industry trendswebex 033014vii
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Critical Industry Trends And What To Do About The Right Now. For link to complete Webex audio, email [email protected]TRANSCRIPT
March, 2014
Critical Industry Trends And What To Do About Them
1
ON-SITE INSIGHTS
2
Collabora'on
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ON-SITE INSIGHTS
3
Collabora'on
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Crea'on
ON-SITE INSIGHTS
4
Collabora'on
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Content Sharing
The Effect of Change on Retail Displays & Marketing
Webinar
Crea'on
ON-SITE INSIGHT
5
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WHAT WE’LL DISCUSS
Critical Trends Facing The Industry • Retail • Consumer • Shopper
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WHAT WE’LL DISCUSS
Critical Trends Facing The Industry • Retail • Consumer • Shopper
Implications For The Business • Logistics • Technology • Marketing
A Vision For Tomorrow • What it will take • What you can do right now
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CRITICAL TRENDS FACING THE INDUSTRY
Multiculturalism
Millennials Seniors Big Data Mktg
Mobile Personalization
Digitization of Products
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DRIVERS OF CHANGE
Retail Future 2020
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DRIVERS OF CHANGE
Retail Future 2020 Political
Economic
Social
Technology Industry
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DRIVERS OF CHANGE
• Deferral of major life stage decisions – Marriage, kids, home ownership
• Low population growth • Multi-cultural àAcculturation
Social
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DRIVERS OF CHANGE
• Deferral of major life stage decisions – Marriage, kids, home ownership
• Low population growth • Multi-cultural àAcculturation • Aging… absolute size of 55+ • Ex-urbanization • Health & Wellness – Active vs.
Inactive • Home Ownership – Rental Society • DIFM vs. DIY – More services
Social
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IMPLICATIONS
• Low Shopper base growth
• Smaller Households
• Decline of Mass Marketing
Social
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IMPLICATIONS
• Low Shopper base growth
• Smaller Households
• Decline of Mass Marketing
• Increased services – esp. health, financial, digital
• Proximate /local vs. Destination stores
• Essential vs. Discretionary mix
• Increased focus on diet/nutrition
Social
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DRIVERS OF CHANGE
• Significant Wildcards • Low economic growth • Improved full time workforce/Part
Time grows
Economic VISUAL
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DRIVERS OF CHANGE
• Significant Wildcards • Low economic growth • Improved full time workforce/Part
Time grows • Declining Middle and Growing
Higher income • “Real Inflation” outpacing wage
growth.. • Inter-generational workforce
Economic VISUAL
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IMPLICATIONS
• Retail focus on customer retention vs. acquisition
• Marketing depth vs. breadth?
Economic
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IMPLICATIONS
• Retail focus on customer retention vs. acquisition
• Marketing depth vs. breadth?
• Pricing & Mix vs. unit growth
• Services critical
Economic
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DRIVERS OF CHANGE
• Addressable market size, engagement and spend
• Availability
• Speed
• Devices
Technology
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DRIVERS OF CHANGE
• Addressable market size, engagement and spend
• Availability
• Speed
• Devices
• App integration
• Analytics (big data/targeting)
• Payment options
• Economics, Assortment, Logistics
Technology
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IMPLICATIONS
• Digital engagement
• New consumer behaviors
• Retail Apps will emerge
Technology
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IMPLICATIONS
• Digital engagement
• New consumer behaviors
• Retail Apps will emerge
• Keep best shoppers out of search
§ Personalization
• New business models drive new revenue streams and competencies
Technology
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IMPLICATIONS
Mobile & Digital List Management Will Drive Grocery Online
Source: Retail Net Group 2014
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IMPLICATIONS
Mobile & Digital List Management Will Drive Grocery Online
Source: Retail Net Group 2014
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IMPLICATIONS
Mobile & Digital List Management Will Drive Grocery Online
Source: Retail Net Group 2014
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IMPLICATIONS
Price Comparison
Store Navigation
Mobile Checkout
Mobile Payments
“Check-in”
Product Search & Availability
List Management
Mobile Offers
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IMPLICATIONS
Price Comparison
Store Navigation
Mobile Checkout
Mobile Payments
“Check-in”
Product Search & Availability
List Management
Mobile Offers
Walgreens 3rd party app Aisle411
item locations
Walmart List Management &
Navigation
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Source: Retail Net Group 2014
Content + Commerce are Blurring
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Mobile Apps Second Screens Where-to-Buy
Tweet to Buy
Shoppable Ads Buy from Video
Image-Base Discovery
Source: Retail Net Group 2014
Content + Commerce are Blurring
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"In the future, app development is going to be just as important
as property development,"
Phil Clarke, CEO Tesco
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DRIVERS OF CHANGE
• Low Organic Growth
• Small Box and Digital growth
• Productivity Drain on SBR= store based retail by Digital
Industry
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DRIVERS OF CHANGE
• Low Organic Growth
• Small Box and Digital growth
• Productivity Drain on SBR= store based retail by Digital
• “Channel” Re- Balancing
§ Proximity/Store Size more relevant than products carried
• Consolidation/competitive intensity
• Segmentation to find & Scale Opportunities
Industry
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IMPLICATIONS
• Shopper Retention Focus
• Smaller Boxes
• Regeneration of Big Boxes – services, new models
Industry
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IMPLICATIONS
• Shopper Retention Focus
• Smaller Boxes
• Regeneration of Big Boxes – services, new models
• Fewer Sell To Points with more varieties to plan for
• No net new stores
• Segmentation
Industry
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DRIVERS OF CHANGE
• Trust
• Policy
• The Fed
Political
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DRIVERS OF CHANGE
• Trust
• Policy
• The Fed
• Record revenue, spending & debt
• Entitlements (over 70 income related programs)
• Municipal and state regulation and taxation
Political
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IMPLICATIONS
• Progress tempered
• Complexity increased
• Tax rates to increase to and through 2020
Political
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IMPLICATIONS
• Progress tempered
• Complexity increased
• Tax rates to increase to and through 2020
• Changes in government support spend directly impacts
• State/local governments require more bailouts..
Political
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SUMMARY
Social & Demographic Change
Retail Industry Consolidation
More “Savvy” Shopper
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SUMMARY
Social & Demographic Change
Retail Industry Consolidation
More “Savvy” Shopper
Need For Customization
Downsizing Of Stores
The “Game” Has Changed
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IMPLICATIONS FOR OUR BUSINESS
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IMPLICATIONS FOR OUR BUSINESS
Source: Retail Net Group 2014
Logistics
25-40% will change
Technology
Apps & Analytics Investment
Marketing
Massive Re-Mix
Merchandising
40% at Risk
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IMPLICATIONS FOR OUR BUSINESS
Services
Grow to 30% of revenue
25% current store
base @ risk
Source: Retail Net Group 2014
Logistics
25-40% will change
Technology
Apps & Analytics Investment
Marketing
Massive Re-Mix
Merchandising
40% at Risk
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IMPLICATIONS FOR OUR BUSINESS
LOGISTICS • Customization by retailer vs.
COT • Customization SKU sort/region
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IMPLICATIONS FOR OUR BUSINESS
LOGISTICS • Customization by retailer vs.
COT • Customization SKU sort/region • Smaller runs • Custom Packaging • “Immediacy” (Amazon Effect) • Increased complexity
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IMPLICATIONS FOR OUR BUSINESS
TECHNOLOGY • App Integration accelerating • Shopper requirements
increasing
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IMPLICATIONS FOR OUR BUSINESS
TECHNOLOGY • App Integration accelerating • Shopper requirements
increasing • Multiple touch points • Speed bumps on the road to
retail • Increased complexity
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IMPLICATIONS FOR OUR BUSINESS
MERCHANDISING • Increased customization • Smaller runs • Variety of structures
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IMPLICATIONS FOR OUR BUSINESS
MERCHANDISING • Increased customization • Smaller runs • Variety of structures • Move to permanent • Increased complexity • Pressure on impulse
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IMPLICATIONS FOR OUR BUSINESS
MERCHANDISING • Personalization Drives Activation and Reduces
Mass Media
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Source: Retail Net Group 2014
IMPLICATIONS FOR OUR BUSINESS
MERCHANDISING • Personalization Drives Activation and Reduces
Mass Media
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Source: Retail Net Group 2014
Evolving Manufacturer/Retailer Relationship
Traditional Relationship
Mfg. Marketing Mfg. Sales/Trade
Retailer Marketing
Shopper Consumer
Retailer Merchandising
IMPLICATIONS FOR OUR BUSINESS
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Source: Retail Net Group 2014
New Collaborative Relationship
Mfg. Marketing
Retailer Marketing
Mfg. Sales/Trade
Retailer Merchandising
Shopper Insights
Retail Store Experience
Shopper Consumer
Evolving Manufacturer/Retailer Relationship
IMPLICATIONS FOR OUR BUSINESS
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Source: Retail Net Group 2014
IMPLICATIONS FOR OUR BUSINESS
MARKETING • Local vs. National • Individual vs. Mass • Customer specific
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IMPLICATIONS FOR OUR BUSINESS
MARKETING • Local vs. National • Individual vs. Mass • Customer specific • Shopper focused • Technology enabled • Increased complexity
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WHAT YOU CAN DO RIGHT NOW
BREAK PAGE WITH VISUAL
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BRING THE FUTURE TO THE
PRESENT
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WHAT YOU CAN DO RIGHT NOW
Organizational Imperatives
Customer Collaboration and Insights
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WHAT YOU CAN DO RIGHT NOW
Organizational Imperatives
Customer Collaboration and Insights
59
Fail Fast, Fail Cheap
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INNOVATION DRIVERS
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INNOVATION DRIVERS
Shopper Insights
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INNOVATION DRIVERS
Shopper Engagement
Shopper Insights
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INNOVATION DRIVERS
Brand Equity Enhancement
Shopper Engagement
Shopper Insights
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INNOVATION DRIVERS
Shopper Insights
• Understanding Shopper Behavior
in-store learning lab
§ Not what they SAY they will do
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… but what they really DO do.
• Quantitative Analytics
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Shopper Insights
INNOVATION DRIVERS
Shopper Engagement
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INNOVATION DRIVERS
Shopper Engagement
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INNOVATION DRIVERS
Shopper Engagement
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INNOVATION DRIVERS
Shopper Engagement Personalization
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INNOVATION DRIVERS
Brand Equity Enhancement Visual
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CONCLUSIONS
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CONCLUSIONS
Trends are happening faster than ever
Change is a constant
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CONCLUSIONS
Trends are happening faster than ever
Change is a constant
Store of the future is here today
Shopper behavior changing dramatically
Technology as an enabler impacting shopping
Requiring change in all business disciplines
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ON-SITE INSIGHTS
74
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QR Code Email To Kathy
March, 2014
Critical Industry Trends And What To Do About Them
75