retail revolution 2015-iulia pencea-gfk

© GfK Romania | Retail Revolution Conference | April 2015 1

Iulia Pencea, GfK

Group Account Manager

Custom Research & Strategy

Bucharest, April 2015


XTREME SHOPPER


Agenda

2 Shopping, we are online

3 A New Shopper has emerged

1 Economical climate...ready for some good news?

4 What now?


Economical climate...ready for some GOOD NEWS?


1,866

RON 0

RON 400

RON 800

RON 1,200

RON 1,600

RON 2,000

Monthly net salary (RON)

0.8%

6%

5%

6%

-10%

-5%

0%

5%

10%

15%

20%

ian.

11

feb.1

1m

ar.

11

ap

r.11

ma

i.1

1iu

n.1

1iu

l.11

au

g.1

1sep.1

1oct.1

1no

v.1

1de

c.1

1ia

n.

12

feb.1

2m

ar.

12

ap

r.12

ma

i.1

2iu

n.1

2iu

l.12

au

g.1

2sep.1

2oct.1

2no

v.1

2de

c.1

2ia

n.

13

feb.1

3m

ar.

13

ap

r.13

ma

i.1

3iu

n.1

3iu

l.13

au

g.1

3sep.1

3oct.1

3no

v.1

3de

c.1

3ia

n.

14

feb.1

4m

ar.

14

ap

r.14

ma

i.1

4iu

n.1

4iu

l.14

Aug.1

4S

ep.1

4O

ct.14

No

v.1

4D

ec.1

4

Salary evolution and the impact of inflation

Inflation - vs. same month previous year

Real salary evolution (% change vs. same month previous year)

Real salary evolution (% change vs. same month in 2009)

Source: GfK Pulse Survey

Purchasing Power Evolution

2013 2014

% change

20122011

Bigger salaries & inflation decreasing


-80

-70

-60

-50

-40

-30

-20

-10

0

10

20

ian.-

11

feb.-

11

ma

r.-1

1

apr.

-11

ma

i.-1

1

iun.-

11

iul.-1

1

aug.-

11

sep

.-11

oct.

-11

nov.-

11

dec.-

11

ian.-

12

feb.-

12

ma

r.-1

2

apr.

-12

ma

i.-1

2

iun.-

12

iul.-1

2

aug.-

12

sep

.-12

oct.

-12

nov.-

12

dec.-

12

ian.-

13

feb.-

13

ma

r.-1

3

apr.

-13

ma

i.-1

3

iun.-

13

iul.-1

3

aug.-

13

sep

.-13

oct.

-13

nov.-

13

dec.-

13

ian.-

14

feb.-

14

ma

r.-1

4

apr.

-14

ma

i.-1

4

iun.-

14

iul.-1

4

aug.-

14

sep

.-14

oct.

-14

nov.-

14

dec.-

14

ian.-

15

feb.-

15

Consumer confidence index Romania vs. EU

Romania European Union (average)

Source: GfK Pulse Survey

Partial recovery of the

salaries of state

administration

employees. Pre-election

Political crisis,

increased inflation,

increased euro-RON

exchange rate.

Second partial

recovery of the

salaries of state

administration

employees.

Introduction of

co-payment for

hospital services

NET confidence

(positive – negative)

2013 201420122011

Minimum salary

+ 50 RON,

cheaper energy.

Income increases

announcements,

presidential

elections*, which

usually bring a

surge of optimism.

2015

Minimum salary

+ 75 RON,

pensions +5%

Consumer Confidence Evolution

Specialists and official institutions expect the Romanian economy to grow by 2.5 - 3.7% in 2015


50 47 46

8 9 9

15 13 14

26 28 27

2012 2013 2014

Hypermarkets

Supermarkets

Discounters

Cash & Carry

Modern ProximityStores

Traditional Trade

FMCG Markets

Modern

Trade:

50% 54%

Value change, 2014 vs 2013

0.4

6

0.4

4

0.4

2

Personal Care

Home Care

Beverages

Food, other than freshproducts

Fresh & Dairy

FMCG

53%

Extra income is likely to be spent rather than set aside

Source: GfK Household Panel


Technical Goods Market

+14% vs. 2013 and surpassed €700 mil

Source: GfK Retail of technology

0

100

200

300

400

500

600

700

800

Total Consumerelectronics

Photo Majordomestic

appliances

Smalldomestic

appliances

IT Telecom-munication

OfficeEquipment andconsumables

Evolution by category (in Q4 2014 vs. Q4 2013)

23%

19%

18%

Mil Euro

Q4 2014 vs. Q4 2013

% change

0

100

200

300

400

500

600

700

800

Q1 2011Q2 2011Q3 2011Q4 2011Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014Q3 2014Q4 2014

Technical goods market evolution

Mil. Euro


Shopping nowadays means...

The process of browsing, comparison shopping,

information gathering OR the actual

purchase of items.

Willing to buy more but...


73

72

64

64

I’m learning how to shop better and more efficiently

I feel like I am in more control than ever before whenchoosing the best products to buy

I am now less loyal to any one retailer, because I have toshop around more to find the best values

Retailers, advertisers, and brands have less influence on mypurchase decisions than ever before

Retailers and

brands

lose

more and more

influence

on

Purchase decision

Whats different in shopping?

(+9)

(+8)

Learning

Control

Less influence

Best value

GfK Xtreme Shopper Online Survey


The role social networks in the shopping experience is undeniable

77

61

58

47

46

I am more concerned about the security of my personalinformation when shopping online than I am when

shopping in a store

I like it when a website keeps track of my visits and thenrecommends things to me

Shopping online saves money

My social networks have become as important as otherinformation sources for me to make the best product

choices

I like it when I can pay for something using my mobiledevice

Even if they are still

at a high level,

customized

recommendations

based on

previous behavior

are decreasing in

importance

(-5)

(+7)

(+3)

Technology

Online

GfK Xtreme Shopper Online Survey


We are online


Split of digital profiles in Romania

DIGITAL

NATIVE

DIGITAL

VOYEUR

DIGITAL

SETTLER

DIGITAL

MONK

DIGITAL

IMMIGRANT

Live in land, far from the sea

Watch the people in the water,

swim to cool off

Fishermen use the water but live on land

Penguins same in or out of the water

Like fish in the sea6%

7%

16%

30%

36%


A New Shopper has emerged


Economy meets tehnology

The rise of the Xtreme Shopper

Competitive 11h/week

searching for

product info

Wired

Xtreme Shoppers are a global and growing phenomenon,

empowered by being proactive and in control.

“Win” at the game of finding the best value

Higher

education&

income

equalin Romania are mostly

25-34, highly educated

and more affluent


Xtreme shoppers % Ro is a bit above the regional average

25%

52%

33%

35%

18%

22%

25%

Australia

APAC

LATAM

US

WE

CEE

Romania

Note: incidence measured in 15-45 years old urban Internet users

* In the past 6 months

80%

74%

71%

67%

58%

36%

Searching for the best price

Check for general product information

Finding products I want

Purchase a product

Read product reviews

Use a social networking site to request /exchange/postinformation about the product

Used

smartphone and/or

tablet

to shop*

Actively using

Internet

in shopping*


61

60

46

53

Previous experience with retailer or brand

Online reviews from experts

Online reviews from other shoppers/users

Opinions of family/friends/colleagues

Retailer websites

Price comparison/discount websites

Xtreme Shoppers (N=250) Non-Xtremes (N=750)

Xtreme Shoppers value most touchpoints more

compared to Non-Xtremes


88

88

68

38

36

26

18

16

14

Xtreme Non-Xtreme

95 85

95 86

78 64

43 36

51 32

30 24

27 15

25 14

17 13

7 6

2 4

Family member

Friends

Neighbors

Colleagues/people I know

To whom I share a hobby/interest

People I know through a community

People I know through my kids’

activities

People who may have read a

recommendation I posted online

People I don’t know

Significantly higher than Non-Xtreme at 95%

confidence level

People recommend products and services mainly to family and

friends, Xtreme shoppers are reccomending to everybody


What now?

1. Are all shoppers going Xtreme?

2. How classic retail affected?

3. How touchpoints are affected?


Is online shopping bound to replace physical stores?

Different experieces


Previous

Experience

Brand websites

Price comparison sites

Coupons Retailer websites

Store flyers

Brochures/flyers

Product packaging

In store displays

Online advertising

General shopping sites

TV or print advertising

Social media

Shelf info

WOM-friends and family

Product samples/demos

Consumer opinion sites

Online experts reviews

Manufacturer apps

Ability to pay with my mobile device

Geo-locater

Shopping /retailer apps your smartphone or tablet

Traditional in-store tactics remain vital influencers, yet

online/ mobile touchpoints influence is growing

Brand Retailer


MORE IN CONTROL, ENGAGED, DEMANDING

MORE EMPOWERED

CRITICAL NEED FOR

SHOPPER-CENTRIC SOLUTIONS

Know me

Engage me

Provide

information

Give me good

value for my

money

Make it easy

for me

Follow me

Favorable climate

Digital boom

Omnichanel shopping gaining importance

Off and online - different experiences coexisting

→ Purchasing Power and markets increasing

→ Turned shopping to procces: browsing, comparing, purchase

→ More complexity in bussines

→ Touchpoints have to adress both, coherently

Wired, higher education

and income

Increased in incidence

with +5pp in one year

online looking for „best

value” - INFORMATION

Values online

expressed reviews

Can be an informal

brand ambassador


DID YOU THINK I'D FORGOTTEN YOU?An algorithm can help you shop the entire wardrobe from “House of Cards”


THANK YOU!

Iulia Pencea

Group Account Manager

Custom Research & Strategy

GfK Romania

www.gfk-ro.com