winning the future shopper

Winning the future shopperFour keys to your future of retail

Omnishopper conference Paris 2015

2© GfK May 1, 2023 | New shopper reality

Today

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Making sense of chaos

Battlegrounds and predictions

Four ways to win


1. Nothing has changed. Execution has changed dramatically, but retail fundamentals

are unchanged.

2. But you need to get faster. When retailing you need to be fitter, more agile.

3. Loyalty is dead. Loyalty, if it ever existed in a pure form, has been left behind.

Your loyalty expectations should now be different.

Our inspiration

Image sources: "5 ball juggling" by Original uploader was James Heilman, MD at en.wikipedia - Transferred from en.wikipedia; transferred to Commons by User:Stevenfruitsmaak using CommonsHelper.. Licensed under CC BY-SA 3.0 via Commons - https://commons.wikimedia.org/wiki/File:5_ball_juggling.jpg#/media/File:5_ball_juggling.jpg; "Video shop" by Tracy the astonishing - The video store on Flickr. Licensed under CC BY-SA 2.0 via Commons - https://commons.wikimedia.org/wiki/File:Video_shop.jpg#/media/File:Video_shop.jpg; http://www.blinkbox.com

https://commons.wikimedia.org/wiki/File:5_ball_juggling.jpg#/media/File:5_ball_juggling.jpg

https://commons.wikimedia.org/wiki/File:5_ball_juggling.jpg#/media/File:5_ball_juggling.jpg

https://commons.wikimedia.org/wiki/File:Video_shop.jpg#/media/File:Video_shop.jpg

https://commons.wikimedia.org/wiki/File:Video_shop.jpg#/media/File:Video_shop.jpg

http://www.blinkbox.com/

http://www.blinkbox.com/


Self service: 1915/1916

self service(US – Groceteria)

Source: Smart Retail, Richard Hammond

The history of retail

Chains:c.200 BC

the creation of the first chain of stores (China – Lo Kass)

Distance selling: 17th century

catalogue based mail order (Europe)

Ye OldeCatalogue

Retail theatre: 1852

the first department store (Paris, France – Le Bon Marché)

In the last2,200 yearsthere have been

four retail innovations


“Retailing is not about inventing new stuff

Retail ideas are about change, improvement and development

They are rarely about coming up with things that no human has ever thought about before

You don’t have to magically pluck new ‘things’ out of nowhere to be innovative and successful”

Smart Retail, Richard Hammond


Take comfort, the fundamentals remain unchanged

Choice PriceConvenience Experience


How should we understand the future shopper?

Live in the jungle Observe shoppersAsk shoppers


The musings of Anya Llewellyn

Use your imagination. Talk to future shoppers


Retail in turmoil


Retail is not as it once was

Amazon selling via Waterstones

Tetley and Nestle collaborating to sellto need states

Stores seeking to communicate through entertainment


The door is open to experimentation

Barriers to trying new things in store have dissolved

Store design, once dictated by cost and efficiency, has opened up

Slowing growth = more innovation in retail


Four pillars of retail


Technology and austerity create raised expectations


Four new retail battlegrounds Sell to need states not categories

Be transparent onprice position

Make the shopper feel good about their choice

Be where your shoppers are


Four vectors which drive retail advantage


Four new retail battlegrounds Sell to need states not categories




Predictions for the future of shoppingMobile will enable omnishopping

Competitors will collaborate

Same price for same item

Shoppers will be satisfied, not coerced

The future is bright…


CH

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EConvenience


PredictionMobile will enable omnishopping


Skip the queue, happy you

The end of the queue?


FutureBuy 2015, 2014, n=1,000 per market

“My mobile device is quickly becoming my most important shopping tool”

Global average = 34%

60%

53%75%

74%

58%

35%16%

48%50%

72%

20%

2015

2014


Being convenient has been essential since retail began

To create attraction from the moment of trigger you must be continuously available

Purchase


CH

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OChoice

Sell to need states not categories

PredictionCompetitors will collaborate


Shoppers want services not categories

Merchandising to an occasion Competitor collaboration


FutureBuy 2015, UK data

People want to buy multiple things at once! Can we do more to help them?

Let’s me see and feel the products before I buy1st

Getting the best advice on what to buy20th

41%

5%

Save money (better pricing, deals)1st

Getting the best advice on what to buy17th

53%

5%

Can buy other things at the same time

Can buy other things at the same time

Why do you buy in stores? Why do you buy online?

5th 11th24%

16%


Tesco.com

How can we help the shopper fulfil their mission?


Ocado.com

How can manufacturers and retailers collaborate to help shoppers visualise a meal?


The key to choice

Offering the right choice has always been critical, but typically product has been merchandised category by category, without a wider view

To win with the future shopper you must create services around need states not categories. Often this will require collaboration with competition.


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Price


Same price for same item

Prediction


Sources: UK retail safari

Talking incessantly about price creates a commodity mind-set among shoppers


Sports Direct website; Up and Running, Aylesbury, Google see inside

This creates a major challenge to retailers who need to command a premium

Price spectrum


SportsDirect.com, Upandrunning.com

How do you monetise expertise?

Price spectrum


Where should the £18.50 go?


FutureBuy, global data, n=23,003

Shoppers are increasingly baffled by the idea that they should pay more at a different place

“It is important to me that the price of an item be the same whether I buy it online or in-store”

+12%p

58% 70%

Total LEC


Digital and austerity create a new level of transparency and shopper scrutiny

The key to price

Charging more for the same item is no longer viable. Premium retailers must trade shoppers up outside of brands, as discounters have traded down.

Matched prices for the same/equivalent products

Upsell(Service, private label, subscription)

Downsell(Private label)


CH

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FO

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Experience


Shoppers will be satisfied, not coerced

Prediction


BOQ - Bank of Queensland Branch of the Future

http://sydneydesignawards.com.au/syd14/entry_details.asp?ID=13421&Category_ID=6059

“If this looks or feels anything like a bank, I’ll walk out!”

How do we make selling spaces more human?


“At Virgin Holidays we like to do things differently

While most stores are designed to sell, sell, sell – that isn’t the top of our agenda

We want to provide a retail space that is designed to inspire consumers through immersive experiences”

Lee Haslett, director of sales at Virgin Holidays


Wagamama, High Wycombe, UK


http://www.techtimes.com/articles/40857/20150319/ailibabas-jack-ma-demos-pay-selfie-technology.htm; http://www.bbc.co.uk/news/technology-33379461

Talking of forgetting passwords…

Selfie pay Alibaba’s CEO Jack Ma

http://www.techtimes.com/articles/40857/20150319/ailibabas-jack-ma-demos-pay-selfie-technology.htm

http://www.bbc.co.uk/news/technology-33379461

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCIL21fzExsgCFYe9GgodoP4LrQ&url=http://www.techtimes.com/articles/40857/20150319/ailibabas-jack-ma-demos-pay-selfie-technology.htm&psig=AFQjCNGiPyPCbgV7bDaQ3sf8kH3wGoWNRA&ust=1445069347650160


“I’m making more payments using my mobile device in store compared to last year”

Global average = 12%

23%

24%32%

32%

12%

11%10%


FutureBuy 2015, n=1,000 per market

Mobile is an experience enabler, where demand exceeds supply

Making more mobile payments

“I’m making more payments using my mobile device in store

compared to last year”

Want to make more mobile payment

“I look forward to being able to pay for more and more transactions from

my mobile device”

Latent demand

+/- diff

19%24%23%12%32%

62%65%63%51%70%

+43+41+40+39+38

© GfK May 1, 2023 | New shopper reality


Deliver to home Deliver to collection point

Deliver to my car Deliver to store

Retail no longer finishes with the ‘store’

Think spare capacity, think sharing economy


FutureBuy, global data, n=23,003

Stand and deliver!

Cost of delivery 1st

Prefer to see product in person3rd

42%

37%

Card/personal details security 2nd 38

%

Free delivery1st

Holiday/seasonal discounts3rd

74%

48%

Better loyalty programmes

What would make you buy more online?

2nd 48%

Why do you not buy online?


The key to experience

The collision of digital and austerity provides the fertile ground we need to enliven retail

Create experiences not transactions


Conclusions


The four keys to winning your future shopper

Create experiences not transactions

Be continuously available from the moment of trigger

Matched prices for the same/equivalent products

Upsell

(Service, private label, subscription)

Downsell

(Private label)

Create services not categories

Price match the core, trade up or down


Our imagination creates a window to the future of shopping

WINES FRUIT