customer shop experience - peter burggraaff

Customer Shop Experience in RetailP t B ffPeter Burggraaff

Sh M k ti J 16 j i 2015Shopper Marketing Jaarcongres, 16 juni 2015

The retail industry seems to reach an agreement: integrated channels & tools are key for an exciting customer journeychannels & tools are key for an exciting customer journey

Customer journey

Orientation Selection Transaction Delivery Customer

Physical in-store INTERACTIVE SCREEN TO REVEW PRODUCT

GET PRODUCT INFO TO OWN

DEVICE

CHECK AVAILABILITY BY STORE ASSISTANT

Orientation Selection Transaction Delivery care

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Digitalin-store

Storedevice

Own

DEVICE

PAY FOR PRODUCT WITH MOBILE WALLET

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On-the-goDigital

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upIn Digitalout-of-store

At home SCAN PICTURE – ADD TO WISH LIST

TRACK DELIVERY

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Physicalout-of-store

RECEIVE EXCLUSIVE OFFERSSEE COOL MAGAZINE AD

STATUS

Shopper Marketing Jaarcongres - Customer Shop Experience - Peter Burggraaff.pptx 1Draft—for discussion only

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Note: Illustrative based on Gucci exampleSource: BCG analysis

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Market innovations observed along the customer journey provide new customer experiencesprovide new customer experiences

Orientation Selection Transaction Delivery Customer care

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d.

Mobile"webrooming"

Mobilewallet

Pricenegotiation

In-storenavigation

Curbsidei k

Customer dialogue

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Bloggers

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Endlessaisles

Self-checkout

In-storeself-service Loyalty

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In-storepickup

apps


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Note: Phases in the customer journey are derived from BCG's Shop Experience Audit

Threat or opportunity?Brick and mortar retailers benefit from digitalBrick-and-mortar retailers benefit from digital

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Avg. yearly EBIT margin growth (%p, 2010 – 20152)Digital frontrunners

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Digital followers

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1. Performance based on six criteria: (1) buy online, return in store; (2) buy online, pick up in store, (3) in-store navigation/movement tracking; (4) RFID tags on items sold; (5) Using augmented reality in store; (6) Using interactive displays in store. 2. Latest available data was used when 2010 – 2015 was not available.Note: Each of the criteria is scored on a 0-3 scale from not available (0) to leading the pack (3)Source: Press research, Annual reports, BVD Orbis, BCG analysis

How can digital solutions contribute to financial success?How can digital solutions contribute to financial success?

Potential benefits can be through• increased revenues• cost savings / better efficiencycost savings / better efficiency• or both

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Measured across all sales channels

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Revenues Traffic Conversion Basket size

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Market innovations observed at retailers who adopted new solutions to boost traffic conversion and size of basketsolutions to boost traffic, conversion and size of basket

Traffic Conversion Size of basket

Smart Home Solutions

Interactive Fitting Rooms

Interactive Shopping Carts

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Push Notifications Digital Aid for Salesforce

In-store Kiosk for Online sales

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What digital solutions work for you?


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Effectiveness of a digital service offering to be measured by its effect on revenue indicatorsby its effect on revenue indicators

Traffic

Number of unique customers

Conversion

Conversion rate

Size of Basket

Revenue per saleq• Per sales channel

Number of store visits• Per sales channel, per store

• % of store visits which lead to a purchase

Conversion rate per step in the

p• Total revenues divided by

number of orders

Items per order

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• Unique sessions for online

Average frequency of visit• Per store, per demographic

sales process (Example: fashion)• % of store visits which enter

the fitting room• % of visits to fitting room which

• Number of items sold divided by number of orders

Revenue per customer

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Customer churn rate• Number of customers which did

not return since last time period di id d b ti t

lead to a purchase

Shopping cart abandonment• Per unique product (SKU)

% f i it h t d t i

• Total revenues divided by number of customers

Up-sell / Cross-sell rate% f t hi h t

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Number of brand mentions• Per (social) media platform

• % of visitors who put product in real or virtual shopping cart, and then not complete the purchase

• % of customers which accept alternative or augmented offer

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Note: Some indicators mentioned can be irrelevant for specific types of retailers.Source: Press research, Public reports.

Several retail technologies available to measure traffic, conversion & basket performance indicators in retail storesconversion & basket performance indicators in retail stores

Point of Sale / Loyalty programs Web Analytics

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Video Analytics WiFi / Bluetooth Analytics

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Source: Press research.

H2 get started Four Enablers of In Store Digital SuccessH2 get started - Four Enablers of In-Store Digital Success

Take R&D seriously

R&D needs to be taken seriously to drive digital innovation

Organize to innovate

Set up new organizational models to manage innovation

1 2

digital innovation• devote funds to digital ventures• bold experimentation• invest in own development

innovation• Store Employee Teams• Business and IT Teams• Innovation Labs

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p• invest in start-ups

A il ITD f i i h

• A Portfolio of Start-Up Companies

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Construct IT systems with a stable back end and flexible front end for agile development

Data for insights

Develop information architecture to provide meaningful insights into customer behavior

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g p• Agile Development. • A/B Testing• Trial and Error• Scaling Up

g g• Build nimble digital frameworks.• Invest in master data• Create a “data lake”• Integrate data to leverage its value

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osto• Scaling Up• Integrate data to leverage its value.


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Source: https://www.bcgperspectives.com/content/articles/technology_strategy_four_digital_enablers_bringing_technology_into_retail_store/

Thank youThank you

bcg.com | bcgperspectives.com

customer shop experience - peter burggraaff

Business

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customer dialogue p

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digital solutions

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