capturing the full-circle brand experience - eight insights into the future of retail

CAPTURING THE FULL-CIRCLE BRAND EXPERIENCE Eight insights into the future of retail

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IF YOU ARE A RETAILER OR AN E-COMMERCE MERCHANT, you could

feel threatened by the digital revolution currently revamping the

retail industry, or you could be excited by the potential for growth

that lies ahead. Whether you jump at the chance of change – and

reap the rewards – really depends on you. I’ll explain why.

THE TRUTH IS, there is no stopping the already mobile, digitally

connected and aware consumers, who will continue to shop in

new ways that challenge both retailers perception, their capabili-

ties and services currently offered. Digitization has come to stay.

It is re-shaping the way consumers perceive retail brands and

how retailers and merchants create value for their consumers.

The impact of this consumer behavior is being felt by businesses

around the world.

A SECOND TRUTH IS, both physical outlets and digital channels are

needed – they will not replace each other. This is good news for

many. What needs to happen – and what is happening – is the

marriage between both forms. POS no longer means just point

of sale, but rather point of service. The product offered creates

certain value, but the app where I can find it, adds value too.

WE PREPARED this Trend Report so we could move the discussion

beyond fab terms such as ‘omni-channel’ and ‘cross-channel’

and instead share insights on new consumer behaviors. Consu-

mers don’t look for offerings that are ‘omni-channel’ – they just

act naturally.

OUR EIGHT INSIGHTS are based on consumer research conduc-

ted by trend analysts Kairos Future and leading consumer ex-

perts. Kairos’s ethnographical study is particularly valuable, as it’s

the type of research that studies actual human beings in their

natural habitats.

WE ARE now going to introduce you to a new branding concept –

the Full-Circle Brand Experience. It provides a new approach to

our digitally charged consumers, and a new pathway to competi-

tiveness. Remember where you heard it first. Enjoy.

Niklas Hedin

CEO Centiro

FOREWORD

88INTO THE FUTUREOF RETAIL

A HOLISTIC APPROACH IS NEEDED FOR FUTURE MARKETING STRATEGIES

SHOPPING SKILLS CAN ENHANCE YOUR STATUS

THE BRAND VALUE SHIFTS FROM THE PRODUCT TO THE PURCHASE PROCESS

BUILD RELATIONSHIPS THROUGHOUT THE FULL-CIRCLE BRAND EXPERIENCE

SAVE YOUR CONSUMER’S ENERGY: WIN THE LOYALTY WAR

VALUE LIES IN GIVING CONSUMERS EASY CHOICES NOT LOTS OF CHOICES

ALL TOUCHPOINTS ARE IMPORTANT TO FULL-CIRCLE BRANDS

DELIVERY IS THE NEXT SOURCE VALUE IN THE DIGITIZED WORLD

1.

2.

3.

5.

6.

7.

8.

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4.INSIGHTS

We’ll see a very radical shift in terms of our shopping future. Stores will change more over the next 12 years than they have over the last 50 years.

PACO UNDERHILL

Internationally renowned retail analyst

Paco Underhill

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INSIGHTS INTO THE FUTURE OF RETAIL

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THE SHIFT OF RETAIL towards an ‘omni-channel expe-

rience’ is changing how we view the branding of products

and services. Digitized shopping is empowering consu-

mers and changing their behavior, resulting in significant

parts of the purchase process moving out of the store

and into homes.

IN OUR RESEARCH STUDY for Centiro, we set out to investi-

gate how and why the purchase process can be used

to improve a company’s competitive edge. The research

comprised an ethnographic study of consumers in their

own homes and an online survey of 1000 consumers.

This qualitative and quantitative approach has provided

insights into how online shopping is changing what it me-

ans to be a consumer. It leads us to the key question for

our retail future: how is branding strategy affected when

consumers adopt new digital purchase processes?

WE ARGUE that the purchase process becomes a ‘full-

circle’ once the purchasing experience begins and

ends in the consumer’s home. Based on consumers’

own opinions and their behavior, we have considered

which parts of the purchase process need to be levera-

ged to become more competitive. Our eight insights are

designed to help you to capture the potential of these

new full-circle consumers.

INTRODUCTION

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1 /8 INSIGHTS INTO THE FUTURE OF RETAIL

IN TRADITIONAL MARKETING, we have studied the purchase pro-

cess with one goal in mind: to identify ways we can convince

consumers to choose our products over those of our competi-

tors. All too often, however, marketing interest wanes, or comes

to an abrupt halt, once the purchase is made. The problem with

this approach is that it treats the customer decision journey as

a linear one, with the decision process starting at one end and

concluding at the other, albeit with a feedback loop in between.

A LINEAR VIEW of purchasing fails to recognize that in a digiti-

zed world, consumers are buying products and services in their

homes, and not in a physical location. The ‘start’ and the ‘end’

of purchasing is no longer the same. Consumers are enga-

ging in full-circle decision journeys, in which the purchase and

delivery of the product or service is now very much part of

their brand experience.

RETAILERS AND MERCHANTS will be best served by adopting

a holistic approach to their mapping of these new decision-

making patterns. The full-circle model shown here reflects the

1. A HOLISTIC APPROACH IS NEEDED FOR FUTURE MARKETING STRATEGIES

HOLISTIC

bUYING

PROCESS

ONLINE

SHOPPING

GOOGLE

RECOM-

MENDA-

TIONS

STORES

ADVERTI-

SING

SERVICE

bRANDS

full-circle nature of consumer behavior today. An understanding

of the holistic nature of today’s purchasing behavior will be the

key to developing successful marketing strategies, creating

loyalty and retaining consumers. This is what will give compa-

nies a competitive edge.

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IN THE PRIVACY OF their homes consumers have access

to a global supply of products. They can shop anywhere,

anytime for anything they want, but they can only do so if

they have the skills to navigate their way through the vast

array of choices available online. Our research highlights

that not all consumers possess the talent to use these

channels to their advantage. To quote one of the consu-

mers we interviewed:

To shop online is a talent, it is not something just any one can do!

KLARA

Online shopping enthusiast

OUR ETHNOGRAPHIC STUDY revealed that Klara and many

of her friends identify themselves as having superior skills

to their peers when it comes to shopping online. In their

eyes, this ability bestows a special status, so that shop-

ping is no longer just shopping, but a status-enhancing

skill. They brag about the success they have in how

they purchased their product, but say little about the

product or the brand itself. The purchase process gives

them far more satisfaction than the qualities or features

of the brand.

THE SAME goes for purchases gone sour. Some consumers

admitted they lied about their shopping online to make

them look better in the eyes of their friends. Often their

stories about poor purchases were about their friends or

acquaintances, rather than being about them.

OUR STUDY SUGGESTS this is for two reasons. First, poor

purchases can be embarrassing and reflect badly upon

the buyer: you do not want to admit to being a shopping

failure. Our second interpretation is that telling stories can

reveal a person’s status in their social circle compared with

that of their friends. In other words, telling your friends you

are a great shopper builds your social position.

GIVING FRIENDS ADVICE on their online shopping also can

be a potential status-builder. With an overwhelming majority

of consumers in our survey seeking advice before buying,

the potential for boosting their status is great indeed. Our

research found that between 60 and 75 percent sought ad-

vice before buying high- and low-interest products across

three categories. The buyers always sought advice from

someone they regarded as a better shopper. It follows that

being asked for shopping advice is an indicator of your hig-

her social standing, reinforcing the conclusion that shop-

ping is a status-enhancing skill.

SHOPPING SKILLS

bUILDS YOUR STATUS!

2/8 INSIGHTS INTO THE FUTURE OF RETAIL

2. SHOPPING SKILLS CAN ENHANCE YOUR STATUS

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THE STATUS VALUE of shopping skills has important implications

for the brand value of a good. The product is still extremely im-

portant; however, the purchase process becomes another as-

pect of how a brand may be built. The brand value is traditionally

viewed as the symbolic value of a product helping consumers

to express identity. Our findings, however, challenge this view.

A major driver of value is how the brand is purchased: shopping

skills themselves now express identity and build status.

THINK AbOUT IT – what is the first thing you say when someo-

ne compliments you on your latest cool gadget? Often one of

the first comments is something like: “Glad you liked it! I got it

from…” And the story of the purchase is on. Our conclusion is

that the purchase process becomes part of the symbolic va-

lue of a product, and of a service. For example, being a run-

ner is not so much about wearing a pair of Pumas or ASICS,

but about how you buy them. One story could be: “I got these

online – for 70 Euros less - it was so quick and easy…” An-

other: “I went to the runners store and had them fitted to my

running style.” The person who keeps quiet about their expe-

rience will be the one who went to the local sports store, did no

research, and paid too much. Not a high-status buyer or runner!

3. THE BRAND VALUE SHIFTS FROM THE PRODUCT TO THE PURCHASE PROCESS


As consumers talk more about their purchases in a way that

marks their social status, the purchase process becomes part of

the branded experience.

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WITH THE WHOLE bRAND EXPERIENCE now being a full-circle, indi-

vidual purchases must be analyzed within that circular process.

Branding will be not only about how to get a consumer to buy your

product rather than your competitor’s, but also about how you ca-

ter to the consumer before, during and after the purchase. A good

example of a company that is tapping into the full-circle behavior of

a consumer is provided by our field study of suburban households

in Sweden.

ONE OF THE CONSUMERS we spent time with had bought a Nes-

presso machine, but she had not bought any capsules since run-

ning out. In Sweden there are only a few retail locations that sell

the capsules over the counter, and our shopper was annoyed at

the prospect of having to order online and then pick up the capsu-

les at the uninspiring local post office. After being encouraged to

buy online, however, the process changed her whole view of on-

line retailing. Her experience was “fabulous”. From the day our cof-

fee lover placed her order, she was kept informed of the shipment

and notified when to pick up the parcel; she was surprised by how

quick and smooth the delivery was. Even the dreaded trip to the

post office became a pleasant experience – it was like “getting a

gift”. The parcel was “beautiful”.

SEVERAL WEEKS LATER, our shopper told us she had received a text

from Nespresso: “Look what I got from Nespresso!” Essentially the

text was a sales offering, which Nespresso had timed perfectly for

when she was about to run out of capsules. Rather than reject the

4. BUILD RELATIONSHIPS THROUGHOUT THE FULL-CIRCLE BRAND EXPERIENCE

sales pitch, our consumer responded enthusiastically. “It was the

greatest experience and of course I bought the offer!” The ex-

ample highlights how well Nespresso is leveraging the Full-Circle

Brand Experience. Its well-designed, holistic purchasing process

builds lasting relationships with their consumers and they push

sales while they are building their brand. Given our buyer’s satis-

faction with the experience, you could expect her to recommend

Nespresso to others.

A 2013 SURVEY OF MORE THAN 3000 ONLINE SHOPPERS by global

shipper UPS1 suggests that the delivery of online purchases contri-

butes both to positive and negative recommendations of a retailer.

In a world where ‘great’ or ‘really bad’ shopping experiences are

the subject of social chatting both on and offline, delivering on the

full-circle experience becomes critical. In the UPS study, as many

as 46 percent said receiving the product by the expected delivery

day would lead them to recommend the retailer.

FOR SOME bRANDS, reliable delivery has already become a com-

petitive edge. One example is the Italian fashion online retailer,

Yoox, which offers Chinese customers enhanced delivery services

when they order from their luxury multi-brand site The Corner. The

Chinese shoppers can try on their high-end fashion items and de-

cide whether to keep or return them, all while the courier waits for

as long as they need them. It’s an extra service that adds to the

Yoox brand experience.


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WHAT IS THE MOST PRECIOUS resource for our consumers? In our

frantic world, being a successful retailer or merchant is no longer

just about the consumers’ money and time but also about their

energy. The consumers we surveyed often cited energy and time

as scarcer resources than money when asked to nominate the

resource they lack the most, with time being their most precious

resource.

WITH SO MUCH EMPHASIS on time, it’s easy for retailers and mer-

chants to assume that energy is a different form of resource to that

of time. If a consumer is pressed for time, you can create value

by saving your consumer time. If a person is stressed for energy,

however, what can you really do to add value? Can saving energy

offer similar value as saving time?

WE FOUND THE ANSWER was yes. The value of energy lies in the

consumer not having to think about a certain product or service or

delivery… or thinking about much at all when it came to a purchase.

Value is created by somebody else taking full responsibility for ma-

king decisions for the consumers. The brand experience when it

comes to energy should be all about lifting burdens, big and small,

from your consumers’ shoulders.

5. SAVE YOUR CONSUMER´S ENERGY: WIN THE LOYALTY WAR

RECENT RESEARCH also suggests that solutions offering the least

effort by the consumer will win the loyalty war. Rather than being

loyal to brands, consumers will reward businesses that help them

solve their needs in a hassle-free way. This is also reflected in the

UPS study, which showed that 75 percent of consumers believe

that every retailer should offer tracking information. Shoppers also

seem to crave a better post-purchase experience that is more

controllable and adjustable to their specific needs.

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GIVEN THAT CONSUMERS are increasingly low on both time and

energy, we have to ask how this influences the importance of

choice. At business schools we are taught the value of choice,

and until now valuable choice has often been synonymous with

more choice and individualized options. In online sales an old

‘truth’ is also that the number of articles offered is positively re-

lated to sales. However, when all the choice in the world beco-

mes readily available to the consumer through the vast supply

offered in the online world, it is not about lots of choice any-

more, but rather about simplifying the choice. Consumers today

need help in choosing, not more choices.

LET´S ILLUSTRATE THIS with a story from our ethnographic study.

One of our female consumer’s favorite shops, on and offline, is

fashion retailer H&M. But she does not choose H&M because

it gives her status, or because she really loves the brand or the

clothes in the shops. She chooses H&M because it saves her

time and energy. Our buyer finds the H&M website enjoyable

to look at and easy to search, and she can buy an entire outfit

in the one purchase. She once followed fashion trends close-

ly, but she no longer has the time given she now has a family

and a career. Our busy consumer needed a brand to make her

fashion choices for her. As she described it, H&M was good

6. VALUE LIES IN GIVING CONSUMERS EASY CHOICES NOT LOTS OF CHOICES

enough because she knew that whatever she picked online or

in a physical store she could rely on it to be sufficiently fashio-

nable for her needs. The best brands and the global winners in

the new digital retail landscape do just this - earn the right to

choose for their consumers.

NO?

YES!

INCREASINGLY bRAND STRATEGY has become synonymous with

strategy. Research by Nicholas Ind and business academics

Mary Jo Hatch and Majken Schultz2, as well as studies from Kai-

ros Future, have indicated that an authentic brand is produced

not first and foremost by the advertising and communication of

brand values but also through all the touch points with the con-

sumer and the organization.

AS MANY AS 21 PERCENT of the 20- to 30-year-olds in our survey

spend several nights a week just browsing online shopping pa-

ges. Typically the TV is on, but it merely provides background

noise, not information or entertainment. This shift in consumer

habits and preferences means that companies need to rethink

not only their marketing mix, but also the way they build their

brands.

THE IMPORTANCE to companies of different touch points will de-

pend on the decision journey of their consumers in different

market segments. Our study clearly shows that the retail inter-

face – both on and offline – is increasingly important as a brand

builder and communicative tool for consumers. In an online

7. ALL TOUCH POINTS ARE IMPORTANT TO FULL-CIRCLE BRANDS

world, this includes how the good is delivered, as this is the

most tangible interaction that an online retailer will have with

their consumers.

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Mobile

Social

Online

Store Discover Inform Choose Transact Delivery Help Return Cash in

bEFORE PURCHASE TRANSACT PURCHASE POST PURCHASE

ONE OF THE MAIN FINDINGS in our study is that the delivery phase

of the purchase process has become an increasingly important

part of building a Full-Circle Brand Experience for online retai-

lers. The question now is how the delivery can create value for

customers. In much research, quick deliveries are often identi-

fied as a critical factor in getting consumers to buy a product.

However, recent research shows that there is more to creating

value in the delivery phase of online buying than just delivering

a product quickly.

FOR INSTANCE, at the retail laboratory of the Swedish Institute

for Innovative Retailing, studies are showing that few consume-

rs are interested in very quick deliveries. Many might describe

the option of express delivery as “great” or “good”, but it is not a

major factor in their purchasing decision. A delivery time of two

to three days is sufficient for many consumers.

IN OUR STUDY, problems with the delivery of products and re-

turns were the greatest barriers to buying online over physical

retail stores, and this was the case in all product categories.

8. DELIVERY IS THE NEXT SOURCE VALUE IN THE DIGITIZED WORLD

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Around 60 percent of consumers cite these as the main re-

asons for not buying online. They are least satisfied with online

shopping when it came to questions of flexibility in delivery rou-

tes, choice of delivery times and dates, and the convenience of

pick-up locations. It appears that what shoppers want most is

more control over their delivery experience.


SATISFACTION WITH ASPECTS OF ONLINE SHOPPING7-point scale (n=3,043). Top 2 box

OvErALL SATISFACTION

EASE OF CHECk-OuT

vArIETy OF BrANdS ANd prOduCTS OFFErEd

THE NumBEr OF SHIppING OpTIONS OFFErEd

THE NumBEr OF pAymENT OpTIONS AvAILABLE

AvAILABILITy OF FrEE Or dISCOuNTEd SHIppING

EASE OF mAkING rETurNS/ExCHANGES

ABILITy TO purCHASE THrOuGH TABLET AppLICATION

ABILITy TO CONTACT A LIvE CuSTOmEr SErvICE rEp

ABILITy TO purCHASE THrOuGH A SmArT pHONE AppLICATION

AvAILABILTy TO pICk up AT A rEAL LOCATION THAT IS CONvENIENT

FLExIBILITy TO CHOOSE my dELIvEry dATE

ABILTy TO CHOOSE A SpECIFIEd TImE OF dAy FOr dELIvEry

FLExIBILITy TO rE-rOuTE pACkAGES

A GrEEN/ENvIrONmENTAL FrIENdLy SHIppING OpTION

SHOppErS AppEAr TO wANT mOrE

CONTrOL OvEr THEIr dELIvEry ExpErIENCE.

Q10. Overall, how satisfied are you with your previous online purchasing experiences in the past three months?

Q.11. Based upon your previous experience, how satisfied are you with each of the following aspects of inline purchasing?

2013 UPS Pulse of the Online Shopper: A Customer Experience Study conducted by comScore.

43 %

44 %

44 %

49 %

55 %

55 %

58 %

61 %

62 %

69 %

71 %

73 %

80 %

81 %

83 %

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AUTHORS

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DR PERNILLA JONSSON, partner, consumer

marketing and retailing, Kairos Future.

MALIN SUNDSTRÖM, assistant professor and

director of the Swedish Institute for Innovative

Retailing, University of Boras.

PATRIK STOOPENDAHL, consultant and business

anthropologist, Kairos Future.

QUALITATIVE AND QUANTITATIVE research was undertaken for

this report– a five-month ethnographic field study in eight su-

burban households in Stockholm and an online survey of 1000

Swedish consumers.

AbOUT 20 CUSTOMERS WERE INTERVIEWED and observed for the

field study - in their homes, online and in everyday life. The con-

sumers’ purchasing and delivery experiences were analysed in

almost 100 of their purchases. The consumers were aged bet-

ween ten and 45 years old, and had diverse professions, edu-

cational backgrounds and ethnicities. However, they all shared

a love of shopping.

THE ONLINE SURVEY inquired into the shopping habits and views

of 1000 Swedish consumers, who ranged in age from 18 to 75

years old. They were a representative cross-section of the Swe-

dish population, in terms of age, income level and area of resi-

dence. As the survey was online, its results should be interpre-

ted in that light.

1 ‘2013 UPS Pulse of the Online Shopper: A Customer Expe-

rience Study conducted by comScore’, UPS, http://pressroom.

ups.com/pressroom/staticfiles/pdf/fact_sheets/2013_PulseS-

hopper_FINAL.pdf

2 Ind, Nicholas (ed) (2003) Beyond Branding: How the New Va-

lues of Transparency and Integrity are Changing the World of

Brands, Kogan Page, US; and Hatch, Mary Jo and Schultz, Maj-

ken (2003) ‘Bringing the corporation into corporate branding’,

European Journal of Marketing, Vol. 37, Issue 7/8, pp. 1041 –

1064.

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METHOD REFERENCES

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I HOPE you got your fair share of ‘ah ha’s’ from reading our report.

Our primary insight – shared by thinkers, analysts and practitio-

ners – is that to gain a competitive edge in the digitized world,

you need to take a holistic view of how you serve your consumer.

This way you can capture the growth potential offered by the

Full-Circle Brand Experience.

SUPPLY CHAINS and logistic capabilities will form the backbone

for delivering the new branding experience, going beyond the

borders of your organization and your current IT landscape.

You will have to do this if you are to truly deliver the Full-Circle

Brand Experience. The biggest ‘ah ha’ is that creating loyalty

and providing service throughout the full-circle will be key to

winning consumers.

THE KEY DIFFERENCE from a business development point of view

is that logistics and delivery management are essential and

strategic tools to satisfy the various ways consumers want to be

served – before, during, and after a purchase. All digitized and

available at the fingertips - all part of the brand.

THIS IS WHERE we come in. We spend most of our time making

sure our clients can grasp opportunities and enable them to of-

fer consumers a brand experience like no other. We make deli-

very management a strategic capability that win loyalty. A key

aspect is to enable our clients to think and act global, yet be

perceived as local, and make all the details surface as a cohe-

rent and orchestrated brand experience. It’s about gluing and

blending the physical and digital experience together so it be-

comes seamless.

WELCOME to a new world where the Full-Circle Brand Experience

is the key to success. It is front and center in our company. Is it

in yours?

Niklas Hedin

CEO Centiro

Centiro offers software for delivery management that let a retailer think

global, yet offer customers a consistent and personalized experience

for first- and last-mile delivery and returns to take a brand and shop-

ping experience full circle. E-commerce, in store, from warehouse or

drop-shipped from a network of vendors. From straightforward ship-

ping labelling solutions and carrier management, through to harmoni-

zed tracking, event management and cost control – we offer functional

features that extend your existing IT landscape. We let you model your

complete delivery and service offering and present it to consumers via

point-of-sales in store, over the web or mobile.

AFTERWORD

capturing the full-circle brand experience - eight insights into the future of retail

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