13themesfor2013

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13themesfor2013

  1. 1. 13 themes for 2013… (what’s keeping retailers awake at night)
  2. 2. #1 Omnichannel changes everything
  3. 3. Omnichannel shopping: the defining st theme of 21 century retailing
  4. 4. “The digital revolution is transforming how customers behave…We cannot differentiate between online and in store. We must use the stores to support the online offer and visa-versa.” Philip Clarke, CEO Tesco, BRC Symposium, London June 2011
  5. 5. “The shopping journey is going online and offline all the time” Brian McBride, Managing Director, Amazon.com, UK Retail Week Conference, London, 03/10 5
  6. 6. An example from automotive: The new vehicle ‘path to purchase’ in the US 35% 30% 25% 20% 15% 10% 5% 0% Dealer Web Beginning Search Early Middle Late Purchase End
  7. 7. The electronics ‘path to purchase’ in Russia 35.0 % of electronic shoppers 30.0 25.0 20.0 Store 15.0 Web 10.0 5.0 0.0 Beginning Search Early Middle Late Purchase End
  8. 8. Click and Collect fast emerging as a preferred model – grocery and General Merchandise Metro Group opened second drive-in Real outlet in Germany in 2011 Casino, France, offers click & collect in 90 of its 120 Geant hypermarkets Sonae, Portugal, launched Continente Drive click & collect, April 2011 Tesco - Installing collection points and ordering kiosks in their stores. Louis Delhaize plans to equip half its French Cora hypermarkets with a drive-in facility by end 2011 in 2011 LeClerc, France, aiming Euro 1.1bn sales from 400 Drive stores by 2015 „Site to store‟ is a key element of the new Walmart Express format launched in the US in mid-2011.
  9. 9. Aiming for seamless delivery across channels M&S: Shop Your Way Shop Your Way  Aims to deliver seamless shopping to customers across all M&S channels, whenever, wherever, however they wish  05 / 2010 launched fully enabled mobile website  12 months to 09/11     160m visits to M&S website (+18%) Transactions +21% Revenues + 20% Conversion +3%
  10. 10. New school convenience - technology enabled to make online and in-store seamless Product email In-store support web offer In-store sale Recycle email
  11. 11. How to be seamless across multiple channels: What shoppers in the UK want  Consistent returns policy, in store and online  Has a reasonable timeframe for returns  Allows me to shop online but return in store  Store is a place to go to pick up something I’ve already learned about online  Makes a conscious effort to link the store and web brand image  Makes a conscious effort to link the store and web service support  Easy to move between their website and store Importance UK retailers where being “Simple and seamless” is highly valued: Dimensions of “seamlessness”
  12. 12. #2 Stores need reinventing to stay relevant
  13. 13. Eataly, NYC Re-imagining the store: Dial up product engagement
  14. 14. Re-imagining the store: Stores as meeting and gathering places
  15. 15. Re-imagining the store: Stores as learning, socialising, participative spaces
  16. 16. Fewer, better stores in specialty – Treat every store as a flagship Top Shop, NYC
  17. 17. But some store formats are under pressure to survive: Hypermarkets – in long term decline in Europe Source: Images from Planet Retail
  18. 18. #3 The rise and rise of non-store retailing
  19. 19. amazon and the power of online Mission To be the place where people can find, discover & buy anything online Global Banner Sales (USD bn) 140 Amazon: Global Banner Sales, 2005-2015f (USD bn) 120 USD126.9 bn 100 World’s 6th largest retailer World’s 31st largest retailer 80 60 World’s 99th largest retailer USD37.7 bn 40 USD9.2 bn 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: f - forecast Source: Planet Retail Amazon trialling collection lockers in shopping centres, office buildings in UK and in 7Eleven in US
  20. 20. No store walls = no stock limits Amazon’s assortment by marketplace Marketplace ASIN (SKU) count Amazon.com 127,811,266 Amazon.co.uk 101,680,706 Amazon.de 91,933,337 Amazon.fr 75,252,368 Amazon.co.jp 59,104,884 Amazon.ca 25,973,378 Amazon.es 18,874,265 Amazon.it 18,196,941 Amazon.cn 4,483,795 ASIN counts at 20/02/12
  21. 21. On track to overtake Walmart as the world’s largest retailer? Source: Retail Net Group, US
  22. 22. Debenhams –A UK department store now in Germany but without stores…
  23. 23. Williams Sonoma – US homewares store everywhere
  24. 24. asos – Fashion clothing without any stores • Strategy: Move from being a UK shop to a global fashion destination • International sales latest quarter +49% to 65% of asos total sales – Of which, Rest of World (mostly Australia) +61%
  25. 25. #4 Mobile as a key engagement platform
  26. 26. Mobile – connecting and blurring the store / outside store environments
  27. 27. Global m-commerce sales expected to reach USD119 bn by 2015 (source: ABI Research)
  28. 28. Smartphone equipped shoppers want to be able to use them to shop… Example: UK shoppers (% is of interest to me) Demand doubles Demand doubles Demand doubles Have Smartphone Don‟t have Smartphone Doubles Doubles © 2011 Leo Burnett and Arc Worldwide
  29. 29. Digital natives – they’ve never known a world without mobile  Close to ubiquitous penetration of mobile phones  Rapid penetration of smartphones and tablets  Accelerating evolution of devices and capabilities (3G, 4G, NextG…)
  30. 30. #5 More personalised shopper engagement
  31. 31. Leveraging data to deliver more personalised promotions Major UK grocers have used technology to launch price guarantees which calculates the costs of shopping versus rivals and offers customers a refund if their shop was cheaper elsewhere. Sainsbury’s Brand Match, launched in mid-2011, is perhaps the most innovative offering a coupon directly at the till at the time of purchase. Source: Planet Retail
  32. 32. Technology-enabled personalised experiences in store Example – Disney ‘magic mirror’ and Kid77 personalisation screens
  33. 33. Technology for personalised product Adidas virtual footwear wall features 4000 styles of shoes, and links to Twitter and Facebook. © 2011 Leo Burnett and Arc Worldwide
  34. 34. Win through localising the experience Selfridges: Shoe Gallery Anthropologie: Chelsea
  35. 35. #6 The power of sharing and social
  36. 36. Because social dialogue can enrich the shopper experience Diesel Cam, Spain
  37. 37. Harness social media – because shoppers are less trusting in institutions and traditional media
  38. 38. Social media can build – and destroy – brands overnight Example: Mumsnet  Launched in UK 2000  25,000 posts every day  850,000 regular users  80% of whom said they wouldn’t make a purchase before consulting the site or their peers
  39. 39. Social media and the power of crowds 82% of UK consumers use the internet at least once a week to research products or services Groupon – 120m subscribers mid-2011 (50m Dec 2010)
  40. 40. #7 The challenge of complexity (connecting multiple touchpoints)
  41. 41. Shoppers demand to be able to engage with retailers on their terms Example: Click and collect at Argos (UK, General Merchandise) : Check & Reserve, 2006-2011 (%) 30% Percentage of Total Sales 26% 25% 22% 20% 16% 15% 12% 10% 5% 8% 5% 0% 2006 2007 Source: Home Retail Group 2008 2009 Year End Feb 2010 2011
  42. 42. Many retailers will have to manage more complex portfolios Smaller stores (less than 2,500 square metres) will increase in importance as hypermarket growth slows Tesco: Sales by Channel, 2006e-2016f (%) 100% 14.6% 90% 23.7% 32.2% 80% Total Sales (%) 70% Services 60% E-commerce 50% 40% Other 85.4% 76.3% 30% 67.8% 20% 10% 0% 2006 2011 2016 Note: Other includes department, fashion & accessories, cash & carries, home garden auto stores and wholesale; Calculated using GBP; <2,500 square metres includes supermarket & neighbourhood + convenience and forecourt; e – estimate; f – forecast. Source: Planet Retail Convenience & forecourt Supermarket & neighbourhood Hypermarket & superstore > 30% of sales by 2016.
  43. 43. #8 The challenge of transparency
  44. 44. Price transparency driving persistent downward pressure on retailers’ margins Technology to help establish trust, through transparency
  45. 45. Sourcing transparency Technology being leveraged because shoppers want to ‘see behind the scenes’ In 2011, Aldi became the first retailer in Germany to proactively offer traceability information for fresh meat on smartphones. ASDA responded to negative criticism of its farming and factory policies by embracing transparency, installing webcams with the live feeds viewable to the public.
  46. 46. #9 Winning by changing category conventions
  47. 47. Change shoppers’ expectations Zara, Rome
  48. 48. Victoria’s Secret Winning retailers are breaking out of their category conventions and reframe shoppers’ expectation Zara IKEA Selfridge & Co. Apple
  49. 49. #10 Retailers as brands
  50. 50. Example: Tesco – ambitious to build entirely new brands Venture Brands 1980 1990 2000 2010 2011 Venture Brands Source: Planet Retail
  51. 51. Aiming to be a global power brand in apparel Turning private label into standalone brands
  52. 52. Customers contributing to the product development process Example: ASDA (UK Grocery)  Own brand re-launched late 2010  200,000 blind taste tests with 40,000 consumers  Standard line became ‘Chosen by You’ when relanched in late 2010
  53. 53. #11 Responsibility as mandatory
  54. 54. Transparency and sustainability – 2 sides of the same coin 71% of UK consumers believe that companies have a responsibility to support the society in which they operate • ‘Green’ and ‘ethical’ are not differentiators – they’re mandatories • BUT, shoppers won’t pay more for ‘doing the right thing’ M&S’s Objective: To be the world’s most sustainable major retailer by 2015
  55. 55. Sustainability credentials – A mandatory, not a differentiator “We want to be a restorative retailer. It’s not enough to be a sustainable retailer.” Mark Price Managing Director Waitrose, 8/6/11
  56. 56. #12 Polarisation and the disappearing middle market
  57. 57. Value retailers showing strong growth in most categories
  58. 58. Value retailers transforming shoppers’ expectations Uniqlo Forever 21, Birmingham Designers at H&M Zara, Rome
  59. 59. The New Space Race: A story of Polarisation
  60. 60. Pressure on large space store in some categories Example: Best Buy – Fewer but better large stores supported by more physical touchpoints with smaller, focused stores 2012 strategic plan – Big Box store size down 20%; points of presence up 20%
  61. 61. #13 The risks of playing safe
  62. 62. The paradox of 21st century retailing Playing safe might just be the riskiest plan of all
  63. 63. Attributes of Winning Retailers
  64. 64.  Genuinely customer centric  No more rhetoric. The customer will genuinely be at the centre of the retailer’s engagement efforts  Using social and digital media to share information that matters to shoppers: ‘Nothing to hide’ mantra  Delivering across multiple touchpoints  Multiple points of engagement with the shopper, online and offline  Seamless movement by the shopper across multiple touchpoints  Stores still important for many, but not the only – or even the main – point of engagement  Click and collect likely to be important for many  Digitally adept  Using technology outside the store for shopper engagement  Using technology inside the store to improve efficiency and / or experience  Brand focused  To deliver shopper engagement across multiple touchpoints  To build shopper confidence throughout the business
  65. 65. In Summary
  66. 66. 13 themes for 2013 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Omnichannel changes everything Stores must reinvent to stay relevant The rise and rise of non-store retailing Mobile as a key engagement platform More personalised shopper engagement The power of social and sharing The challenge of complexity The challenge of transparency Winning by changing category conventions Retailers as brands Responsibility as mandatory Polarisation and the disappearing middle ground The dangers of playing safe
  67. 67. 13 themes for 2013 Shopper Engagement Themes Business Initiative Themes 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Omnichannel changes everything Stores must reinvent to stay relevant The rise and rise of non-store retailing Mobile as a key engagement platform More personalised shopper engagement The power of social and sharing The challenge of transparency The challenge of complexity Winning by changing category conventions Retailers as brands Responsibility as mandatory Polarisation and the disappearing middle ground The dangers of playing safe

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