synchronous selling seema williams analyst, consumer ecommerce research
TRANSCRIPT
Synchronous Selling
Seema WilliamsAnalyst, Consumer eCommerce Research
Theme
Synchronizing channels will win
customers
Agenda
Consumers shop across channels Traditional retailers face challenges Creating a synchronous customer
experience
The on-line retail growth spiral
$ $
3More categories become available
$ $More retailers sell
22
More people shop1
On-line shopping takes off
33
3944
5156
60
1013
1823
31
38
0
10
20
30
40
50
60
70
1998 1999 2000 2001 2002 2003
Millions of U.S. households On-line
households
On-lineshoppinghouseholds
Three stages of Web buying
Convenience spending Small-ticket, low-risk items
Examples: books, music, apparel, gifts
Researched purchases Information-intensive big-ticket items
Examples: travel, appliances, computers
Fulfilling essentials Low-information habitual purchases
Examples: groceries, prescription medication
In his first year . . . In his second year . . .In his third year . . .
Total: $300 to $350Total: $1,100 to $1,300
Total: $1,500 to $1,700
Convenience
Researched
Replenishment
Convenience Convenience
Researched
Today (1998) customer profile: Joe Shopper
First-time shoppers accelerate spending
In five years -- profile: Suzy Shopper
In her first year . . .Convenience
Researched
Replenishment
Convenience
Researched
Total: $1,250 to $1,400Total: $1,700 to $2,000
First-time shoppers accelerate spending
Retail Spending Growth
3 6 10 15 23 324
1120
31
43
56
12
3
6
11
20
0
20
40
60
80
100
120
1998 1999 2000 2001 2002 2003
$Billions
Convenience Researched Replenishment
$108
Consumers shop across channels
Convenience
Where did you purchase products in the last six months?
Store
Catalog
Web
Researched Replenishment
Source: Forrester’s Consumers & Technographics Retail & Media Study of 10,000 on-line consumers. *Note: Consumers who buy researched goods generally do not buy again within six months.
(multiple responses accepted)
89% 91% 98%
31%
14% 11%
29%17%
8%
Consumers will shift spending to the Web
How much do you plan to spend in the next six months in each channel?
Source: Forrester’s Consumers & Technographics Retail & Media Study of 10,000 on-line consumers. *Note: Consumers who buy researched goods generally do not buy again within six months.
(multiple responses accepted)
-63%
-4%
-23%
-20%
-28%-24%
16%4%1%
Less
More
Convenience Researched Replenishment Store
Catalog
Web
The Net is not just another channel
Theme
Synchronizing channels will win
customers
Brick-and-mortar retailers fall short
Different product= unmet expectations
Variable pricing= engenders distrust
Incomplete service= forces inconvenience
Pure-play competitors set the standards
Infinite product selection Lower prices Superior service
The solution: center customer experience around the Web
The battle to own customers is on-line
The Net offers the best communication
Most robust shopper data found on-line
Synchronizing channels
Offer depth then breadth in core products
Eliminate regional pricing Limit on-line/off-line price differential Align marketing strategies and tools
Give stores a make-over
Add kiosks to extend shelf-space Consider stores a delivery option Proliferate points-of-sale
Synchronous channels will cycle consumers between stores and sites
The pay-off:
Protect existing customer base Recruit new customers Win the game of scale
Theme
Synchronizing channels will win
customers
Summary
Consumers are cross-channel shoppers
Web storefronts will lead
Brick-and-mortar assets come into play