GLOBALIZATION HASadvantage. Instead, over what is likely to be an economically turbulent next 10 years, retailers will need to be able to move swiKly in order to adapt to consumers’ rapidly changing MADE THE WORLDpreferences. Some of the brands of yesterday will die some with a bang and some slowly as if from an incurable was=ng disease. The future will be characterized by asymmetric INTERCONNECTEDcompe==on, where crea=vity, intelligence and adaptability are more important than size and brute force.
RETAILOMANIA THAT`S WHAT TEOTRWAWKI GLOBALIZATIONN THAT A HIGHLY IS ALL ABOUT. ADD O HAS MADEPROBABLE RECESSION. THE WORLD INTERCONNECTED
RETAILOMANIALET´S TAKE A QUICK LOOK AT ”THE RECESSION ISSUE” GLOBALIZATION HAS MADE THE WORLD INTERCONNECTED
RETAILOMANIAQuick Global Overview 2012:American depth crisis…Peak oil…Euro crisis…Fallingconsumer confidence…China´s growth is slowing down…
RETAILOMANIAGLOBALIZATION HAS MADE THE WORLD INTERCONNECTED
RETAILOMANIAIT HAS BECOME APPARENT THAT WE LIVE IN A FRAGILE WORLD AND THE STATE OF DEBTS VS ECONOMIC STRENGTH IN THE US AND EURO ZONE MIGHT LEAD TO ADECENNIUM OF VERY THOUGH ECONOMY OR EVEN RECESSION.
RETAILOMANIA RECESSIONS COME AND GO IF THE ECONOMY FALLS INTO ADEPRESSION IT WON`T BE THE FIRST OR THE LAST TIME IT HAPPENS
RETAILOMANIARECESSIONS FOLLOW A PATTERN WITH A START AND AN END
RETAILOMANIABUT YOU HAVE TO THE TRICK IS TO SURVIVE IN START IN TIME! THE MIDDLE…
RETAILOMANIACONSUMER BEHAVIOUR DURING RECESSION-‐SPENDING LESS -‐PUTTING OF MAJOR PURCHASES AND/OR PRIORITIZE BETWEEN THEM -‐TRADING DOWN TO CHEAPER PRODUCTS BUT -‐PEOPLE WILL ALLOW THEMSELVES TREATS IF PROPERLY PRESENTED WITH CARE AND SMARTNESS -‐VALUE FOR MONEY
RETAILOMANIA …THIS MAKES RECESSION A RETAIL GRAVEYARD
RETAILOMANIABUT YOU DON´T NECESSARILY HAVE TO JOIN “I was asked what I thought about the recession. I thought about it and decided not to participate” Sam Walton, founder of Wal-‐ Mart
RETAILOMANIASO WHAT IS ALL THIS ABOUT? ”It is not the strongest species that survive, not the most intelligent but the ones most responsive to change” Charles Darwin
RETAILOMANIABUT, ONLINE AND SOCIAL CHANGES THE CONSUMER DECISION PROCESS… AND THERE HAVE NEVER BEEN SO MANY CHANNELS OF COMMUNICATION
RETAILOMANIA TRADITIONAL ONLINE RETAIL RETAIL SERVICE RETAIL PRE-‐TAIL RETAIL POST-‐TAIL Researching and comparing alterna=ves by GeYng more detailed informa=on while Sharing experiences and conquests using: in-‐store: Word of mouth On-‐line search In-‐store communica=on/Signage Social networks Word of mouth Staﬀ Social networks In store search with help of mobile Ads devices Apps Good and bad experiences are beeing used by other consumers to facilitate their own decision process
RETAILOMANIAHARSH COMPETITION AND ONLINE HAS LED TO A CHANNEL DEVELOPMENT IN RETAIL THAT MAKES THE WORD ”MULTICHANNEL” AN UNDERSTATEMENT
RETAILOMANIANEVER BEFORE HAVE SO MANY RETAILERS HAD SO MUCH TO SELL IN SO MANY CHANNELS
RETAILOMANIA FROM MULTICHANNEL TO HYPERCHANNEL RETAIL DEVELOPMENT 2012-2022 Online retailers are retailers using only the online world as their field of operations. Online Traditional retailing will retailing are likely to rise the continue to develop with focus Online retailing on coming decade as more on smaller concepts as Mobile internet has exploded communities and online consumers are online, more social media platforms The C2C-market is likely to rise turnover/square meter will over the last couple of years consumers feel safe online and due to both economical and become a critical KPI as due to smart phones and are likely to be more the evolution of payment environmental concerns. competitions get harder. Small various need-to-have and specialized as the systems will make payments format also means: Online kiosks nice-to-have apps. platforms mature. easier. - Quicker, easier shopping inside stores More retail functionality will be - Smaller investments (risk) - Coming closer to the makes it possible to research online built into apps and both ecommerce and in-store Online customer implies less fuel and compare interactivity will be standard retailers spending - More possibilities to optimize functions and features of the features. C2C Multichannel retailers includes offline retailers store location density. assortment. going online, but also Mobile retail EBay those online retailers that chooses to open a services Online physical store. Traditional Some use the online ”Social” media services world to gather information before retail platforms retail going to the store, while Spotify others use the physical Popup- In-store Facebook et al Voddler store as a showroom before ordering online, online kiosks stores perhaps via smartPopup stores started asguerilla activities but have now Multi- Online virtual phone while still in the Virtual goods are products ormatured as a new format channel goods retailing Farmville etc services consumed online and storewhen and where temporary Why should people need to go are never an actual asset of theinstallations are necessary. outside to grab a prescription or use.Here Telenor, mobile phone pick up a preordered bag of Drive-thrukiosk. groceries. Drive-thru are a reality stores in many places and are likely to rise. Several banks have launched retail store Vending Retailers looking concepts in order to appear as a machines O providing utlet modern service s services provider. Photo from Danish Jyske Bank Vending machines are not what they used to be. Here is U´tiques luxury product vending machine, In order to improve the and its modern cousins from Third party co-op share of wallet ratio from existing customers Service providers other vending operators are selling everything from shoes to several retailers are using retail tactics moving into the service vodka from designed machines. Hotels, gyms, spas industry providing banking, insurance, Retail banking, Retail opportunities for gardening wedding and situational shopping. Shoes and insurance companies, even funeral services. training equipment at the gym, travel agencies wellbeing at the spa and so on.
RETAILOMANIAAND COMPETITION STILL GETS TOUGHER BY THE MINUTE ”The only easy day was yesterday” US Navy Seals
RETAILOMANIATHE CREATIVE RETAILER HAS NEVER BEFORE HAD SO MANY POSSIBILITIES TO COMMUNICATE AND REACH ITS CUSTOMERS
RETAILOMANIA RECESSION IS A POSSIBILITY TO STARVE OUT YOUR COMPETITORS
RETAILOMANIA BUT YOU HAVE TO START IN TIME! ACT WHILE YOU CAN AND NOT WHEN YOU HAVE TO!
RETAILOMANIATwo guys are in the jungle when they see a lionrunning towards them. Frantically, one of the menstarts putting on his running shoes.Surprised, the other man says “What are youthinking, you can’t outrun a lion!!!”“I don’t have to outrun the lion,” said the man, “Ijust have to outrun you.”
RETAILOMANIA NEW FANCY MEDIA OR SALES CHANNELS DOES´NT MEAN THAT YOU CAN SKIP OLD SCHOOL MATH FOR INSTANCE, WATCH THE CASH FLOW LIKE YOUR LIFE DEPENDED ON IT (IT DOES)!
RETAILOMANIACash ﬂow is the blood stream of you company. Make two cash ﬂow budgets for the 12 months to come In best case, project ﬂat sales to a 10% decline, in worst case, go as much as a 30% sales decrease In best case, project expenses 10% lower than last year and in worst case, expenses at last year levels
RETAILOMANIA INVENTORY CONTROL IS AS IMPORTANT AS BREATHING OR HOW MANY VARIATIONS OF MUSTARD DO YOU NEED?
Evaluate every outstanding buying order. Do you really need the merchandise? Do you really need that many items of each? Do you really need them now or can you delay the delivery to a =me closer to when it is supposed to be sold? Check the stock ra=o for each item in stock and see if you could lower the levels to get more cash. Prepare an aged inventory list, iden=fy and clear out the dogs at any price you can get for them. It will not be more worth later on. Send back damaged items from your stock room for credit or refund Re-‐nego=ate terms of payment with vendors and see if you could return slow moving merchandise when placing new orders. When things get tough, vendors will come to you with oﬀers you have never seen before. Use some of the cash to make good deals.
RETAILOMANIAStore layout/presenta=on will drive sales by: -‐ Improving conversions -‐ Sell more to exis=ng customers -‐ Get them back more oKen -‐ Increase margins through adding value to your oﬀer -‐ Keep the customer longer in the store – the longer they stay, the more they buy
RETAILOMANIAFIELD TIP: Photograph your store, print the photos and put them on a wall. Photographs don´t lie – this is what your customers see. Mark everything that does not contribute to sales and/or a be1er experience with a red ”x”. Make a list and ﬁx it, star=ng today.
RETAILOMANIAFIELD TIP: Get a drawing of the store and stand right inside the entrance. Follow visitors around the store and mark their path on the drawing. AKer some 20 visitors a pa1erns usually emerges, showing the ”hot” and ”cold” zones of the store. This will be an important input to op=mize the customer ﬂow and increase sales steering.
RETAILOMANIAChange your store according to visitor frequency: -‐ Customers habituate to your stores -‐ Change oﬀerings weekly, move everything around as much as possible
RETAILOMANIAMaking the perfect store layout: h1p://retailomania.blogspot.com/2010/04/everything-‐you-‐ever-‐wanted-‐to-‐know.html On great range presenta=on: h1p://retailomania.blogspot.com/2010/03/everything-‐you-‐always-‐wanted-‐to-‐know.html Deﬁne more seasons: h1p://retailomania.blogspot.com/2011/08/more-‐seasons-‐more-‐cash-‐for-‐retailers.html
RETAILOMANIAReward loyalty. 20 % of your customers are most likely accountable for 70-‐80 % of your sales. !
RETAILOMANIAFollow up on: -‐ The number of visitors -‐ Conversion rate -‐ Number of add-‐on sales -‐ Average basket value -‐ Average number of ar=cles per transac=on Benchmark several stores to ﬁnd room for improvement