Patrick Rodmell's highly visual, interactive and provocative look at:
1) The prominent trends that will influence what tomorrow's customers will buy, how they will buy it and where they will shop;
2) The role insights and shopper marketing play in defining the path to purchase;
3) Innovations that have been developed in response to these trends that are currently being tested in the retail industry; and
4) A hindsight look at the predictions Rodmell made in 2007, and how many have come to fruition.
1. The Future of Retail:
The World Beyond Recession
GlobalShop 2011
Patrick Rodmell
President + CEO
Watt International
prodmell@wattintl.com
www.wattisretail.com
2. Watt International | Overview
Integrated Retail Agency
+40 years; +40 countries
We help retailers and brands find ways to sell
MORE things, to
MORE people,
MORE often.
“Watt International is a unique group of talented people,
encouraged to think beyond their specialty…”
www.wattisretail.com
5. Moderate Entertainment: Realtime Polling
1. Read the question
2. Select your answer by pushing the corresponding number
3. Change your mind if you want to – you‟ll have 10 seconds
4. We’ll see the results in real time…and results from 2007!
www.wattisretail.com
6. Predictions from 2007
Engaging through in-store technology
1. Energy expended through the course of our everyday lives will
be captured and used as a major power supply
2. Authenticity will be a key brand attribute in the new world of
skepticism
3. The potential to scan codes and obtain product information
will soon be mainstream
4. In a world of “accelerated adaptation of technology”,
companies that look for “competitive edge” vs. “bleeding
edge” will be the winners.
www.wattisretail.com
7. YOUR turn to make a prediction:
Ten years from now, the Biggest Change We Will See At Retail Will Be:
2007
16% 19% 1. Smaller stores with more streamlined
product mix
20% 28% 2. More stores and brands that are aligned
with environmental and wellness values
47% 41% 3. New technology playing a greater role
in information and transactions
17% 12% 4. Reduced store traffic, as consumers buy
more online and get home delivery
www.wattisretail.com
8. Conclusion:
Consumer/Shopper behaviour and the retail landscape are
going to change dramatically in the post-recession era.
But don’t blame the recession.
The recession is simply accelerating changes that were already
underway due to other factors, for example;
-Too many stores and product options
-Shrinking middle class
-Demographics….
www.wattisretail.com
9. Trends that will shape the Future of Retail:
Trend
1 Shopper + Consumer Insights go mainstream
www.wattisretail.com
10. Who „Owns” the Consumer?
The brands/products we buy The places we buy them
The game changer…
Who‟s calling the shots now?
But this only told us “what”;
NOT “who”
www.wattisretail.com
11. Then came rewards programs and the data started flowing…
www.wattisretail.com
12. All we can do is learn everything we can about them
www.wattisretail.com
13. How many Reward Programs do you belong to?
2007
13%
1% 1. None
21% 18% 2. 1 to 2
31% 36% 3. 2 to 4
36% 45% 4. 5+
www.wattisretail.com
14. The brands/products we buy The places we buy them
Who‟s calling the shots now?
www.wattisretail.com
15. Make no mistake – the Shopper is now in charge!
…and it‟s only going to get
worse…or better!
www.wattisretail.com
16. social media and mobile connectivity have
changed the Path to Purchase and dramatically
increased the importance of understanding the
“Perception” of your brand
www.wattisretail.com
19. Trends that will shape the Future of Retail:
Trend
1 Shopper + Consumer Insights go mainstream
1. Women: Chief Purchasing Officers
www.wattisretail.com
20. Women: Chief Purchasing Officers
1.Women make;
Trend
- 93% of over-the-counter pharmaceutical purchases,
1 - 93% of food purchases,
- 92% of vacation buying decisions,
- 66% of personal computer purchases...
[Too Busy To Shop: Marketing to Multi-Minded Women]
2.Women influence 95% of all purchases and control
80% of all household spending [Marti Barletta, Marketing to Women]
www.wattisretail.com
21. Marketers still aren’t getting it
1. 59% of women feel misunderstood by
Trend
food marketers
1 2. 66% of women feel misunderstood by
health care marketers
3. 74% of women feel misunderstood by
automotive marketers
4. 84% of women feel misunderstood by
investment marketers
[Source; Too Busy to Shop: Kelley Skoloda]
www.wattisretail.com
22. Women value authenticity, community,
connectedness and quality of life.
The more „virtual‟ our life gets, the more me
crave authentic experiences
Does your brand and retail experience exhibit
these qualities?
www.wattisretail.com
23. The Dove ads celebrated “authenticity” and self-esteem…
and drove up soap sales 600%! (Unilever)
www.wattisretail.com
25. Trends that will shape the Future of Retail:
Trend
1 Shopper + Consumer Insights go mainstream
1. Women: Chief Purchasing Officers
2. Perdido en la traducción
www.wattisretail.com
26. Perdido en la traducción
1. By 2015, Hispanic consumers will play a major role in contributing to
the upsurge of retail spending
2. Hispanics are adopting the internet twice as fast as the general
market - 14 percent growth vs. 7 percent (Ethnic Technologies, 10/06/09)
www.wattisretail.com
27. Papa John‟s
A greater proportion
of Hispanic customers
place orders using
cellphones.
http://espanol.papajohns.com
28. Trends that will shape the Future of Retail:
Trend
1 Shopper + Consumer Insights go mainstream
1. Women: Chief Purchasing Officers
2. Perdido en la traducción
3. Generation M.
www.wattisretail.com
29. Generation M
• Born after 1990: The coming consumer generation
• Don‟t know life without the internet
• Short attention spans
• Don‟t trust advertising – look to their social network
• Mobile technology is a commodity
• Sensitive to our environment
www.wattisretail.com
30. Pick the Statement That Most Accurately Reflects Your Opinion:
Generation M (16-21 years old) will:
2007
20% 14% 1. Be more brand loyal than consumers
are today
6% 9% 2. Demonstrate about the same loyalty as
consumers do today
40% 43% 3. Be more likely to switch brands
4. Have few, if any, real brand
34% 34%
relationships.
www.wattisretail.com
31. Trends that will shape the Future of Retail:
Trend
2 Economic Instability changes the value equation
1. It’s smart to save
www.wattisretail.com
33. Target
Saving can be fun!.
Same Store Sales - 2010
Source: AC Neilsen: Company press releases; latest monthly or quarterly report
34. Trends that will shape the Future of Retail:
Trend
2 Economic Instability changes the value equation
1. It‟s smart to save
2. Buy American
www.wattisretail.com
35.
36. Trends that will shape the Future of Retail:
Trend
2 Economic Instability changes the value equation
1. It‟s smart to save
2. Made in America
3. The rationalization of retail
www.wattisretail.com
37. The Rationalization of Retail – Changing Retail Formats
• Retailers are open to new options, such as becoming
landlords to other retailers
• Retailers are opening smaller format stores
• Reigning in previously stand alone stores and nesting them
in existing stores
www.wattisretail.com
38. Smaller Store Formats
Smaller Store Formats
• Walmart will open its first Express
store this year
• Best Buy Mobile, Office Depot
and Staples are all coming out
with small format models
39. Gap
• Away from stand-alone: The Gap
is gradually reverting to nesting its
Baby Gap and Gap kids offerings
within its Gap store
40. Trends that will shape the Future of Retail:
Trend
2 Economic Instability changes the value equation
1. It‟s smart to save
2. Made in America
3. The rationalization of retail
4. The continued assent of private brands.
www.wattisretail.com
41. Private Label Unit Share
Economic Growth Recession
Post Crisis Norm
Pre Recession Norm
2005 2006 2007 2008 2009 2010
Source; Nielsen
www.wattisretail.com
42. Trends that will shape the Future of Retail:
Trend
3 Conscious Consumption becoming a decision driver
1. Environmental Distress
www.wattisretail.com
43. Marks & Spencer
„Sustainable Learning‟ store
• Harvested rainwater will
supply all the toilets
• Heated by expelled heat from
its refrigeration units
• Electric car charging points
will be available in the car
park
• Goal – to be the world’s most
sustainable major retailer by
2015
47. Trends that will shape the Future of Retail:
Trend
3 Conscious Consumption becoming a decision driver
1. Environmental Distress
2. Social Concern.
www.wattisretail.com
50. Which of the following technologies do you think will deliver the
most value to your business within the next five years
2007
18% 66% 1. Connecting with customers through
cellphones/smartphones
10% 5%
2. In-store media
37% 15% 3. Internet e-commerce
36% 14% 4. In-store interactive media
www.wattisretail.com
51. Trends that will shape the Future of Retail:
Trend Adaptation of Technology: putting control in the
hands of the shopper
4
www.wattisretail.com
52. Mobile Rules
1. Mobile usage up: In December 2010, nearly
47% of mobile subscribers in the US accessed
mobile media
2. More than 64% of consumers want to
receive information and notifications about
shopper loyalty offers via email
3. Redemption rates for mobile coupons are
10x that of paper coupons
www.wattisretail.com
56. Mobile Apps
Loopt and Neer‟s location-
triggered reminder apps
Loopt: limited-time perishable-
inventory deals close to their real-
time location.
Neer: link tasks to retailers and
sends a reminder message when
the user is close by.
57. Virtual Coupons
Virtual butterflies appear on consumers phones as they approach one of the participating shopping
centers. Shoppers must “catch” the butterflies in order to activate the coupons.
58. What people love about the virtual world;
1. Limitless Horizons
2. Personalization
3. Connectedness
4. Engagement
5. Entertaining
How can you deliver this through physical retail?
www.wattisretail.com
59. Since it‟s inception, the digital world has tried to emulate
the positive features of the real world.
It’s time to turn the tables.
www.wattisretail.com
60. rewards
social PRX
Personal Retail eXperience access
entertaining
www.wattisretail.com
61. If you asked your customers, they would tell you that it’s exciting
to shop your store
2007
10% 22% 1. Absolutely
52% 33% 2. Somewhat
36% 35% 3. Not really
1% 10% 4. Not at all
www.wattisretail.com
62. Personal Retail Experience technology
Engaging through in-store (PRX)
In a recent survey in the UK, 40% of respondents said they
recommended retailers to friends as a direct result of a positive
technology-enhanced experience at the store
www.wattisretail.com
63. Adidas
The new touch-screen interactive adiVerse
Footwear Wall displays as many as 8,000
shoes for shoppers to view. The wall renders
products in 3-D, and allows a shopper to spin
and zoom in on the shoes, and call up
specs.
64. JCPenney
Self-Service Kiosk
• View product availability
• E-mail images and information
• 360-degree views and zoom features
• Scan the bar code of an in-store item to learn more about the
product‟s features
• Provide product recommendations for complementary items
• Online “dressing room – with directions
• Print out a receipt and purchase an online item at an in-store
register, with the rest of their in-store purchases.
65. Walgreens
Virtual makeover booth at Walgreens
features a built-in camera for customers to
take their picture and experiment with
various looks while in store.
66. Intel Interactive Screen
The informational overlay onto the physical space
behind is similar to augmented reality.
67. Step 1:
It‟s NOT about a retail experience;
it‟s about experience retail.
www.wattisretail.com
73. IKEA
Pop-Up Stores
IKEA – Created displays in dense urban locations to
reach their target market (New York City, Downtown
Toronto, Subway Terminals).
76. What makes this an “amazing retail experience”?
Products, People and energy!
77. Convergence:
As virtual experiences and the physical
world collide, the need for integration of
all brand touchpoints becomes even
more critical
www.wattisretail.com
78. Rogers
“We appreciate your business”
“Valued Rogers Customer”
“These exclusive savings… are
not available to everyone”
“…a price reserved exclusively
for you”
79. Rogers
“Exclusive” deal is $30 more than the
standard offer on their website
81. The Future of Retail is being shaped by;
1 Shopper + Consumer Insights going mainstream
- Rewarding Shoppers will be price of entry
- Women and Ethnic sensitivity – Authenticity and character
- The M-Powered Generation
2 Economic Instability changes the value equation
- Redefined value equation – it‟s fun and smart to save
- “Buy American”
- More private brands
3 Conscious Consumption becoming a decision driver
- Cause Marketing
- Packaging innovation
- Game change at gas/convenience
4 Adaptation of Technology putting control in the hands of the shopper
- Smaller stores; pop-up stores
- Personal Retail Experiences (customization, flexibility)
- Flexible retail – including Vending/Kiosks
- Experience Retail – connected and engaged
- Integration of all brand touchpoints – online and off
www.wattisretail.com
82. Thanks for your time!
prodmell@wattintl.com
www.wattisretail.com
. . .
Insight Strategy Creative