idea engineer exchange webinar series - sapientnitro 2012 omnichannel research

© Copyright 2012 Sapient Corporation 1

November 7th and 8th, 2012

Hilding AndersonRachel Zinser

In-Store Digital Retail: The Quest for Omnichannel


Table of Contents

Introductions

Overview of Insights 2013

Research Findings Top performers

Six main themes

Questions


About these sessions

First in a series of public sessions by SapientNitro’s Idea Engineers

Future Topics Include: Insights 2013: Highlights and Walkthrough

Strategies For Maximizing Digital Content

Convergent Retail

Recordings and link to the PPT will be distributed via email this week. They will also be available at the following link: http://ideaengineers.sapient.com/events/idea-engineer-exchange-webinar-series/


Your speakerHilding AndersonDirector of Research + InsightsSapientNitro

Author, editor, strategist and researcher

Over 12 years of industry experience

Focused on the emerging digital consumers and retail

Editor of Insights 2013

Contact:Email: [email protected]: http://www.linkedin.com/in/hildingandersonTwitter: hildinganderson


Introducing Insight 2013 | The omnichannel study is featured in the report

The best thinking of SapientNitro’s 10,000 employees and 35 global offices

Our focus this year is on redefining experience

Four major themes: Real-time Control: New consumer-oriented devices & data

Predicting Desire: Building the infrastructure to anticipate consumer demand in real-time

Continuous Experiences: How companies are blurring the online and offline world

Globalization: The global marketer and the rise of the global consumer

Proprietary research study on 71 retailers

L2 Partnership & Excerpt

10 distinct international perspectives

43 global authorsDigital version with additional, exclusive content at

http://sapient.com/insights


In-Store Digital Retail: The Quest for Omnichannel


E-commerce is growing at 20% per year; traditional retail is growing at about 3%.


Four years from now, in-store retail will still represents 90+% of the total U.S. retail spend

Conversion rates are higher, plus there is the physical interaction and entertainment value

67%

In-store conversion

(October to December)

eCommerceConversion

2% to 3%

Higher Conversion Rates

Source: Forrester Research State of Online Retail 2011 and State of Retail 2012: Mobile and Tablet Commerce. NPD Group provides in-store conversion rates based on the month of October and December 2011 (consumer survey).

Mobile Conversion

(excludes flash-sales)

1%

2016 Retail Sales

9%

91%

Online In-store


We wanted to understand to what extent retailer were enabling consumers digitally while in-store

We called this the ‘digitization of physical spaces’

Our hypothesis was that retailers have made a substantial investment in the in-store digital experience


We developed our SapientNitro Omnichannel Digital Index to compare retailers with their peers

At least one location, primarily Flagship stores in NYC

500 points of data collected

May 2012 – August 2012

Based on L2’s list of specialty retailers

Over the course of three months, we visited 71 retailers


No retailer was crowned “excellent”

Only two stores – Sephora and Bloomingdale's – achieved “good”

Revenge of the department stores: they emerged as top performers –five of the top ten, reflecting their finances and scale

Over 20% of retailers had no digital elements connected to in-store

Excellent Good Average Fair Weak None

Sephora

Bloomingdale's

Macy’s

Crate & Barrel

American Eagle Outfitters

Nordstrom

Saks Fifth Avenue

UNIQLO

Lord & Taylor

Ethan Allen

ZARA

Guess

Lacoste

JCPenney

Barneys New York

Diesel

Tourneau

Steve Madden

Williams-Sonoma

Aeropostale

Bath & Body Works

French Connection

Ralph Lauren

Ann Taylor

BCBG

H&M

Brooks Brothers

Lindt

Neiman Marcus

Stuart Weitzman

Gymboree

bebe

Coach

Talbot's

A|X Armani Exchange

American Apparel

Banana Republic

Express

Urban Outfitters

Gap

Victoria's Secret

Chico's

White House | Black Market

ALDOCole HaanNine WestTumi7 for All MankindAbercrombie & FitchAnthropologieClub Monaco

J.CrewJuicy Couture Lucky BrandlululemonathleticaRugbyL'OCCITANE en Provence

SN Omnichannel Index

In-store Digital Retail: The Quest For OmnichannelMajor Gaps Remain In The In-store Digital Experience


Department Stores emerged as the single most dominant

0 10 20 30 40

Watches & Jewelry

Accessories & Shoes

Apparel

Home & Gift

Beauty & Skincare

Department Store

Average Score (out of 75) by Sector

10

n

5

9

34

7

6

Key Findings

While apparel had the highest representation, Department Stores emerged with the highest average score

In part, this is due to consistency – they only had two brands (Bergdorf Goodman, and Intermix) which emerged with zero scores.

The Accessories and Beauty & Skincare categories (L'OCCITANE en Provence, LUSH, The Body Shop) had over 50% of stores with a zero overall


Retailers are stronger in Cross-Channel Inventory Fulfillment and Brand, while Functionality and Content categories struggle

0123456789

10

Cross-ChannelInventory &Fulfillment

Visibility Content Functionality Brand Social SharingIntegration

Mobile In-storeExperience

54

Retailers Scoring 4 or 5 (best) by category

Key Findings

Cross-channel inventory emerged with the highest number of ‘5’

Content has a number of companies with ok to good scores, but none which received the top score

Functionality (interactivity) was a key gap

Brand is an area with strong investment

Store Experience

# o

f Ret

aile

rs


Top 3

1 Sephora 59 Good

Our #1 for having a variety of useful interactive tools that enhance the store experience, but there's still room to push the envelope

2 Bloomingdale’s 52 Good

Exemplary use of video screens, delightful 59th @ Lexapp for use in the flagship store, and seamless execution of Clinique iPads

3 Macy’s 46 AverageOn the right track with a diverse range of digital touchpoints, but visibility and functionality need a boost


Example 1: Sephora offered the Scentsa Fragrance Finder Kiosk, Beauty Studio Tablets, Skincare IQ Kiosk; mobile inventory and some social elements; no in-store pick-up.

Digital Index Score


Example 2: Bloomingdale’s had well integrated digital merchandising which support the brand, the best Clinique customization, a strong mobile way finding app, and inventory visibility

Digital Index Score


Example 3: Macy’s had a strong mobile offering*, find-in-store, interactive kiosks (but no inventory or ordering), generic Clinique tablets; hurt by brand, in-store display visibility.

* Find in-store mobile app on Android was inconsistent in our testing

Digital Index Score


The Next Eight

4 Crate + Barrel 44 AverageCompetent implementation of gift registry, but only cross-channel inventory & fulfillment goes above and beyond

5 AE Outfitters 43 AverageKids' section features fun, digital entertainment, but has minimal instrumental value

6 (tied) Nordstrom 40 AverageCosmetics department screens, mobile app, and inventory visibility shine, the rest falls flat

6 (tied) Saks Fifth Avenue 40 AverageA minimalist approach: branded video screens complement the fine-art feel of the store

8 UNIQLO 36 FairBranded video screens around every corner enhance the store's high-tech feel but none offer interactivity

9 Lord + Taylor 33 FairA sleek cosmetics department bolsters an otherwise mediocre digital experience

10 (tied) Ethan Allen 32 FairTouchscreen kiosk is a strong step in the right direction, but location and in-store role need attention

10 (tied) ZARA 32 FairHandful of well-placed digital video screens and a smooth mobile scanner; no visibility into store inventory


Highlights from the Next Eight

American Eagle Outfitter’s kids experience let you record and email your music video

Crate & Barrel offers a well-developed in-store gift registry, in addition to solid cross-channel inventory

A homely Nordstrom in-store digital experience; they were saved by their mobile and in-store inventory

UNIQLO was successful despite having no in-store interactivity

Saks offered a fine-art feel in-store.


As we reflected on the research, we noted six major themes

Digital In-Store Displays Are Powerful Tools—But Too Often Poorly Executed

Poorly Planned Digital Is Worse Than No Digital At All

It Isn’t Just the Hardware: Content and Software Matter

The Right Tools Generate Additional Revenue

Retailers Should Focus on Supporting User Tasks

The Omnichannel Battle Has Begun

Just 43% of retailers had a device mounted, and visible in-store

At one retailer, 87% of their price checkers were out of order

Just 25% received a baseline (3+) score in content

We’ve found a 10% to 40% increase in same-store sales for well-executed in-store kiosks

While 43% had something visible, just 22% had interactivity

More retailers were awarded the top score in cross-channel inventory visibility than any other


Finding 1: Digital In-Store Displays Are Powerful Tools—But Too Often Poorly Executed


1. Digital In-Store Displays Are Powerful Tools – But Too Often Poorly Executed

UNIQLO and Bloomingdales integrated digital throughout.

While other touchpointsfelt poorly executed…

GUESS: touchscreen technical issues

Ann Taylor: fitting room with exposed hardware, just website, not formatted to screen

Sephora: Bumble and Bumble screen

Macy’s: Good display, with roller rack in front of the display


Finding 2: Poorly Planned Digital Is Worse Than No Digital At All


2. Poorly Planned Digital Is Worse Than No Digital At All

Few offered interactive touchpoints, and of those that did some were unavailable or delivered only errors.

Price scanners were a common mobile function, but very few worked consistently.


Finding 3: It Isn’t Just the Hardware: Content and Software Matter


3. It Isn’t Just the Hardware: Content and Software Matter

Clinique’s app delivers personalized recommendations and Sephora helps users narrow down products and get more info.

While each of these has great, responsive hardware, they only deliver dot-com content.

Barneys: tablets with no in-store specialized content

New Balance (not scored): Kiosk had no in-store specialized content


Finding 4: The Right Tools Generate Additional Revenue


Finding 4: The Right Tools Generate Additional Revenue

Marks & Spencer offers co-browsing with sales associates, resulting in an increase in same-store sales.

Ron Johnson announced Q2 results which saw a lift of 25% in denim sales relative to stores which lack the experience.


Finding 5: Retailers Should Focus on Supporting User Tasks


5. Retailers Should Focus on Supporting User Tasks

Task-based tools were few and far between. Outside of Clinique’s skin evaluation, others include gift registry, mobile price scanners, and an interactive floor plan from Bloomingdale’s.

Some experiences appeared promising, but fell short, including mobile scanners that failed to scan and Aldo’s tablets that were mounted on shelves but for employees only.


Finding 6: The Omnichannel Battle Has Begun


6. The Omnichannel Battle Has Begun

A number of retailers provide store inventory visibility on the dot-com and mobile channels; a few took it a step further to offer in-store pick-up and delivery.

Nordstrom’s mobile site even offers a ‘nearby’ filter.


Other interesting experiences

Neiman Marcus’s Chanel runway video screen

Niketown’s interactive experience

Lebron James’ Unknwn shop features tablets next to each shoe

ALDO’s tablet trap LEGO’s AR would be great – if it worked


Conclusion | Six main themes

Digital In-Store Displays Are Powerful Tools—But Too Often Poorly Executed

Poorly Planned Digital Is Worse Than No Digital At All

It Isn’t Just the Hardware: Content and Software Matter

The Right Tools Generate Additional Revenue

Retailers Should Focus on Supporting User Tasks

The Omnichannel Battle Has Begun

Just 43% of retailers had a device mounted, and visible in-store

At one retailer, 87% of their price checkers were out of order

Just 25% received a baseline (3+) score in content

We’ve found a 10% to 40% increase in same-store sales for well-executed in-store kiosks

While 43% had something visible, just 22% had interactivity

More retailers were awarded the top score in cross-channel inventory visibility than any other


The full report is available now | Insights 2013

The best thinking of SapientNitro’s 10,000 employees and 35 global offices

Our focus this year is on redefining experience

Four major themes: Real-time Control, Predicting Desire, Continuous Experiences, Globalization

Proprietary research study on 71 retailers

L2 Partnership & Excerpt

10 distinct international perspectives

43 global authors

Digital version with additional, exclusive content at

http://sapient.com/insights


Thank You

idea engineer exchange webinar series - sapientnitro 2012 omnichannel research

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