retail today defined by the power€¦ · research online, buy in-store click and collect research...

RETAIL TODAY DEFINED BY

THE POWER AND

THE MONEYHow millennials and baby boomers are shaping

the today and tomorrow of global retail

This research was conducted with 13,250 consumers across 12 countries: Australia; Brazil; China; France; Germany; Italy; India; Japan; Mexico; Russia; UK and US. Independent business market research agency, Morar Consulting interviewed consumers about their shopping habits and attitudes towards many of the trends shaping global retail. This report is based on the results of those interviews with global consumers.

RETAIL TODAY DEFINED BY THE POWER AND THE MONEY

A TIME OFINCREDIBLE CHANGE:

Retailers are facing a time of unprecedented change in how consumers shop and connect with brands. Consumer expectations are heightened, they require a service that treats them as an individual and many have embedded technology in every aspect of their daily lives.

Furthermore, with disruptive brands entering the retail space, from start-ups to major brands breaking new sectors and geographies, there is an urgent imperative upon retailers to act now – and get it right - or risk their very futures.

However, they must balance two very contrasting priorities.

They must respond to those progressive trends, advance their businesses and embrace technology. But they must also remember they cannot leave wealthy customers behind. For all the need to innovate there is also a need for retailers to ensure all customers can follow them to the future.

This report, based on extensive research into consumer attitudes around the world, explores how retailers can find a single route to the future that offers a different pace of travel to different consumers. It looks at how retailers can engage those who have the power and those who have the money; how powerful, industry shaping trends being defined by younger consumers can be balanced with the need to court a growing, affluent older population, many of whom have more disposable wealth than their children.

Retailers must balance the power and the money and they must do so under increasing pressures of time and urgency. They must run to tomorrow while not abandoning the customers who will spend most with them today.

It sounds difficult but it need not be complex. In this report Oracle will discuss how retailers can meet these contrasting challenges, not with different approaches for different audiences but by being a brand that can give every individual the experience they are looking for.


RUSH TO THE FUTURE…BUT DON’T LEAVEANYBODY BEHIND

Many retail businesses are rightly focusing on the ways in which the ‘millennial’ generation (under-30s) will shape their business but there is a lot of potential spending power still locked up in the ‘baby boomers’ (over 60s) who have more disposable income and are enjoying greater financial stability and quality of life than many younger demographics. For these shoppers it is crucial to continue investing in the in-store experience. But the emphasis must be on ‘experience’.

Oracle’s research found older shoppers (74% of over-60s) prefer to shop in-store still (compared to (59.7% of under-30s) and they think it is far more important to be able to see and touch products before they buy (20% compared to 8.7%).

Older shoppers want their questions answered by people they can talk to and they want to be given the confidence and human assurances that their transaction is safe and their purchases protected (48.6% of over-60s feel more secure shopping in-store, compared to 32% of under-30s).

Meeting these demands need not be a short-term investment for retailers however, because millennials are also keen on an in-store experience. It is simply not true to assume the store is for older shoppers and online and mobile for younger.

All retail channels must be complementary to enable the widest variety of experiences.

The baby boomers are more likely to shop in-store and take items there and then than the millennial shoppers, but millennials are more likely to visit the store to collect items they have ordered online, or research in-store and then shop online. Both need products on shelves, both need a comfortable experience, both need information.

Whether it is the case that millennials treat shops more like a showroom or collection point while baby boomers still engage in more traditional shopping behaviours, both need to get an experience that encourages a transaction and provides the information they need.

RESEARCHFINDINGS

71% of over-60s… 54% of under-30……prefer to buygoods in storeand take themhome with them

35% of under-30s…24% of over-60s…

…prefer to buy goods online and have them delivered

Percentage of millennials shopping online at least once per week:

Percentage of baby boomers shopping online at least once per week:

It is clear both age groups are active in-store and online however, the most rapid growth online is among the millennials.

Among the baby boomers it appears to have reached a plateau, suggesting fresh investment in encouraging that group online, while addressing some of their persistent concerns will be important.

201531%

201640.7%

201516%

201616.4%


Retailers must ensure when millennials are researching items in-store before buying online they are given a reason to buy from them, not a rival. That means removing any temptation to visit rival retailers’ websites by making the in-store and online experience as seamless as possible and as attractive as possible. From ensuring price competitiveness, after sales care and returns policies are clearly advertised at the product – not just at the point of sale, which may not be visited - to ensuring all questions are answered, retailers need to ensure customers leaving the store to buy online will buy with them.

Ideally, retailers should encourage shoppers to buy online while still in-store. In-store, retailers need to make clear what buying and delivery options are available and ensure there are devices and staff around the store that can process online orders while a customer is in the mood to purchase.

Making all such information and services available will be beneficial to all consumer groups, even if they come at them from different directions.

Helping customers discover how multiple channels complement one another will give older demographics confidence to branch out, while encouraging younger demographics into the store more regularly to engage with the brand and the products. The easy provision of online ordering in-store can help overcome a major concern for baby boomers which is not finding the item they want in-store.

Across all channels, prices must be the same if customers are to see those channels as complementary rather than conflicting.

Doing so will help address a growing concern among baby boomers who feel left behind by a perceived inequality between online and offline pricing. Older demographics believe they see the same companies charging less for items online than in-store and feel more strongly that pricing should be consistent across all channels than younger demographics. (30% of over-60s have seen the same retailer charging less online for goods also sold in-store. 45% believe this shouldn’t happen).

Retailers must avoid giving the impression they punish older shoppers for preferring to visit stores with higher prices – not least because as we’ve established the in-store experience has an increasing role to play in online sales for all audiences

Similarly, the preference for face-to-face contact among older shoppers shows in their concerns about refund and returns policies when buying online. Retailers need to do more to communicate what in-person options are available for returning or collecting goods bought online. (32% of over-60s are concerned about returns and refunds when shopping online.)

Retailers must do all they can to bridge any gaps between the offline and online experience.

IMPROVE THE IN-STORE

EXPERIENCE

The instore experience is crucial – even for the millennials - and sits at the heart of major trends.

Percentage of millennials shopping in-store at least once per week:

The fact this has increased may be down in part to the data itself, however, the rise of trends such as click and collect and the blurring of the lines between the online and in-store experience is bringing more people into shops, even if their retail experience starts online.

24% of millennials have shopped online and collected in-store in the past year

28% have shopped in-store but had purchases delivered to their home

42% have researched items online but bought them in-store

These trends may hold the key to getting more millennials in-store but conversely may help steer more baby boomers online.

13% of baby boomers have shopped online and collected in-store in the past year

18% of baby boomers have researched an item in-store and then purchased it online

201552%

201662.2%

The store sits at the heart of many rising trends among both millennials and baby boomers

Millennial trends on the rise Baby boomer trends on the rise Click and collect Buy in-store, arrange home-delivery Research online, buy in-store Click and collect Research in-store, buy online Shopping on mobile Check in-store availability pre-visit Check in-store availability pre-visit

TOP TRENDS ON THE RISE…

MOBILE:AN ESSENTIAL ELEMENT OF THE RETAIL EXPERIENCE

Retailers must ensure they factor mobile into their planning at all times.

36.8% of millennials have shopped on their mobile phone via an app or mobile website in the past 12 months. 38% expect to do so more over the coming year.

The demand is less evident among the baby boomers 4.8% of baby boomers have shopped on their mobile over the past year, with 7.3% expecting to do so more in the coming 12 months.

However, it is clear from the number of shoppers in both age groups who would like to check live product availability or research product information on their mobile phones that the value of mobile to retailers is not just about the transaction. It is a vital element of the overall retail experience.

95.5% of millennials and 68.4% of baby boomers say they would regularly check product information on their mobile phone, in-store, if they were able to do so.

36.3% of millennials want to see retailers roll out better mobile services and 31.7% want to see a mobile experience that is more joined-up with the in-store experience. For example, 36.7% of millennials would like to be able to scan and pay for items in-store using their mobile (compared to 14.1% of baby boomers)


INNOVATION:FULL STEAM AHEAD OR STEADY AS YOU GO?

Few things divide the baby boomers and the millennials more than innovation. The research clearly reveals older demographics are less immediately excited by technology and innovation. Over a third (37.5%) of over-60s dismissed out of hand a wide range of potential innovations, saying they have no interest in them at all, compared to just 8.3% of the millennials.

That isn’t to say the right approach is to innovate for the millennials and do nothing for the baby boomers. Rather the issue is about education and showing the need for innovation.

When presented with instances where innovation could provide an immediate benefit to their retail experience – such as getting better answers from shop staff armed with smart devices - baby boomers were keener to consider them.

Similarly being able to check live availability in-store (32% of baby boomers would find this convenient) or using location-based services to locate items in large stores proved more popular (20%). This suggests innovations which are subtle and practical will improve engagement with this important demographic. These innovations will also prove a ‘springboard’ to further innovations. Once consumers are using their mobile phone to assist with one aspect of the retail experience, it will be easier to provide further mobile and online services.

Most important are innovations which can resolve frustrations older shoppers feel in-store. Over a third of over-60s shoppers have given up on an in-store purchase because of poor customer service. Nearly a quarter have walked out because staff couldn’t answer their questions and 42.5% have given up due to a lack of choice or availability. It is clear this group would benefit most from retail staff having more information at their fingertips. Similarly, more options to check live availability would prove successful across all groups.

Putting in place the back-end to support innovations such as live product availability, accessible on mobile devices, will also provide a scalable infrastructure for rolling out further innovations of the kind that will excite millennials and future generations.

THE RISE OF THE MACHINES?

30% of millennials are excited by the idea of delivery by drones, compared to just 10% of baby boomers.

What’s more, 27% of millennials are keen to be helped by robots in-store. This prospect appeals to just 16% of baby-boomers.

While not all consumers are ready for technology such as drones making deliveries, 42% of millennials and 34% of baby boomers do want to see new and improved, more convenient, delivery options. Retailers should consider integrating more third party courier and delivery services, or on-demand taxi applications such as Uber into their delivery options. This would give consumers more choice, more control and more transparency.

AVOID FRUSTRATING CONSUMERS

46% of millennials and 32.4% of baby boomers want to be able to check live availability of products before visiting a store.

FEED THE NEED FOR INFORMATION

23% of millennials and 23% of baby boomers have abandoned a purchase in-store due to a lack of information.

26% of millennials and 29% of baby boomers believe shop staff don’t know enough about the products they sell.

31.7% of baby boomers believe all shop staff should carry smart devices to increase their ability to handle customer enquiries

The solutions shoppers actually use may transpire to be different – millennials may use more self-service options, while baby boomers may still prefer human contact, in the shape of staff with more information at their fingertips, but the underlying solution is to make that information available on multiple devices.

A COMMON APPROACHTO CHANGINGCONSUMER PRIORITIES

The Oracle research has highlighted clear trends which differentiate millennials and baby boomers but there are also many similarities, spanning consumers of all ages. For example there is a clear trend towards more ethical buying behaviours.

The research shows consumers are increasingly concerned about issues such as authenticity, quality assurance and responsible sourcing. They want to know what their products are made of and where and how they are made. These findings highlight the clear need for retailers to ensure more information is available about their products and their supply chains.

Whatever a shopper wants to understand about the products they buy or the conditions under which they were produced, all that information can, and should, exist in the same place, to be searchable in its entirety, not least because some consumers may want to see it all while some may want to see very little or none at all.

Retailers need to ensure they have that information and can structure it in a way that means it can be served up to consumers on multiple devices, in-store, online and on mobile, at the product level and in the hands of shop staff.

They must ensure customers get the same answer whether they research their question online or ask in-store or at a self-service information point.

QUALITY ASSURANCE

MATTERS

43.5%of consumersbelieve retailersshould make iteasier to find out where their food comes from, whether shopping online, in-store or on mobile.

42%wantassurancesthat the foodthey buy is responsibly sourced and want to beable to find that information easily online, in-store or on mobile.

40%of consumersexpect in-storestaff to be ableto answer detailed questions about issues such as quality assurance, ethical sourcing and authenticity.

RESHAPING FORTHE FUTURE

Retailers must have flexible, agile systems in place that allow them to meet the conflicting needs of different consumers who expect to be treated as an individual online and offline and want to shop on their terms, when and where they want to.

Consumers want choice. As such, retailers need to work towards providing a level of service that enables a seamless freedom in an agile, flexible way for consumers to shop when they want, where they want and how they want. It is not about treating customers differently, but rather treating them all the same and providing the means for each and every one to find a retail experience that works for them. Traditional service has become a technology-enabled experience.

However, this is not just about technological change, it is also about cultural change, about retailers having the courage of their convictions to implement real change within their business that delivers greater agility, flexibility and responsiveness. They must respond to the powerful trends shaping their businesses while not losing sight of the need to make money.

They must balance the power and the money shaping their businesses today and tomorrow.


retail today defined by the power€¦ · research online, buy in-store click and collect research...

Documents