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Making the Digital Connection: Why Physical Retail Stores Need a RebootCountry Snapshot

Italy

2

Table of Content

Consumer expectations from retail stores

Are consumer expectations being met?

Retailer response

Digital Sprinters in Italy

Copyright © Capgemini 2016. All Rights Reserved

Shopping in brick & mortar stores is no more a pleasurable activity

3

Most Consumers view shopping in store as an avoidable

activity

Bricks-and-mortar shopping is seen by more and more

people as an increasingly onerous chore

42%

29%

40%

54%

Italy China (Lowest) Global Sweden(Highest)

39%

32%

17%

47%

Italy Global US (Lowest) Sweden(Highest)

Source: Capgemini Future of Retail Store Survey


Shopping is just a chore that has to be doneI would rather wash dishes or clothes than go shopping in a retail store

Consumers want same-day delivery and ability to check product availability

4


Consumers expectations from the store

73% 73% 69% 68% 68% 68%75% 73%

67%61%

68% 67%

Check availability ofproducts in stores

Same day delivery ofproducts purchased in-

store

Digital shelves forproduct information and

comparison

Payment options likeContactless cards,

Digital Wallets,Wearable payment

devices

Tablets/kiosks insidethe store to order

products that are not instock

Store employees usingtablets/mobiles to bebetter informed when

assisting the customer

Italy Global


Consumers also want lower prices and rewards for revisiting and spending time in stores

5


Consumers wants the store to serve higher function than just selling a product

66% 65%59%61%

68%

57%

Lower prices with store membership (LikeAmazon Prime)

Loyalty points for spending time in store andrevisiting

Additional activities in-store

Italy Global


6Copyright © Capgemini 2016. All Rights Reserved

Are consumer expectations being met?


Retail executives vastly underestimate consumer’s dissatisfaction


Disclaimer: Net Promoter Score measures the loyalty that exists between a provider and a consumer. It is calculated based on responses on a 0-10 scale to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague?Net Promoter, NPS, and the NPS-related emoticons are registered service marks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld

4

-6 5

11

50

33

25

-13Grocery Fashion Home

ImprovementElectronic

NPS as per Consumers in Italy

NPS as per Retail Executives in Italy

Average: 31

Average: 4

Highest, Lowest and Average NPS® by consumersItaly- Net Promoter ScoresSM comparison between

consumers and retail executives

44

30

37

1614

5 6

11

2

-21

-1

10

Grocery Fashion HomeImprovement

Electronics

US (Highest) Global Sweden (Lowest)

Average: 32

Average: -2

Average: 9


Absence of relevant discount, long queue at checkout and difficulty in comparing product explain low satisfaction scores

Frustrations for consumers in retail store


69% 69% 68% 70%72%68%

72%66%

Long queues at checkout counters Absence of relevant andpersonalised discounts/promotions

to customers in store

Difficult to compare products Absence of relevant andpersonalised discounts/promotions

to customers in store

Grocery Fashion Home Improvement Electronics

Italy Global


Consumers are considering reducing their reliance on traditional retailers


Consumers show willingness to experiment with new ways of shopping

62% 62% 63% 62%60%56%

59% 57%

Most of shopping online instead of inthe store

Order products through intelligentdevices like smart fridges

Buy from GoogleExpress/Apple/Facebook/Amazon

Fresh

Buy directly from brands online,bypassing retailers

Italy Global


How are retailers responding to changing consumer expectations?


58% of Italian retail executives agree that digitization in stores is slow


43%

54%

71%

58%

US (Lowest)

Global

France (Highest)

Italy

Italian retailers lack in implementation even after realizing benefits from in-

store initiatives

Percentage of Retail Executives

who Agree that Digitization in

Stores is Slow


Store employees do not promote initiatives; this leads to slow digitization of stores

Top reasons for slow in-store digitization

40%

33%

43%

36%

40%

24%

32%

32%

37%

39%

Still implementing the foundation to enable digitalinitiatives

Customers are not using the in-store digitalinitiatives implemented

Unable to gauge the return on investment linked toin-store digital initiatives

In-store digital initiatives have not resulted inimproved sales/footfalls

Store managers/associates are not promoting in-store digital initiatives

Italy Global



Retailers face numerous technical, process & people related challenges in transforming stores

Top Challenges for implementing the digital initiative in-store


62% 60% 62%55%

64%

53%

Difficult to gauge thebenefits of new

technology initiativeson revenue/cost

Difficult to integratelegacy retail systems to

in-store digitalinitiatives

Difficult to prioritize in-store digital initiative

among multiplealternatives

Lack of a feedbackmechanism for in-storeinitiatives implemented

Customers want thesame level of

personalization in-storeas is available to them

online

No incentives for thestore

managers/associates todrive the usage of new

initiatives inside thestore

Technological Challenge Process Challenge People/Customer/Skills Challenge

Rating as per Retail Executives


Digital Sprinters in Italy


Geographical spread of Digital Sprinters across 9 countries surveyed (Italy – 18%)


Digital Sprinters by country

17%

24%

13%

31%

24%

11%

16%

18%

5%

N = 88

www.capgemini.com

About Capgemini

With more than 180,000 people in over 40 countries, Capgeminiis one of With more than 180,000 people in over 40 countries,Capgemini is one of the world's foremost providers of consulting,technology and outsourcing services. The Group reported 2015global revenues of EUR 11.9 billion. Together with its clients,Capgemini creates and delivers business, technology and digitalsolutions that fit their needs, enabling them to achieve innovationand competitiveness. A deeply multicultural organisation,Capgemini has developed its own way of working, theCollaborative Business Experience™, and draws on Rightshore®,its worldwide delivery model.

Learn more about us at www.capgemini.com.

The information contained in this presentation is proprietary.Copyright © 2016 Capgemini. All rights reserved.

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