4. “The digital revolution
is transforming how
customers behave…We
cannot differentiate
between online and in
store. We must use
the stores to support
the online offer and
visa-versa.”
Philip Clarke, CEO Tesco, BRC
Symposium, London June 2011
5. “The shopping journey is
going online and offline
all the time”
Brian McBride, Managing Director, Amazon.com, UK
Retail Week Conference, London, 03/10
5
6. An example from automotive:
The new vehicle ‘path to purchase’ in the US
35%
30%
25%
20%
15%
10%
5%
0%
Dealer
Web
Beginning
Search
Early
Middle
Late
Purchase
End
7. The electronics ‘path to purchase’ in Russia
35.0
% of electronic shoppers
30.0
25.0
20.0
Store
15.0
Web
10.0
5.0
0.0
Beginning
Search
Early
Middle
Late
Purchase
End
8. Click and Collect fast emerging as a preferred
model – grocery and General Merchandise
Metro Group opened second drive-in Real outlet
in Germany in 2011
Casino, France, offers click & collect in 90 of its
120 Geant hypermarkets
Sonae, Portugal, launched Continente Drive click
& collect, April 2011
Tesco - Installing collection points and
ordering kiosks in their stores.
Louis Delhaize plans to equip half its French Cora
hypermarkets with a drive-in facility by end 2011 in
2011
LeClerc, France, aiming Euro 1.1bn sales from 400
Drive stores by 2015
„Site to store‟ is a key element of
the new Walmart Express format
launched in the US in mid-2011.
9. Aiming for seamless delivery across channels
M&S: Shop Your Way
Shop Your Way
Aims to deliver seamless shopping to
customers across all M&S channels,
whenever, wherever, however they
wish
05 / 2010 launched fully enabled
mobile website
12 months to 09/11
160m visits to M&S website (+18%)
Transactions +21%
Revenues + 20%
Conversion +3%
10. New school convenience - technology enabled
to make online and in-store seamless
Product
email
In-store
support
web
offer
In-store
sale
Recycle
email
11. How to be seamless across multiple channels:
What shoppers in the UK want
Consistent returns policy, in store and online
Has a reasonable timeframe for returns
Allows me to shop online but return in store
Store is a place to go to pick up something I’ve
already learned about online
Makes a conscious effort to link the store and web
brand image
Makes a conscious effort to link the store and web
service support
Easy to move between their website and store
Importance
UK retailers where being
“Simple and seamless”
is highly valued:
Dimensions of “seamlessness”
19. amazon and the power of online
Mission
To be the place where people can find, discover & buy
anything online
Global Banner Sales (USD bn)
140
Amazon: Global Banner Sales, 2005-2015f (USD bn)
120
USD126.9 bn
100
World’s 6th
largest retailer
World’s 31st
largest retailer
80
60
World’s 99th
largest retailer
USD37.7 bn
40
USD9.2 bn
20
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Note: f - forecast
Source: Planet Retail
Amazon trialling
collection lockers in
shopping centres, office
buildings in UK and in 7Eleven in US
20. No store walls = no stock limits
Amazon’s assortment by marketplace
Marketplace
ASIN (SKU) count
Amazon.com
127,811,266
Amazon.co.uk
101,680,706
Amazon.de
91,933,337
Amazon.fr
75,252,368
Amazon.co.jp
59,104,884
Amazon.ca
25,973,378
Amazon.es
18,874,265
Amazon.it
18,196,941
Amazon.cn
4,483,795
ASIN counts at 20/02/12
21. On track to overtake Walmart
as the world’s largest retailer?
Source: Retail Net Group, US
22. Debenhams –A UK department store now
in Germany but without stores…
24. asos – Fashion clothing without any stores
• Strategy: Move from being a UK shop to a global fashion destination
•
International sales latest quarter +49% to 65% of asos total sales
– Of which, Rest of World (mostly Australia) +61%
29. Digital natives – they’ve never known
a world without mobile
Close to ubiquitous
penetration of mobile phones
Rapid penetration of
smartphones and tablets
Accelerating evolution of
devices and capabilities
(3G, 4G, NextG…)
31. Leveraging data to deliver more
personalised promotions
Major UK grocers have used technology to launch price
guarantees which calculates the costs of shopping
versus rivals and offers customers a refund if their shop
was cheaper elsewhere. Sainsbury’s Brand Match,
launched in mid-2011, is perhaps the most innovative
offering a coupon directly at the till at the time of
purchase.
Source: Planet Retail
37. Harness social media – because shoppers are
less trusting in institutions and traditional media
38. Social media can build – and destroy –
brands overnight
Example: Mumsnet
Launched in UK 2000
25,000 posts every day
850,000 regular users
80% of whom said they wouldn’t
make a purchase before
consulting the site or their peers
39. Social media and the power of crowds
82%
of UK consumers use the
internet at least once a
week to research products
or services
Groupon – 120m subscribers
mid-2011 (50m Dec 2010)
41. Shoppers demand to be able to engage
with retailers on their terms
Example: Click and collect at Argos (UK, General Merchandise)
: Check & Reserve, 2006-2011 (%)
30%
Percentage of Total Sales
26%
25%
22%
20%
16%
15%
12%
10%
5%
8%
5%
0%
2006
2007
Source: Home Retail Group
2008
2009
Year End Feb
2010
2011
42. Many retailers will have to manage more
complex portfolios
Smaller stores (less than 2,500 square metres) will
increase in importance as hypermarket growth slows
Tesco: Sales by Channel, 2006e-2016f (%)
100%
14.6%
90%
23.7%
32.2%
80%
Total Sales (%)
70%
Services
60%
E-commerce
50%
40%
Other
85.4%
76.3%
30%
67.8%
20%
10%
0%
2006
2011
2016
Note: Other includes department, fashion & accessories, cash & carries, home garden auto stores and wholesale; Calculated using GBP;
<2,500 square metres includes supermarket & neighbourhood + convenience and forecourt; e – estimate; f – forecast.
Source: Planet Retail
Convenience &
forecourt
Supermarket &
neighbourhood
Hypermarket &
superstore
> 30%
of sales
by 2016.
44. Price transparency driving persistent
downward pressure on retailers’ margins
Technology to
help establish
trust, through
transparency
45. Sourcing transparency
Technology being leveraged because shoppers want to ‘see behind
the scenes’
In 2011, Aldi became the first
retailer in Germany to proactively offer traceability
information for fresh meat on
smartphones.
ASDA responded to negative criticism of its farming and
factory policies by embracing transparency, installing
webcams with the live feeds viewable to the public.
52. Aiming to be a global
power brand in apparel
Turning private label into
standalone brands
53. Customers contributing to the product
development process
Example: ASDA (UK Grocery)
Own brand re-launched late
2010
200,000 blind taste tests with
40,000 consumers
Standard line became
‘Chosen by You’ when
relanched in late 2010
55. Transparency and sustainability –
2 sides of the same coin
71%
of UK consumers believe that
companies have a responsibility
to support the society in which
they operate
• ‘Green’ and ‘ethical’ are not
differentiators – they’re mandatories
• BUT, shoppers won’t pay more for
‘doing the right thing’
M&S’s Objective:
To be the world’s most sustainable
major retailer by 2015
56. Sustainability credentials – A
mandatory, not a differentiator
“We want to be a
restorative retailer. It’s
not enough to be a
sustainable retailer.”
Mark Price
Managing Director
Waitrose, 8/6/11
61. Pressure on large space store in some
categories
Example: Best Buy – Fewer but better large stores supported by
more physical touchpoints with smaller, focused stores
2012 strategic plan – Big Box store size down 20%; points of presence up 20%
65. Genuinely customer centric
No more rhetoric. The customer will genuinely be at the centre of the retailer’s
engagement efforts
Using social and digital media to share information that matters to shoppers:
‘Nothing to hide’ mantra
Delivering across multiple touchpoints
Multiple points of engagement with the shopper, online and offline
Seamless movement by the shopper across multiple touchpoints
Stores still important for many, but not the only – or even the main – point of
engagement
Click and collect likely to be important for many
Digitally adept
Using technology outside the store for shopper engagement
Using technology inside the store to improve efficiency and / or experience
Brand focused
To deliver shopper engagement across multiple touchpoints
To build shopper confidence throughout the business
67. 13 themes for 2013
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Omnichannel changes everything
Stores must reinvent to stay relevant
The rise and rise of non-store retailing
Mobile as a key engagement platform
More personalised shopper engagement
The power of social and sharing
The challenge of complexity
The challenge of transparency
Winning by changing category conventions
Retailers as brands
Responsibility as mandatory
Polarisation and the disappearing middle ground
The dangers of playing safe
68. 13 themes for 2013
Shopper
Engagement
Themes
Business
Initiative
Themes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Omnichannel changes everything
Stores must reinvent to stay relevant
The rise and rise of non-store retailing
Mobile as a key engagement platform
More personalised shopper engagement
The power of social and sharing
The challenge of transparency
The challenge of complexity
Winning by changing category conventions
Retailers as brands
Responsibility as mandatory
Polarisation and the disappearing middle ground
The dangers of playing safe