raising the bar – how to get even closer to your customer

OCTOBER 6, 2021

TCG Summit

Raising the bar – how to get even closer to your customer in the new reality

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Four big themes shape the world coming out of the pandemic

These analyses represent only potential scenarios based on discrete data from one point in time. They are not intended as a prediction or forecast, and the situation is changing daily

Source: BCG analysis

Emotional and mental stress

Limited direct interactions

Digital has jumped to a different curve

Still being forced to work a lot from

home

The extent of change driven by these themes on employees and consumers is still not fully visible

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In just 18 months, the online channel share for consumer electronics grew rapidly due to the pandemic


Pre-crisis (2019)

36% online channel share1

Post-crisis (2021)

52% online channel share1

18 months

Source: Forrester 1. Western Europe average of online channel share for consumer electronics

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Successful retailers have gotten even closer to their customers and leave the crisis as winner in the market



Ultra-fast order pick-up

Fast delivery options

Digital purchase planningSubscription models

Personalization

Frictionless checkout

Table-stake features

Differen-tiating

features

Automated re-ordering of commodities

Digital shopping events

Digital consulting

Ultra-fast & same day delivery

(Personalized) Digital in-store navigation

Deep-Dive

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Digital consulting | Lowe's AR-based app provides personalized customer support

Source: BCG F&L PA, News articles, Interviews, BCG analysis

• Combines video, computer vision and augmented reality capabilities to help Pros evaluate repair and maintenance projects during virtual consultations with customers

• Provides 1:1 support: • Includes AR and tools for

guiding customers visually • Detects serial numbers for

quick product details and reference to Pros

• Innovative for touchless service and support

Lowe's for Pros JobSIGHT app uses AR-support for in-home service calls virtually:

Deep DiveThese analyses represent only potential scenarios based on discrete data from one point in time. They are not intended as a prediction or forecast, and the situation is changing daily

Table stake

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Digital instore navigation | Walmart to leverage benefits of store network to compete with Amazon

Source: BCG F&L PA, News articles, Interviews, BCG analysis

• In-store layout supports end-to-end digital navigation guiding customers through a ‘seamless omni-shopping experience’

• Inspired by airport wayfinding systems, Walmart seeks to leverage benefits of its significant store network

• Stores includes new, contactless, app-based checkout experience

• New features to be rolled out in 200 Supercenters, some Health Centers and Neighborhood Markets by the end of FY

Walmart unveiled new store design focused on digitally enabled shopping experience (Sept. 2020):

Deep DiveThese analyses represent only potential scenarios based on discrete data from one point in time. They are not intended as a prediction or forecast, and the situation is changing daily

Differentiator

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• Arive works directly with consumer brands like Apple and Samsung

• Promise of on-demand bike delivery in under 30 minutes of order

• Products in multiple categories like consumer electronics, beauty, fitness and more

• Startup operational in Munich, Frankfurt and Berlin

• Focus on sustainable operations

Arive delivers premium brands in multiple categories within 30 minutes of order:

Ultra-fast delivery | Startup Arive delivers high-end products in under 30 minutes



Deep Dive Differentiator

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Not a lack of understanding but rather executional challenges prevent step changes in customer experience


Specification of "How to make it happen" as next step

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Offering such features requires massive changes to the front and back-end structures



Customer Relationship

Enabler:Operating model

Enabler:Technology

Organization

Talent

Culture & Collabo-ration

Tech &tools

Data & AI

Go-to-market

& offering

Persona-lization

Omni-channel

customer journey

Vision

Automation & robotics

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Operating Model | What determines a "digital mindset" within an organization?


Cult

ure

and

colla

bora

tion

Key dimensions

Focus

1

Ways of working

2

Leadership

3

Change mgmt.approach

4

Project-centric Product-centric

Waterfall with chronological process steps Agile & iterative working process

Hierarchal top-down leadership style Collaborative & autonomous mindset

Comprehensive trainings Change "on the flight"

Design options

Note: Options are not mutually exclusive. Several options may be relevant for each dimensions.

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Technology | Be bold in pursuing greenfield approach



Recommended approach

Online web

Legacy Landscape

Core Transaction layer

Infrastructure layer

Mobile In-Store Other

Brownfield Update



OmniservicesMobileOnline web In-Store Other

Greenfield Replacement



Data layer

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Omnichannel challenges are not

new but well understood in the

industry. Thus, nothing stands in the

way of short-term acceleration

There are many reasons to believe why there are a lot of opportunities in the TCG industry



1Stores will still have a role as unmatched points of experience & trustworthy points of sale for high-value

products and solutions

Demand for CE will continue to rise:

Digitalization drives demand for computers,

peripherals etc. (B2C as well as B2B)

New categories and services are on the rise: smart home, mobility etc. with

numerous opportunities

New business models emerge: Leveraging data & connectivity enabled by devices and applying this to

the business practices

2 3 4 5

15

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raising the bar – how to get even closer to your customer

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