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Decoding the digital opportunity in retail
Report launch deck.pptx 1Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
By 2021, India will have more Internet users than the entire
population of 'six G7' countries
60
66
66
83
337
170
0
100
200
300
400
500
600
700
330
202120212016
~600-650
650-700
USA
Number of people (Mn)
Germany
Canada
2013
France
Italy
38
UK
Internet users in India
Population of G7
countries
Source: BCG CCI Digital Influence Study, EIU, BCG Analysis
Report launch deck.pptx 2Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
Digital is all pervasive – goes well beyond stereotypes
% of Internet
users in 2014
% of Internet
users in 2016
Source: BCG Buzz to Bucks study 2014,2016
Young (<25 Yrs)
47% 75%
1.6x
Male
39% 57%
1.5x
Metro/T1
30% 51%
1.7x
Not So Young (35+ Yrs)
12% 29%
2.4x
Female
15% 27%
1.8x
Non- Metro
27% 44%
1.6x
Affluent
55% 60%
1.1x
Strugglers
16% 39%
2.4x
People who we think use internet in India...
... but many others beyond the stereotype are
online
Report launch deck.pptx 3Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
This digital usage has no 'time slot' in user's life – it is
omnipresent!
7 am
8:30 am
11:30 am
12 pm
1 pm
5 pm
6 pm
7:30 pm
8:30 pm
10:30 pm
11 pm
Downloads study material and
uses the university websiteTransfers funds to mother through
bank account, recharges mobile
Surfs e-commerce websites for
the latest deals
Shortlists the most attractive
deals to discuss
with family later
Checks WhatsApp messages
and browses Facebook
Listens to music on his phone
on the way to college
Wakes up and checks
messages on WhatsApp
Updates latest events, uploads
pictures and shares jokes on
Facebook and WhatsApp
Calls friend studying in
Australia over Skype
Plays Mini Militia,
a multi-player game with his
friends and brother
1 am
Discusses e-commerce deals
with family over dinner, orders
the most attractive ones
Checks WhatsApp before going
to bed
References study material,
watches Youtube
during study breaks
Typical day of an Indian internet user
Report launch deck.pptx 4Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
'Each' digital consumer displays a distinct behavior online
0
1
2
3
4
5
See
Select
Search
Socialize
Spend
Study
Save
Sell
Each line represents the
activity map of a sample
online user
Source: BCG consumer immersion surveys 2016
Report launch deck.pptx 5Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
To
"Many" (hundred) segments using:
Implication: New segmentation possibilities, enabling
predictive and customized targeting
?
Mass
Targeting
Micro
Segmentation
Time of
day
Day of
week
Location
Weather
Season
Phone
Email
Billboard
Product
Previous
behaviour
Timing Context Channel
Personalized
product offering
Shirt recommendations based on
previous browsing history, purchases,
"likes" on social media ( Facebook/
Instagram), usage and latest trends...
Personalized
communication
and
promotions
Source: BCG
Targeted contextual
promotion such as, "It's a foggy day, try
our new hot beverage "
From
A "handful" of segments....
• Limited data availability
• Demographic data based segmentation
Report launch deck.pptx 6Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
E-commerce expected to be 50-55 Bn USD by 2021
E-commerce could become a significant channel across many categories
0 20 40 60
2021 50-55
2016 12-14
2015 6-8
0
10
20
30
40
Online share of total retail sales (%)
13-15%
Consumer
electronics
38-42%
Appliances
6-8%
16-18%
Apparel
5-7%
13-15%
Homeware
and
furniture
2-4%
11-13%
Luxury
3-5%
9-11%
Health
2-4%
9-11%
FMCG
1-2%
7-9%
Food &
Grocery
0-1%
1-3%
2016
2025
Online retail spends
(Billion USD) Percentage penetration of e-commerce across categories
E-commerce values are total annual sales, net of returns / discounts, for physical goods sold. It does not include services like travel / banking insurance etc.
All estimates are at constant currency USD =68 INR -
Report launch deck.pptx 7Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
Business strategy, powered by digital
Enable
Transform the core
Winning in the new reality: Digitize and Disrupt
Organisation Data & Insight Support FunctionsIT & Infrastructure
Disrupt & Innovate
New
Business
Models
Digitize core
business
Enhance
effectiveness across
the retail value
chain
Digital
engagement
Enhance consumers
digitally; build strong
advocates
Digital
commerce
Use digital as a
sales channel
1 2 5
Digital in store
Redefine role of
physical stores:
enhance experience
through in-store
interventions
3 4
Report launch deck.pptx 8Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
Re-imagine consumer journeys in light of new and emerging technologies
Key takeaways for a true digital transformation
Do not treat digital as an "add on" – It should be central to the CEO's agenda
Challenge the organization to digitize across the value chain
Harness the power of data – The hidden goldmine of BIG DATA
Reorganize for the digital world & create network of partnerships for new capabilities –
CANNOT be done in-house
2
3
4
5
1
Report launch deck.pptx 9Draft—for discussion only
Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved.
The services and materials provided by The Boston Consulting Group (BCG) are subject to BCG's Standard Terms
(a copy of which is available upon request) or such other agreement as may have been previously executed by BCG. BCG does not
provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice concerning these matters. This
advice may affect the guidance given by BCG. Further, BCG has made no undertaking to update these materials after the date
hereof, notwithstanding that such information may become outdated or inaccurate.
The materials contained in this presentation are designed for the sole use by the board of directors or senior management of the
Client and solely for the limited purposes described in the presentation. The materials shall not be copied or given to any person or
entity other than the Client ("Third Party") without the prior written consent of BCG. These materials serve only as the focus for
discussion; they are incomplete without the accompanying oral commentary and may not be relied on as a stand-alone document.
Further, Third Parties may not, and it is unreasonable for any Third Party to, rely on these materials for any purpose whatsoever. To
the fullest extent permitted by law (and except to the extent otherwise agreed in a signed writing by BCG), BCG shall have no liability
whatsoever to any Third Party, and any Third Party hereby waives any rights and claims it may have at any time against BCG with
regard to the services, this presentation, or other materials, including the accuracy or completeness thereof. Receipt and review of
this document shall be deemed agreement with and consideration for the foregoing.
BCG does not provide fairness opinions or valuations of market transactions, and these materials should not be relied on or construed
as such. Further, the financial evaluations, projected market and financial information, and conclusions contained in these materials
are based upon standard valuation methodologies, are not definitive forecasts, and are not guaranteed by BCG. BCG has used public
and/or confidential data and assumptions provided to BCG by the Client. BCG has not independently verified the data and
assumptions used in these analyses. Changes in the underlying data or operating assumptions will clearly impact the analyses and
conclusions.
Disclaimer
Thank you
bcg.com | bcgperspectives.com

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Decoding the digital consumer, bcg

  • 1. Decoding the digital opportunity in retail
  • 2. Report launch deck.pptx 1Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. By 2021, India will have more Internet users than the entire population of 'six G7' countries 60 66 66 83 337 170 0 100 200 300 400 500 600 700 330 202120212016 ~600-650 650-700 USA Number of people (Mn) Germany Canada 2013 France Italy 38 UK Internet users in India Population of G7 countries Source: BCG CCI Digital Influence Study, EIU, BCG Analysis
  • 3. Report launch deck.pptx 2Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Digital is all pervasive – goes well beyond stereotypes % of Internet users in 2014 % of Internet users in 2016 Source: BCG Buzz to Bucks study 2014,2016 Young (<25 Yrs) 47% 75% 1.6x Male 39% 57% 1.5x Metro/T1 30% 51% 1.7x Not So Young (35+ Yrs) 12% 29% 2.4x Female 15% 27% 1.8x Non- Metro 27% 44% 1.6x Affluent 55% 60% 1.1x Strugglers 16% 39% 2.4x People who we think use internet in India... ... but many others beyond the stereotype are online
  • 4. Report launch deck.pptx 3Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. This digital usage has no 'time slot' in user's life – it is omnipresent! 7 am 8:30 am 11:30 am 12 pm 1 pm 5 pm 6 pm 7:30 pm 8:30 pm 10:30 pm 11 pm Downloads study material and uses the university websiteTransfers funds to mother through bank account, recharges mobile Surfs e-commerce websites for the latest deals Shortlists the most attractive deals to discuss with family later Checks WhatsApp messages and browses Facebook Listens to music on his phone on the way to college Wakes up and checks messages on WhatsApp Updates latest events, uploads pictures and shares jokes on Facebook and WhatsApp Calls friend studying in Australia over Skype Plays Mini Militia, a multi-player game with his friends and brother 1 am Discusses e-commerce deals with family over dinner, orders the most attractive ones Checks WhatsApp before going to bed References study material, watches Youtube during study breaks Typical day of an Indian internet user
  • 5. Report launch deck.pptx 4Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. 'Each' digital consumer displays a distinct behavior online 0 1 2 3 4 5 See Select Search Socialize Spend Study Save Sell Each line represents the activity map of a sample online user Source: BCG consumer immersion surveys 2016
  • 6. Report launch deck.pptx 5Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. To "Many" (hundred) segments using: Implication: New segmentation possibilities, enabling predictive and customized targeting ? Mass Targeting Micro Segmentation Time of day Day of week Location Weather Season Phone Email Billboard Product Previous behaviour Timing Context Channel Personalized product offering Shirt recommendations based on previous browsing history, purchases, "likes" on social media ( Facebook/ Instagram), usage and latest trends... Personalized communication and promotions Source: BCG Targeted contextual promotion such as, "It's a foggy day, try our new hot beverage " From A "handful" of segments.... • Limited data availability • Demographic data based segmentation
  • 7. Report launch deck.pptx 6Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. E-commerce expected to be 50-55 Bn USD by 2021 E-commerce could become a significant channel across many categories 0 20 40 60 2021 50-55 2016 12-14 2015 6-8 0 10 20 30 40 Online share of total retail sales (%) 13-15% Consumer electronics 38-42% Appliances 6-8% 16-18% Apparel 5-7% 13-15% Homeware and furniture 2-4% 11-13% Luxury 3-5% 9-11% Health 2-4% 9-11% FMCG 1-2% 7-9% Food & Grocery 0-1% 1-3% 2016 2025 Online retail spends (Billion USD) Percentage penetration of e-commerce across categories E-commerce values are total annual sales, net of returns / discounts, for physical goods sold. It does not include services like travel / banking insurance etc. All estimates are at constant currency USD =68 INR -
  • 8. Report launch deck.pptx 7Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Business strategy, powered by digital Enable Transform the core Winning in the new reality: Digitize and Disrupt Organisation Data & Insight Support FunctionsIT & Infrastructure Disrupt & Innovate New Business Models Digitize core business Enhance effectiveness across the retail value chain Digital engagement Enhance consumers digitally; build strong advocates Digital commerce Use digital as a sales channel 1 2 5 Digital in store Redefine role of physical stores: enhance experience through in-store interventions 3 4
  • 9. Report launch deck.pptx 8Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. Re-imagine consumer journeys in light of new and emerging technologies Key takeaways for a true digital transformation Do not treat digital as an "add on" – It should be central to the CEO's agenda Challenge the organization to digitize across the value chain Harness the power of data – The hidden goldmine of BIG DATA Reorganize for the digital world & create network of partnerships for new capabilities – CANNOT be done in-house 2 3 4 5 1
  • 10. Report launch deck.pptx 9Draft—for discussion only Copyright©2017byTheBostonConsultingGroup,Inc.Allrightsreserved. The services and materials provided by The Boston Consulting Group (BCG) are subject to BCG's Standard Terms (a copy of which is available upon request) or such other agreement as may have been previously executed by BCG. BCG does not provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice concerning these matters. This advice may affect the guidance given by BCG. Further, BCG has made no undertaking to update these materials after the date hereof, notwithstanding that such information may become outdated or inaccurate. The materials contained in this presentation are designed for the sole use by the board of directors or senior management of the Client and solely for the limited purposes described in the presentation. The materials shall not be copied or given to any person or entity other than the Client ("Third Party") without the prior written consent of BCG. These materials serve only as the focus for discussion; they are incomplete without the accompanying oral commentary and may not be relied on as a stand-alone document. Further, Third Parties may not, and it is unreasonable for any Third Party to, rely on these materials for any purpose whatsoever. To the fullest extent permitted by law (and except to the extent otherwise agreed in a signed writing by BCG), BCG shall have no liability whatsoever to any Third Party, and any Third Party hereby waives any rights and claims it may have at any time against BCG with regard to the services, this presentation, or other materials, including the accuracy or completeness thereof. Receipt and review of this document shall be deemed agreement with and consideration for the foregoing. BCG does not provide fairness opinions or valuations of market transactions, and these materials should not be relied on or construed as such. Further, the financial evaluations, projected market and financial information, and conclusions contained in these materials are based upon standard valuation methodologies, are not definitive forecasts, and are not guaranteed by BCG. BCG has used public and/or confidential data and assumptions provided to BCG by the Client. BCG has not independently verified the data and assumptions used in these analyses. Changes in the underlying data or operating assumptions will clearly impact the analyses and conclusions. Disclaimer
  • 11. Thank you bcg.com | bcgperspectives.com