One perspective about the future of shopping is that it will evolve into the "Store of One"

1. The Future of Shopping AKA: The Toughest Race on Earth
Gary Orosy, O&CO
March, 2013

2. Topics
•The Premise
•The Race is On!
•Stage 1: Future Shopper Types
•Stage 2: The Customer’s Equipment
•Stage 3: The Retailer’s Equipment
•Who Will Win?

3. THE PREMISE IS SIMPLE THE SOLUTION IS COMPLEX

4. Up until very recently, shopping was a common experience, shared by all
Everyone went to a store and got their stuff
But now multiple technologies are shape- shifting the marketplace …folks are getting their stuff in different ways
This development has started “the greatest race on earth”

5. THE RACE IS ON!

6. The race is on…two groups of contestants
The Customer
A customer wants to:
Make better decisions,
Save time,
Live better
The Retailer
Retailers want to:
Acquire more customers,
Increase lifetime value,
Make more money

7. For customers/shoppers, the race is for time
Source: TimeUse Institute, 2011
Weekly Time Allocation for Grocery Shopping
33 to 36 hours/year, almost a complete work week

8. For retailers it is about the prize
To win the shopper’s heart, mind and pocketbook…is a big prize for retailers

9. How big is the prize, you ask?
Total US Retail Sales
$4.4 Trillion
Source: Department of Commerce, December 2012
Total Global Retail Sales
$14.3Trillion
Source: Canadean, 2011
Total US GDP
$15.1 Trillion
Source: The World Bank Group, December 2012
Total Global GDP
$67.3Trillion
Source: CIA World Fact Book, 2012 Est.
/
/
= 29%
= 21%

10. But…what it takes is not easy
Retrofitting an industry:
HUGE technology integration issue +
new, smart supply chains =
multiple options for purchase and delivery

11. That is why it is the toughest race in the world
The Antarctica Desert Race:
One of the official “four” desert races in the world, but clearly the toughest.
Antarctica is the great last desert - a polar region with little precipitation, no lakes and no rivers.
Fifteen competitors completed 250 kilometers – 168 miles in three locations: Esperenza, Deception Island and King George Island.
Competitors are delivered to each stage by zodiacs. Equipment must be transported in waterproof bags
Pretty much analogous to the toughest sport race in the world

12. Retailer: what does this have to do with me?
•Are you one of these five brands…as researched by Forbes, 2012? Customers were asked, “which will be defunct?”

13. Major problem…
Here’s where retail buyers live
Here is where the race is run
Market conditions for success:
•Affluent customer population
•Low unemployment, deflationary economy
•Pursuit of luxury goods and perception of better lives
Market conditions for success:
•Thoughtful customers chose products carefully
•Economic conditions can be unpredictable and shift geographically
•Customers are value-sensitive and SMART

14. Welcome to the future of shopping
•It’s the greatest race of all time
•For the biggest prize on the planet
•A zero-sum game
•Winners will take home the entire prize
•Losers will be in line at the soup kitchen

15. RACE: STAGE I -- ESPERANZA FUTURE SHOPPER TYPES

16. ESPERANZA BASE
Esperanza (Spanish "Hope Base") is located in Hope Bay, Antarctic Peninsula. It is one of only two civilian settlements on Antarctica (the other being Chilean Villa Las Estrellas)

17. From the data, change in shopping approach is underway
Source: TimeUse Institute; projections are for further trends in the same direction

18. Shoppers shift to use time to research and learn about lifestyle solutions

19. How customers research solutions
50% of consumers spend 75% or more of their total shopping time conducting online research.
–From 2010 to 2011, these numbers doubled!
Other findings:
•1 in 3 shoppers (34%) spends a few days conducting research about important products such as computers, appliances, and TVs before purchase.
•More than 4 in 10 of shoppers (44%) start online product research process with a search engine.
Source: Hubspot, 2011

20. Customers are forming new shopper segments
Four types of shoppers are solidifying their behavioral affinity or lack thereof for the experience…
Interest in Shopping
Value of Time
Bankers
Savers
Splitters
Investors
High
Low
High

21. Definitions – How customer segments are defined…
•Time Bankers: highly value the time they would normally spend shopping to do other things of interest to them. This category is growing.
•Time Savers: know they can “order online or automatically” and not have to trundle off to a brick and mortar, but will do so when necessary. This segment is growing.
•Time Splitters: buy everything they can automatically (toilet paper, toothpaste, etc.) and shop only for those items of significant interest or investment. This segment is forming and is rapidly developing.
•Time Investors: “we like to shop and shopping is what we do” types who enjoy the experience…this segment is declining and is the source of growth for other segments

22. STAGE II: DECEPTION ISLAND THE EQUIPMENT OF CUSTOMERS

23. DECEPTION ISLAND
The derelict hangar The destroyed British base Remains of the whaling station’s boilers

24. What shoppers “pack”
Some say in a few years retail stores will exist for a "touch and feel" experience, but no actual sales.
By Alejandro Gonzalez, USA TODAY
The convergence of smartphone technology, social-media data and futuristic technology such as 3-D printers is changing the face of retail in a way that experts across the industry say will upend the bricks-and-mortar model in a matter of a few years.

25. Customers are armed to shop >>

26. With an invaluable tool for shopping

27. Global shoppers have access to Internet resources

28. Smart devices as fashion statements
Project Glass. Interactive glasses superimpose virtual data onto real-world environments. Deeply integrated to Google’s other services—such as Google Maps, Google +and Google Talk (Snap a picture with the built-in camera, for instance, and you can share it with your Circles instantly.)
Whether you see the glasses as bane or boon depends on where you stand on privacy. Until you turn them off, you can give up any illusion of solitude—you’re plugged into the hive mind all day, all the time.

29. Why not shop at home?
•Samsung Galaxy Beam projects images
•Within years these could be immersive, such as like being in-store
•Interactive functionality allows for product examination – opening package – and “touch ordering”

30. Why not just print it out at home?
The Urbee is the world’s first totally “printed” car
Strong as steel, half the weight
What’s in your printer ink supply? Food ingredients by chance?

31. Why Leave Home? Fate of brick and mortar?
Within 10 years, retail as we know it will be unrecognizable, says Kevin Sterneckert, a Gartner analyst who follows retail technology.
Big-box stores such as Office Depot, Old Navy and Best Buy will shrink to become test centers for online purchases. Retail stores will be there for a "touch and feel" experience only, with no actual sales.
Stores won't stock any merchandise; it'll be shipped to you. This will help them stay competitive with online-only retailers, Sterneckert says

32. STAGE III: KING GEORGE ISLAND THE EQUIPMENT OF RETAILERS

33. KING GEORGE ISLAND
In the mid-1990s Patriarch Alexius II of Moscow gave his blessing for this audacious project. The church was constructed in Russia and transported to its present location. One or two monks from Troitse-Sergiyeva Lavra, considered the most important Russian monastery as it is the spiritual center of the Russian Orthodox Church, volunteer to man the church year-round.

34. Big data = Competitive advantage
Companies that have taken on big data initiatives have a 4 percent greater rate of customer growth year-over- year than their counterparts

35. Retailers appeal to specific customer needs
"The first 15 years of online shopping was about making it easier for people to find and purchase items they were looking for," says David Fisch, director of platform partnerships at Facebook, which is working closely with retailers.
"Now, it's about helping you find what you may not know about, based on your social (media profile)."

36. Big Data: making stores smarter
Merchants know what you plan to buy next.
Target combs shopping data via purchases, e-mail, activity on Target.com accounts and more to determine which customers are pregnant, so it can sell goods popular to them such as orange juice
Target spokeswoman Molly Snyder acknowledges it uses "research tools that help us understand guest shopping trends … (but) we take our responsibility to protect our guests' trust in us very seriously."

37. Enhanced store experience with AR
Augmented reality technology adds a visual layer of information on top of surfaces such as a mirror.
AR displays are being tested to show video a curved wall at the NASCAR Museum and in Charlotte within subways and airports.

38. AR: Intel’s magic mirror
Parametric technology simulates body type and how fabrics fit — based on weight, height and measurements.
A digital fitting room.

39. Store of the future, new formats
Stores will become more theatrical, more immersive, and more of a life experience rather than simply a place to get something
Selling products will be selling a good time, a lifestyle."

40. Store layouts = Competitive advantage
Apple applies for patent on centralized floor plan invention
The patent filing, named "System and method for planning layout of a retail store," combines a number of interactive features such as dynamic product displays, floor plan blocking and a centralized management system ensuring customers have a consistent experience when visiting any Apple Stores in the world
The core of the patent filing is a central server that mete interpret data and manage dynamic product signage.

41. Alternative Store Formats
Mattel, WalMart test virtual pop-up store in Canada
QR code-based shopping experience for commuters and gift-givers. Located in the PATH, Toronto's underground walkway, the virtual toy store will run for four weeks

42. “Smart Shelves”
Shelves That Talk Back
Retailers have begun embedding near field communication (NFC) chips, quick response (QR) codes, or other interactive enabling technologies.
Technologies such as smart lamps from Massachusetts Institute of Technology's Media Lab users will be able to access a trove of relevant information about a product, without a mobile device.
Smart-lamp technology senses when a user has picked up a product from a shelf and can project images and interactive video onto the shelf (where a normal, paper tag once was).
Each lamp has its own internet address

43. Shopping carts will become your NBF
Carts programmed to understand shopper buying patterns.
Reveals the speed of the shopper, how long it takes to make a selection, preferred route, and order in which items are placed in the cart.
Equipped with a GPS, plugs into the supermarket’s mainframe computer, making it possible to pinpoint, within inches, exactly where the shopper is, all the while building up a personal shopping profile.
Shopper is promised specially customized discounts, available only to them.

44. Store Service Robots
Carnegie Mellon University
AndyVision — a robotic inventory system — takes the form of an autonomous robot patrols and scans the aisles and shelves.
The robot generates a detailed aisle/shelf-level interactive store map that is displayed on an in-store digital sign for customers to browse the virtual world of the store using gestures on a touch screen interface.
Store staff doesn’t always know where all of the items are located.
Real-time product location and inventory information puts product info into shoppers' hands as well as store staff's hands."

45. VR Codes embed additional information
VRCodes, Viral Spaces, MIT Media Lab Envision a world where inconspicuous and unobtrusive display surfaces act as general digital interfaces which transmit both words and pictures as machine- compatible data. VRCodes present the design, implementation and evaluation of a novel visible light-based communications architecture based on undetectable, embedded codes in a picture that are easily resolved by an inexpensive camera. This design of a visual environment rich in information for both people and their devices

46. Indoor navigation
Meridian "glowing blue dot" feature
Macy's 150,000 square-foot flagship store in New York City.
Meridian's turn-by-turn navigation system at Macy's.
Shoppers get utility to get around in stores,
Retailers send targeted offers to them based on where they are standing.
In 2-3 years out indoor as big as outdoor GPS

47. Is this the store of the future?
Tesco has landed 50% share of the market for food ordered on the web.
The highly-automated, 115,000 square foot warehouse aims to cover a catchment of 980,000 registered households
A "virtual store“, with no customers.

48. WHO WILL WIN?

49. Who will win?
Customers first and foremost will use their shopping time they way they want
Retailers who cater to the four dominant shopping behavior segments will appeal to shoppers
Within each segment there will be winners who adopt the technologies that most thrill and super please their customers…some of these will be bricks and mortar but more and more so, virtual models will prevail

50. The OmniChannel Retailer
Winning retailers interact through countless channels—
websites,
physical stores,
kiosks,
direct mail and catalogs,
call centers,
social media,
mobile devices,
televisions,
networked appliances,
home services, and more.

51. By the way, here’s the race end…
Don’t run into a Lion Seal, they bite!
You can tell by the inscription on the Cairn stone