eretail 2013 - rik veldhuizen - deloitte
DESCRIPTION
TRANSCRIPT
Mobile RetailingIf you don’t do it, someone else will
Rik Veldhuizen
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
According to research...Which Industry has the most potential for new Mobile Growth and Value Generation?
#1 Healthcare / Life Sciences #2 Retail
Source: Deloitte - Open Mobile: The Growth Era Accelerates - 2012
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
According to some other research...Which Industry is most impacted by digital disruption (size/timing)
#1 Retail #2 Finance
Source: Deloitte - Digital Disruption - Short Fuse, Big Bang? - 2013
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
41
CRM
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
TopicsHigh level topics for today
Mobile Influence
What canyou do?
One sizedoes notfit all...
4 +1 P’s
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. 7
Mobile InfluenceMobile Disruption & its Influence on Retail
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Strategy – main considerationsMobile Disruption
Mainframe Terminals“Green screens”
Windows Applications“Fat Client Server”
Web Applications“Thin”
Mobile Computing“Multi-Platform”
1970-1980 1990’s 2000’s 2010’s
Computers Tablets Smartphones Mobile Web Kiosk
MOBILE IS NO LONGER OPTIONAL
+
“The mobile power shift will touch every aspect of our lives at home and at work. This power shift will change how companies and institutions treat us and how they empower their own employees to take action in their immediate context and moments of need”- Forrester, 2013
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Constantly Connected Consumer
Source: Google/IPSOS OTX Media CT Mobile Movement Study, April 2011: PEW Internet & American Life Project
Consumers love their devices
Would rather give
up chocolate
Use it on the toilet
Sleep nextto it
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Define own Purchase Path
Pre-Purchase•Social Interaction•Product Discovery•Marketing•Price Checking
Purchase•Cashless/cardless purchase
online or in-store•Self-checkout
Post-Purchase•Order Management•Customer Service•Loyalty•Social Interaction
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
}Makes prices & quality
transparant to everyone
Customers buy from your competitors in your store!
Reduces number of store trips to comparison shops
Reduces store transactions
Mobile price checking & Social Networking
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
InvasionCompetitors invade your store } changed where they
purchased
changed what they purchased based on product reviews
65%
77%
6 of 10 smartphone owners comparison-shop online while in your store Source: Board of Governors of Federal Reserve System - Consumers & Mobile Financial Systems - March 2012
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Influence Factor
Source: Deloitte Mobile Influence Survey, March 2012
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Influence Factor
Source: Deloitte Mobile Influence Survey, March 2012
“When are you most likely to use your smartphone for a
store-related shopping trip?”
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Influence Factor - by store category
Source: Deloitte Mobile Influence Survey, March 2012
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Influence Factor - the future of retail
Sources: Row 1: eMarketer — US Mobile Commerce Forecast: Capitalizing on Consumers’ Urgent Needs; Row 2: Deloitte analysis; Row 3: Forrester — U.S. Online Retail Forecast, 2011–2016
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Yet, focus is kept on mCommerce
82%“Mobile objective is to drive revenue to website”
Forrester — Mobile Commerce Forecast: 2011–2016, June 17, 2011
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
New Approach to Mobile
Should be strategic imperative because it affects the entire business
Should be C-suite issue, not a low-priority, eCommerce division task
because
17-21% of store sales mobile-influenced by 2016;21% Higher conversion rate driven by mobile
Source: Deloitte Digital - the Dawn of Mobile Influence - 2012
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. 19
What can you do?Knowledge, Experience & Payments
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
If they know more, they buy moreKeep them hooked
• Provide key tools & information to support customers at each stage of decision-making process• Especially in store
• Information needs vary by product & shopping trip• Relevant & tailored• About products, locations, events & promotions
• Be relevant on channels they use
• Interactive experience
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Get to know you customerNow more than ever
• Complicated behaviour
• Omni-channel analysis
• But... new ways of getting to know your customer
• Many customers rather share personal info with ‘machine’ than with sales person
• Intimacy requires• Knowing how customers shop within
product categories• Lots of data• Mining & Analysis• Data analysis
Sources: Deloitte - Mobile retailing - are you ready for radical change? - 2012Zebra Technologies, “How printing from iPad enhances the shopping experience: Lift sales while creating multi-channel opportunities,” 2011
30% sales increase
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Advertising is deadLong live tablet & smartphone advertising
€ 1,90 € 9,70
€ 0,46 € 5,38
• Mobile advertising traditionally grouped tablets & smartphones together
• Prediction is that “mobile” advertising will get split into 2 categories (similar yet distinct)
• Makes it easier to realize value• Lots of innovation & experimentation
• Second/Third screening• In-game advertisements
• Advertisement geared towards type of interaction...• Smartphone > discovery• Tablet > more information• Desktop > transaction
• ...and towards device specifics• Screensize, location based, connectivity type, etc
Source: Deloitte - Technology, Media & Telecommunications Predictions 2013
ad revenue
display revenue
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
ExperienceAre you ready for tomorrow’s store?
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
“While physical stores may have once enjoyed the advantage of crafting cool
shopping experiences, the aesthetics of the iPad and all the social sharing surrounding
online shopping today are now shifting that advantage to online retailers.”
Source: Industry Leader quote - Deloitte - Global Powers of Retailing 2013 - Retail Beyond
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Price & PromotionsStill relevant
• Geofencing• Young technology; adoption is spotty
78% indicate Price & Promotions are most important factors
4-5x (targeted promotions) greater purchasing rate than conventional marketing
7% use phones to learn about in-store promotions or events
Sources: Maxxing, “Increased promotions efforts in response to economic conditions”Forrester, “Can texting save stores? 'Geofencing' lets retailers offer deals to nearby customers, fight price- shopping,” Wall Street Journal, May 8, 2012
• Popularity gaining• Most cost-effective
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Physical SpaceRetail Store is not dead, and is not going away
• Supports consumer interaction with the brand, product and each other - mobile technology as starting point
• Extends virtual world into the physical space - Merge
• Shifts from transactional to experiential
• Change in future store portfolio, footprint, layout & inventory• Brand & Product showroom• Hub & Spoke• In-store pickup• After Sales Service
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Elevate In-Store ExperienceSome examples
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
TalentAssess how to enable store-talent to deliver new service model, with the technology & right-sized workforce to support it
• Mobility = Productivity Improvement
• Free personel from checkout counters & stockroom• Check inventory across stores & distribution centers
• Reduce inventory costs & stockouts and expand shopper’s choices• Out of stock items costs retailers almost 50% of intended purchases• Make inventory visible & keep customers from shopping elsewhere• Provide virtual inventory to mobile users
• Technology-enabled product & service knowledge
• Technology-savvy assistance with sales, order tracking & returns
• Brand ambassadorship (face of the retailer)
• Link personel with customers through mobile• Favorite sales associate
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Process in the StoreSystems of the future
• Enabling Technology
• Store technologies equip talent with tools to deliver superior service
• Accomodate expectations of the connected consumer (drop off, showroom, after sales service a.o.)
• Customer facing tools & technologies deliver customer experience of tomorrow
• Requires flexibility & ability to integrate existing & emerging applications and devices
• Intelligent Mobile Wallet
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. 30
4+1PsProduct, Price, Promotion, Place & ... Payment
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile, Money & CardsTurning into the inevitable Mobile Wallet
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Payments - where are we today?Preparedness of key players to deploy mobile payments
Most viable business model
Source: Deloitte Future of Mobile Payment Survey
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Payments - where are we today?
Mobile Carriers Financial Institutions Handset Makers Merchants Consumers
Wait & See Gains by innovating disruptive models
Loses by being on the sidelines or acts defensively when credible threat emerges
Limited gain from small scale NFC deployment by carrier
Limited gain from competition to card-based ecosystem
Loses because of fragmented offerings and limited availability
Buddy SystemGains from tapping existing payment network and generates incremental revenues
Loses by sharing merchant revenues with carriers unless it is a niche player that expands revenue pie
Moderate gains from NFC deployment to larger customer base
Gains from speeded up transactions but loses from upgrade costs of POS
Gains from merchant acceptance and convenience
Fly Solo Significant risk without commensurate returns
Significant risk without commensurate rewards
Limited gains from small-scale deployment
Limited gains from small-scale deployment
Limited gains from low merchant acceptance
Open FederationSignificant gains from large-scale mobile payment deployment
Moderate gains from large-scale mobile payment deployment
Significant gains from mass deployment of NFC
Significant gains from mass deployment of NFC and greater competition among payment instruments
Gains significantly because of expanded choice, merchant acceptance and convenience
Players & Scenarios
Source: Deloitte - Cell me the money - Unlocking the value in the mobile payment ecosystem
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Mobile Payments - where are we today?And why should you care?
• Merchants reluctant• Changeover costs (even online)• Operating costs, Stability & Processing time• Additional mode, but may be not perfect substitute
• Merchants have lot to gain• Expectations to be innovative• Channel additional information a/o Increase customer loyalty • Differentiation from competition• Improved reporting & real-time analysis on purchases• Reduced complexity in payment process
Source: EHI Retail Institute 2011
22%
think mobile wallets will be successful
27%
think NFC-enabled payments will be most
successful
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Consumers don’t understand the value...
86%
don’t know mobile payments systems
Sources: Steinbeis Research Center for Financial Services 2012EHI Retail Institute 2011
“Cash, Card and... phone. Another payment method”
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
...But they understand the risk
Source: Steinbeis Research Center for Financial Services 2012
73%
says security is most important factor re mobile payments
86% don’t want to pay extra for using mobile wallets
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
B: 2014
C: 2015 D: 2016
When will Mobile Wallets rule the world?
A: 2013
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved. 38
One size...does not fit all
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
One size does not fit all...Use of Mobile Technology differs, as Retail formats differ in their value propositions, strategies, performance objectives & customer expectations
Apparel Store Department Store
Discount Store Club Store Drug Store Grocery Store
Home Improvement
Store
Non-apparel Specialty
Store
• Expert opinions• In-store Ambience• Customized
Clothing
more important than transaction speed
• Loyalty programs• Targeted offerings
to attract & retain young customers
• Personalized offerings
• Price discounts
appealing to price-sensitive customers
• Targeted offerings• Bundled products• Discounts
attractive to price-sensitive shoppers
• Loyalty programs• Discount offerings• Decrease checkout
time
may keep customers from shopping elsewhere
• Low prices• Targeted offerings• Real-time
discounts
could shape customer behaviour & increase loyalty
• Expert opinions• Store talent
• Brand / product type connection
• Customer profiling
• Real-time fashion advice
• Access social networks to validate purchase decisions
• In-store navigation
may help customers find products they are looking for
• Mobile Point-of-Sale
to shorten wait times & simplify shopping experience
• Efficient navigation• Locate specific
items on shelves
beneficial for club store customers (members)
• Credible information on drugs
• Checkout time
valued by customers
• Accelerate shopping process
• Expert opinions• How-to videos for
relevant products
enhances customer experience and decreases staffing requirements
• Personal recommendations
based on shopper’s own tastes & requirements
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Choose your Consideration(s)You can’t do it all at once
Preserve FlexibilityConsumers will increasingly expect a seamless and user-friendly mobile experience regardless of the mobile device or operating system they use. When selecting off-the-shelf apps or developing mobile apps in-house, consider short and medium-term implications of your choice with respect to a potential change in the dominant smartphone operating systems or brands. Always consider how your mobile strategy impacts your overall flexibility.
Current Pain PointsA great starting point for mobility is to identify current pain points. For example, have you ever walked all over a store floor to find an available sales associate? Mobility could easily alleviate this customer pain point by allowing the customer to submit a “help” request including their current location in the store through an app.
Include Employees & PartnersAs consumers become ‘super users’ of mobile devices and apps, deyning your sales staff (ao) access to the same technology and tools could cause a fundamental disconnect and lead to to an ineffective customer experience in the stores. Furthermore, consider how mobility can enable your interactions with suppliers and your distribution process.
Map Customer JourneyHow do customers move from mobile to social to store to web and beyond as they go through product & price considerations, purchase a.o.? Understanding the customer journey is the bedrock of any mobile strategy.
Don’t underestimate Security & PrivacyA mobile-related security or privacy breach could severely damage your reputation and hamper adoption of mobile capabilities. If you want your customers to engage with your business via mobile channels and share critical info such as their location, you should emphasize privacy & security at all times.
Usability & Experience firstUsability is everything. But not just the app, make sure that integration points between your mobile and other channels, notably the store, are in place and support a desirable experience.
Omnichannel approachMake sure your mobility strategy isn’t operating in a silo. Things get really interesting when mobility is combined with your other channels.
5PProduct, Price, Promotion, Place & PaymentConsider the impact mobility has on the 4P’s, plus the additional P for Payment. Consider how consumer do price research while in store, or provide proper promotions when consumers are in the store or when they are scanning a certain product (bundles), or how to deliver a new ‘place’ (in-store) experience.
Mobile CapabilitiesConsider movement, NFC, Bar/QR codes, etc. Retailers should constantly explore how these additional capabilities can not only speed up or enhance existing processes, but more importantly how they can be leveraged to expand the horizon of what is possible.
€Benefits of doing it rightGrow brand awareness and loyalty, Increase revenue, Increase traffic, Improve conversion rate, Increase overall basket size, Enhance the customer experience, Keep pace with evolving customer demands and expectations, Reduce labor costs, Increase marketing efficiency, Execute flawlessly, Implement securely
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Bottom Line
If you don’t do it, someone else will...
And they’ll do it to customers inside your stores
Deloitte Digital Copyright © 2013 Deloitte Consulting B.V. All rights reserved.
Thank you.
S e c u r e B y D e s i g n