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Retail Disruption 3 Strategies to Capitalize on

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Page 1: eBook retail disruption: 3 strategies to capitalize on retail disruption

Retail Disruption

3 Strategies to Capitalize on

Page 2: eBook retail disruption: 3 strategies to capitalize on retail disruption

The evolution of retail from the 1870s to the present has brought radical changes to the industry . Over the years, we’ve seen buying preferences shift from catalog shop-ping and department stores to specialty stores focusing on vertical markets and a retail environment where online shoppers can browse and buy from storefronts anywhere in the world 24/7.

Disruptive factorsare drastically changing retail...

And now, the rate of change is accelerating, threatening the survival of many brands and retailers.

Page 3: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 3© 2015 InReality. All rights reserved.

THE IMPACT OF RETAIL DISRUPTION

• Since 2009, online retail has grown at almost 3x the speed of brick-and-mortar retail, with a compound annual growth rate (CAGR) of 16% com-pared to a CAGR of less than 6%.

• Consumersareflockingtoverticalspecialtystores,andiconicretailbrandsare losing relevance.

• Onlineretailersaremovinginstoreandfindingnewwaystodelightthecon-sumer, while brick-and-mortar retailers are still scrambling to adopt “omni-channel” strategies.

• In2014,Amazonbecamethefirstonlineplayertojointhetop10largestre-tailers, with nearly $10B in sales volume.

• Since 2007, the number of brick-and-mortar stores in the U.S. has declined by nearly 6%. And, since 1992, store numbers have declined by over 1/3.

• Someofthebiggestbrandshavebeenforcedtoundertakemajorstoreclosings,includingSears,Target,Barnes&Noble,GameStop,OfficeDepot, Staples and Ann Taylor, to name a few.

ONLINE

IN-STORE

CAGR

SOURCE: www.census.gov/retail

SINCE 2009

ACKNOWLEDGEMENTS: on page 18

Page 4: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 4© 2015 InReality. All rights reserved.

SO HOW DID WE GET HERE? A BRIEF HISTORY OF RETAILSince1865,therehavebeensignificantshiftsinretail,fromhowandwhyconsumerspurchase,tohowretailersandbrandsattempttoreachtheseconsumersandinfluencetheir purchase behavior.

ACKNOWLEDGEMENTS: on page 18

Page 5: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 5© 2015 InReality. All rights reserved.

TECHNOLOGY ADOPTION IS FUELING RETAIL DISRUPTIONWith the rapid adoption of the PC, web, ecommerce and mobile technologies, con-sumers can now shop anywhere, anytime and any way they choose.

# OF YEARS FOR TECHNOLOGY TO REACH A 25% ADOPTION RATE IN THE U.S.

ACKNOWLEDGEMENTS: on page 18

Page 6: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 6© 2015 InReality. All rights reserved.

SO WHAT NOW?3 Survive-&-Thrive Strategies to Turn Disruption into Opportunity

Page 7: eBook retail disruption: 3 strategies to capitalize on retail disruption

#13 Strategies to Capitalize on Retail Disruption 7© 2015 InReality. All rights reserved.

FORGET OMNICHANNEL.ADOPT OMNIPRESENCE.

Page 8: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 8© 2015 InReality. All rights reserved.

Be Everywhere with Consumers

OMNICHANNEL... NICE BUZZWORD

The problem with “ominchannel” is that it’s taught us to think of the various touch points along the consumer’s path-to-purchase as separate pieces rather than as a whole.

Omnipresent brands create consumer experi-ences that meet needs and expectations and drive customer loyalty everywhere, all the time.

Today’s consumers are always connected. It’s critical to know how, when, where and why they want to buy and meet them at these intersections. But, don’t stop there. Seek to understand how experiences with your brand impact purchases and loyalty so you can remain competitive and constantly create improved consumer experiences.

Use Physical Spaces to Anchor the BrandDon’tceasebrick-and-mortarinvestmentbecauseofgrowthinonlineretail;thatopportunity is far from dead. Instead, rediscover the “why, how and wow” of the physical store for your consumers—why the physical store positively impacts consumers, how it helps move them along the buying process, and what the unique “wow” is that cannot be replicated in an online world. Whether it’s the ability to touch and feel merchandise, test products or gain expert advice from salesassociatesorkiosks,usethephysicalstoretofulfillneedsand“wow”con-sumersinwaysthatyouotherwisecouldnot.And,don’tjustthinkofthestoreas a money generator, also think of it as a marketing tool and platform to estab-lishthebrandandimpactallsales—onlineandoffline.

Page 9: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 9© 2015 InReality. All rights reserved.

It’s About the Entire Consumer Journey

FORGET CHANNELS . FOCUS ON PHASES.

While it is important to maximize your strategy at every consumer touch point, thinking in terms of channels often leads to a fragmented consumer experience. The best approach is to focus on understanding and improving your consumer’s path-to-purchase,byfocusingontheirjourneythrough 3 phases: pre-purchase, purchase and post-purchase.

There might be some things you need to address so that your brand isn’t eliminated in the early stages. Today’s consumer is reading blogs, product reviews, and asking friends/family for rec-ommendations before making a purchase. Is this working to your best advantage?

This is the battleground. Use con-sumer insights to create winning experiences that connect with consumers and compel them to act. And, ensure that you are constantly meeting the expecta-tions you’ve set for consumers. Ask yourself, do all of our promis-es translate into the actual experi-ence, especially in store?

What you do here can largely affect whether or not you have loyal or one-time customers. After the sale, is there an opportunity to extend “buyer’s joy” or gracefully reverse “buyer’s remorse” to ensure that consumer perceptions of your brand remain positive?

Page 10: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 10© 2015 InReality. All rights reserved.

#2FORGET WHAT YOU THINK.ASK WHAT THEY THINK.

Page 11: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 11© 2015 InReality. All rights reserved.

GUT FEELINGS… TOO MUCH LIKE ROLLING THE DICE.

Constantly Gather Consumer InsightsThe truth is, it’s not what you think that mat-ters in retail anymore. It’s consumer insights that drive marketing and sales success. And, giving consumers what you think they need is a risky gamble in today’s hyper-competitive landscape. The more you know, the less you have to guess.

Todaywinningconsumerattentionrequiresmorethanjustunderstanding demographics, you need to know everything about consumer behavior and how that translates into the pre-purchase, purchase and post-purchase phasesandthecorrespondingtouchpointsalongtheirjourney.Fortheseinsights, it is critical not to rely simply on secondary sources. You need to understandconsumersinyourspecificproduct/servicecategory,especiallysincewithtoday’stechnologiesit’seasyandcost-effectivetogatherconsum-er insights.

Do You Know:• Who they are?• What they need?• What they expect?• Where they hang out?• Where they are in their buying cycle?• What motivates them to buy?• What their pain points are?• Why they shop your brand versus another and vice-versa?• How the above impacts their path-to-purchase?• How these insights can be used to improve their experience?

Page 12: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 12© 2015 InReality. All rights reserved.

#3 DON’T SELL. HELP THEM BUY.

Page 13: eBook retail disruption: 3 strategies to capitalize on retail disruption

13© 2015 InReality. All rights reserved.

TRADITIONAL SALES STRATEGIES... JUST DON’T CUT IT ANYMORE.

Remove Purchasing Barriers.Online- or in-store-only deals are a classic example of barriers to the purchase. Consumers will buy, where, when and why they please and it’s important not to trytodictatehowandwhenthatpurchasehappens—justhelpmakeithappen.Otherwise, you might end up impeding the purchase or sending a frustrated consumer elsewhere.

Experience First—Sell Second.Pushy, “fear-of-loss” sales techniques aren’t the way to get in the door. It’s time to rethink the role of sales and the sales associate. Today’s sales associ-ate should be available to help, but be patient until consumers are ready to buy. Theyshouldalsotakethelegworkoutoftheconsumer’sjourney—buildingcred-ibilitybyofferingahigherlevelofproductinformationinaninteractive,informa-tive and useful format.

The reality is, consumers hate to be sold to, but most love to buy. And, traditional sales techniques don’t quite work anymore. In a world where the consumer is now largely in charge of the path to purchase, there are things you must do to earn consumers’ interest, trust and loyalty.

Think “MeCommerce.”Put consumers’ likes and dislikes front and center. Where are they in their buying cycle? What do they prefer during their retail shopping experience? And, what are you going to do about that?

THE ROLE OF SALES AND THE SALES ASSOCIATE.

IT’S TIME TO RETHINK

Page 14: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 14© 2015 InReality. All rights reserved.

CREATE BUYING ENVIRONMENTS— NOT SELLING ENVIRONMENTS

INSIGHT: Doyouunderstandmorethanjustconsumer demographics, including things like buying habits, motivations and pain points?

PERSONALIZATION: Doyoucreateconsumerexperiencesthat are highly targeted, personalized and immediately relevant?

PROXIMITY: Whether the consumer is in store or online, are you giving them an imme-diately relevant experience to help them choose your product or service?

EMOTION: Are you guiding consumers to a desire—maybe one they didn’t even realize they had?

TECHNOLOGY: Areyoubridgingofflineandonlinewith in-store technologies to enhance the buying experience and stand out among the crowd?

ADAPTABILITY: Doyouhaveaconstantpulseonwhatmotivates consumers to buy so you can remain competitive and relevant?

Find Meaningful Ways to Incorporate:

Page 15: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 15© 2015 InReality. All rights reserved.

RETAIL DISRUPTION:It’s Time To Start Reinventing The 4 Walls

Page 16: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 16© 2015 InReality. All rights reserved.

THE OPPORTUNITY...

The PayoffThanks to technology, retail’s rate of change is rapidly accelerating and is now threatening the survival of many retailers and brands.

As always there will be winners, and there will be losers. However, winners willbethosewhoembracedisruptionforalltheopportunitiesitoffers. Fortheseretailersandbrands,thecomingyearspromisestoberipewithdramatic and exciting changes. Because technology moves so quickly, consumer needs and expectations are always changing. It’s a moving target, but one well worth chasing:

SOURCE: www.census.gov/retail

In 2014, total U.S. retail sales was $4.7 Trillion(online + in-store)

In 2014, almost94 percent ofall retail salestook place inphysical stores(totaling $4.4T)

SOURCE: www.census.gov/retail

In 2013, retail’s share of total GDP was 27 percent

SOURCE: www.emarketer.com

ACKNOWLEDGEMENTS: on page 18

Page 17: eBook retail disruption: 3 strategies to capitalize on retail disruption

3 Strategies to Capitalize on Retail Disruption 17© 2015 InReality. All rights reserved.

THE SKY IS THE LIMIT…when you let consumers fuel your marketing strategy.

Consumers will always have needs and desires that drive purchases. Are you adapting your business to snag these opportunities?

Meet InRealityInReality transforms how consumers experience brands and retailers, turning consumer insights into innovative in-store solutionsfortherealityof21stcenturyretail.For20years,we’vehelpedbannerclientslikeTheCoca-ColaCompany, Tempur-Pedic,TheHomeDepotandmanyotherstobetterconnectwithandengagewiththeircustomersthroughscalable, results-driven solutions.

Let’s disrupt retail together.www.inreality.com 120 Interstate North Pkwy E.

STE 226, Atlanta, GA 30339

P 770.953.1500

E [email protected]

Contact Us:

Page 18: eBook retail disruption: 3 strategies to capitalize on retail disruption

ACKNOWLEDGEMENTS:Robin Lewis and Michael Dart (2010). The New Rules of Retail. New York: Macmillan.

(2012, March 21). A Narrative History of Sears. Retrieved from http://www.searsarchives.com/

(2012). Economic Census: Industry Snapshots. Retrieved from http://thedataweb.rm.census.gov/

(2015, February 17). Latest Quarterly E-Commerce Report. Retrieved from http://www.census.gov/retail/

State of the U.S. Online Retail Economy in Q3 2014. Retrieved from http://www.comscore.com/Insights

David P. Schulz. (2014, July 1). Top 100 Retailers. Retrieved from http://www.nrf.com/news/top-100-retailers

(2014, December 23). Retail Sales Worldwide Will Top $22 Trillion This Year. Retrieved from http://www.emarketer.com/

Robin Lewis. (2014, March 25). The Great Retail Demassification, Part 2. Retrieved from http://www.forbes.com/sites/robinlewis/

Barbara Farfan. (2014). All 2014 Store Closings - US Retail Industry Chains to Close Stores. Retrieved from http://retailindustry.about.com

K.N.C., G.S. & P.K. (2014, March 12). Happy Birthday World Wide Web [Graph illustration]. Retrieved from http://www.economist.com/blogs/

© 2015 InReality. All rights reserved.3 Strategies to Capitalize on Retail Disruption