The document outlines 13 themes for retailers in 2013, focusing on omnichannel retailing, reinventing physical stores, the rise of non-store formats, using mobile and social media for personalized engagement, managing transparency and complexity across channels, developing strong retailer brands, addressing societal responsibilities, and the risks of not adapting to changes in the retail environment. Key themes include leveraging data and technology to provide a seamless shopping experience across online and offline channels, reimagining physical stores, harnessing social sharing, and delivering more customized and localized experiences.

1. 13 themes for
2013…
(what’s keeping retailers awake at night)

2. #1
Omnichannel
changes everything

3. Omnichannel
shopping: the
defining
st
theme of 21
century
retailing

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. “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. 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. 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. 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. 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. 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. 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. #2
Stores need
reinventing to stay
relevant

13. Eataly, NYC
Re-imagining the store:
Dial up product
engagement

14. Re-imagining the store:
Stores as meeting and
gathering places

15. Re-imagining the store:
Stores as learning,
socialising, participative
spaces

16. Fewer, better stores in specialty –
Treat every store as a flagship
Top Shop, NYC

17. But some store formats are under pressure
to survive: Hypermarkets – in long term decline in Europe
Source: Images from Planet Retail

18. #3
The rise and rise of
non-store retailing

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. 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. On track to overtake Walmart
as the world’s largest retailer?
Source: Retail Net Group, US

22. Debenhams –A UK department store now
in Germany but without stores…

23. Williams Sonoma – US homewares store
everywhere

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. #4
Mobile as a key
engagement platform

26. Mobile – connecting
and blurring the
store / outside store
environments

27. Global m-commerce sales expected to
reach USD119 bn by 2015 (source: ABI Research)

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. 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. #5
More personalised
shopper engagement

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. Technology-enabled personalised
experiences in store
Example – Disney ‘magic mirror’ and Kid77 personalisation screens

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. Win through localising the experience
Selfridges: Shoe Gallery
Anthropologie: Chelsea

35. #6
The power of sharing
and social

36. Because social dialogue can enrich the
shopper experience
Diesel Cam, Spain

37. Harness social media – because shoppers are
less trusting in institutions and traditional media

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. 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. #7
The challenge of
complexity (connecting
multiple touchpoints)

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. 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. #8
The challenge of
transparency

44. Price transparency driving persistent
downward pressure on retailers’ margins
Technology to
help establish
trust, through
transparency

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. #9
Winning by changing
category conventions

48. Change shoppers’ expectations
Zara, Rome

49. Victoria’s
Secret
Winning retailers are
breaking out of their
category conventions
and reframe
shoppers’ expectation
Zara
IKEA
Selfridge & Co.
Apple

50. #10
Retailers as brands

51. Example: Tesco – ambitious to build
entirely new brands
Venture Brands
1980
1990
2000
2010 2011
Venture
Brands
Source: Planet Retail

52. Aiming to be a global
power brand in apparel
Turning private label into
standalone brands

53. 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

54. #11
Responsibility as
mandatory

55. 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

56. 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

57. #12
Polarisation and the
disappearing middle
market

58. Value retailers showing strong growth in
most categories

59. Value retailers transforming shoppers’
expectations
Uniqlo
Forever 21, Birmingham
Designers at H&M
Zara, Rome

60. The New Space
Race: A story of
Polarisation

61. 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%

62. #13
The risks of playing safe

63. The paradox of 21st century retailing
Playing safe
might just be
the riskiest
plan of all

64. Attributes of
Winning Retailers

65.  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

66. In Summary

67. 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

68. 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