amazon can’t do THAT Lee Peterson EVP , Creative Services WD Partners wdpartners.com
Jan 12, 2015
amazon can’t do THATLee PetersonEVP, Creative ServicesWD Partners
wdpartners.com
amazoncan’t dothat
agendaOur sponsor
agendaOur sponsorWhy?
agendaOur sponsorWhy?Amazon
agendaOur sponsorWhy?AmazonStudy Vitals
agendaOur sponsorWhy?AmazonStudy VitalsFindings & Results
agendaOur sponsorWhy?AmazonStudy VitalsFindings & ResultsBE the Store of the Future Video
agendaOur sponsorWhy?AmazonStudy VitalsFindings & ResultsBE the Store of the Future VideoConclusion
WD is a customer experience expert for global food and retail brands.
Our mission is to deliver innovative solutions that will drive and shape the future of retail.
46 years 10 offices worldwide 350+ people
What We Do
insights & strategy design & brand digital services
operations engineering architecture & engineering program management
Thought Leadership
Wiring the Customer ExperienceHow Consumers Are Embracing Fast-Emerging Digital Technologies
Retail's Next GenerationHow Millennials Will Change Shopping
The New Killer App: StoresYou Have Stores, Use Them!
The Continuum of CoolHow Successful Brands Stay Relevant Crossing the Generations
Supermarket ShowdownLeaders and Laggards in the Battle for Consumer Preferences in Physical and Digital Grocery Experiences
The Fundamentals of Aisle AttractionIncreasing Center-Store Traffic How In-Aisle Merchandising Attracts
Our PartnersBIG BOXCPG CONVENIENCEGROCERY SPECIALTY RETAILFOOD SERVICE
why?
nce upon a time...O
Retail was simple.
There was a customer, a list and a store.
So we opened stores.
And then we opened a lot of stores.
And a lot more stores.
Buy online ’96
BUY!
Until one day it changed...
MILLIONS OF STORES
But we kept opening stores.
Until someone had an even better idea.
So what once looked like this only a short time ago...
Now looks like this.
What does this mean for retail?
It means...
Customers can buy anywhere.
Anytime...
THEY ARE ALWAYS SHOPPING!
WE ARE ALWAYS SHOPPING!
And a lot of it is being done like this...
And less and less through these.
More and more through these guys...
the 900pound gorilla
Number 9 retailer in the US
2nd fastest growth retailer of the top 50 in the US
Source: Stores.org, 2013 Top 100 Retailers
Over the past year:
180 million customers, bought 3.5 billion items
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Over the past year:
$75+ billion salesin 2013
Source: The New York Times
Over the past year:
Added about 25,000 employees
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Over the past year:
Built several new warehouses across US & world
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Over the past year:
Hired 75,000+ part-timers for the holiday season
Source: The Wallstreet Journal
Over the past year:
Integrated with Proctor & Gamble
Source: The Wallstreet Journal, October 2013
Over the past year:
Sunday delivery with USPS
Source: The New York Times, November 2013
Over the past year:
Planning a new 3.3 million-sq-ft headquarters Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Over the past year:
Near downtown Seattle, with biospheresSource: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
salesAmazon has reached a point where they surf a feedback loop of dominance.
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
sales
profit
Amazon has reached a point where they surf a feedback loop of dominance.
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
sales
profit
investment
Amazon has reached a point where they surf a feedback loop of dominance.
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Amazon has reached a point where they surf a feedback loop of dominance.
sales
profitexpansion
investment
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Source: fool.com, How Long Can Amazon.com Defy Gravity?
2005 2006 2007 2008 2009 2010 2011 20120%
10%
20%
30% 29.66%29.34%27.15%
4.19%
0.99%
Apple Profit Margin
Microsoft Corporation Profit Margin
Google Profit Margin
Wal-Mart Stores Profit Margin
Amazon.com Profit Margin
40%
The very concept of online shopping has become synonymous with Amazon.
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Harris Interactive2013 Brand Equity Poll
2013 Brand Equity poll:
Measured brand familiarity, quality perception and how likely consumers will buy
Polled more than 38,000 US residentsSource: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
The results put Amazon on top:
Achieved the highest overall score in the survey’s 25-year history
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
The results put Amazon on top:
More than half said Amazon was the first site they went to when shopping online
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
The results put Amazon on top:
Nearly half said they were likely to have orders delivered to Amazon branded lockers
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
2/3 among younger respondents Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Amazon topped the Harris Interactive poll for companies that Americans trusted most.
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
AMAZON ISN’T A COMPANY YOU WANT TO HUG; IT’S A COMPANY THAT DOES EXACTLY WHAT IT SAYS IT WILL DO–EVERY TIME.
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Since shopping has changed so much...
Source: WIRED Magazine, The Only Thing Amazon Has to Fear Is Amazon Itself
Is Amazon the store of the future?
Is Amazon the company of the future?
studyvitals
Surveyed 1,700 consumers using a nationally syndicated panel
Seven in-depth focus groups with three generations of shoppers: Millennials, Gen-X and Boomer
Quantitative & qualitative shopper research
4%Mature
24%Millenial
31%Gen X
41%Boomer
Hispanic
17%
Caucasian
62%
African-American
12%Asian
6%Other
3%Female
53%Male
47%
Rankings based on the top two boxes, appeal and influence on purchase behavior.
store strengths vs. online strengthsThis study isolates twelve experience attributes of shopping online vs. in-store as defined by consumers and redefined by us.
ExperienceattributesExclusive to online shopping
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
online attributes
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
online attributes
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
online attributes
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
online attributes
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
online attributes
ExperienceattributesExclusive to in-store shopping
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
in-store attributes
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
in-store attributes
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
in-store attributes
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
in-store attributes
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
in-store attributes
ExperienceattributesShared online and in-store
Ideas & inspiration
Exclusive products& bargains
shared attributes
Ideas & inspiration
Exclusive products& bargains
shared attributes
findings& results
Stores arewinning
The top 2 features for physical shopping beat all online features.
79%
75%68%
69%
Appeal Influenceon purchase
Instant ownership
Touch & feel
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experienceAggregated all consumers across three generations.
i’ve been excited online, it’s just not the same thing as shopping in the store.– Millenial male
Amazon still can’t compete with... I can just get in my car and get it...
Amazon still can’t compete with: I can just get in my car and get it...Now.
AppealRankings for online vs. in-store features
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
79% 59%
No. 1 in-store feature No. 1 online feature
Rated reviews as very/ extremely appealing
Rated instant ownershipas very/extremely appealing
Instant ownership
Touch & feel
Excl. products/bargains
Reviews
Price comparison
Experience
Unlimited options
One-click shopping
With friends
Ideas & inspiration
Associates
Suggestive selling
79%75%65%59%57%55%48%47%42%40%31%27%
Appeal rankings
In-store features are in orange. Online features are in blue. Shared features are in gray.
Influence onpurchaseRankings for online vs. in-store features
69% 53%
No. 1 in-store feature No. 1 online feature
Rated reviews as very/ extremely influential for purchase
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
Rated touch and feel as very/extremely influential for purchase
Touch & feel
Instant ownership
Excl. products/bargains
Reviews
Price comparison
Experience
Unlimited options
With friends
Ideas & inspiration
One-click shopping
Associates
Suggestive selling
69%68%57%53%48%46%36%34%32%31%24%20%
Influence on purchase rankings
In-store features are in orange. Online features are in blue. Shared features are in gray.
well, i don’t find anything exciting about shopping online. I just do it because i like to comparison shop. I like to find the best price, but it’s really not thrilling or exciting. it is very informative though. i like that part.– gen-x shopper
for now,emotional benefitstrump functional.
But not for longThe Millennial erosion
millenials aredifferent.
Shopping anytime, anywhere, for anything they want is the cost of entry.
I like the convenience of online shopping; you don’t have to get dressed. you don’t have to be social. i can still have my crazy kids running around and get just what i need while i’m multi-tasking.– millennial female
You feel powerful. you feel like you can get anything you want. you feel like you can get any brand at any time. when you’re shopping in store, you feel like you have to settle for that brand because they don’t have anything else. – millennial male
Most appealing to Millennials Rankings for online vs. in-store features
Unlimited options
Customer reviews
Instant ownership
Price comparison
Touch & feel
Excl. products/bargains
One-click shopping
Shop w/friends & family
Suggestive selling
Experience
Inspiration & ideas
Store associates
1 4
7 7
4 3
10 8
2 5
8 9
5 1
11 10
3 2
9 12
6 6
12 11
MillennialsMost Appealing
BoomersMost Appealing
Millennials are more comfortable with mobile shopping overall.More than 3x more likely to buy than Boomers.
Source: 2012 WD Partners study, Wiring the Customer Experience
Millennials are more comfortable with mobile shopping overall.More likely than a Boomer or Gen-Xer to have made a purchase on Amazon.
Source: 2012 WD Partners study, Wiring the Customer Experience
Millennials are more comfortable with mobile shopping overall.2x more likely as Boomers to make purchases on Amazon 2-3 times a month.
Source: 2012 WD Partners study, Wiring the Customer Experience
the vastness of just everythingis right at your fingertips. youcan look at macy’s. you can look at walmart. you can look at target. you can look at amazon. you can look at all your stores at once.– millennial female
70%
Millenial Gen-X Boomer
64%
68%
60%
54%
45%
Ranking online customer reviews as most appealing
Ranking online customer reviews as influential forpurchase
Millennials value peer reviews and seek information from trusted sources before making purchases.
One-click shopping
Price comparison
Suggestive selling
Unlimited options
Online reviews &recommendations
sometimes getting things in themail is like christmas or something, it is exciting waiting for things to arrive at your door when you could go to the store and get it.– millennial female
Millennials grew up with this
the window of opportunity for retailers is closing fast, especially for retailers eager to capture the loyalty of millennials.
So what was at the bottom?
Store associatesranked 11th out of 12 features.
Instant ownership
Touch & feel
Exclusive products & bargains
Shopping with friends
Inspiration & ideas
Associates
79%
75%
65%
42%
40%
31%
68%
69%
57%
34%
32%
24%Ideas & inspiration
Exclusive products& bargains
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
AppealInfluence
on purchase
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
Ideas & inspiration
Exclusive products& bargains
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
Instant ownership
Touch & feel
Shopping with friends
Store associates
Store experience
I try to avoid stores because the customer service is so bad.– gen-x male
in the past, store associates were knowledgeable about things but i think that’s gone away. most of the time you go into a store and they don’t know anything about anything.– boomer female
retail crimeof the century
Invest inpeople Opportunity
Customer service, customer focused 86%
Factors that consumers consider of high importance when choosing small businesses
Source: Web.com and Toluna, Consumer and Small Business Perception Survey, Sep 10, 2013
Customer service, customer focused
Personal, intimate,human, face-to-face86% 84%
Factors that consumers consider of high importance when choosing small businesses
Source: Web.com and Toluna, Consumer and Small Business Perception Survey, Sep 10, 2013
Reinvent the role of your store employee.
Think of...
Think of...
Think of...
Think of...
Think of...
Think of...
invest in the one asset online can never trump:
invest in the one asset online can never trump:
people.
The emotional connectivity that a store associate brings is the ultimate differentiator between shopping online and shopping in-store.
Summary (so far)
1 Stores are winning
12
Stores are winning
But not for long
123
Stores are winning
But not for long
Employee status to consumer is deplorable
store ofthe future
stores must evolveand actually be something more in the minds of shoppers
Be... The Store of the Future
Be social
Be open
Be captivating
Don’t be... The Store of the Past
Don’t be... loud
Don’t be... contained
Don’t be... boring
Don’t be... dis-engaged
Don’t be... warehousesque
Don’t be... cluttered
Don’t be... horizontal
Don’t be... littered with random technology
Don’t be... terrifying
Don’t be... conservative
Don’t be... old-school
Source: businessinsider.com, 7 Retailers That Are Closing A Ton Of Stores
Barnes & Noble
226
To close between 2011-2021
To close by end of 2015
Closed in 2013 Closed in
2012 and 2013To close by 2015 To close between
2014 - 2019
To close by May 2014
225
200185
180 175
33
Staples GameStop The Gap Aeropostale JCPennyAbercrombie & Fitch
0
50
100
150
200
250
Hundreds of Retail Stores Are ClosingUS Retail Store Closings
conclusion
Our findings reflect a deep truth:
Human beings are, and will always be, socially driven.
however...
Stores must invest to retain cultural relevance and gain next-generation loyalty.
the closer you are to a physical amazon (warehouse), the more vulnerable you are to getting destroyed by...
it’s easy to compete with us, just do what we don’t do.– SAM WALTON
wdpartners.comHow to get this study:
he nd.
Thank you...
T E