DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 1
DELIVERANCE STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 2
Source: IBM Institute for Business Value study 2014
CLICKS BRICKS
2012
2013
PERCENT OF LAST PURCHASES REPORTED BY CHANNEL
72%27% 72%
84%14% 84%
CLICKS BRICKS
AVERAGE BRAND DESIRE INDEX SCORE: BRICKS VS CLICKS BRANDS
201180
2012 2013
97 100
119
103 105112
Source: Clear’s Brand Desire survey 2011-2013, US & UK
ONE ALMIGHTY CHALLENGE Twentieth century shopping just can’t seem to change fast enough for shoppers in the twenty first century. This is reflected not just in shoppers’ rapid adoption of e-commerce, but also in their rising desire for those brands that are fulfilling their needs online.
These online brands, increasingly enabled by mobile technologies, have set new standards for shopping – the ability to compare prices and reviews, to pre-check inventory, to checkout with ease, even to get great customer service.
Where even only three years ago we were yet to be convinced about online brands, they have raised the ante so far and fast that we now simply expect all our shopping to meet the standards they’ve set.
But to suggest this is a battle between online and real world shopping is misleading. This isn’t about supremacy of one over the other. It’s about making retail experiences more relevant.
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 3
“ DIGITAL IS AT ITS VERY BEST WHEN IT PROMOTES REAL WORLD INTERACTIONS”
JACK DORSEY + founder of Twitter and Square
RELEVANT RETAIL Though near perfect shopper experiences of e-fulfillment integrated with real world interaction are still tantalizingly rare, when they do happen it’s extremely potent for shoppers.
But that potency cannot accurately be described as ‘omnichannel’. It’s a term that doesn’t accurately reflect the needs and expectations of the shopper. Shoppers are omnichannel but that doesn’t mean they expect retailers to be.
What shoppers now expect – all that they expect – is for their shopping experiences to come together in the right way at the right time and in the right place.
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 4
Each of these shopper needs has different levels of relevance across different sectors and occasions. Each can be optimized, both in its own terms, as well as by stretching into adjacent drivers, to deliver competitive advantage in retail.
TRANSACTIONAL SERVICE EXPERIENTIAL
SHOPPER NEED
BROWSABILITYPRICE ASSURANCE
ONLINE
OFFLINE
CONVENIENCEADVICE
SAMPLINGSOCIABILITY
OPTIMUMCHANNEL
VALUE DRIVERS
Source: Clear’s Shopperfection model
TRANSACTIONAL SERVICE EXPERIENTIAL
RELEVANT RETAIL Delivering interaction relevance has become retail’s latest greatest challenge. It involves understanding and designing retail experiences around three very specific needs:
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 5
Source: Brand Desire data (UK & US 2013) for Transactional, Service and Experiential type retailers (representative buckets of type brands)
TRANSACTIONAL
EXPERIENTIAL
SERVICE
DESIRABILITY OF TRANSACTIONAL, SERVICE AND EXPERIENTIAL RETAIL BRANDS
96
139
149
When the performance of brands stretching into each of these driver types is compared, the value of meeting extra shopper needs is clear to see. Retailers that get this mix right, and augment their transactional offer with relevant service and experiential elements, are winning – their brands are more desirable.
RELEVANT RETAIL
But again, this isn’t about delivering everything across all channels, it’s about delivering relevance in shopping experience - trading off price vs experience, advice vs browsability, convenience vs experience. It’s about deliverance.
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 6
DELIVERANCEWHO’S BRINGING IT?
WALMART APPAccording to Walmart, its app-wielding customers make twice the shopping trips and spend 40% more than non-app users.
BROWSABILITYPRICE ASSURANCE
SAINSBURY’S BRAND MATCH Sainsbury’s proprietary automated price matching mechanic is helping it win in UK grocery wars. Shoppers get realtime payback with this permanent price checking offer.
Photo Source: Flickr, Sainsbury, J
MACY’S AND SHOPKICKMacy’s has partnered up with Shopkick app and Apple’s iBeacon to trial “flag and tag” – sending contextual, personalized information and offers to its shoppers as they step in store.
Photo Source: Gizmodo.comPhoto Source: Theverge.com
AMAZON’S SCANNER APPShowrooming has rapidly become a major revenue stream for Amazon, as app-enabled shoppers stroll Main St getting the best prices delivered to their door with a single touch.
Photo Source: techorange.com
TRANSACTIONAL
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 7
KINDLE FIRE’S MAYDAYCustomer help’s evolving beyond face-to-face and tele-conversations, enabling interactions to happen on shoppers’ terms - like Kindle’s on-demand support with the push of a button.
THE HOINTER TOUCH TAGStartup Hointer promises to revolutionize in-store fulfillment, not least with its touch tag that uses NFC technology to fit you to the right clothes and feed socially mediated ratings.
Photo Source: Youtube, Kindle Photo Source: BBC News / http://www.bbc.com/news/business-22342626 - © [2013] BBC
VENMO TOUCHVenmo’s one-touch mobile wallet makes mobile shopping transactions feel more personal and enjoyable, allowing customers to keep their focus on the excitement of their new purchase.
MACY’S MICRO DISTRIBUTION500 stores now do double duty as fulfillment centers so customers can order and pick up from any location, same day if needed - already 10% of online sales are fulfilled from stores.
Photo Source: Youtube, VenmoTV Photo Source: Vimeo, Catherine Rigod
CONVENIENCEADVICE
SERVICE
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 8
CONVENIENCEADVICE
SERVICE
AMAZONFRESHAmazon’s new grocery service delivers fresh, however shoppers want it – next day, local pick-up, even on Sundays. All price-assured and with a single touch. Watch this space...
BOSTON PROPER, BURBERRY, J CREWSmart apparel retailers are using smart data interfaces to provide personalized advice based on shopper preference and behavior. Clothes buying’s no longer left to a rack trawl.
Photo Source: Vimeo, Gin Lane Media Photo Source: Flickr, Atomic Taco
LOWE’S FIX IN SIX The big box store is sharing DIY tips into 6 seconds videos on Vine. Learn how to unscrew a gnarly, stripped screw using a rubber band, or how to save money and time on paint tray clean-up. There’s also great cost-saving advice.
Photo Source: Tumblr, Lowes
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 9
SAMPLINGSOCIABILITY
EXPERIENTIAL
THE BURBERRY EXPERIENCETake a trip to London’s Regent Street and drink in this ‘web experience made live’ at the Burberry store: from selection-activated catwalk videowall to iPad enabled sales staff.
KATE SPADE SATURDAYeBay teamed up with women’s fashion retailer Kate Spade to give new meaning to window shopping – 24hr shoppable store windows, promising 1-hour delivery anywhere in NYC.
Photo Source: Youtube, National Retail Federation
INDOCHINO & WARBY PARKERTwo very exciting startups with similar stories – ecommerce concept now opening experiential stores and setting the standard for merging online and real-world shopping.
Photo Source: Flickr, Techvibes Photo Source: Blogspot, sandinourstilettos
VIRGIN MONEY LOUNGESMembers now get to use their local bank as a place to meet up with friends, get advice, and get involved in local enterprise.
Photo Source: Flickr, VirginMoney
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 10
SAMPLINGSOCIABILITY
EXPERIENTIAL
LULULEMON STORE YOGA SESSIONSThe seemingly unstoppable trendy yoga kit store has done lots of people lots of favors, and created a real buzz, with the free yoga classes it puts on outside its stores regularly.
FOURSQUARE CHECK INSFoursquare’s location-based social platform may now be coming of age, alerting users of nearby haunts and offers based on your and your friends’ past activities.
Photo Source: Flickr, Mark Morgan Trinidad Photo Source: Facebook, Lululemon
DIANE VON FURSTENBURG’S HANGOUTDVF’s fashion video interview lets viewers tune in to live inspirational talks by the designer herself, while getting the opportunity to buy limited edition outfits as they appear on screen.
Photo Source: Youtube, DVF
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 11
DELIVERINGRELEVANCE Of course, the realities of delivering to shoppers’ rapidly evolving expectations are huge. Not just in terms of infrastructural change, and the cap-ex involved in that, but, crucially, organizational too.
Recent research conducted by Clear shows us that what’s delaying the realization of that innovation opportunity is retailer organizations’ abilities to gather and deploy resources in the right way. They need to be agile.
Our research shows that more than half of retailers surveyed either struggle to see beyond their own internal workings or to adapt to external change.
46%
5%
39%
11%
EXTERNAL CONCERN
INTERNAL CONCERN
PROA
CTIV
E
REAC
TIVE
SETTING THE BAR
INWARDLY FOCUSED
STURDY BUT BLINDLY FOLLOWING
WALLOWING INTERNALLY
THE AGILITY CHALLENGE
Source: Clear’s 2014 Cost of Change survey of 103 business leaders.
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 12
70%
60%
50%
40%
30%
20%
10%
0%
STIMULUS PROCESSPEOPLE ACTIONS
Competitive strategy goes beyond reviewing research reports
Insights are communicat-ed effectively thru the organization
Our insights team is ahead of the trends that matter most
We are well incentivized to deliver on actionable insights
Industry trends are quantified for potential business impact
Measure-ments are in place to benchmark success
Clear action plans accommodate new initiatives
Success is defined at the start of every new project
Employees are empowered to make their own decisions
Our structure allows for fluid
There is consensus from the top on the goals of the company
New initiatives are properly socialized across the company
Proactive organizations Reactive organizations
DIFFERENTIATING BEHAVIORS OF AGILITY
Source: Clear’s Cost of Change survey of 100 organizations: Differentiating behaviors
DELIVERINGRELEVANCE Specifically, our findings point to critical differences in organizational approach, from providing sufficient stimulus for decision making to actually putting the right actions in place.
What did our survey identify as the three greatest differences between proactive and reactive organizations – the things that really deliver relevance? Stimulating the organization with insight; projecting the direction of travel of shoppers’ needs; and energizing the shopping experience via staff.
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 13
#1. STIMULATE
WHAT WE DID
Clear helped a global electronics retailer reach a single view of consumer and shopper needs. We enhanced 30 markets’ existing U&A data with fresh shopping mission and journey mapping.
We compiled our findings into a set of compelling insights and stimulus, socialized across the business using mobile platform apps.
AGILITY RULESAgile retailers are feeding their culture the right stuff. They are allowing themselves to be driven by insight.
Not only that, but they’ve set up internal communication paths that enable rapid and widespread dissemination of those insights across the whole business – not just within the insight dept.
Given shoppers’ rapidly changing expectations and behavior, a great place to start is on shopper missions. How are they changing, what’s the impact of digital, where is your brand’s core territory in people’s minds?
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 14
WHAT WE DID
Clear helped a global credit card provider evaluate how people’s money needs and behaviors were changing.
We established a fresh view of how shoppers view lending and spending, and sized the growth potential of different types of borrowing.
This exercise meant we didn’t just find out where they should play but also how to win there.
Agile retailers have recognized the dynamic nature of their market and plotted ahead of the curve so they can drive the business in the right direction.
They’ve taken into account the discontinuities going on in their space, identified all the possible places they could compete, and established which ones they should compete in.
Since the retail marketplace is very much not a static one right now, defining what shoppers’ core value drivers are now, and quantifying how they are changing, is critical.
#2. PROJECTAGILITY RULES
DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO 15
WHAT WE DID
Clear helped a leading European restaurant chain to define a fresh vision for its category.
Then we established where their brands should be working hardest, and redefined them as cultural drivers.
This energized the overall guest experience, in particular by directing staff on how to engage.
You’ve only got to look at the retailers that are winning to see they’ve got a clear steer on what differentiates their brand, and how that focuses the shopping experience.
That focus ultimately defines what moments the shopper remembers, and that energize their people to live the brand loud. Ultimately your staff should be your most differentiating, productive touchpoint.
So your brand should be acting as a change agent: use it to get your people aligned on those key areas, to hire and train the right talent, to ‘deliver the goods’.
AGILITY RULES#3. ENERGIZE
16@ 2014 Clear Ideas. All rights reserved.CLEAR-IDEAS.COM
CLEAR IS A MARKETING STRATEGY CONSULTANCY WITH OFFICES IN NEW YORK, LONDON, SINGAPORE AND SYDNEY. IT SPECIALIZES IN INSIGHT-LED STRATEGY AND INNOVATION AND HAS DELIVERED PROJECTS FOR RETAIL CLIENTS SUCH AS WALGREENS, ASDA-WALMART, JOHN LEWIS AND BOOTS.
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