Future of Retail - CACDS Conference 2011

The Future of Retail:
The World Beyond Recession
CACDS Canadian Drugstore Conference 2011

Patrick Rodmell
President + CEO
Watt International
prodmell@wattintl.com

www.wattisretail.com

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…”


What We Do
We work with our clients to uncover insights, define winning retail strategies,
then bring them to life through products, actions, people and physical expressions.

strategy
Brand Positioning
Marketing Strategies
Channel Strategies
Product + Merchandise Strategies
Private Brand Architecture
Business + Strategic Planning
Management Consulting

research creative
Retail Design
Trends + Innovation Reports Package Design
Financial Analysis BrandvertisingTM
Stakeholder Interviews Brand Name, Identity
Consumer + Shopper Research Merchandising + POP
SWOT + Best Practice Analysis Integrated Communications
Need State + Path to Purchase Web, Mobile + Social Media
Total Production Management
Value Engineering


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!


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.


YOUR turn to make a prediction:
Ten years from now, the Biggest Change We Will See At Retail Will Be:

2007
16% 0% 1. Smaller stores with more streamlined
product mix
20% 0% 2. More stores and brands that are aligned
with environmental and wellness values
47% 0% 3. New technology playing a greater role
in information and transactions
17% 0% 4. Reduced store traffic, as consumers buy
more online and get home delivery
10


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;
- Blurring channels
- Shrinking middle class
- Ethnic influences…


Trends that will shape the Future of Retail:

Trend

1 Shopper + Consumer Insights go mainstream


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”


Then came rewards programs and the data started flowing…


The brands/products we buy The places we buy them

Who‟s calling the shots now?


Make no mistake – the Shopper is now in charge!

…and it‟s only going to get
worse…or better!


social media and mobile connectivity have
changed the Path to Purchase and dramatically
increased the importance of understanding the
“Perception” of your brand


Understanding shopper perceptions is key…


…and understanding how they shop is essential



Trend


1. Women: Chief Purchasing Officers


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]


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

automotive marketers

investment marketers
[Source; Too Busy to Shop: Kelley Skoloda]


The Dove ads celebrated “authenticity” and self-esteem…
and drove up soap sales 600%! (Unilever)


Harley Davidson

Today, women riders
constitute roughly 12%
of Harley sales, up from
2% in 1995.

Women value authenticity, community,
connectedness and quality of life.

For everyone, the more „virtual‟ our life gets, the
more we crave authentic experiences.

Does your brand and retail experience exhibit
these qualities?



Trend



2. Perdido en la traducción


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)


Papa John‟s

A greater proportion
of Hispanic customers
place orders using
cellphones.

http://espanol.papajohns.com

How Canadians are Different – Female Immigrants

In 2006, international migration accounted for two-thirds of Canadian population growth and immigration is
soon to be Canada‟s only source of population growth (due to low fertility and aging of the population).

She’s Somewhat Older She’s More Educated

She’s Arriving from South & East Asia – versus South & Central America

NOTES: Data only includes individuals aged 25-54 and only new immigrants (no more than 5 years in the country) who
were aged 25 or older at arrival. We‟re only showing females, trends for males were for the most part similar.



Trend



2. Perdido en la traducción

3. Generation M.


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


Pick the Statement That Most Accurately Reflects Your Opinion:
Generation M (16-21 years old) will:

2007

20% 0% 1. Be more brand loyal than consumers
are today
6% 0% 2. Demonstrate about the same loyalty as
consumers do today
40% 0% 3. Be more likely to switch brands
4. Have few, if any, real brand
34% 0%
relationships.
10



Trend

2 Economic Instability changes the value equation
1. It’s smart to save


Target

Saving can be fun!.

Same Store Sales - 2010

Source: AC Neilsen: Company press releases; latest monthly or quarterly report


Trend


1. It‟s smart to save

2. The rationalization of retail


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


Smaller Store Formats

Smaller Store Formats

• Walmart launches Express store format

• Best Buy Mobile, Office Depot and Staples are all coming out with small format models


Trend


1. It‟s smart to save

2. Made in America

3. The rationalization of retail

4. The continued assent of private brands.


Private Label Unit Share

Economic Growth Recession

Post Crisis Norm

Pre Recession Norm

2005 2006 2007 2008 2009 2010

Source; Nielsen



Trend

3 Conscious Consumption becoming a decision driver

1. Environmental Distress


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

P&G Compacted Detergents

Could help save
up to 22 million
pounds of total
packaging in
North America
each year

Wine Self-Service Kiosk… in France!

Electric Cars

Charging Stations at Retail
What happens to gas stations?


Trend

3 Conscious Consumption becoming a decision driver

1. Environmental Distress

2. Social Concern


Social

1. Human Rights
2. Fair Trade
3. Philanthropy
4. Diversity


Pepsi

The Pepsi Refresh project
awards up to $1.2 million in
grants each month to fund
community projects. Visitors to
Pepsi‟s website or facebook
page vote for their favourite
idea.

The website has received over
4 million “Likes” on Facebook

Check it out:
www.refresheverything.com

Which of the following technologies do you think will deliver the
most value to your business within the next five years

2007

18% 0% 1. Connecting with customers through
cellphones/smartphones
10% 0%
2. In-store media

37% 0% 3. Internet e-commerce

36% 0% 4. In-store interactive media

10



Trend Adaptation of Technology: putting control in the
hands of the shopper
4


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


Walgreens iPhone and Android Apps

• Express refills by scan or by entering your prescription number
• Locate a store
• Order photos
• Get weekly ad
• Create a shopping list


Game-changers:

1. Location-based Marketing

2. Mobile Self-checkout POS
- no price tags; personalized pricing
- reduced in-store labor


QR Codes and Barcodes

1 2 3

4
6
5

Levi‟s

The Facebook “Like” button:
when will it start showing up in stores?

Mobile Apps

Loopt and Neer‟s location-
triggered reminder apps

Loopt: limited-time perishable-
inventory deals close to their real-
time location.

Neer: links tasks to retailers and
sends a reminder message when
the user is close by.

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.

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?


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.


rewards

social PRX
Personal Retail eXperience access

entertaining


If you asked your customers, they would tell you that it’s exciting
to shop your store

2007

22% 0% 1. Absolutely

33% 0% 2. Somewhat

35% 0% 3. Not really

10% 0% 4. Not at all
10


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


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.

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.

Step 1:
It‟s NOT about a retail experience;
it‟s about experience retail.


What makes this an “amazing retail experience”?

Products, People and energy!

As virtual experiences and the physical
world collide, the need for integration of
all brand touchpoints becomes even
more critical


Rogers

“We appreciate your business”

“Valued Rogers Customer”

“These exclusive savings… are
not available to everyone”

“…a price reserved exclusively
for you”

Rogers

“Exclusive” deal is $30 more than the
standard offer on their website

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

- Redefined value equation – it‟s fun and smart to save
- More private brands

Conscious Consumption becoming a decision driver
3 - 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


Knowing all this,
what does your future look like?

Patrick Rodmell
President + CEO
Watt International
prodmell@wattisretail.com


Thanks for your time!

Patrick Rodmell
President + CEO
Watt International
prodmell@wattisretail.com


DUANEreade – Largest DUANEreade in NYC


DUANEreade


All Retail Shoppers vs. Drug Store Shoppers
Survey Conducted on behalf of PLMA by Buxton Consumer Research Survey of shopping behaviour - 2011

Brands are often not specified on shopper’s lists.
Q. Thinking of what you plan to buy, how often would you say you specify a particular brand name, such as Dove soap or Lipton
tea bags?
Occasionally on the list 38%
Frequently on the list 30%
Rarely on the list 18%
Always or almost always on the list 9%
Never on the list 5%

Most drug store shoppers don’t put brands on their lists.
Q. In general, when making out your list for the drug store, would you say that you most often write down brand names or list
products only by type?
List products mostly by type 78%
Mostly list products by brand name 22%


All Retail Shoppers vs. Drug Store Shoppers
Survey Conducted on behalf of PLMA by Buxton Consumer Research Survey of shopping behaviour - 2011

Drug store shoppers don’t rely on lists.
Q. Thinking about other types of stores where you shop, do you also make a shopping list before going to the drug store?
No 62%
Yes 27%
Don‟t shop at a drug store 12%

In drug stores, shoppers compare prices and read labels.
Q. When you shop in a drug store would you say you are more or less likely, as compared to shopping in the supermarket, to do the following?
(Percent of those saying “more likely”)
Compare prices 60%
Read labels 42%
Buy the retailer‟s store brand 32%
Buy the national brand 19%
Never 3%

Most shoppers continue to buy health and beauty items at mass merchandisers.
Q. Thinking of health and beauty products, at which of the following types of stores would you say you are most likely to buy them?
Mass merchandiser 52%
Drug store 18%
Supermarket 12%
Dollar store 7%
Beauty specialty 4%
Club store 3%
Other 2%
Don‟t know 2%


Future of Retail - CACDS Conference 2011

Recomendados

Recomendados

Más contenido relacionado

Último

Último (20)

Destacado

Destacado (20)

Future of Retail - CACDS Conference 2011

Notas del editor