Futurebuy 2014 Aust

© GfK 2014 | Futurebuy 2014 Australia – Breakfast Seminar 221014 1

Norrelle Goldring, Head, Shopper Experience & Retail Performance

April 2015

F U T U R E B U Y | 2 0 1 4

.

Bricks & (Mortar) Mobile: The industries

in Australia winning the battle.


We view retail evolution

as similar to Charles

Darwin’s description of

evolution:

It’s not the strongest

of the species that

survives nor the most

intelligent, but the

one most responsive

to change.

Ruslan Kogan, October 2014

(Qantas Magazine)


Futurebuy is GfK’s proprietary survey of shopper attitudes and behaviours- run

annually since 2009

GfK Futurebuy 2014 Overview

FMCG • Beauty and Personal Care

• Packaged Food/Bev

• Household Washing and

Cleaning products

• OTC Healthcare

Consumer Durables • Consumer Electronics

• Mobile Phones

• Home Appliances

Services • Financial Services

• Healthcare Services

• Meals at Restaurant

Other • Automotive

• Toys

• Apparel

• Home Improvement

• Home and Garden

15 Categories…

Australia

Canada

Mexico

US Romania

Germany Poland

Spain

France

Russia

Bulgaria

Columbia

Argentina

Brazil

Korea China Japan

20

minute

17 Countries…

Online Survey N = 1000 per country (18+)


GfK Futurebuy Shopper Survey Topics:

Only a small portion of these we are talking to today

Omni-Channel Shopping • Drivers of channel choice

• Prevalence of omni-channel behaviour

• How utilizing mobile devices?

Touchpoints • Sources of info

• Most influential in shopping process

• Product choice drivers

Special Topics • Social media role

• Showrooming

• Privacy/security

• Generational differences

• Leading edge consumers (LEC)

Mobile payments • How participating?

• Barriers to participating

• Attitudes toward adoption


By ‘shopping’ we mean:

“The process of browsing, comparison

shopping, information gathering, or the

actual purchase of products and

services”

By ‘omnichannel’ we mean:

“Shopping across both online and

physical store channels”

Definitions for this survey


Agenda

1

2

3

Context How Australians are shopping

What’s more important to Australians now?

Where is the game going – GfK’s Four ‘predictions’

And if we have time … retailer and manufacturer readiness for omnichannel shopping and digital shopper marketing


1. How are Australians shopping?


Context: Size of Australian online retailing ecommerce

8

Domestic Australian spend proportion of

total online spend by Australians

(source: NAB, July 2014)

75%

Amount this equates of

spend at traditional bricks

& mortar stores

(source: NAB online retail

sales index, Mar ‘15)

$16.7b

7%

Online shopping anticipated growth.

(source: IbisWorld)

Increase by end

2015

10% 24%

Annual growth

2009-2014

Number of Australians (and 18-29yos) claim

to shop online at least once a week

(source: Ebay Aust)

57% 76%

• Grocery, liquor, electronic games online retail spend

• Daily deals, personal & recreational goods online retail spend

• Fashion, department and variety stores, homeware appliance stores

online retail spend growing but slowing (source: NAB online retail sales index)

Spent on online retail in the

12 months to Feb 2015, 1/3

is in dept and variety stores


Q13. Which of the following shopping activities have you engaged in over the past 6 months using the internet?

Usage of Internet for shopping continues its upward trend

23%

60%

66%

67%

69% Searching for best price

Make purchases

Check for general information about products

Finding products & services

Use social media to

exchange /post info about

product/service

vs 2013

7pts

6pts

9pts

9pts

7pts


Q12: Which of the following devices have you used to help you shop for a product in the past 6 months?

With smartphones and tablets increasing shopping usage

substantially, as desktops decline

24%

34%

17%

81% Computer at home

Computer

at work

Smartphone

Tablet

vs 2013

9pts

7pts

11pts

9pts


The top shopping tasks conducted on mobile devices are

highly functional, rather than sharing or social media based

Q16_01. Let’s focus on the last time you used your [DEVICE to help you shop for [CATEGORY]. In which of the following ways did you use your [DEVICE] when you were shopping? – Top 10 tasks

Compareprices

Search forproduct info

Checkproduct

availability

Locate astore

Accessproductreviews

Paid forproduct

Buy productthrough an

app

Get salesalerts

Text afamily/friend,to check with

them

Write a list ornote

Tablet Smartphone

30%

10%

20%


Travel insurance on mobile

Because travellers are on the go before and during holidays

AAMI Insurance example: mobile transactions options and a

way of linking information

Claims App


ConsumerElectronics

Apparel,Footwear

Automotive Toys HomeAppliances

MobilePhones

Financialservices

Beauty &personal care

HomeImprovement

HealthcareServices

Lawn &Garden

OTChealthcare

Packagedfood & bev

Restaurantmeals

Householdcleaning

Onlineonly

Both

Some categories are playing the omnichannel game better

than others

Q2: And have you shopped for each of the below exclusively online, exclusively instore, or both?

50%

Omni-channel driven categories In store driven categories

25%


S h o p o n l i n e O N LY

Online-only shopping tasks has increased exponentially in

some categories, even if off a small base in some cases

14%

7%

4% 3%

1%

21%

18%

14%

7%

9%

5%

15%

30%

2013 2014

Q2: And have you shopped for each of the below exclusively online, exclusively instore, or both?

Mobile

phones

Consumer

electronics

Automotive Home

appliances

Apparel Toys Household

cleaning

Beauty &

personal

care

OTC

healthcare

Home

improve

ment

Lawn and

garden

Packaged

food and

bev

Health

care

Services

Financial

Services

Meals at a

restaurant


Example: Online retailing in Australian grocery increasing

Now 15% of Australian online retail sales transactions

15

Share of online shopping industry

(source: IbisWorld, May 2014)

202

Click & Collect stores, of a total

931 stores (source: SMH)

WW Ltd Wes

Farmers

Grocery and liquor online sales

growth.

Fastest growing sector (source: NAB online retail sales index)

WW online revenue increase (source: SMH – Rose Powell)

2013 2014

8.7% 16%

9.9%

$0.8% $1.2b

50%

WW ‘dark store’, Mascot,

Aug 2014


The growth of omnichannel shopping behaviour means the

new grocery meal shopping purchase journey is moving to …

POINT 1 Daily menu suggestion sent to phone/tablet

POINT 2 Order online

POINT 3 Have delivered to home, or click & collect

(pick up instore)


2. What’s important for Australians now?


Bricks and Mortar evokes softer/more social attributes

Q5. Thinking about the times you shopped online/instore in the past 6 months, which attributes below best describe your overall experience?

Online Shopping Evokes Functional Associations, and modernity

Top Descriptors of Shopping Experiences (Aust)

Effortless

Satisfying Organized Social

Friendly Safe

Satisfying

Personal

Easy

BRICKS & MORTAR

Fast

Modern

Easy

ONLINE


Q4: Thinking about the last time your were deciding whether to purchase something online versus in a store, what factors were most important?

Drivers Of Channel Choice By Format

Reveals Divergent Strengths

Advantage- Bricks and Mortar

Advantage- Online

“More enjoyable experience.”

“Best advice.”

“Good relationship with retailer.”

Store 22%

Online 18%

Store 14%

Online 8%

Store 11%

Online 7%

35%

39%

44%

53%

58%

9%

16%

26%

26%

6%

“See and feel before buying.”

“Get products sooner.”

“Can buy other things at same time.”

“Routinely shopping there already.”

“Hassle-free returns.”

21%

27%

23%

27%

44%

46%

53%

61%

16%

5%

11%

18%

28%

21%

24%

28%

“Save money.”

“Easier.”

“Better selection.”

“Faster.”

“Better information.”

“Better delivery options.”

“Already have account set up.”

“Better payment options.”

More even

Bricks & Mortar Online

Speed, convenience, tactile


Q8. When shopping for [category], how important was each of the following factors in your shopping decision?

Experience and In-Store environment still top the

‘Touchpoint Influence Hierarchy’

Previous Experience

• Retailer

• Brand

• Store catalogues

• Gen. shop sites

• Product samples/demos

• Consumer opinion sites

• Packaging

• Retailer sites

• Brand sites

• Price sites

• TV/Print

• Brochures

• Online advertising

• Online expert reviews

• Ability to pay with mobile

• Social media

• Shopping apps

• Retailer apps

• Manufacturer apps

• Shelf info

• Coupons

• In store displays

• WOM-friends and family


Q7. Below are different statements about shopping. Compared to a year ago, would you say you are doing more, less or about the same of each activity?

But it’s use of digital touchpoints and activities that is

increasing

(Increase of 20pts+) (Increase up to 19pts)

Purchase over

web

Use Google to

shop

Use web to find

products

Shop with mobile

phone

Manufacturer

website coupons

Cross-retailer price

comparisons

Research

products on web Find products via

web

Shopping list

creation

Brand/retailer

apps

Online coupons

Click ad to buy

Store

circular/coupons “Webrooming”

Email coupon

Shopping apps

Mobile payments Geo location

apps

Advice from

friends/family

Shop from mail

catalog

Paper coupons


Example: Lowe’s Holoroom – An Immersive Augmented

Reality Reason To Visit Store

United

States

http://www.mobilecommercedaily.com/wp-content/uploads/2014/06/lowes-big-opt.jpg


Example: Ikea Interactive Catalogue 2014

Scan to unlock extra content


Audi Virtual Store – ‘Audi City’

In February 2014, Audi City Berlin launched the 3rd of Audi’s Virtual Showrooms

Featuring digital technologies; Kinect “power wall”, multi-touch tables, 3D virtual

driving experience and RFID.

This showroom is almost completely digital and virtual, meaning there is only one

or 2 cars in the showrooms

https://www.youtube.com/watch?v=afJAtAVb4k0


Transacting online instore: The ‘endless aisle’ that enables

smaller physical store footprints

J o h n L e w i s

2 0 11

A l l S a i n t s ,

2 0 1 2

Ta r g e t ,

2 0 1 4


Example: Medadvisor app manages medicine prescriptions

Features include:

• Smart medications list

• Script refill reminders

• GP visit new script reminders

• Take my meds

• Tap to refill

• Medication info

• My favourite pharmacy

• Pharmacy locator

• Carer mode


Nestle recipes in Woolworths using Tapit, August 2014

Shoppers tap the enabled aisle fin and take home new recipe ideas from

Woolworths Fresh magazine.


My Best Buy Rewards app, US

• In-store mode gives rewards points for checking in to geo-fenced Best Buy locations

• Scan items for product information and videos – option to purchase through the app

• Targeted promotions get pushed to phone while in-store

Best Buy Becomes The Ultimate Showroom

http://www.mobilecommercedaily.com/wp-content/uploads/2013/09/bestbuybig.jpg


Using your mobile camera, In a Snap recognizes select ads, makes a "snap"

sound, and then provides additional information about the product in the ad

Target In A Snap - Make Purchases From Print Ads

United

States


L’Oreal– Virtual Kiosk In NYC Subway For Makeup On The

Go …that matches your outfit


3. And where is the game going? GfK’s four future

‘predictions’


Source: GfK Futurebuy 2014

Leading Edge Consumers (LEC) - Our Tour Guides To

“Future Of Shopping”

Early Adopters

Passionate

Shoppers

Influentials

• Innovators that value new

products or ideas “before their

time”, and that are also

predictive of the rest of the

population

• Emotionally

connected to

shopping and thus,

highly involved

• Leading indicators of

trends with a history

of being years ahead

of the mainstream;

word-of-mouth

leaders who are often

called upon by others

to offer advice,

insight, information

15% of sample identified via proprietary questions and analytics


‘The relevance of

Bricks & Mortar

retail, in its current

form, will continue

decreasing’

45%

44%

45%

71%

71%

70%

“Traditional stores much less important to my

shopping than few years ago.”

“I can shop for nearly 100% of things I

need online.”

“I can see future were traditional retail stores

not a big factor in my shopping.”

1st. Prediction

Q3. Below are different statements about shopping. Indicate how much you agree od disagree with each. T2B


2nd. Prediction

32%

62%

60%

72%

76%

76%

80%

81%

“Feel more in control than ever before when

shopping.”

“Now less loyal to any one brand.”

“More loyal to brand/retailer that gave me input to

what I buy.”

“Now less loyal to any one retailer.”


‘Loyalty will be

scarce, unless

shoppers feel

involved’


3rd. Prediction

34%

29%

20%

61%

62%

65%

“My mobile device is quickly becoming my most

important shopping tool.”

“I am planning on making more mobile payments in

the next 12 months.”

“I make mobile payments whenever possible.”

‘Mobile devices will

become “Work

Horses” of

shopping, with

many jumping on

mobile payments’



4th. Prediction

38%

69%

71%

83%

“More concerned about security of personal

information after shopping online (vs the store).”

“I like it when website keeps track of my visits and

recommends things for me.”

‘Security concerns

could be

overlooked if it

comes with a

tailored benefit’



Takeouts


GfK Futurebuy 2014 – Some Key Takeaways

Omni-Channel coming soon to your category!

• Rapidly cascading from high

value and involvement

categories to FMCG

• Winning requires delivering

seamless and compelling

omni-channel shopping

experience

• Mobile set to overtake

desktops, and then, laptops

Mobile optimisation necessity

• Mobile devices influencing

majority of purchase

decisions

• Mobile payments increasing

• Optimisation of websites

and mobile for payment

necessity not luxury

Four future predictions

1. The relevance of Bricks &

Mortar, in its current form,

retail will continue

decreasing

2. Loyalty will be scarce,

unless shoppers feel

involved

3. Mobile devices will

become “Work Horses” of

shopping, with many using

mobile payments

4. Security could be

overlooked if it comes with

a tailored benefit


Mobile is the

mouse of the

physical world

Steve Sadove, Chair National Retail

Federation, at the World Retail

Congress, Paris, October 2014


THANK YOU

[email protected]

Norrelle Goldring

Head, Shopper Experience & Retail Performance

P: +61 2 9900 2888 | M: +61 437 335 686

Ask us about:

• Access to the Futurebuy

portal

• Customised presentation for

your category

Further reading:

• “The digital future: a game plan

for consumer packaged goods”,

August 2014,

Google/GMA/BCG/IRI

• IBM Smarter Consumer Study,

2014

• NAB online retail sales index,

July 2014


Appendices


Q15a And which devices have you used to help you shop for the below products and services in the past 6 months?

Mobile Shopping Predominant In Select Categories

Consumer

Electronics

Toys

Top Categories Shopped On Mobile Device (AUST)

27% 29% 29%

31% 34%

Home

Appliances

Auto Mobile Phones



Free Delivery Remains King In Driving More Online Purchases

Most Important Factors to Get Me to More

Online Purchases Next Year(Aust)

41%

42%

43%

46%

46%

69%

Free Delivery

Discounts on bulk purchases

Better Loyalty Programs

Daily/Weekly Deals

Same Day Delivery

Holiday/seasonal

© GfK 2014 | Futurebuy 2014 Australia – Breakfast Seminar 221014 45 45

Google Express Enters The “Same-Day Fray”

United States

© GfK 2014 | Futurebuy 2014 Australia – Breakfast Seminar 221014 46 46

Differences In Shopping Attitudes And Behaviours

Evident Along Generational Lines

GEN Z GEN Y GEN X Boomers Silent/GI

Social natives Book smart

& savvy

Street smart

& skeptical

Education

generation

Educational

divides

Fun and frugal Fun first,

hard work next Get it done

Break the mold –

be me Do what’s right

Connected Confidence No drama Agelessness Integrity

Global minder “Both/And”

stress Balance

Do it all –

or die trying Under control

Friends = family Close to

doting parents

Prepared,

rule-setting parents My self = my kids

Disciplined to

do what’s right

Source: GfK Consumer Trends, 2013

Age in 2014:

18-24 25-34 35-49 50-68 69+

Broadly, Gens Z, Y X similar to each other but different to Boomers and Silents


What devices are they using, to do what?

47


Product and services reviews more important for Gen Y & and less so Gen Z

Q16_01. Let’s focus on the last time you used your [DEVICE to help you shop for [CATEGORY]. In which of the following ways did you use your [DEVICE] when you were shopping?

Top 2 shopping activities on mobile devices similar across

generations

NET Gen Z Gen Y Gen X Boomers

Compare prices

Search for product info

Check product availability

Locate a store

To access product/service reviews 7

Activity Incidence Rank By Generation (Via Mobile Device – Aust)


Tablets are used more to shop electronics and higher complexity

categories. Smartphones used less for shopping than tablets

49 Q15a And which devices have you used to help you shop for the below products and services in the past 6 months?

0%

10%

20%

30%

40%

50%

60%

Tablet Smartphone

FMCG categories still in the 20%s shopped via tablet


Q17b. During any of your shopping occasions over the past 6 months, have you used your smartphone for any of the following?

Showrooming declining, whether friendly or hostile.

Trends suggest some Bricks & Mortar retailer progress (Aust)

2013 2014

35% 16%

23% “Saw the product on

phone and later went to

store to purchase.”

Consistent with global reduction 35% 25%

“Saw product in store

then purchased on

phone elsewhere.”



Showrooming Also Appears To Be Declining On Tablets (Aust)

Recent efforts buy Bricks and Mortar retailers appear to be shifting shopper perceptions that buying in

store is price competitive and offers important advantages

2013 2014

20% 28%

25% “Saw the product on

Tablet and later want to

store to purchase.”

Globally down 9pts

“Saw product in store

then purchased on

Tablet elsewhere.”


Mobile phone payments small but increasing, and are a

source of more data for retailers

52

Of credit card transactions

<$100 are via PayPass

(source: Mastercard Australia)

Of purchases <$100 are

Paywave

(source: Visa Australia)

50%

Direct mobile phone

payments % of purchases,

where they are 6% via apps

(source: RBA)

In mobile purchases

in 2013

>$5m

Ave spend pp via

mobile (2013)

Cash used of all transactions

(source: RBA) Paypal accounts in Australia

Forecast online retail sales made

on mobile devices by 2017

(Source: Emarketer)

$2,616

25%

1%

50%+

47% 69%

2007 2013

5.5m


29%

Q18F. Thinking about your experience with mobile payments in general, how much do you agree or disagree with the following statements?

Some Shoppers Recognize Mobile Payment Advantages

“Paying with mobile

device is faster.”

24%

“Make shopping more efficient.”

24%

“All payment methods in one place

on mobile device is a Major

Convenience.”

27%

“Is easier than other payments methods.”

http://www.gettyimages.com/detail/photo/man-using-cell-phone-in-clothing-shop-royalty-free-image/497325295



Mobile Payment Activity In Australia lower than

global benchmarks (function of existing platforms)

% of Shoppers Reporting Making Mobile Payment (Past 6 Months)

19%

24%

35% 39%

46% China 83%

Korea 62%

Japan 10%

Australia WE CEE LATAM APAC


Q18B. What percentage of transactions do you estimate you pay for using each method below?

Mobile devices are still only 4% of shopping transactions in

2014, but set to rise

37

27

28

4 4

Cash Credit Card Debit Card Mobile device Other

Top mobile payment

categories:

• Toys

• Auto

• Financial Services

• Healthcare

• Apparel

• CE & Mobile


Q18F. Thinking about your experience with mobile payments in general, how much do you agree or disagree with the following statements?

Infrastructure aside, a range of shopper concerns are likely holding

mobile payment from full potential

“Mobile payment more of a

GIMMICK today than major way I pay.”

42%

“Mobile payment technology STILL

CLUNKY.”

44%

“Worried about SECURITY,

PERSONAL INFORMATION.”

52%

“I am planning to make

more mobile payments in

next 12 months

25%

Ability to make mobile

payments important factor

in making more online

purchases next year

26%


Q3. Please indicate how much you agree dr disagree with each statement as it relates to your shopping experienes

Privacy A Highly Polarizing Issue

“I like when websites keep track of my visits, then recommend things to me.”

(-6pts)

(-5pts)

(-18pts)

(-7pts)

(-7pts)

Germany

Japan

France Australia

Canada

“Open Book”

“Most Private”

65% Colombia 64%

61%

60%

57%

56%

Romania

China

Brazil

Mexico

Bulgaria

23% 25%

34%

35%

36% (-6pts)

35%

United States

(-4pts)


LEC Non-LEC


Leading Edge Consumers Are More Wired And Heavier Web

Shoppers

(% Own Device) (% Reporting Shop behaviour)

LEC Non-LEC

80%

66%

62%

47%

44% 35%

Exclusively Online

Omni-Channel

85% 74%



Leading Edge Consumers Are Big On Saving And Sharing

“Using social media to exchange/post info

about product/services.” 46% LEC Non-LEC 24%

% of LEC reporting Doing

more of… 57% Comparing prices across

stores (v.41%) Using coupons on manufacturers websites (v.34%)

54%


Australian Retailer and Manufacturer digital shopper

marketing readiness


60%

50%

57%

46%

42%

45%

38%

26%

26%

16%

25%

21%

21%

21%

16%

25%

28%

29%

37%

34%

51%

0% 20% 40% 60% 80% 100%

Digital/mobile technologies are shifting the balance to shoppers andaway from retailers & manufacturers

My organization is prepared to manage the impact of digital/mobiletechnologies on shopping behaviour

My industry lacks best practices for leveraging digital/mobile in-store

A resource shortage is limiting my organization's ability to lead in thedigital/mobile space

A lack of specialist expertise is limiting my organization's ability tolead in the digital/mobile space

A lack of clear strategy is limiting my organization's ability to lead inthe digital/mobile space

A perceived lack of importance is limiting my organization's ability tolead in the digital/mobile space

Net Agree Neutral Net Disagree

Q: DOM5 To what extent do you agree with the following statements with regard to readiness to meet the mobile and digital challenge?

Base: Total Sample (n=145)

There is recognition that digital is shifting the balance of

power toward the shopper, but the industry is lagging

the shopper in the skills and resource to capitalise on it

Despite recognition of its importance, nearly half lack resources, specialist expertise and strategy.


Q DOM1 Which digital, online or social media techniques have you trialled or adopted for shopper marketing in the past 12 months?


Use of digital touchpoints has not moved much since

2011, particularly for manufacturers. 1 in 7 were using no

digital touchpoints.

67% 66%

50%

36%

27%

25% 21%

20% 19%

13%

9% 9%

9%

3%

1%

14%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Websites SocialMedia

Email offers/eDM

Promotionbased

microsites

Search engines – sponsored

results

Onlinecatalogue/printable

e-coupons

Mobileoffers

(eg via SMS)pre-store

Mobileapps (eg

price checkapplications)

Web basedcommunityfeedback &

reviewforums

Onlinereviews

& feedback

Locationbased

offers/NFC

Mobilesearch

Mobilelocation-

based offers

Augmented/Virtual reality

Groupdeal-of-day

offers

Other None ofthe above

Total

Manufacturer

Retailer

Agency

2011 53% 55% 49% 37% 25% 22% 18% 12% 28% 23% n/a 6% 5% n/a 4% n/a 15%

Expected to increase over time


7% 4% 12%

21% 18% 23%

23%

19% 24%

15%

13%

20% 19%

23%

20%

25% 26%

23%

23%

9% 8% 15%

8%

Total Manufacturer Retailer Agency

None

Less than 25%

25-49%

50-74%

75-99%

100%

Q: DOM2 How many (what %) of your shopper marketing programs and campaigns include digital/social/local/mobile elements?


Yet 43% say they use digital, social, mobile elements in

shopper campaigns more than half the time, with

agencies more likely to

USA

2013

75%

(!!)

But what they are using is fairly basic, per prior slide


Q: DOM3 Is there a dedicated digital/mobile function or capability in your organisation?


2/3 of retailers and nearly half of manufacturers don't

have dedicated digital/mobile functions in their

organisation, irrespective of where they sit

Total Manufacturer Retailer Agency

Yes 49%

No 51%

Yes 57%

No 43%

Yes 38%

No 62%

Yes 42%

No 58%


74% 73% 80%

4% 2%

20%

2% 2%

2% 2%

4% 5%

13% 15%

0%

20%

40%

60%

80%

100%

Total Manufacturer Retailer

In its ownfunction

Executive

IT

Shopper

Sales

Marketing

Q: DOM4 Where does the digital/mobile capability in your organisation sit (report to)?


Where there is a digital capability, it sits in Marketing

USA

2013 2014

37% 48%

USA

2013 2014

12% 36%

Positioning in marketing means not much used in shopper. Current focus of digital by

manufacturers is brand advocacy, not linked to purchase behaviour changes

Futurebuy 2014 Aust

Documents