The future of retail michael weissman svic presentation

The Future of RetailHow to put it back together when it all falls apart

Outline

• Macro view

• Implications

• Causes

• Recommendations

30,000” view

WHAT IS RETAIL?

Ecommerce Value Chain

Customer perspective

Sellerperspective

Selection

Finding the right product quickly

Customer acquisition & merchandising CMS

Buy

Fast, simple & affordable transaction

1-click ordering

Process order

Easy to pay the way want to pay

Cart

Get it shipped

Convenient delivery & cost

Warehouse & logistics

Get support

Easy to try, return, or work through issues

Omni-channel support

Ecommerce Value Chain

Selection

SINGLE RETAILER

Benefits of scale- Purchase power- Selection- Logistics efficiencies

Buy Process order Get it shipped

Get support

Yet… Retail is breaking

Becoming disaggregated

Discovery

Buy

Selection

Transact

DeliverySupport

Share

PLACE

Changes in DistributionDrive Innovation

Instacart

Where can it head?

• Robotic sorting• Robotic delivery• Autonomous cars

Moving to Omni-Channel

INSIGHT | WHAT HAPPENS WHEN RETAIL

IS NO LONGER A PLACE?

DISCOVERY & SEARCH

© 2013 SYNQY

CONTENT CONSUMPTION WAS CENTRALIZED

80% of adults could be reached with 3 TV ads in 1965.

Today, it would take 117 commercials in prime time.

- Former CMO, P&G

Path to purchase used to be linear

Most time was in store

Actively shopping After the exchange

Preparing to shop

Retailers are too-transaction centric

• Didn’t focus on path to purchase (P2P)

• Missed most of the shopping process

• Less opportunities to create ROI and monetization

Only focused

here

Missed opportunityMissed

opportunity

15 different sites over 5-6 weeks Lots of content

Actively shopping

After the exchangePreparing to shop

Discovery time in-store is declining

34% drop

Shoppers are going elsewhere to learn about what to purchase.

This raises acquisition costs, too.

Money is made along the path to purchase not, just at transaction

Discover Purchase Use

Marketing $$ Margin $$ Repeat/Upsell $$

Ad revenue has dropped 50% in 6 yrs

50% drop

Advertisers know retailer circulars don’t work like they used to.

The Purchase Path is now convoluted

The number of touch points is growing exponentially.

© 2013 SYNQY

CONTENT IS EXPLODINGBreaking through is harder than ever

“We generated more content in the last 2 days than we did from beginning of time until 2003”

– Eric Schmidt, Google

2003TodayBeginning of time

2 Days today > 6,000 years

© 2013 SYNQY

CUSTOMERS MORE DISTRACTED THAN EVER

Source: Google

© 2013 SYNQY

CONSUMERS DON’T READ, THEY SCANRead only 8% of the article (32 words)

40% view

½ story

http://www.slate.com/articles/technology/technology/2013/06/how_people_read_online_why_you_won_t_finish_this_article.html

Only 40% see more than ½ the article

And they only read 20% of what they see.

Source: Jacob Nielsen

© 2013 SYNQY

USERS DON’T CLICK ON WHAT THEY DON’T SEE(only 10-20% of links get seen)

50% never read past here.Above the

fold The good stuff – the interactive content and links are here.

© 2013 SYNQY

AND THEY RARELY GET TO THEIR CTA DESTINATION

Most customers are lost quickly when asked to click away from what they are doing

1 2 3 4 5 6 7 80%

20%

40%

60%

80%

100%

120%

Number of clicks

33%

11%

3.7%1.2% 0.41% 0.14% 0.05%

% of customers still with you

Marketing $ are moving from retailers to online properties like Google

Discover Purchase Use

Marketing $$ Margin $$ Repeat/Upsell $$

Product Listing Ads – big trend

Internet Scavenger Hunt

BUY

MARKETING TRANSPORTATION$100B

Marketing dollars are substantial…

$83

Google Ad dollars per

order*

$10 margin per order

Source: Google average ad cost @ 3% convert rate, Margin assumption of 50%

8x bigger

Retailers are getting commoditized

Price becomes differentiator

Who is this retailer?

Who is this retailer?

Let’s skip search altogether!

INSIGHT | WHO CONTROLS SHOPPER?

DIGITAL SHELF

How will we disrupt merchandising?

Discovery

Buy

Selection

Transact

DeliverySupport

Share

HOW WILL YOU CUT CUSTOMER ACQUISITION COSTS?

Add value through proximity

$$

Path to purchase

POS

The closer to the time and place of purchase, the more valuable the marketing investment

Persuasion is weakest at the shelf

Brand Storytelling and product marketing are separated

Limited retail usability innovations

2002 2014

Object of Desire

Object of Desire

The desire comes from the marketing and brand work

Ecommerce Today

No persuasive brand content

How Brands Market

Object of Desire

Great content is stripped when it goes to resellers

Object

INSIGHT | RETAILERS ARE

COMMODITIZING BRANDS

Commoditized shopping experience

Commoditized shopping experience

There’s very little other differentiationSection Attribute TRU Amazon Walmart Target

Details &Description

Product details ✔ ✔ ✔ ✔

Product description <50 word ✔ ✔ ✔ ✔

Quick bullet facts about product ✖ ✔ ✔ ✖

Rich-media content

Roll over image/zoom ✔ ✔ ✔ ✔

30 Second video commercial ✔ ✖ ✖ ✖

Customer and shipping information

Customer Question & Answer ✔ ✔ ✔ ✖

Customer reviews ✔ ✔ ✔ ✔

Featured/related items ✔ ✔ ✔ ✔

Fast shipping options ✔ ✔ ✔ ✔

Local store search ✔ N/A ✔ ✔

Price comparison/financing options ✖ ✔ ✔ ✖

INSIGHT | RETAILERS ARE

COMMODITIZING THEMSELVES

Enthusiasm gets lost, not amplified

What Happens Without Impulse Buying?

Merchandising

Matters.

Didn’t deliver right content

• Most shoppers still go to vendor websites for information

• Over 50% of shoppers who abandon shopping carts go to visit vendor websites

Sources: LivePerson, IBM/CoreMetrics

100% of shopping

carts

32%Buy

The cost of stripping away the content

Sources: LivePerson, IBM/CoreMetrics

100% of shopping

carts

68%Abandon

32%Buy

The cost of stripping away the content

Sources: LivePerson, IBM/CoreMetrics

100% of shopping

carts

32%Buy

41%Other reasons

27% Seek rich

vendor content

The cost of stripping away the content

Transactional info, not lifecycle info

• Focused only on one small sliver of time and narrow content

• Didn’t think end-to-end or whole consumer lifecycle

Win the discovery phase with more relevant content

Discover Purchase Use

Give them a reason to shop you in this phase

Content Enhances Discovery

VENDOR PRODUCT REGISTRATION

VENDOR-BASEDPRODUCT SUPPORT &

CONTENT INFORMATION

PROMOTIONAL INFOBUYER’S GUIDES &

EXPERT ADVICE

LIVE VENDOR CHAT

AUTHENTIC UNBOX VIDEOS AND USER PHOTOS

INTERACTIVE MARKETING MATERIALS

CAUSE MARKETING MATERIALS

RICH-MEDIA SHARING

HOW-TO TUTORIALS

AWARDS

INSIGHT | RELEVANCE WINS DISCOVERY

COMPARISON SHOPPING

HOW WILL YOU FIGHT SHOWROOMING?

THE PATH ISN’T CLEAR

AMAZON FIREFLY

Google Value Chain

Selection Buy Process order Get it shipped

Get support

PLAAdwordsExpress

Wallet WalletExpress

Express ?

44% of transactions today in ecommerce

Where are you?

Advice: Be careful with your partnerships

INSIGHT | SCALE MATTERS AGAIN.

© 2013 SYNQY

ENCOURAGED YET?

THE VENDOR PERSPECTIVE

WHAT HAPPENS WHEN 3-4 BIG RETAILERS CONTROL EVERYTHING?

Vendors need a toxin. Retailers too.

Need a way out.

Vendors need to protect their channel.

As Google search goes local,National brands lose control

Vendors must transform discovery

Discovery

Buy

Selection

Transact

DeliverySupport

Share

• Lowers the Google tax• Increase flatter retail• Shortens path to purchase• Can move location of retail

INSIGHT | IT’S THE NETWORK. STUPID.

HIDDEN PROBLEM.

Product marketing content doesn’t flow to resellers.

PRODUCTS FLOW

PRODUCTS FLOW

Content Doesn’t Flow

Work gets replicated

Problem

• Gathering the rich media content

• Organizing and managing it

• Keeping it current

• Displaying the content across sites, platforms and apps

Too hard and expensive for companies to do themselves

INSIGHT | IT’S THE NETWORK. STUPID.

NOW WHAT?

EMBRACE THE COMPLEXITY

Turn Pointers to Engagement into Places of Engagement

Built engagement everywhere

LEVERAGE THE POWER OF THE NETWORK

Introducing SYNQY

Introducing SYNQY

Introducing SYNQY

Introducing SYNQY

Introducing SYNQY

Introducing SYNQY

Introducing SYNQY

Rich, interactive brand content

Improves your results and product pages

Curates together

Live Feed

How it works

1 line of codeProduct pages

SEE IT IN ACTION

Sources: LivePerson, IBM/CoreMetrics

100% of shopping

carts

32%Buy Upside of fixing

91% growth

41%Other reasons

27% Seek rich

vendor content

SYNQY can deliver real financial results

Everybody Wins

Shoppers Get better experience

Resellers Increase revenue per visitor

BrandsImprove persuasion at the pivotal moment of truth

UPDATE ONCE – CORRECT EVERYWHERE

See more clearly

Hassles eliminated

• Simplify shopping• No more wasted time• Discovery is comprehensive

DYNAMIC & RESPONSIVE

Costs Eliminated

Gets rid of manual efforts to keep content current and relevant

INSIGHT | PARTNER OR PERISH

WHAT IS RETAIL?

Summary

• Retail is disaggregating

• Product discovery sits as pivotal way to survive

• Key is to partner with vendors

• Think network, not static

• Ride the change to survive

Thank [email protected]

925-200-1047

Q&A | LET’S DISCUSS