winning the future shopper
TRANSCRIPT
Winning the future shopperFour keys to your future of retail
Omnishopper conference Paris 2015
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Today
1
2
3
Making sense of chaos
Battlegrounds and predictions
Four ways to win
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1. Nothing has changed. Execution has changed dramatically, but retail fundamentals
are unchanged.
2. But you need to get faster. When retailing you need to be fitter, more agile.
3. Loyalty is dead. Loyalty, if it ever existed in a pure form, has been left behind.
Your loyalty expectations should now be different.
Our inspiration
Image sources: "5 ball juggling" by Original uploader was James Heilman, MD at en.wikipedia - Transferred from en.wikipedia; transferred to Commons by User:Stevenfruitsmaak using CommonsHelper.. Licensed under CC BY-SA 3.0 via Commons - https://commons.wikimedia.org/wiki/File:5_ball_juggling.jpg#/media/File:5_ball_juggling.jpg; "Video shop" by Tracy the astonishing - The video store on Flickr. Licensed under CC BY-SA 2.0 via Commons - https://commons.wikimedia.org/wiki/File:Video_shop.jpg#/media/File:Video_shop.jpg; http://www.blinkbox.com
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Self service: 1915/1916
self service(US – Groceteria)
Source: Smart Retail, Richard Hammond
The history of retail
Chains:c.200 BC
the creation of the first chain of stores (China – Lo Kass)
Distance selling: 17th century
catalogue based mail order (Europe)
Ye OldeCatalogue
Retail theatre: 1852
the first department store (Paris, France – Le Bon Marché)
In the last2,200 yearsthere have been
four retail innovations
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“Retailing is not about inventing new stuff
Retail ideas are about change, improvement and development
They are rarely about coming up with things that no human has ever thought about before
You don’t have to magically pluck new ‘things’ out of nowhere to be innovative and successful”
Smart Retail, Richard Hammond
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Take comfort, the fundamentals remain unchanged
Choice PriceConvenience Experience
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How should we understand the future shopper?
Live in the jungle Observe shoppersAsk shoppers
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The musings of Anya Llewellyn
Use your imagination. Talk to future shoppers
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Retail in turmoil
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Retail is not as it once was
Amazon selling via Waterstones
Tetley and Nestle collaborating to sellto need states
Stores seeking to communicate through entertainment
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The door is open to experimentation
Barriers to trying new things in store have dissolved
Store design, once dictated by cost and efficiency, has opened up
Slowing growth = more innovation in retail
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Four pillars of retail
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Technology and austerity create raised expectations
Choice PriceConvenience Experience
Four new retail battlegrounds Sell to need states not categories
Be transparent onprice position
Make the shopper feel good about their choice
Be where your shoppers are
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Four vectors which drive retail advantage
Choice PriceConvenience Experience
Four new retail battlegrounds Sell to need states not categories
Be transparent onprice position
Make the shopper feel good about their choice
Be where your shoppers are
Predictions for the future of shoppingMobile will enable omnishopping
Competitors will collaborate
Same price for same item
Shoppers will be satisfied, not coerced
The future is bright…
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CH
AP
TER
ON
EConvenience
Be where your shoppers are
PredictionMobile will enable omnishopping
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Skip the queue, happy you
The end of the queue?
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FutureBuy 2015, 2014, n=1,000 per market
“My mobile device is quickly becoming my most important shopping tool”
Global average = 34%
60%
53%75%
74%
58%
35%16%
48%50%
72%
20%
2015
2014
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Being convenient has been essential since retail began
To create attraction from the moment of trigger you must be continuously available
Purchase
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CH
AP
TER
TW
OChoice
Sell to need states not categories
PredictionCompetitors will collaborate
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Shoppers want services not categories
Merchandising to an occasion Competitor collaboration
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FutureBuy 2015, UK data
People want to buy multiple things at once! Can we do more to help them?
Let’s me see and feel the products before I buy1st
Getting the best advice on what to buy20th
41%
5%
Save money (better pricing, deals)1st
Getting the best advice on what to buy17th
53%
5%
Can buy other things at the same time
Can buy other things at the same time
Why do you buy in stores? Why do you buy online?
5th 11th24%
16%
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Tesco.com
How can we help the shopper fulfil their mission?
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Ocado.com
How can manufacturers and retailers collaborate to help shoppers visualise a meal?
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The key to choice
Offering the right choice has always been critical, but typically product has been merchandised category by category, without a wider view
To win with the future shopper you must create services around need states not categories. Often this will require collaboration with competition.
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CH
AP
TER
TH
RE
E
Price
Be transparent onprice position
Same price for same item
Prediction
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Sources: UK retail safari
Talking incessantly about price creates a commodity mind-set among shoppers
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Sports Direct website; Up and Running, Aylesbury, Google see inside
This creates a major challenge to retailers who need to command a premium
Price spectrum
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SportsDirect.com, Upandrunning.com
How do you monetise expertise?
Price spectrum
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Where should the £18.50 go?
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FutureBuy, global data, n=23,003
Shoppers are increasingly baffled by the idea that they should pay more at a different place
“It is important to me that the price of an item be the same whether I buy it online or in-store”
+12%p
58% 70%
Total LEC
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Digital and austerity create a new level of transparency and shopper scrutiny
The key to price
Charging more for the same item is no longer viable. Premium retailers must trade shoppers up outside of brands, as discounters have traded down.
Matched prices for the same/equivalent products
Upsell(Service, private label, subscription)
Downsell(Private label)
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CH
AP
TER
FO
UR
Experience
Make the shopper feel good about their choice
Shoppers will be satisfied, not coerced
Prediction
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BOQ - Bank of Queensland Branch of the Future
http://sydneydesignawards.com.au/syd14/entry_details.asp?ID=13421&Category_ID=6059
“If this looks or feels anything like a bank, I’ll walk out!”
How do we make selling spaces more human?
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“At Virgin Holidays we like to do things differently
While most stores are designed to sell, sell, sell – that isn’t the top of our agenda
We want to provide a retail space that is designed to inspire consumers through immersive experiences”
Lee Haslett, director of sales at Virgin Holidays
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Wagamama, High Wycombe, UK
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Wagamama, High Wycombe, UK
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http://www.techtimes.com/articles/40857/20150319/ailibabas-jack-ma-demos-pay-selfie-technology.htm; http://www.bbc.co.uk/news/technology-33379461
Talking of forgetting passwords…
Selfie pay Alibaba’s CEO Jack Ma
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“I’m making more payments using my mobile device in store compared to last year”
Global average = 12%
23%
24%32%
32%
12%
11%10%
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FutureBuy 2015, n=1,000 per market
Mobile is an experience enabler, where demand exceeds supply
Making more mobile payments
“I’m making more payments using my mobile device in store
compared to last year”
Want to make more mobile payment
“I look forward to being able to pay for more and more transactions from
my mobile device”
Latent demand
+/- diff
19%24%23%12%32%
62%65%63%51%70%
+43+41+40+39+38
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Deliver to home Deliver to collection point
Deliver to my car Deliver to store
Retail no longer finishes with the ‘store’
Think spare capacity, think sharing economy
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FutureBuy, global data, n=23,003
Stand and deliver!
Cost of delivery 1st
Prefer to see product in person3rd
42%
37%
Card/personal details security 2nd 38
%
Free delivery1st
Holiday/seasonal discounts3rd
74%
48%
Better loyalty programmes
What would make you buy more online?
2nd 48%
Why do you not buy online?
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The key to experience
The collision of digital and austerity provides the fertile ground we need to enliven retail
Create experiences not transactions
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Conclusions
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The four keys to winning your future shopper
Create experiences not transactions
Be continuously available from the moment of trigger
Matched prices for the same/equivalent products
Upsell
(Service, private label, subscription)
Downsell
(Private label)
Create services not categories
Price match the core, trade up or down
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Our imagination creates a window to the future of shopping
WINES FRUIT