agility - driving multichannel success

Jason Simpson

From Multi-channel to Omni-channel

commerce

• What’s happening in Multi-channel commerce? (in Europe & the US)

• Technological advancement & changing consumer expectations

• Omni-channel behaviour is shaping Multi-channel commerce

• How channels interact: the role of print• Reaction to the shifting environment• Brand integrity = Multi-channel strategy• What to be ready for; how to be ready

Agenda

The world of Multi-channel commerce…

• Technology is enabling new channels to market

• Traditional model = physical stores with print driving footfall and/or mail order business

• Today = new channels emerging every year

• Proliferation of media• Marketing reach becoming harder• Consumers demanding purchasing

flexibility and convenience

• Now 1.6 billion internet users worldwide• UK e-commerce sales totalled £30bn in 2010 • Accounts for 7% of all retail sales• Sales predicted to grow to reach £50bn by 2015

Source: Forrester

South Africa = 5.3m

The ‘new now’:• Price comparison

sites• Digital catalogues• iPhone/Android apps• iPad & other tablets • In-store kiosks• Social media

Developments in e-commerce…

• UK mobile internet sales forecast to double in the next 3 years to £275m

• Accounts for 4% of online retail spending • Just 2.1% of UK‘s adult population

currently shop via a smartphone, but nearly 80% of owners have used it to buy something!

• But smartphone ownership is growing by c100% annually, driven by iPhone, Android and other comparable products

(source: Verdict & Ovum Research)

Developments in mobile commerce…

• 10% of European shoppers are using their mobiles for product searches, price comparison or purchasing

• 20% plan to do so, according to a study of 1,500 people in the UK, France, Germany, Italy and Spain

• The study also found that shoppers who used mobile in some part of the research and purchase process spent 15% to 30% more than those who used just one channel

(source: IDC/Akamai)

80% of all web-page views in Japan are via mobile devices!

UK predicted to mirror this by 2014

Highly likely that developing nations will leapfrog to this stage



Example

http://reallylindabarker.agilityeditions.co.uk/winter2010/

Technology convergence

• The ‘mash-up’• Integrating offline and online media • Quick Response (QR) Barcodes• Augmented Reality• RFID & NFC (Near Field Communication)• Mobile Apps

The Omni-channel consumer

“The omni-channel shopper wants to use all channels – stores, catalogues, call centre, eCommerce and mobile – simultaneously, not each channel in parallel”

Hand and Parker (IDC)Examples:• Price comparison websites, accessed from

mobiles whilst in-store• Reserve/pay online, collect in-store

The Omni-channel consumer…‘InfoLust’

‘Consumers are lusting after detailed information on where to get the best of the best, the cheapest of the cheapest, the first of the first, the healthiest of the healthiest, the coolest of the coolest, or on how to become the smartest of the smartest. Instant information gratification is upon us’

(www.trendwatching.com)

Omni-channel consumers are shaping Multi-channel commerce…

McKinsey research 2009

Clothing retail example

USD$ average customer spend per year

3 channels = 4.4 x higher than print alone4.5 x higher than stores alone5.6 x higher than web alone

How does print fit into the Multi-channel mix?

What we thought we knew:• Shopping is heavily influenced by printed

matter• The “shop in the home” works• Multi-channel is here & increasing revenue• The print catalogue is part of life in UK &

US

Private & Confidential, Copyright Pindar & Verdict Consulting 2010

Who are Verdict Consulting?

today's consumerwhere we’re headed


1980s

Carefreeconsumption

1990s

Carelessconsumption

Late 2000s

Carefulconsumption

2010s

Consideredconsumption


Today’s consumer: the mindset shift

QuantityI buy lots of things: some I need, some I don’t…

Quality I buy things I that I really want…

ProductIt’s mainly about the product…

Holistic It’s about the product and the background to the product…

PriceI want everyday low prices…

ValueI don’t mind paying for good things…

ImpulseI buy things without thinking about them…

ThoughtfulI buy things I like, but I think about what I am buying…


Today’s consumer: considered consumption


B2C Research

For this research a catalogue is defined as:• A traditional mail order catalogue• A more modern catalogue or brochure• Lifestyle magazines from retailers in

which the primary aim is promotion or selling (magalogue)

• Retail inserts & circulars• Leaflets & postcards not included

1999

£9,503m2009

£4,393m

Size of traditional mail order catalogue market

?


The traditional view – a changing landscape

Lost in a sea of cross-channel confusion

Affiliates

C2C

Telephone

Kiosks

Online

Social networking

Stores

Cats, Mags, Inserts

Mobile


The modern scenario

The stigma’s gone – they’re totally different now

They’ve changed, they’re a really nice read


Perceptions have changed

20.8%regularly use a catalogue to directly buy products


The influence of the catalogue today

Physical

92.9%

Online

70.7%

Catalogue

53.9%

News/mags

32.2%

Th

ink

Rese

arc

h

Bu

y

Retu

rn

83.5%

69.1%

53.8%

31.0%

63.7%

69.0%

37.4%

12.8%

53.8%

31.0%

84.2%

66.3%

21.8%

5.7%

74.5%

40.4%

9.5%

0.7%

The purchase decision process


86.1%

Omni-channel consumers are shaping Multi-channel commerce…

McKinsey research 2009

Clothing retail example

USD$ average customer spend per year

3 channels = 4.4 x higher than print alone4.5 x higher than stores alone5.6 x higher than web alone

53.9%regularly use a catalogue in the purchase process


The influence of the catalogue today

35.9% 36.4%

30.4% 29.6%

21.7%

Seekinginspiration

Gatheringideas

Browsing forfun

Checkingproduct details

Comparingprices

It’s nice to sit and relax – to sit on a sofa and flick through

I can see how the clothes will look on my children

They’re good at product placement

The underlying reasons for usage


Catalogues£81

Stores£2,079

Online£369

Online to store£257

Catalogue to online£215

Catalogue to store£240 Private & Confidential, Copyright Pindar & Verdict Consulting 2010

• 58% of online sales are driven by the catalogue• 85% of catalogue sales are checked out online or in store

The Multi-channel consumer

74.7%£31.0bn

73.2%£15.9bn 69.4%

£8.6bn67.4%£8.5bn 63.5%

£6.8bn54.8%£9.5bn

45.2%£4.5bn

43.0%£1.4bn

14.6%£18.1bn

Clothing Electricals DIY Furniture HomewaresBeauty Books Music/film Food

Percentage of spend in each sector influenced by catalogues

53.9% baseline


The monetary value: sectors

Catalogue browsing

The charts below shows the percentage of people who browse catalogues in the various situations and locations.

At home89.4%

In store24.8% While

waiting14.4%

At a friend'shome14.1%

While traveling

9.1%

At work 8.9%

On holiday 3.0%

Where is print used and viewed?


Average household receives2 catalogues each month

5% of households receive more than 5 catalogues each month

+

Average time spent browsing catalogues:

8 hours per month


Catalogue dynamics – shop in the home

Traditional views of the catalogue do not hold true

Catalogues are critical influencers, at the critical points

We live in an omnichannel world

Driving spend, through channels of choice


B2C research summary

Further evidence

Of those, 80% found their purchase in a catalogue and then went online to order.

70% of those surveyed shopped from home last year.

Experian, 2009

Why the catalogue is so important…

• Digital ‘page-turning’ catalogue deliver enhanced sales

Further evidence

B2C example launched last February:• 3 x higher shopping basket values

compared with website-only shoppers

B2B example launched last February:• 2 x higher shopping basket values

compared with website-only shoppers

http://reallylindabarker.agilityeditions.co.uk/winter2010/

But:

Consumers do not see channels, they see brands. Therefore, brand and service level consistency across all channels is important for maintaining customer loyalty.

Sharing product and customer data across channels is vital to achieving a consistent customer services and brand message.

A single, central repository is required to provide a single view of the data. But many retailers are still not managing important processes at a multichannel level. (DataMonitor, Sep 2009)

How are retailers responding?

• Retailers are embracing new channels in order to maintain mindshare

• Focus in IT has been on logistics and ERP/CRM – single customer view

The challenges associated with Multi-channel marketing

The Multi-channel challenge

• Getting the right information about the right product to the right customer through their channel(s) of choice

• Ensuring consistency of product data & pricing• Duplication of effort across channels• Speed to market slow due to complexity• Logistical/back-end issues such as:

• Returns (buy online, return to store)• Stock availability across channels• Single customer view (channel agnostic)

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Inefficient process due to:

• Searching and gathering of images/data

• Brand consistency checking

• Repetitive operational tasks

• Complex process and duplication

• Copy proofing multiple times

• Reformatting refreshed text

• Inefficient language localisation process

• Constant verifying

• Re-checking legal information

• Manual pricing and re-checking

• Cumbersome approval process

• Unproductive communication

• Time sensitive re-work Etc, etc….

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PIM Solution

The benefits of Agility multichannel publishing

• Create consistent product promotions for web, print and in-store marketing

• Publish content to websites within hours of product creation and convert your business to ‘web first’ publishing

• Reduce production times for printed promotions by up to 75%

• Free up designers time to use their creative minds and design more pages

• Reduce the number of errors and review cycles by up to 90%

• Do more marketing, with the same resources (or less)

• Turn your product information into a strategic asset:

> Be ready to exploit emerging channels

> Speed to market = competitive advantage

The challenge is recognised

PIM is a crucial foundation

Ensuring product information and pricing is up to date and consistent across channels

Enabling cross-channel fulfillment

Cross selling and personalized promotions

Synchronizing customer and inventory information across channels

Same day shipping & simple, consistent returns

Information sharing with merchandise vendors on product features and availability

Enabling real time views of cross-channel inventory

Retailers asked to comment on which business initiatives had the greatest positive impact in improving customer satisfaction across all channels

Retail Systems Research May 2010

Web site

Price comparison site

Email PrintCatalog

Digital catalog

Flyer/ Ad

iPad/ Tablet

MobileComm

SocialMedia

Magalog

Call center/ Sales

Packaging/ tech data/offer

Awareness /interest

Research

Selection

Order

Acquire (£)

EndorseDecision

Repeat process (££)

= =

The purchase decision process

Driving multichannel success…

+ =(Multichannel Success)