retail in 2015

Retail in 2015

Outlook, Trends and Insights

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Global Outlook 2015

Retail Trends 2015

Consumers in 2015

Digital influence in-store

Customer journey development

Contents

© 2015 Deloitte & Touche Oy, Group of Companies

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Developing retail market

Global Outlook 2015


Japan• Demographic changes force

retailers to change business models by focusing on convenience stores and alternative delivery channels

• Domestic players restructuring business to remain competitive

China• Expected to be the largest retail

market by 2018, overtaking the US• Rapid urbanization boosting store

expansion and e-commerce• Unorganized retail constitutes 92%

of the total market• Strong competition from domestic

players operating on behalf of foreign operators

• Aging population and shift in demographic profile to challenge growth

India• Rapid urbanization and

increasing income levels offer scope for growth

• Preference for branded products

• Rising prominence of online retail

• Increase in private equity investment in online retail segment

Source: Deloitte Overview of key retail markets in Asia 2014, Deloitte Consumer Review – Africa: A 21st Century View, Digital in UK Retail, Omni-channel

Africa• Emerging middle class drives

demand for consumer goods and services as well as luxury brands

• Annual growth ca. 8%• Consumer opportunity rests on rapid

urbanization, fast adoption of digital technologies and the dominance of youth

• Africa is a world leader in mobile money and mobile is becoming the primary channel for internet access

• Despite low income levels, young consumers prefer quality over price

US• To grow and differentiate • Innovations are made outside

retailer’s core competencies• Convergence: store matching

the online experience and online sites providing virtual physical store experience

• Visionary retailers continue to expand into other markets such as China

Europe• Low growth of economy

has affected consumer demand

• Consumer ownership of digital technology is growing

• E-commerce challenges brick stores

© 2015 Deloitte & Touche Oy, Group of Companies 4

Deloitte’s publications 2015Our view on global trends

Global Powers of Retailing 2015 Global Powers of Consumer Products 2015

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Five trends are reshaping retailing: mobile retailing, faster retailing, experience retailing, innovative retailing and travel retailing

Retail trends 2015


Mobileretailing

Faster retailing

Experience retailing

Innovative retailing

Travel retailing

Quickly becoming a major retail

platform

Retailers who move first and

fastest gain the edge

Making the process of

shopping part of the total

value

The near future is about adoption and

embracing change

Driving growth by catering the high-spending

travellers


Quickly becoming a major retail platformMobile retailing

• Mobile payments will play an increasingly important role

• Example: Mobile apps, such as those offered by Tesco, Starbucks or Target are linked to consumer’s loyalty account and enable payment in-store

• Mobile retailing continues to grow and is becoming a norm

• Example: Deloitte UK’s research shows that mobile’s influence on in-store sales has grown rapidly during last few years

• Mobile experience needs to be customer friendly

• Example: Wal-mart, Home Depot and Lowe’s offer more advanced mobile applications with a range of features and product information

Mobile experienceMobile PaymentsAggressive growth


Retailers who move first and fastest gain the edge

Faster retailing

• Delivery window is becoming narrow and specific

• Retailers are racing to offer same-day delivery

• Efficient end-to-end supply chain is more important than ever

• Example: Google Express is a same-day shopping service

• Faster to market, faster to respond, faster to deliver

• Example: Kate Spade offers a free delivery anywhere in Manhattan within an hour for orders made through their digital window shops

• Consumers expect immediate and relevant information

• Retailers must optimize information by balancing content and load time

• Example: Sear’s Personal Shopper allows shoppers to send a photo of an item they are looking for and get a store location response

Instant informationShrinking delivery

windowAdding speed everywhere


Making the process of shopping part of the total value

Experience retailing

• Consumers want to order, pick up, ship, receive and return at their convenience

• Example: House of Fraser’s “Buy & Collect” stores enable picking up items at store and virtual queuing

• Retail environment should offer new experiences in form of entertainment, education, emotion and engagement

• Example: Burberry’s offers tailored customer experience through seamlessly integrated technology

• Consumers expect personalized service

• Analytics and transparency

• Example: Burberry’s personalized shopping experience with iPads and Sear’s personal shopper application

PersonalizationAnytime, anywhereRetail as environment


The near future is about adoption and embracing change but there is no single formula for success

Innovative retailing

• More retailers to become innovators, many will start connecting strategy, capabilities, initiatives and data

• Example: Macy’s fulfillment stores support the omni-channel model execution

• Innovation and consumer demands will both escalate

• Example: Traditional usage of postal services is declining as new models such as Uber Rush delivers the orders to the client straightaway

• Not only products and services but also business models and customer engagement

• Example: Online supermarket Ocado operates from picking centers and delivers groceries to customer’s home

Innovation everywhereJoining the bandwagonThe rise of disruption


Driving growth by catering the high-spending travelers

Travel retailing

• Consumers often wait to shop where the selection is better and there are no high import taxes

• Example: Over half of France’s 16 billion euros luxury industry depends on tourists*

• Increase in travelers who are willing to shop while on the move

• Example: ACI Europe reports a 6% increase in EU travelers for Q1 in 2015

• Companies promote their brand to travelers even in countries where their goods are not available to increase brand awareness

Building brand awareness

Better abroadInternational tourism

*Inside France’s €16.8 Billion Luxury Goods Market, Luxury Society, 13 February 2014

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Consumers in 2015


The supply-driven world has become more demand-driven—today’s consumer is in charge with more information, more choices, and no geographic boundaries.

Critic Curator Creator

Independent and confident consumers are now critics, curators, and creators.

The opportunity Direct conversations with consumers can drive growth and innovation—if your company can engage them.

Today’s consumers own the conversation


Consumers are now truly globalChallenge of serving global consumers remains

• Embrace new approaches

• Compete in smarter ways

Global opportunities

Example—Enter markets virtually• Direct-to-consumer

websites• International

shipping• Stores on global

marketplaces

Global challenges

• Balancing global vs. local requirements

• Managing and growing profitably

• Buying and selling to optimize portfolio

• Develop end-to-end global supply chains

• Meet consumers’ demands from any part of the world, through any channel

Global consumers

• Socialize with people around the globe

• Shop from the global marketplace

• Access information from almost any part of the world

• Travel globally


The influence of digital devices on in-store purchase behaviour

has grown by 175% in two years

Influence of mobile and digital devices on in-store retail

Influence of devices on in-store retail sales has grown rapidly Influence of devices on in-store retail sales affect many areas

Mobile

All digital

*The digital influence factor for 2012 was an estimate based on the digital influence calculations from the Deloitte US The New Digital Divide study.

14© 2015 Deloitte & Touche Oy, Group of Companies

Pretty front-end online and mobile are useless without back-end technology and supply chain excellence

Omni-channel customer journey development

Innovation, Business Analysis & Commercialisation

Strategy Creation

Business Capability Analysis

Development & Implementation

Developing an omni-channel strategy to identify where to invest and direct resources.

Innovating of new or improved products and services based on digital opportunities and analysing business potential & establishing go-to-market capability.

Identifying strategic capabilities needed to implement new products & services and defining development initiatives.

Supporting development and implementation of new products and services and digital business processes.


Key takeaways

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02

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Mobile and experience retailing are on the rise as retailer’s digital capabilities evolve

Innovations are made throughout the whole omni-channel model but there is no magic answer to success

Today’s consumers own the conversation - direct conversation with consumers can drive growth and innovation

High performing retailers execute omni-channel initiatives to both innovate their product and experience

Pretty front-end online and mobile are useless without back-end technology and supply chain excellence


Deloitte FinlandYour local contact

For further information, please contact:

Jussi SairanenPartnerConsumer [email protected] 020 755 5364

mailto:[email protected]

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Appendix



Our view on global trends

Deloitte publications

http://www2.deloitte.com/fi/en/pages/consumer-business/articles/global-powers-ofretailing2015deloittefinlandconsumerbusiness.html

http://www2.deloitte.com/fi/en/pages/consumer-business/articles/samsung-yha-maailman-suurin-kuluttajatuoteyhtio---deloitte-finla.html

http://www2.deloitte.com/fi/en/pages/consumer-business/articles/digital-influence-in-uk-retail---deloitte-finland---consumer-bus.html

Global Powers of Retailing 2015

Global Powers of Consumer Products 2015

Digital Influence in UK Retail: The true value of digital in-store









Analysts has named Deloitte the global leader in digital strategy, mobility IT strategy and retail strategy.

Our experience

Deloitte named a Vanguard Leader in Digital Strategy by Kennedy

“Deloitte stands out for its ability to deliver recommendations that are aligned with clients’ particular circumstances, demonstrate the achievability of results, and generate excitement at all levels of an organization around digital strategy.”

Deloitte named the global leader in Mobility IT Strategy Consulting by Kennedy

“Deloitte pulls together experts from Deloitte Digital and its IT strategy, risk & security and tax groups to ensure a client’s mobility IT strategy is addressed from each angle.”

Deloitte named the global leader for IT Customer Strategy Consulting in the Retail Industry by Kennedy

“Deloitte’s ability to mesh its depth and breadth in the retail industry and IT consulting is illustrated through its portfolio of client cases. These cases highlight the firm’s understanding of each individual retail company’s needs and designing mobile technologies that fit culturally with the retailer and its customers, while simultaneously improving interactions between both parties.”

Source: Kennedy Consulting Research & Advisory; Digital Strategy Consulting; Kennedy Consulting Research & Advisory estimates © 2013 Kennedy Information, LLC. Reproduced under license

Source: Kennedy Consulting Research & Advisory; IT Strategy Consulting: Mobile Technologies; © 2013 Kennedy Information, LLC. Reproduced under license

Source: Kennedy Consulting Research & Advisory; IT Customer Strategy Consulting in the Retail Industry; © 2013 Kennedy Information, LLC. Reproduced under license

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Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.


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