The document discusses key retail trends for 2014. It notes that ecommerce grew 29% in 2013 and is expected to reach $300 billion in 2014. Retailers will face challenges with shipping as consumers expect low costs. This will drive "delivery wars" and force retailers to offer in-store pickup and ship-to-store options to reduce costs and bring customers into physical stores. Retailers are also investing in mobile experiences and integrating digital technologies like interactive displays and dynamic digital signage to provide seamless omnichannel experiences that blend online, mobile, and in-store shopping. Data collection and metrics will be important to customize experiences and measure their impact.

1. First Look: !
What to Expect in Retail in 2014
Notes, Observations, and Key Trends
from NRF 2014

2. 2013 was a great year for eCommerce
• Average YOY growth = 29%
• Trending upward: 2014 eCommerce
expected to reach $300b
• Online-influenced sales grew significantly
– Web-research driven / pre-shopping behavior
that leads shoppers to the physical store
– 2013 estimated at $1 trillion; 2014 expected
to increase
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3. 2013 Holiday Recap
• November was extremely strong
• 50% of holiday shopping is actually for SELF
(not others!)
• Growth in early December softened
• Huge spike in last minute shopping
– Dec. 22-23 were strongest days
– Largely due to extended / “guaranteed”
shipping promises made by retailers
– Aggressive shipping plans promised by
retailers were overconfident: many retailers
had to refund purchases they couldn’t deliver
on time
• Cyber Shoppers deliberately avoid stores
during the holidays
– Consumers spend greater portion of wallet
share online in Q4
– Email is still highly effective in communicating
promotions / deals for consumers – driving a
lot of traffic to purchase in Q4
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4. So What Happens Next…
• “Delivery Wars” are just
beginning
– Couriers
– Drones (4-5 years…)
– Same day delivery
– Shipping rates will drive
competition in Retail
• Consumers EXPECT low
shipping costs or won’t
make a purchase unless
retailer is offering free/
discounted shipping…
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5. Shipping as the “Achilles Heel” of Retail
• USPS is in dire straights
– Major carriers still rely on USPS
• USPS delivered 30% of FedEx shipments in 2013
holiday season
• USPS must change / adapt:
– Declining volume and rising expectations from
consumers for faster / more affordable options
are driving these changes
– Cost Reductions:
• Retail shared deliveries with neighboring stores
• Clustered delivery boxes
• Fewer delivery days in the week
– Cost Increases:
• First Class
• Parcels – very profitable for USPS – and relatively inelastic for retailers since they MUST get
packages to consumers
• Business Delivery (catalogs, magazines, direct mailers…expect these cost contracts to rise)
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6. Shipping’s Savior: the Physical Store
In-Store
Pick-up
+
Ship-to-Store
options
– Reduces cost pressure
– Reduces time pressure
– Brings consumers back
to the physical store
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7. eCommerce will drive traffic to Stores
• Given the shipping challenges
retailers face, 2014 will present
opportunities for the retailer to
reconnect with consumers via in-
store pick-up programs
• How will retailers capitalize on
these visits?
– Must blend the online and physical
store
– Create a seamless experience that
connects eCommerce with pick-up
and store visits
– Omni-channel investments will
insulate retailers from becoming
casualties of the “Shipping Wars”
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8. What about mobile?
• 9% of all 2013 sales were made via
mobile phone (excluding tablets)
– Mobile experience is overwhelmingly
disappointing
– Strong numbers suggest consumers
are willing to suffer through poor
mobile experience to make purchases
from their phones
• Retailers are slated to invest in mobile
in 2014 – need to reduce friction
between mobile / eCommerce / in-
Store experiences
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9. Frictionless Experiences
• Mobile = 1st Screen; Reality = 2nd Screen
– Mobile is the most important screen, but it’s
not the only one…
• Experiences on mobile / in-store must
complement one another
• Omni-channel = looking at this system as
one whole; connecting the dots between
mobile / eCommerce / in-Store
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10. Contextually Aware Marketing
• 51% of consumers want mobile
apps that recognize their
location within a store and
send relevant discounts and
promotions
• 80% want mobile apps that will
be useful to them when they
want to make a choice
between products
• Mobile experience should tie-
in to physical experience:
create links to blend these two
and better the overarching
brand experience
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Customize messaging, product
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11. Dynamic Digital Signage
• Digital Signage is an opportunity
to tailor messaging to specific
customer
• Mobile phones and Loyalty cards
as identifiers
– QR / NFC / BLE tie-ins
• Recognition Tools
– Gender / Emotion / Age
recognition can work twofold:
• Dynamic content creates
personalized experience for
customer
• Provides demographic data on
customers entering store / what
content they are identifying with
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12. Experiences > Sales
• In-Store Interactive Solutions
– Physical Tables, Walls, Signage
that customers can directly
interact with
– Empowers retail associates with
the tools they need to deliver
better experiences to the
customer
– PSFK’s Future of Retail Report
• Technology Tables increase sales
10% per location
• Associates knowledgeable about
inventory in-store AND online via
in-store technology tables
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13. Data, Data, Data
• If it’s not measured,
it’s meaningless…
– Identify key metrics
before
implementation
– Identify solutions
that can measure
activity and in-store
shopping behaviors
and patterns for
ongoing analysis
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14. Conclusions for 2014 Retail
1. Shipping = opportunity to bring shoppers back to the store via in-
Store Pick-Up Program
• Retailers must capitalize on this by blending online environment with
in-store environment for a cohesive brand experience
2. Mobile = opportunity to augment in-store experiences with
contextually-aware messaging and promotions for shoppers
3. Digital Signage = opportunity to present dynamic content by
automating demographic recognition or allowing for shoppers to
opt-in via mobile or loyalty card
4. In-Store Interactive Solutions = opportunity to increase
interactions AND provide tool to store associate to improve the
customer’s experience by blending online/mobile/in-store
channels in one central place
5. Metrics = Everything. The more data, the more you can customize
the end experience.
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15. Learn more about our
retail experiences:
t1visions.com/markets/retail
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