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RetailOasis 'Big Breakfast' Presentation - Anna Ellis, Besen Investments

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A wrap-up of the National Retail Federation's Big Show and NYC stores from the perspective of one of Australia's preeminent retail investors.

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RetailOasis 'Big Breakfast' Presentation - Anna Ellis, Besen Investments

  1. 1. TITLE THE FUTURE OF RETAIL Through the eyes of an investor
  2. 2. TITLE insert text here BESEN – Who are we? 2 DANIEL BESEN ANDREW POST ANNA ELLIS JOE TACK
  3. 3. THIS IS WHAT WE LOOK FOR IN A RETAIL BUSINESSES NOW 3 •  Profitable •  A passionate entrepreneur or founder with a vision to grow •  A unique or differentiated product, service or business model that consumers love and / or a sustainable competitive advantage •  Growth potential PAST EXAMPLES:
  4. 4. WHERE DOES BESEN THINK THE PITCH WILL BE IN 3 YEARS? 4 Retail businesses in the future will need: 1. To answer the question WHY not just WHAT 2. To respond to “the age of the consumer” 3. To have one strategy which covers physical and digital
  5. 5. 1. BUSINESSES IN THE FUTURE WILL NEED TO ANSWER THE QUESTION WHY NOT JUST WHAT It is no longer enough to have a great product or service… Why should the consumer buy it? We will be looking for businesses that: 5 1.  Stand for something 2.  Enhance value to the consumer 3.  Have provenance or an authentic story
  6. 6. 6 BUSINESSES THAT STAND FOR SOMETHING SHINOLA TOMS
  7. 7. 7 BUSINESSES THAT ENHANCE VALUE TO THE CONSUMER With an innovative or disruptive business model… WARBY PARKER
  8. 8. 8 BUSINESSES THAT HAVE PROVENANCE OR AN AUTHENTIC STORY Mast Brothers Chocolate “bean to bar” concept MAST BROTHERS CHOCOLATE
  9. 9. WHERE DOES BESEN THINK THE PITCH WILL BE IN 3 YEARS? 9 Retail businesses in the future will need: 1. To answer the question why not just what 2. To respond to “the age of the consumer” 3. To have one strategy which covers physical and digital
  10. 10. TITLE insert text here 2. BUSINESSES IN THE FUTURE WILL NEED TO RESPOND TO THE AGE OF THE CONSUMER Consumers today: 10 •  Are more connected than ever before •  Care more about experiences than things •  Want to be part of a community in-store and online Let’s have a closer look at each of these and what they mean for what BESEN will be looking for from businesses in the future…
  11. 11. 11 CONSUMERS ARE MORE CONNECTED THAN EVER BEFORE •  Online has long been a cost of entry but mobile enabled is next •  Businesses need to be social – no longer an add-on but a necessity, part of the DNA of a business
  12. 12. TITLE insert text here 12 CONSUMERS CARE MORE ABOUT EXPERIENCES THAN THINGS •  We have known for some times that affluent Australians rate enjoying experiences above acquiring material goods – this is translating to retail •  We like retailers that provide in-store experiences that give consumers a reason to get off the couch and shop MAST BROTHERS Chocolate factory and taste testing
  13. 13. TITLE insert text here 13 CONSUMERS WANT TO BE PART OF A COMMUNITY IN-STORE AND ONLINE •  Being part of a community makes consumers happy – why do we think this is important for retail businesses? 1.  It costs 5x as much to acquire than keep a customer 2.  The #1 influencer of purchases is recommendations 3.  Community engagement can increase revenue by up to 25% •  In New York in-store communal spaces such as lounges, coffee shops and free wi-fi are the norm rather than the exception LULULEMON NYC CONCEPT STORE NIKE + RUN CLUB AUSTRALIA
  14. 14. TITLE insert text here WHERE DOES BESEN THINK THE PITCH WILL BE IN 3 YEARS? 14 Retail businesses in the future will need: 1. To answer the question why not just what 2. To respond to “the age of the consumer” 3. To have one strategy which covers physical and digital
  15. 15. TITLE insert text here 3. BUSINESSES IN THE FUTURE WILL NEED ONE STRATEGY WHICH COVERS PHYSICAL AND DIGITAL 15 1.  When it comes to bricks or clicks, the choice is both 2.  Physical stores are no longer one size fits all 3.  A seamless consumer experience across all channels
  16. 16. TITLE insert text here 16 WHEN IT COMES TO BRICKS OR CLICKS – THE CHOICE IS BOTH The death of retail was overstated… • We are not saying that online only retailers will not be successful, there are many businesses where a purely online strategy is the best one • What we are saying is that we don’t believe it is bricks OR clicks – the physical and digital are complimentary • Online retailers are opening physical stores because retail flagships are driving online sales MICROSOFT
  17. 17. TITLE insert text here 17 PHYSICAL STORES ARE NO LONGER ONE SIZE FITS ALL •  Different store concepts and formats are required for different consumer markets – we like businesses that are innovative in adapting their footprint, offer and location •  Lowe’s – a traditional big box home improvement retailer adapting their model to the city market “Lowe’s urban stores” •  Murray’s Cheese Shop – a NYC institution that has rolled out 350 store-in-store concepts in supermarkets across the US LOWE’S MURRAY’S CHEESE SHOP
  18. 18. TITLE insert text here 18 A SEAMLESS CONSUMER EXPERIENCE ACROSS ALL CHANNELS •  The physical and digital need to connect and the consumer needs to be able to move seamlessly between all channels •  We think UK retailer John Lewis is a great example of how a seamless customer experience should look over the few years –  80% of customers shop across both channels –  75% of all John Lewis transactions comprise some component of online and in-store (i.e. browsing on mobile then purchasing in-store) –  40% of John Lewis sales are online –  Delivery options include next day, click and collect and commute and collect JOHN LEWIS
  19. 19. AS AN INVESTOR I LOOK FORWARD TO SEEING HOW AUSTRALIAN RETAIL BUSINESSES RESPOND… 19

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