shifting shopper preferences: analyzing the latest data on cross-channel trends
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Troy Brown Retail Practice Leader Demandware, Inc.
Debbie Hauss Executive Editor Retail TouchPoints
Jim Bengier Global Retail Executive Sterling Commerce an IBM Company
© 2010 IBM Corporation
Agenda for Cross-Channel Brand Interaction 2010 Consumer Preference Survey
Introductions
Key Results from the Survey
Survey Released at Shop.org Annual Summit
Sterling Commerce’s point of view
Demandware’s point of view
The Future of Cross-Channel
Questions
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© 2010 IBM Corporation
Overview of the 2010 Consumer Preference Survey
2010 versus 2007 consumer expectations
Importance of Cross-Channel to the Consumer
Required Cross-Channel Capabilities
UK versus US Consumer Expectations
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© 2010 IBM Corporation
Consumers Cross-Channel Expectations Have Changed
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2007-2010 Comparisons1
Cross-Channel Consumer Expectations 2007 2010 Complete an order anywhere 55% 61% Modify an order anywhere 65% 74% Track an order anywhere 56% 87% Shipping Notice (via any combination of channels) 94% 88% Shipping Delays (via any combination of channels) 91% 91% Delivery Notice (via any combination of channels) 78% 79% Cross-channel return to store 90% 84%
1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare
© 2010 IBM Corporation
They’ve Raised The Bar Even Higher
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1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare
85% of respondents “expect a seamless
experience across all channels for a retailer”. 1
© 2010 IBM Corporation
And, The “Spoiled” Consumer’s Expectations Have Expanded
8 1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare
Importance Of Cross-Channel Capabilities 1
Notify when item is ready for in-store pickup (important to very important) 91% A negative experience online gives me a negative impression of the retailer over all 62%
Notify when frequently-purchased item will be on sale (important to very important) 59%
Maintain cross-channel customer history (important to very important) 53%
What impact does your online shopping experience on a retailer's website have on your overall perception of the retailer's brand? 48%
Importance of social media when shopping online or via mobile (important to very important) 22% Access product reviews when shopping online or via mobile (important to very important) 75% Chat with CSR when shopping online or via mobile (important to very important) 53%
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© 2010 IBM Corporation
Consumer Expectations in UK Versus US
9 © 2010 Sterling Commerce intellectual property. All rights reserved.
1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare
2010 Comparisons1
Cross-Channel Consumer Expectations UK US Have high expectations of a seamless cross channel experience 87% 85%
Want in store pick up/returns 78% 83% UK consumers less likely to buy extras while picking up at store 23% 40%
Experience frequent OOS for promotional products 32% 32%
Uncomfortable making purchases on mobile phones 71% 69% Use mobile to more to assist than to buy
Check product availability Purchase products
29% 12%
28% 7%
Market place is the most useful mobile shopping app 69% 66%
© 2010 IBM Corporation
Survey Was Released at 2010 Annual Shop.org Summit
Tuesday Afternoon Invitation Only Executive Summit – 125 Senior Level Retail Executives – Key Note Speaker was Terry Lundgren, Chairman and
President of Macy’s
Comments – Terry referred to the new “Omni” channel and Macy’s IT
budget – Executives took notes on customer preference – Everyone was in agreement on the required cross-
channel focus
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© 2010 IBM Corporation
Sterling Commerce Point of View
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© 2010 IBM Corporation
On-Line
Cross Channel
Omni
Compete against pure play
Customers shop
Technology view
New customer touch point
Integrate Channels
New Relationships
Retail Transformation
Singe touch point
Primary shopping venue
Store
© 2010 IBM Corporation
Three Key Findings From the 2010 Customer Preference Survey
Meet the “Rewired” consumer – No longer separate channels, but consumers use
touch points – Connectivity is the answer
Convenience and flexibility are deciding factors for the consumer
– 66% consider it important to be able to determine in-stock availability before visiting a store
Technology in the consumer’s hands is Leading retailers – Mobile capabilities for price, 30%; specials, 28%;
availability, 26%; item location, 16%
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© 2010 IBM Corporation 14
Order Management System: The “Brains” of Your Cross-Channel Fulfillment Must Provide:
Flexible Fulfillment
Management By Exception
Inventory Optimization
Real-time Decision Support (SmartApps™)
Source: AMR, “Unlocking Cross-Channel Benefits Through Advanced Order Management”, September 20, 2009
© 2010 IBM Corporation © 2009 Sterling Commerce intellectual property. All rights reserved. 15
Our Customers Are Investing in Cross-Channel Technology
© 2010 IBM Corporation
Four Areas Where Retailers Are Investing in Cross-Channel Technology
Inventory Visibility & Available to Promise – Consolidate inventory information across multiple systems, enterprises, and participants – Intelligent sourcing engine optimizes inventory use across the extended enterprise to
provide best Available-to-promise (ATP ) dates
Orchestrate Inventory Fulfillment – Coordinate complex fulfillment across the extended enterprise – Provide a single order repository to modify, cancel, track, and monitor the order lifecycle
in real-time – Configurable, adaptive processes
Returns and Exchanges – Enable cross-channel returns and exchanges – Automate returns disposition such as return to stock, return to supplier, or destroy – Link return requests to original sales orders, to enable lifecycle tracking
Delivery, Service and Scheduling – Ability to schedule delivery, installation, and other add-on services at time of order
transaction – Rules-based promising, provider selection and crew allocation – Integrated control of inventory, delivery and services execution 16
© 2010 IBM Corporation
What Is the Future of Cross-Channel?
Terminology- “Omni” seems to be taking hold
Technology will continue to lead retailers
Seamless customer experience regardless of start and stop points
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Copyright 2010Demandware, Inc. - Confidential
Your Brand. Your Consumer. Demandware.
Demandware Strongly Branded eCommerce Since 2004
Innovated merchant-centered tools to support strongly branded customer experiences
Delivered on a shared success business relationship that builds long-term partnership
Relieved IT burden with first SaaS eCommerce platform with continuous innovation, full customization and utility-level reliability
Copyright 2010Demandware, Inc. - Confidential
Your Brand. Your Consumer. Demandware.
Demandware Strongly Branded eCommerce Since 2004
19
Copyright 2010Demandware, Inc. - Confidential
Brands Extend eCommerce Branded Consumer Engagement
Copyright 2010Demandware, Inc. - Confidential
Branded Engagement Brand Strength In Every Consumer Experience
Expresses your brand through every aspect of the consumer experience
Delivers relevant experiences across consumer’s need
Builds an emotional and rational bond between the consumer and your brand
Branded Engagement
Brand Values Brand Promise
Marketing
Sales
Service
Merchandising
Copyright 2010Demandware, Inc. - Confidential
Branded Engagement Foundational Considerations
• Focus investment at the branded engagement application level versus expensive integration and throwaway custom code
• Flexibly integrate merchandising, sales and service at the business process level, enabling rapid response to changing consumer demands
• Unified data underpins the lifecycle of browsing, consideration, purchasing, service
– Customer, product, orders, inventory
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