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The_Disruptive_Future_of_Retail_Mayl_(final)
The document discusses the disruptive future of retail and how emerging technologies are impacting the industry. It provides an overview of key retail trends like the rise of omnichannel shopping and importance of mobile. Data shows retailers are focusing technology investments on areas like personalized marketing, security, and payment technologies to address challenges from Amazon. The future of retail is highlighted as one driven by consistency, convenience and accessibility across all channels for shoppers. Technology like RFID and analytics are allowing stores to become smarter with benefits like improved inventory visibility, customer engagement and loss prevention.
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The_Disruptive_Future_of_Retail_Mayl_(final)
- 1. Tony D‘Onofrio May 2016 TheDisruptive Future of Retail
- 2. © 2016 Tyco.All Rights Reserved. Agenda 2
- 3. © 2016 Tyco.All Rights Reserved. 3 Tony D‘Onofrio May 2016
- 4. 4© 2016 Tyco.All Rights Reserved. The Global Retail Market in 2019 Source: Euromonitor
- 5. 5© 2016 Tyco.All Rights Reserved. Global Retail Market Data Store CountRetail Market Growth Sales Volume Source: Euromonitor
- 6. 6© 2016 Tyco.All Rights Reserved. Global Retail Sales – The World is Flat Best and worst performers: retail sales volume in 2016 (% change) Russia Hungary Ukraine Azerbaijan Venezuela India China Algeria Romania Vietnam Worst performers Best performers -30 -25 -20 -15 -10 -5 0 0 2 4 6 8 10 Up 2.7% in 2016 same as 2015 Sources: The Economist Intelligence Unit, Planet Retail. 2015 2016 forecast 2017 forecast Retail sales volumes by regions (% change) Asia-Pacific Latin America Western Europe Middle East & Africa North America World 5 4 3 2 1 0 -1 -2 -3 -4 5 4 3 2 1 0 -1 -2 -3 -4
- 7. 7© 2016 Tyco.All Rights Reserved. GRDI Country Attractiveness Tyco Confidential Source: AT Kearney 2015 Global Retail Development Index
- 8. 8© 2016 Tyco.All Rights Reserved. 2015 Global Retail Development Index Source: AT Kearney 2015 Global Retail Development Index
- 9. Level of globalization byproduct sector, FY2014 Product sector profiles, FY2014 The Global Top 250 Retailers Source: 2016 Deloitte Global Powers of Retailing
- 10. 10© 2016 Tyco.All Rights Reserved. Q Ratio LeadersFastest Growing Source: 2016 Deloitte Global Powers of Retailing Top 10 Fastest Growing / Q Ratio Retailers Retailer Country FY2009 - 2014 retail Revenue CAGR¹ RANK Retailer Country Q Ratio Vipshop Holdings Limited China 320.8% 1 Hermès International SCA France 6.422 JD.com Inc. China 106.3% 2 Tractor Supply Company US 6.113 Axel Johnson AB/ Axfood, Axstores Sweden 49.3% 3 H & M Hennes & Mauritz AB Sweden 5.811 AB Acquisition LLC (now Albertsons Companies Inc.) US 45.3% 4 Inditex S.A. Spain 5.792 Steinhoff International Holdings Ltd. S. Africa 41.6% 5 Amazon.com Inc. US 5.307 Southeastern Grocers LLC (formerly BI-LO Holding LLC) US 36.0% 6 Nike Inc./Direct to Consumer US 5.180 Yonghui Superstores Co. Ltd. China 33.7% 7 Next plc UK 4.952 OJSC Dixy Group Russia 33.3% 8 The TJX Companies Inc. US 4.438 Chongqing Department Store Co. Ltd. China 32.5% 9 Vipshop Holdings Limited China 4.400 Jumbo Groep Holding B.V. Netherlands 30.1% 10 Ross Stores Inc. US 4.369
- 11. © 2016 Tyco.All Rights Reserved. 11 Make Wise Technology Choices Make Wise Technology Choices Tony D‘Onofrio May 2016
- 12. 12© 2016 Tyco.All Rights Reserved. Retailer Losses Shrinkage Inventory Distortion Returns Return $642.6 Overstock $471.9 Out‐of‐Stocks $634.1 Source: Global Theft Retail Barometer, IHL Group
- 13. 13© 2016 Tyco.All Rights Reserved. Global Retail Shrink Highest Global Shrink Countries 2014 -2015 Cost of Retail Crime as % of Total Sales 39% 16% 7% 38% Shoplifting Dishonest Employee Theft Admin/non-crime Loss Supplier Fraud Source: Global Theft Barometer, 2014-2015 MEXICO FINLANDNETHERLANDS FINLAND HONG KONGMEXICO 1.68%1.48% 1.38% 4.48%2.80% 1.38%
- 14. 14© 2016 Tyco.All Rights Reserved. 14 The Evolution of Loss Prevention Item Intelligence Store Intelligence Item Security Data & Video Analytics EAS Video RFID Traffic & Shopper Analytics
- 15. 15© 2016 Tyco.All Rights Reserved. Store Systems Priorities Top Store System Priorities for 2016 15% 16% 16% 19% 21% 29% 32% 35% 42% 52% Assisted Selling Ship-from-Store Workforce Management Improved Training Tools Single Transaction Engine WAN/WiFi Upgrade Inventory Visibility BI/Analytics Mobile for Associates Advanced CRM/Loyality 3.9% Average increase in-store technology spending in 2016 Source: 2016 IHL / RIS Store Systems Study 6.5% 5.0% 4.7% 2.8% 2.4% Predictive Analytics Proximity Marketing Data Visualization RFID Internet of Things Emerging Tech
- 16. 16© 2016 Tyco.All Rights Reserved. Status of In-Store Technology Deployments Source: RIS / Gartner Retail Technology Study 2016 6% 7% 11% 13% 16% 19% 25% 27% 29% 31% 19% 15% 18% 20% 20% 22% 21% 20% 20% 12% 15% 16% 12% 19% 19% 17% 21% 17% 10% 11% 13% 8% 15% 12% 12% 14% 6% 12% 9% 9% Location-based sensing for MarComm In-store video analytics Clienteling/guided selling Shopper tracking capability Digital devices (signage, kiosks, magic mirrors, etc.) Real-time store monitoring / KPIs Mobile devices for associates / manager In-store pickup / return of web goods WiFi for customers In-store shipping Up-to-date tech in place Started major upgrade Will start within 12 months Will start within 12-24 months
- 17. 17© 2016 Tyco.All Rights Reserved. 17 Omnichannel / Multi-Sensored / Mobile Future SCREEN TIME (Per Day) 30 Country Millward Brown study of 16-45 year olds Source: Transparency Research Deloitte Digital Frost & Sullivan Frost & Sullivan Global Theft Barometer IHL Group IHL Group $1.5 Trillion Mobile & Digital Influence on in‐store sales in 2014, up from $334B in 2012 $5,409Million Retail RFID Market By 2020, up from $542M in 2013 $5.8 Billion Global Wearables Tech market by 2018, Up from $750M in 2012 $162 Billion Global Retail Shrink $4.3 Trillion Global Online Retail Sales By 2025, up from $0.55T in 2011 $1.1 Trillion Global Inventory Distortion $634 Billion From Out‐Of‐Stocks 63% Global Retailers Maintaining / Expanding Global Source Tagging Phones 147 minutes TVs 113 minutes PCs 108 minutes
- 18. 18© 2016 Tyco.All Rights Reserved. Age of Amazon: Challenges & Opportunities Source: RIS / Gartner Retail Technology Study 2016 1. Developing personalized marketing capabilities 51% 2. Network and IT systems security 47% 3. Leveraging social media (for sales, CRM, hiring, customer service, etc.) 46% 4. New payment technologies (EMV, contactless, mobile, etc.) 45% 5. Expanding unified commerce (omnichannel) initiatives 44% Top 5 major strategies over the next 18 months Top 5 challenges over the next 3 years 1. Customer data security 49% 2. Retiring legacy systems 46% 3. Optimizing digital commerce as growth channels 39% 4. Application integration 35% 5. Optimizing stores as a growing channel 29% Investments in technologies that improve the retailer’s ability to meet customer expectations, exploit innate strengths, overcome weakness and disintermediate others, will move the needle. Make wise choices.
- 19. © 2016 Tyco.All Rights Reserved. 19 The Disruptive Future of Retail The Disruptive Future of Retail Tony D‘Onofrio May 2016
- 20. 20© 2016 Tyco.All Rights Reserved. 20 Technology Driving Shifts in Retail Power
- 21. 21© 2016 Tyco.All Rights Reserved. 21 EvolvingTechnologySystems ImpactingRetail
- 22. 22© 2016 Tyco.All Rights Reserved. 22 Top Retail Trends Multichannel consumers more profitable than single channel* shoppers to refrain purchasing from store if desired brand not available* *Sources: RIS 2015 Shopper Experience Study; RSR 2015 Omnichannel Report; RSR 2015 Mobile Study retailers believe consumers are using mobile as part their shopping experience* 50% 69% 90%
- 23. 23© 2016 Tyco.All Rights Reserved. 23 Relevancy of the Store Educate & empower in-store employees using technology #1 Brick & mortar stores account retailer revenues* 85% Sources: PSFK and RSR Research; RSR 2015 Store Report Opportunity for improving in-store experience*
- 24. © 2016 Tyco.All Rights Reserved.. 24 The Retailer’s Opportunities Mandates for Omnichannel Shopper Satisfaction in Digital Retailing CONSISTENCY - Product, Price and Service CONVENIENCE - Where / When / How ACCESSIBILITY – All Channels & Locations SERVICE - Balancing Operations, Service & Costs The Digital Future Retail Store
- 25. 25© 2016 Tyco.All Rights Reserved. 25 The Consumer Power What Consumers Want How are Retailers Addressing it?
- 26. 26© 2016 Tyco.All Rights Reserved. The Consumer / Retailer Information Dichotomy Retailers Consumers How do consumers in general feel about disclosing information about themselves? 0% 20% 40% 60% 80% 100% Retailers Consumers Store employees welcome the customer by name when he or she enters the store Source: HUI Research (2015)
- 27. 27© 2015 Tyco.All Rights Reserved. Company Confidential.© 2015 Tyco. All Rights Reserved. Company Confidential. 27 Global Source Tagging & The Future of Retail Future Plans of Using Source Tagging Across Regions Future Plans of Using Source Tagging Across Product Categories The Future of Retail • Less Store Labor / Improved Customer Experience • Interactive Retail Stores with Employees as Brand Ambassadors • Item Level Intelligence Driven by Source Tagging / Out of Stocks FOCUS • A Focus on “Value” Integration • A Sustainable Retail Future
- 28. 28© 2016 Tyco.All Rights Reserved. 28 Technology Will Continue to Disrupt the Store
- 29. 29© 2016 Tyco.All Rights Reserved. Tony D’Onofrio Email: adonofrio@tycoint.com Phone: +41 791 508 208 Thank You
- 30. © 2016 Tyco.All Rights Reserved. Store Reinvented - The Future of the Store “Retailers reported 16.5% YOY improvement in KPI’s related to sales, customer engagement and satisfaction as a result of empowered sales associates” Source: EKN Modern Labor for Omnichannel Success Report
- 31. 31© 2016 Tyco.All Rights Reserved. The Smart Store Shopper Analytics Staff Allocation Loyalty/ Abandonment Zone Performance Market Benchmarks Customer Engagement Draw Rate Foot Traffic Inventory Intelligence Omni-Channel Fulfillment Inventory Visibility Track & Trace Authentication Stock-out Reduction Loss Prevention Loss Pattern Recognition Employee Theft Protection Shrink Reduction Smart Storefronts Multi-Sensored Immersive Shopping Experiences
- 32. 32© 2016 Tyco.All Rights Reserved. RFID Market in Retail: 2010-2020 Revenue Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan By Products By Region
- 33. 33© 2016 Tyco.All Rights Reserved. Benefits from RFID in Retail Revenue Customer Sat Product availability and merchandizing Reduced OOS Better display execution Better omni-channel execution Inventory Intelligence Inventory Accuracy Margin OpEx Planning and allocation Reduced markdowns Reduced inventory carrying costs Better omni-channel execution OpEx Labor efficiency Counting Replenishment Receiving Stocking COGS Loss prevention Shrink pattern recognition
- 34. 34© 2016 Tyco.All Rights Reserved. Macy’s RFID Journey • Inventory count 1x / year • Inventory accuracy deteriorates 2-3% per month • Inventory accuracy 60-70% BEFORE RFID • 1x / year & can cycle count up to 24x / year • Achieve nearly 99% accuracy w/annual inventory • Annual inventory accuracy 95% • RFID categories out performed non-RFID categories with avg. 10% sales lift WITH RFID • B2F – Back to Front, Sales Floor Replenishment • Increased sales and margins, reducing MDs • 1/3 reduction in basic stock required on-hand • Improved display compliance from avg. 65-70% to nearly 100% • P2LU – Pick to the Last Unit • Leverage 15-20% of store inventory that exits in single units • Omni-channel readiness enabling $1B reduction in store inventory • Sales lift on regular & 1st MD merchandise BEYOND REPLENISHMENT Peter Longo Macy’s, President, Operations and Logistics - January 2015 RFID is your foundational ‘air supply’ to deliver an omni‐channel promise. Source: GS1 panel discussion ‐‐ January 13, 2015 at NRF Big Show