NSBK 2013 Retail Trendswatch

RETAIL

The Retail world. Reinventing the way we buy and sell.

TRENDSWATCH2013

NSB/Keane

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CUSTOMERS BUY FOR THEIR OWN REASONS, NOT FOR YOURS

Sometimes they do it on impulse, other times for necessity, other times because they are used to it, other times to belong, other times because of boredom, other times while seeking self-esteem, and other times for no specificreason whatsoever.

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Overexposure

The consumer today is exposed to thousands of ad messages, on hundreds of TV channels, radio stations, magazines and digital devices.

Each day it becomes more difficult to reach them and convince them.Brand influence has eroded. The simple fact of knowing a brand does not translate into sales. Many decisions are made at the point of sale.

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HOW IT USED TO BE

VIEW TV OR

PRINT ADGO TO STORE COMPARE

OPTIONSCHOOSE

BEST OPTION

ALIGNSELF WITH

BRANDBUY ITEM

LOYALTY

COMMITMENT

EVALUATION

INTEREST

KNOWLEDGE

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NOW IT’S COMPLICATED

Consumers are more informed and they are more selective.The new outlook demands retailers to go back and rethink their strategies.

SearchDownload

iPhoneApp

CompareShop

Online

Demo productin store

WatchTutorial

ReadReviews

ViewPrintAd

ViewBanner

Ad

ReadBlog

Shopon

Website

WatchYoutube

commercial

Like uson

Facebook

BuyItem

Watchvideo onPhone

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IN THE NEXT FEW YEARS, WHICH RESEARCH OPTIONS WILL BE MOST IMPORTANT PRIOR TO PURCHASING?

CUSTOMER REVIEWS

SOCIALNETWORKS

Sales Staff

Brands

Immediate Environment

Consumer Associations

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General perceptions from consumers

on retail sales services

Understanding the consumer needs

Information about the service

Convenience of service

Quality of the employees

Promptness of service

Quality and reliability of service

Clarity of service benefits

Service environment

Reliable self-service technology

Respectful contact with customers

Readiness to respond to a customer request

Services rendered as promised

Services performed right the first time

Reliability on problem resolution

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MULTICHANNELEXPERIENCEONLINE sources researched during the shopping process

Online stores Search engines

Comparison shopping sites for products/services

Social NetworksBlogs and forums

Brand and retail websites

E-newsletters and digital brochures

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COMPULSIVEEXPLORERSConsumers wish to explore and analyze how products can increase their quality of life on a regular basis.

They explore to obtain the information they think they need and are motivated to interact with other people and strengthen their relationships while obtaining information.

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They are driven by the desire to assume responsibility for their own identity and the wellbeing of their families and lifestyles.

The Future Of Retail Link: http://www.youtube.com/watch?v=SZutnRg9oeg

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Today we are all digital explorers, searching for online scores, critics from perceived experts, videos and product details as we go through the purchasing cycle.

The Internet has changed the way we decide what to buy.

THE PURCHASING CYCLE EVOLUTION

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Researching information before buying has gained predominance in customer consumer habits. In the past, the search was limited to high ticket items such as vehicles, electronics or homes.

Now, people will inquire about the smallest purchases. This trend has exceeded all categories for consumer habits.It is simply the way people shop today.

ZMOTGoogle calls it

ZERO MOMENT OF TRUTH

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THE SHOPPING DECISION-MAKING STEPS HAVE CHANGED.

What used to be a message before is now an interaction.

The ZMOT is the new crucial step, which incorporates the classic three steps: STIMULATION, PURCHASE AND EXPERIENCE.

Today, consumers share the information they have obtained about products in their own way and at their own pace.

Word of mouth is more important than ever.

For the first time in human history, word of mouth is an outlet that is stored digitally.

The truth cannot be rejected.

Consumers are not only looking for information on the Internet about homes and medical care services, but about band aids and pens.

Moments of truth are finding a convergence point.

Mobile devices are moment of truth machines. As the use of these devices increases the three moments of truth begin to converge.

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I am going to Google itToday, when consumers hear about a product their first reaction is to say “I am going to search for it on the Internet” and they begin a discovery adventure: about a product, a service, a problem or an opportunity.

70% of Americans say they read the review & comments about products before they buy them.

79% of consumers admit they used a smartphone to make decisions when they shop.

83% of moms say they look online for the products after seeing commercials on television.

70%79%83%

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MARKETING MYOPIAMarketing has evolved and the modern marketing strategies need to evolve with the changes in the way people shop.

Some companies make the great mistake of wanting to focus their efforts only on the product, forgetting about the consumer and the market. They forget that the shopping experience needs to satisfy the consumer as much as the product itself.

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–– Stimulating the shopping experience.

SENSORYMARKETING

As we all know, the act of shopping is much more than simply going into a public place where products are stored and are exchanged for money when they are needed.

The sensitive shopper

Shopping involves using the senses, as a basis for choosing certain things and rejecting others.

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Visu

alizatio

nhow it rings?

odor

s...

s ound

savor

how it smells?how it

l o o k s ?how it feels?see how it's

tou c hconnect

listen

wha

t th

e taste

hear

colors

V I E W E D

–– Sensory Marketing

Emphasis on creative exploration and experimentation through gaming.

The Concept Store O2 was born from brand sensitivity. The space is organized around the practical integration of activities, emphasizing accessibility and a creative lifestyle. It submerges the visitor in an unique environment that is both dynamic and tactile, combining a game of creative high tech with materials and basic natural textures.

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It is very common to go into a business and perceive a certain fragrance. It is not only about covering the space with perfume, but about having a fragrance that hides part of the brand identity and attracts the public to become consumers of that business.

Aromatic marketing has the goal of reinforcing the brand image, to compliment it beyond the product itself, to stimulate the senses, to attract clients, transforming an aroma into an invisible marketing strategy. Through the sense of smell you can trigger memories, emotions and mental images, creating an association between that stimulus and a world of experiences.

AROMATICLOGO

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DISNEY’S AROMASWhen you walk around any of Disney’s theme parks, something that you cannot ignore is the large quantity of aromas that exist.

The live shows smell like powder to create the sense of realism, they change the aromas on Main Street depending on the season or festivity. There is caramel, ginger, and pine tree during Christmas and pumpkin smells during the Fall.

Aromas can also be a part of the rides, for example, the Pirates of the Caribbean ride uses an old and abandoned aroma and in some areas the scent of sea salt.

The hotels are no exception, they use specific aromas depending on the theme; for example the western and cowboy hotels smell like wood in the lobby.

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SELECTING THE PROPER MUSIC FOR THE RIGHT TARGET:

The auditory sense cannot be voluntarily controlled, hence it lends itself for strong commercial use both at a conscious and unconscious level.

Music is an important element of seduction that is interrelated to emotions.

The choice of proper ambiance helps to create trust between the client and the establishment and it increases sales.

At a supermarket, there were two arrangements of wines, one was French and the other was German. On the days they used French music in the background, 80% of the shoppers chose the wine of the same nationality.

Most of the clients did not associate the background sound of the Gallic accordion with their purchase. The days they had German music, the German wine was also favored in a similar proportion.

During the research the chances of purchasing wine increased between 3 and 4 times when they combined it with the music from its place of origin.

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TURNING CLIENTSINTO DJSPepe Jeans launched an application for mobile devices called “DJ Store” which uses geo location technology to make it possible for the client to choose the music they want to listen to at their store, adding the songs to the playlist that is playing live. This way, the client brings their music taste to the brand and the brand brings a shopping experience to the client while their favorite song is playing.

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This concept awakened the genius idea that Starhub had for musicalizing fitting rooms with music that adapts to the clothing style they are trying on, providing a deeper shopping experience connected with emotions and taste of the consumer.

When a client tries on a piece of clothing, an RFID reader that is installed in the fitting room reads the smart barcode which has data on style and type.

MUSICAL FITTING ROOMSAdapt the music to the style of clothe.

“Young people define themselves based on the music they listen to and the clothes they wear”.

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THE ABERCROMBIE & FITCH CASE

There are few cases that are as highly representative for sensory marketing than with Abercrombie clothing stores, famous for their music, lighting and characteristic aroma.

The ambiance of their stores recreates something more similar to a club than a traditional clothing store.

The music is on full volume, the lighting is just bright enough to see the colors of the clothes, and the characteristic perfume covers most everything in the store – and can even be detected several feet before entering.

In certain moments, the sales associates break into dance generating an experience completely untraditional for a retail environment.

The strategy is clear. Sensory enjoyment weakens reasoning, appeals to our limbic system (the part of our brain that manages emotions) and allows those emotions to control shopping decisions.As a result, we are not subject to “shopping tension”, but rather we enjoy it and let our purchasing guard down.

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STORE TODAY

CONVENIENCE STORE

CONCEPTSTORE

ONLINESTORE

– AVAILABILITY– PROXIMITY– SPEED– PRICE

– EXPERIENCE– INNOVATION– TECHNOLOGY

– PRACTICALITY– COMFORT– SUPPLY

Beyond the standardized resources related to sensory Marketing, today we can classify stores in three different formats based on core characteristics.

A B C

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STORE TODAY

*The Experience Economy by B. Joseph Pine II and James H. Gilmore (1999).

Proposal Commodities Goods Services Experiences

Economy Agrarian Industrial Service oriented Experience oriented

Economic Function Extraction Produce Deliver Please

Central attribute Nature Standardized Customized Personalized

Nature of the offer Fungible Tangible Intangible Memorable

Offer Stored in bulk Inventoried after being produced Developed by order Revealed during

its duration

Sales person Trader Producer Supplier “Stager”

Shopper Market User Client Guest

Demand factors Characteristics Functionalities Benefits Sensations

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CONVENIENCE STORES

Format for smaller establishments.Convenience stores are the answer to the demographic level changes, since studies have shown an increase in smaller family sizes more and more, having less time availability and value the importance of proximity.

The most valued and scarcest asset for postmodern consumers today is time.Saving time at the point of sale and during the shopping and payment process is essential.

A

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WOULD THE ONE NEXT TO ME MOVE FASTER?

Client motivation decreases rapidly when they need to wait to pay, shop, stop by somewhere, and anything else.

Tick, tock, tick, tock. Waiting time negatively affects the global perception of the quality and service of the product.

In many cases anxiety is created from the moment we choose a checkout line and if it is the “correct” one or not.

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The “day to day shopping” is the main workhorse for these locations, with an average of 3,000 square feet. They bring shopping speed and agility, withthe advantage of being very close to the home or on the way to work.

Carrefour is a clear example of this.

Aware that the premise of “closeness” is the first shopping engine for consumers, betting on the “Express” format to expand their business. They have few mainstream brands and use their own brands to compete with the Chinese chain retailers.

Chinese supermarkets have great success due to their backward beginnings small stores without service. They realized that larger stores were reserved for weekend trips, but people were not buying anything.

CONVENIENCE STORESSUPERXPRES

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Farmacity appears like a postmodern business model.Therein lies the fusion of everything. There are no limits nor precise definitions. They managed to introduce pharmacies on a grand scale for impulse purchases.They implemented a new format where medicine, cereal bars, and MP3 players coexist. The 24 hour service broke the “regular hours” scheme for pharmacies.

THE REMAKE OF THE GENERAL STORE WAREHOUSE

–– Convenience Stores

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–– Convenience Stores

The secret of success for the kiosk chain Open 25 was realizing that they had the opportunity to mount a chain that would know how to handle commercial strategies that large supermarkets use when it comes to selling snacks. The challenge was to stop looking at what the corner kiosk was doing and rather look at what Carrefour, Coto and Disco were doing.

Specifically, what Open 25 has are agreements to place the signage for a brand or to commercialize the space for candy maufactures at each of the more than 180 kiosks distributed nationwide, not worrying about having exclusivity with anybody.

For the brands, they offer more sophisticated services like shopper behavior analysis, through cameras installed at their locations.

OPEN 25 THE GONDOLA FOR SNACKS

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Emotional /Experience

The Apple Stores are places to “be seen”, places where consumers feel inspired. They are more than stores, becoming social places and points of reference.

Visual identity and signposting system

Apple’s visual system is coherent, impactful and of great reach, and their logo, graphics and sources are recognizable worldwide.

Product interaction

Products are shown in a simple manner and accessible for everyone, with ample opportunities for product interaction and with the assistance of the employees, in case it is required.

Decoration

The quality of the materials at the Apple Stores represent an interesting mix of design quality that at the same time is simple with great lighting.

Staff

The personnel at the Apple Store are young, energetic and well trained.

CONCEPTSTORESThey look to stand out, generating innovative concepts related to lifestyles.

B

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–– Concept Stores

Electric vehicle brand Think has opened a new concept store in Zurich, specializing in electric mobility. M-way is the first “Concept Store” dedicated to electromobility in all aspects. Multimedia screens, special exhibits, and a library where clients will find answers to all their questions about technical topics in an engaging and fun way.

INNOVATIVE SPECIALIZATION

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EMPHASIS IN CREATIVE EXPLORATION AND EXPERIMENTATION THROUGH A GAME.

CONCEPTSTORES

TOUCHING ALLOWED

Musical store allow the customer to touch, try and improvise with the instrument in store. Sometimes renowned musicians perform free clinic and shows in the musical room located within each location.

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NEW CONCEPTS:

POP-UP STORE–– Concept Stores

They can be basements, ships, homes, terraces, buses, trucks, containers, plazas…The space stops being fixed and transforms itself to something itinerant and tempo-rary, to offer an unrepeatable experience.

Characteristics:

• Term: Anywhere from 3 days and 3 months.

• Location: High pedestrian traffic zones like urban centers, commercial centers and busy streets.

• Price: Significantly lower than a traditional store.

• Use: Launch new products, generate awareness, move stock, increase the brand perceptions.

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RESIGNIFYINGCONCEPTS:

Umpqua Bank

The brand identity of Umpqua Bank is as close as you can find to something like Apple in the financial industry. The facilities do not look like a bank but render the feeling of a social place, a modern deconstructed profile, even offering book presentations, thematic lectures and other activities outside normal business hours. When Umpqua opens a new branch, an ice-cream truck - branded by the bank - delivers colorful and fun food throughout the area!

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New concept of exposition store.A different way to exhibit the product on the gondolas.

Unifying Concepts:

STORE+EXPO

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Reconnecting social identities with the physical presence.

SOCIAL FRIENDLY

COMMERCERetailers also intend to reach THE F-FACTOR. (Friends, Fans & Followers).

Fliike is a physical “likes” counter, and it counts in real time the “Likes” that Facebook Fan Pages local businesses get. It is a simple way to keep the interconnection between the online networks and the real world. It has the function of making the clientele more loyal: it is more likely that a client becomes interested in a business if they can prove that they have an online community.

At the same time, it is more realistic that the consumer from a business can integrate to a community formed by that business if they can prove that such community is growing, as indicated by the live counter.

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SOCIAL

FRIENDLY COMMERCEBRINGING THE BEST OF THE ONLINE WORLD TO THE REAL WORLD

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BRINGING THE BEST OF THE ONLINEWORLD TO THE REAL WORLD

MyBestFit is a free service that has a presence at different shopping malls throughout the United States. Clients step into a body scanner before being advised on which sizes will fit them best from each brand.

JC Penney developed its findmore service at 120 stores throughout the United States. The 42 inch touch screens at the store would allow shoppers to see the complete catalog from the retailer online, review the inventory levels at the local stores, share products with friends and scan product barcodes to receive extra information and recommendations about complementary products.

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BRINGING THE BEST OF THE ONLINE WORLD TO THE REAL WORLD

Inamo, an Asian fusion restaurant in the Soho district of London, has found a way to differentiate itself from other such restaurants. Using touch screen tablets, Inamo allows consumers to order food, play and even watch a live video from the kitchen.

Digital Signage

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THE STORES ALSO CLOSED

Through interactive windows installed in the traditional window, clients can go discover the collection and can obtain product information 24/7.

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ENHANCED REALITYBRINGING THE BEST OF THE ONLINE WORLD TO THE REAL WORLD.

The shopping experience is enriched through different technological tools. They offer an added value to the product, through the experience, to incentivize a purchase.

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Brands Traditionally using distribution channels begun to diversify their sales strategy by opening their own retails outlets.

–– Tiendas concepto

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OnlineStoresIn both mature markets, where there is already an online shopping deployment, and growing markets, rapid urbanization and mobile internet penetration are unlocking new consumer habits, shoppers are “e-shopping”.

8 out of 10 consumers investigate their purchases online.Multi-channel consumers that receive information from more than one source before the purchase (the store, online, mobile or catalog), spend 82% more per transaction than a client that only shops at the store.

About 74% of smartphone shoppers make a purchase as a result of using their smart phones.Out of these, 76% of them have shopped at the store, 59% have doneit online, and only 35% have made a purchase via their smart phone.

C

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ONLINE STORESGLOBAL STATISTICS

62%2016

In the United States, e-commerce sales will increase 62% by 2016, up to 327 billion dollars.

78%2016

2020

In Europe, e-commerce sales will increase 78%

by 2016, up to 230 billion dollars.

21.9%2016

In Brazil, e-commerce sales will increase 21.9%

by 2014, up to 18.7 billion dollars.

10mpersonas

In Argentina, e-commerce sales increased by 44%

during the past year. More than 10 million people

made at least one transaction.

66%2011

In China, e-commerce sales were 124 billion dollars

in 2011, with an increase of 66% since 2010. The estimate is that

e-commerce will increase between 3% and 7%

in 2015.

U S A E U B R A R C H

U$S327 billion dollars=

U$S23 mil millones=

U$S18,7 billion dollars=

1 transaction=

U$S124 billion dollars=

billion dollars

USDThe estimate for India, is that e-commerce will grow up to 70 billion dollars by 2020.

INDIA

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WHY E-COMMERCE WILL AFFECT CONVENIENCE STORES MORE THAN CONCEPT STORES

Unlimited selection you can shop for almost everything that you can think of.

Price comparison using search engines and shopping bots, you can compare prices at a large scale.

Convenience you can shop from wherever and whenever you want.

Speed shop at your own rhythm and pay quickly.

InformationThe information that it can provide is unlimited.

In particular, the Web has been very effective in providingdirect and impartial evaluations that came from other clients.

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Paraphrasing Pine & Gilmore and the book subtitle “The Experience Economy”...

“THE POINT OF SALE IS THE THEATERAND EVERY REP AN EMOTIONALSTAGER."

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SOURCES

- Compradicción - Verdades y mentiras de por qué las personas compran. Martin Lindstrom.

- Why We Buy - The Science of Shopping. Paco Underhill.

- Ninja Innovation – The ten killer strategies of the world´s most successful businesses. Gary Shapiro.

- ZMOT. zero moment of truth. Jim Lecinski.

MAGAZINESAPERTURA

ASARETAIL

EL CRONISTA COMERCIAL

MERCADO

http://geek.comhttp://independent.co.ukhttp://informabtl.comhttp://mashable.comhttp://psfk.comhttp://puromarketing.com

http://www.addicted-to-retail.comhttp://brandingmagazine.comhttp://businessinsider.comhttp://comscore.comhttp://digitalsignagetoday.comhttp://e-table-interactive.com

http://retailcustomerexperience.comhttp://retaildesignblog.nethttp://www.retailprophet.comhttp://slideshare.net/http://slowretailen.wordpress.com/concept-stores

http://specialtyretail.comhttp://springwise.comhttp://stores.orghttp://trendwatching.comhttp://untappedcities.comhttp://webretail.com.ar

BOOKS

WEB

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NSBK 2013 Retail Trendswatch

Business

concept stores

sensory marketing

concept stores

real world

convenience

creative exploration

united states

7 billion