the cognizant uk shopper study 2013
TRANSCRIPT
Getting personal with shoppers
The Cognizant UK Shopper Study 2013
KEEP CHALLENGINGTM
Staying relevant tomorrow requires challenging your business today We help forward-looking companies run better and run differently Since businesses that stand apart never stand still
Keep Challenging
3KEEP CHALLENGING November 2013
Contents
Welcome 5
Introduction 6
About this research 7
The basics really matter 8
People power counts 12
Supercharging the in-store experience 15
Digital goes mainstream 21
Plotting a course in the age of the customer 26
The opportunity is now29
References 30
About Cognizant 31
4 GETTING PERSONAL WITH SHOPPERS
5KEEP CHALLENGING November 2013
Welcome to the first Cognizant UK Shopper StudyOur shopper study has been widely distributed in the US for several years but 2013 marks the publication of our first UK-specific report
It tells an important story not only about the exciting cutting edge of retail innovation but about the core expectations that your shoppers hold and the behaviours they exhibit Whatever you sell everyone needs an occasional reminder of what really matters to customers and where you should focus your investment and attention
Every retailer will take their own ideas from this study a teen fashion retailer will naturally have a very different business environment to a supermarket or a bookshop But many trends are common to all retailers the continuing growth in e-commerce the huge potential and risk posed by big data and the fundamental need to offer the right product at the right price with the right service
The retail industry is famously competitive and itrsquos changing fast Itrsquos the job of every retailer to respond to these changes and stay one step ahead not just of their competitors but of their customers too We hope the shopper study can help you do just that
We look forward to discussing these findings with you so please get in touch and let us know what you think And of course look out for next yearrsquos study mdash wersquore sure the retail landscape has plenty more surprises in store
Yours
Ron Curry
Head of Retail Travel and Hospitality Consumer Goods Cognizant Technology Solutions
6 GETTING PERSONAL WITH SHOPPERS
Introduction
Finding the truth
Retail is the heart of the UK economy It employs more than 4 million people across more than 287000 stores1 Wersquore all shoppers ourselves so itrsquos natural that we all take a deep personal interest in the issues that the retail industry is facing everything from the oft-proclaimed death of the high street to rising food prices
Yet as a retailer it can be hard to get a clear and unbiased picture of what issues actually matter to your customers and in what direction to take your business to get the optimum return And itrsquos important to do so while Office for National Statistics (ONS) figures say that UK retail sales are strong3 (particularly online) suggesting growing consumer confidence we all know that this is no time to relax
The view from the ground
The Cognizant Shopper Study gives you the facts you need It looks directly at the most important element mdash the shoppers themselves mdash through annual quantitative and qualitative research with thousands of shoppers asking them about their shopping behaviours likes and dislikes both in store and online
Every retail market is different Just look for instance at the varied fortunes of UK retail giants like Marks amp Spencer5 and Tesco6 after theyrsquove expanded internationally Thatrsquos why the data we report here is exclusively from UK shoppers It shows you where to target your investments to meet consumersrsquo needs in order to raise satisfaction and loyalty
A pinch of salt
Asking shoppers about their needs and wants is vitally important for fine-tuning your execution but itrsquos only one piece of the puzzle and can fall short when yoursquore planning how to differentiate your business
Thatrsquos because sometimes consumers canrsquot see the potential of the new and disruptive Some resist change and itrsquos the job of pioneering companies to forge ahead and show them the benefits Steve Jobs said it best ldquoA lot of times people donrsquot know what they want until you show it to themrdquo7
Similarly book lovers (and booksellers) said time and again that they would never abandon the smell and experience of traditional printed books for cold clinical ebooks mdash but some have as have film lovers and music buffs It just took a little time to persuade consumers about the convenience of digital media and to change their buying behaviour The Amazons Spotifys and Apples of the world had to take the lead and challenge the status quo overcoming legal and commercial barriers along the way
Retailers face the same opportunity and challenge to innovate Wersquove already seen the disruption that e-commerce has created reshaping the entire shopping experience What other processes and consumer interactions are going unchallenged yet are ripe for reinvention How can you disrupt shopper behaviour to get ahead of your competitors and unlock new business opportunities
Quick Take More than a third of consumer spending goes through shops
British Retail Consortium2
ldquoCustomers are the most reliable guiderdquo
Sir Terry Leahy Tesco CEO 1997ndash20114
7KEEP CHALLENGING November 2013
About this researchThis is our first UK-specific report but Cognizantrsquos fourth annual shopper study During H1 2013 we conducted online quantitative and qualitative interviews with 499 UK shoppers covering a representative spread of
bull Ages from 18 to over 65
bull Incomes from less than pound15000 to over pound135000 per year
bull Education levels from no qualifications to advanced degrees
In some questions where particularly important we asked about specific categories of purchases in detail mdash for instance groceries or electronics In most questions we asked about two main retail groupings mdash ldquoconsumablesrdquo (including groceries and health and beauty products) and ldquospecialityrdquo (including categories such as fashion homeware and entertainment products)
The quotations throughout this report are from real respondents and have been edited for grammar and spelling only
Quick Take Check out the US version of the Shopper Study and additional retail content on our dedicated microsite
httpcognizantcomretail
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
Staying relevant tomorrow requires challenging your business today We help forward-looking companies run better and run differently Since businesses that stand apart never stand still
Keep Challenging
3KEEP CHALLENGING November 2013
Contents
Welcome 5
Introduction 6
About this research 7
The basics really matter 8
People power counts 12
Supercharging the in-store experience 15
Digital goes mainstream 21
Plotting a course in the age of the customer 26
The opportunity is now29
References 30
About Cognizant 31
4 GETTING PERSONAL WITH SHOPPERS
5KEEP CHALLENGING November 2013
Welcome to the first Cognizant UK Shopper StudyOur shopper study has been widely distributed in the US for several years but 2013 marks the publication of our first UK-specific report
It tells an important story not only about the exciting cutting edge of retail innovation but about the core expectations that your shoppers hold and the behaviours they exhibit Whatever you sell everyone needs an occasional reminder of what really matters to customers and where you should focus your investment and attention
Every retailer will take their own ideas from this study a teen fashion retailer will naturally have a very different business environment to a supermarket or a bookshop But many trends are common to all retailers the continuing growth in e-commerce the huge potential and risk posed by big data and the fundamental need to offer the right product at the right price with the right service
The retail industry is famously competitive and itrsquos changing fast Itrsquos the job of every retailer to respond to these changes and stay one step ahead not just of their competitors but of their customers too We hope the shopper study can help you do just that
We look forward to discussing these findings with you so please get in touch and let us know what you think And of course look out for next yearrsquos study mdash wersquore sure the retail landscape has plenty more surprises in store
Yours
Ron Curry
Head of Retail Travel and Hospitality Consumer Goods Cognizant Technology Solutions
6 GETTING PERSONAL WITH SHOPPERS
Introduction
Finding the truth
Retail is the heart of the UK economy It employs more than 4 million people across more than 287000 stores1 Wersquore all shoppers ourselves so itrsquos natural that we all take a deep personal interest in the issues that the retail industry is facing everything from the oft-proclaimed death of the high street to rising food prices
Yet as a retailer it can be hard to get a clear and unbiased picture of what issues actually matter to your customers and in what direction to take your business to get the optimum return And itrsquos important to do so while Office for National Statistics (ONS) figures say that UK retail sales are strong3 (particularly online) suggesting growing consumer confidence we all know that this is no time to relax
The view from the ground
The Cognizant Shopper Study gives you the facts you need It looks directly at the most important element mdash the shoppers themselves mdash through annual quantitative and qualitative research with thousands of shoppers asking them about their shopping behaviours likes and dislikes both in store and online
Every retail market is different Just look for instance at the varied fortunes of UK retail giants like Marks amp Spencer5 and Tesco6 after theyrsquove expanded internationally Thatrsquos why the data we report here is exclusively from UK shoppers It shows you where to target your investments to meet consumersrsquo needs in order to raise satisfaction and loyalty
A pinch of salt
Asking shoppers about their needs and wants is vitally important for fine-tuning your execution but itrsquos only one piece of the puzzle and can fall short when yoursquore planning how to differentiate your business
Thatrsquos because sometimes consumers canrsquot see the potential of the new and disruptive Some resist change and itrsquos the job of pioneering companies to forge ahead and show them the benefits Steve Jobs said it best ldquoA lot of times people donrsquot know what they want until you show it to themrdquo7
Similarly book lovers (and booksellers) said time and again that they would never abandon the smell and experience of traditional printed books for cold clinical ebooks mdash but some have as have film lovers and music buffs It just took a little time to persuade consumers about the convenience of digital media and to change their buying behaviour The Amazons Spotifys and Apples of the world had to take the lead and challenge the status quo overcoming legal and commercial barriers along the way
Retailers face the same opportunity and challenge to innovate Wersquove already seen the disruption that e-commerce has created reshaping the entire shopping experience What other processes and consumer interactions are going unchallenged yet are ripe for reinvention How can you disrupt shopper behaviour to get ahead of your competitors and unlock new business opportunities
Quick Take More than a third of consumer spending goes through shops
British Retail Consortium2
ldquoCustomers are the most reliable guiderdquo
Sir Terry Leahy Tesco CEO 1997ndash20114
7KEEP CHALLENGING November 2013
About this researchThis is our first UK-specific report but Cognizantrsquos fourth annual shopper study During H1 2013 we conducted online quantitative and qualitative interviews with 499 UK shoppers covering a representative spread of
bull Ages from 18 to over 65
bull Incomes from less than pound15000 to over pound135000 per year
bull Education levels from no qualifications to advanced degrees
In some questions where particularly important we asked about specific categories of purchases in detail mdash for instance groceries or electronics In most questions we asked about two main retail groupings mdash ldquoconsumablesrdquo (including groceries and health and beauty products) and ldquospecialityrdquo (including categories such as fashion homeware and entertainment products)
The quotations throughout this report are from real respondents and have been edited for grammar and spelling only
Quick Take Check out the US version of the Shopper Study and additional retail content on our dedicated microsite
httpcognizantcomretail
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
3KEEP CHALLENGING November 2013
Contents
Welcome 5
Introduction 6
About this research 7
The basics really matter 8
People power counts 12
Supercharging the in-store experience 15
Digital goes mainstream 21
Plotting a course in the age of the customer 26
The opportunity is now29
References 30
About Cognizant 31
4 GETTING PERSONAL WITH SHOPPERS
5KEEP CHALLENGING November 2013
Welcome to the first Cognizant UK Shopper StudyOur shopper study has been widely distributed in the US for several years but 2013 marks the publication of our first UK-specific report
It tells an important story not only about the exciting cutting edge of retail innovation but about the core expectations that your shoppers hold and the behaviours they exhibit Whatever you sell everyone needs an occasional reminder of what really matters to customers and where you should focus your investment and attention
Every retailer will take their own ideas from this study a teen fashion retailer will naturally have a very different business environment to a supermarket or a bookshop But many trends are common to all retailers the continuing growth in e-commerce the huge potential and risk posed by big data and the fundamental need to offer the right product at the right price with the right service
The retail industry is famously competitive and itrsquos changing fast Itrsquos the job of every retailer to respond to these changes and stay one step ahead not just of their competitors but of their customers too We hope the shopper study can help you do just that
We look forward to discussing these findings with you so please get in touch and let us know what you think And of course look out for next yearrsquos study mdash wersquore sure the retail landscape has plenty more surprises in store
Yours
Ron Curry
Head of Retail Travel and Hospitality Consumer Goods Cognizant Technology Solutions
6 GETTING PERSONAL WITH SHOPPERS
Introduction
Finding the truth
Retail is the heart of the UK economy It employs more than 4 million people across more than 287000 stores1 Wersquore all shoppers ourselves so itrsquos natural that we all take a deep personal interest in the issues that the retail industry is facing everything from the oft-proclaimed death of the high street to rising food prices
Yet as a retailer it can be hard to get a clear and unbiased picture of what issues actually matter to your customers and in what direction to take your business to get the optimum return And itrsquos important to do so while Office for National Statistics (ONS) figures say that UK retail sales are strong3 (particularly online) suggesting growing consumer confidence we all know that this is no time to relax
The view from the ground
The Cognizant Shopper Study gives you the facts you need It looks directly at the most important element mdash the shoppers themselves mdash through annual quantitative and qualitative research with thousands of shoppers asking them about their shopping behaviours likes and dislikes both in store and online
Every retail market is different Just look for instance at the varied fortunes of UK retail giants like Marks amp Spencer5 and Tesco6 after theyrsquove expanded internationally Thatrsquos why the data we report here is exclusively from UK shoppers It shows you where to target your investments to meet consumersrsquo needs in order to raise satisfaction and loyalty
A pinch of salt
Asking shoppers about their needs and wants is vitally important for fine-tuning your execution but itrsquos only one piece of the puzzle and can fall short when yoursquore planning how to differentiate your business
Thatrsquos because sometimes consumers canrsquot see the potential of the new and disruptive Some resist change and itrsquos the job of pioneering companies to forge ahead and show them the benefits Steve Jobs said it best ldquoA lot of times people donrsquot know what they want until you show it to themrdquo7
Similarly book lovers (and booksellers) said time and again that they would never abandon the smell and experience of traditional printed books for cold clinical ebooks mdash but some have as have film lovers and music buffs It just took a little time to persuade consumers about the convenience of digital media and to change their buying behaviour The Amazons Spotifys and Apples of the world had to take the lead and challenge the status quo overcoming legal and commercial barriers along the way
Retailers face the same opportunity and challenge to innovate Wersquove already seen the disruption that e-commerce has created reshaping the entire shopping experience What other processes and consumer interactions are going unchallenged yet are ripe for reinvention How can you disrupt shopper behaviour to get ahead of your competitors and unlock new business opportunities
Quick Take More than a third of consumer spending goes through shops
British Retail Consortium2
ldquoCustomers are the most reliable guiderdquo
Sir Terry Leahy Tesco CEO 1997ndash20114
7KEEP CHALLENGING November 2013
About this researchThis is our first UK-specific report but Cognizantrsquos fourth annual shopper study During H1 2013 we conducted online quantitative and qualitative interviews with 499 UK shoppers covering a representative spread of
bull Ages from 18 to over 65
bull Incomes from less than pound15000 to over pound135000 per year
bull Education levels from no qualifications to advanced degrees
In some questions where particularly important we asked about specific categories of purchases in detail mdash for instance groceries or electronics In most questions we asked about two main retail groupings mdash ldquoconsumablesrdquo (including groceries and health and beauty products) and ldquospecialityrdquo (including categories such as fashion homeware and entertainment products)
The quotations throughout this report are from real respondents and have been edited for grammar and spelling only
Quick Take Check out the US version of the Shopper Study and additional retail content on our dedicated microsite
httpcognizantcomretail
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
4 GETTING PERSONAL WITH SHOPPERS
5KEEP CHALLENGING November 2013
Welcome to the first Cognizant UK Shopper StudyOur shopper study has been widely distributed in the US for several years but 2013 marks the publication of our first UK-specific report
It tells an important story not only about the exciting cutting edge of retail innovation but about the core expectations that your shoppers hold and the behaviours they exhibit Whatever you sell everyone needs an occasional reminder of what really matters to customers and where you should focus your investment and attention
Every retailer will take their own ideas from this study a teen fashion retailer will naturally have a very different business environment to a supermarket or a bookshop But many trends are common to all retailers the continuing growth in e-commerce the huge potential and risk posed by big data and the fundamental need to offer the right product at the right price with the right service
The retail industry is famously competitive and itrsquos changing fast Itrsquos the job of every retailer to respond to these changes and stay one step ahead not just of their competitors but of their customers too We hope the shopper study can help you do just that
We look forward to discussing these findings with you so please get in touch and let us know what you think And of course look out for next yearrsquos study mdash wersquore sure the retail landscape has plenty more surprises in store
Yours
Ron Curry
Head of Retail Travel and Hospitality Consumer Goods Cognizant Technology Solutions
6 GETTING PERSONAL WITH SHOPPERS
Introduction
Finding the truth
Retail is the heart of the UK economy It employs more than 4 million people across more than 287000 stores1 Wersquore all shoppers ourselves so itrsquos natural that we all take a deep personal interest in the issues that the retail industry is facing everything from the oft-proclaimed death of the high street to rising food prices
Yet as a retailer it can be hard to get a clear and unbiased picture of what issues actually matter to your customers and in what direction to take your business to get the optimum return And itrsquos important to do so while Office for National Statistics (ONS) figures say that UK retail sales are strong3 (particularly online) suggesting growing consumer confidence we all know that this is no time to relax
The view from the ground
The Cognizant Shopper Study gives you the facts you need It looks directly at the most important element mdash the shoppers themselves mdash through annual quantitative and qualitative research with thousands of shoppers asking them about their shopping behaviours likes and dislikes both in store and online
Every retail market is different Just look for instance at the varied fortunes of UK retail giants like Marks amp Spencer5 and Tesco6 after theyrsquove expanded internationally Thatrsquos why the data we report here is exclusively from UK shoppers It shows you where to target your investments to meet consumersrsquo needs in order to raise satisfaction and loyalty
A pinch of salt
Asking shoppers about their needs and wants is vitally important for fine-tuning your execution but itrsquos only one piece of the puzzle and can fall short when yoursquore planning how to differentiate your business
Thatrsquos because sometimes consumers canrsquot see the potential of the new and disruptive Some resist change and itrsquos the job of pioneering companies to forge ahead and show them the benefits Steve Jobs said it best ldquoA lot of times people donrsquot know what they want until you show it to themrdquo7
Similarly book lovers (and booksellers) said time and again that they would never abandon the smell and experience of traditional printed books for cold clinical ebooks mdash but some have as have film lovers and music buffs It just took a little time to persuade consumers about the convenience of digital media and to change their buying behaviour The Amazons Spotifys and Apples of the world had to take the lead and challenge the status quo overcoming legal and commercial barriers along the way
Retailers face the same opportunity and challenge to innovate Wersquove already seen the disruption that e-commerce has created reshaping the entire shopping experience What other processes and consumer interactions are going unchallenged yet are ripe for reinvention How can you disrupt shopper behaviour to get ahead of your competitors and unlock new business opportunities
Quick Take More than a third of consumer spending goes through shops
British Retail Consortium2
ldquoCustomers are the most reliable guiderdquo
Sir Terry Leahy Tesco CEO 1997ndash20114
7KEEP CHALLENGING November 2013
About this researchThis is our first UK-specific report but Cognizantrsquos fourth annual shopper study During H1 2013 we conducted online quantitative and qualitative interviews with 499 UK shoppers covering a representative spread of
bull Ages from 18 to over 65
bull Incomes from less than pound15000 to over pound135000 per year
bull Education levels from no qualifications to advanced degrees
In some questions where particularly important we asked about specific categories of purchases in detail mdash for instance groceries or electronics In most questions we asked about two main retail groupings mdash ldquoconsumablesrdquo (including groceries and health and beauty products) and ldquospecialityrdquo (including categories such as fashion homeware and entertainment products)
The quotations throughout this report are from real respondents and have been edited for grammar and spelling only
Quick Take Check out the US version of the Shopper Study and additional retail content on our dedicated microsite
httpcognizantcomretail
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
5KEEP CHALLENGING November 2013
Welcome to the first Cognizant UK Shopper StudyOur shopper study has been widely distributed in the US for several years but 2013 marks the publication of our first UK-specific report
It tells an important story not only about the exciting cutting edge of retail innovation but about the core expectations that your shoppers hold and the behaviours they exhibit Whatever you sell everyone needs an occasional reminder of what really matters to customers and where you should focus your investment and attention
Every retailer will take their own ideas from this study a teen fashion retailer will naturally have a very different business environment to a supermarket or a bookshop But many trends are common to all retailers the continuing growth in e-commerce the huge potential and risk posed by big data and the fundamental need to offer the right product at the right price with the right service
The retail industry is famously competitive and itrsquos changing fast Itrsquos the job of every retailer to respond to these changes and stay one step ahead not just of their competitors but of their customers too We hope the shopper study can help you do just that
We look forward to discussing these findings with you so please get in touch and let us know what you think And of course look out for next yearrsquos study mdash wersquore sure the retail landscape has plenty more surprises in store
Yours
Ron Curry
Head of Retail Travel and Hospitality Consumer Goods Cognizant Technology Solutions
6 GETTING PERSONAL WITH SHOPPERS
Introduction
Finding the truth
Retail is the heart of the UK economy It employs more than 4 million people across more than 287000 stores1 Wersquore all shoppers ourselves so itrsquos natural that we all take a deep personal interest in the issues that the retail industry is facing everything from the oft-proclaimed death of the high street to rising food prices
Yet as a retailer it can be hard to get a clear and unbiased picture of what issues actually matter to your customers and in what direction to take your business to get the optimum return And itrsquos important to do so while Office for National Statistics (ONS) figures say that UK retail sales are strong3 (particularly online) suggesting growing consumer confidence we all know that this is no time to relax
The view from the ground
The Cognizant Shopper Study gives you the facts you need It looks directly at the most important element mdash the shoppers themselves mdash through annual quantitative and qualitative research with thousands of shoppers asking them about their shopping behaviours likes and dislikes both in store and online
Every retail market is different Just look for instance at the varied fortunes of UK retail giants like Marks amp Spencer5 and Tesco6 after theyrsquove expanded internationally Thatrsquos why the data we report here is exclusively from UK shoppers It shows you where to target your investments to meet consumersrsquo needs in order to raise satisfaction and loyalty
A pinch of salt
Asking shoppers about their needs and wants is vitally important for fine-tuning your execution but itrsquos only one piece of the puzzle and can fall short when yoursquore planning how to differentiate your business
Thatrsquos because sometimes consumers canrsquot see the potential of the new and disruptive Some resist change and itrsquos the job of pioneering companies to forge ahead and show them the benefits Steve Jobs said it best ldquoA lot of times people donrsquot know what they want until you show it to themrdquo7
Similarly book lovers (and booksellers) said time and again that they would never abandon the smell and experience of traditional printed books for cold clinical ebooks mdash but some have as have film lovers and music buffs It just took a little time to persuade consumers about the convenience of digital media and to change their buying behaviour The Amazons Spotifys and Apples of the world had to take the lead and challenge the status quo overcoming legal and commercial barriers along the way
Retailers face the same opportunity and challenge to innovate Wersquove already seen the disruption that e-commerce has created reshaping the entire shopping experience What other processes and consumer interactions are going unchallenged yet are ripe for reinvention How can you disrupt shopper behaviour to get ahead of your competitors and unlock new business opportunities
Quick Take More than a third of consumer spending goes through shops
British Retail Consortium2
ldquoCustomers are the most reliable guiderdquo
Sir Terry Leahy Tesco CEO 1997ndash20114
7KEEP CHALLENGING November 2013
About this researchThis is our first UK-specific report but Cognizantrsquos fourth annual shopper study During H1 2013 we conducted online quantitative and qualitative interviews with 499 UK shoppers covering a representative spread of
bull Ages from 18 to over 65
bull Incomes from less than pound15000 to over pound135000 per year
bull Education levels from no qualifications to advanced degrees
In some questions where particularly important we asked about specific categories of purchases in detail mdash for instance groceries or electronics In most questions we asked about two main retail groupings mdash ldquoconsumablesrdquo (including groceries and health and beauty products) and ldquospecialityrdquo (including categories such as fashion homeware and entertainment products)
The quotations throughout this report are from real respondents and have been edited for grammar and spelling only
Quick Take Check out the US version of the Shopper Study and additional retail content on our dedicated microsite
httpcognizantcomretail
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
6 GETTING PERSONAL WITH SHOPPERS
Introduction
Finding the truth
Retail is the heart of the UK economy It employs more than 4 million people across more than 287000 stores1 Wersquore all shoppers ourselves so itrsquos natural that we all take a deep personal interest in the issues that the retail industry is facing everything from the oft-proclaimed death of the high street to rising food prices
Yet as a retailer it can be hard to get a clear and unbiased picture of what issues actually matter to your customers and in what direction to take your business to get the optimum return And itrsquos important to do so while Office for National Statistics (ONS) figures say that UK retail sales are strong3 (particularly online) suggesting growing consumer confidence we all know that this is no time to relax
The view from the ground
The Cognizant Shopper Study gives you the facts you need It looks directly at the most important element mdash the shoppers themselves mdash through annual quantitative and qualitative research with thousands of shoppers asking them about their shopping behaviours likes and dislikes both in store and online
Every retail market is different Just look for instance at the varied fortunes of UK retail giants like Marks amp Spencer5 and Tesco6 after theyrsquove expanded internationally Thatrsquos why the data we report here is exclusively from UK shoppers It shows you where to target your investments to meet consumersrsquo needs in order to raise satisfaction and loyalty
A pinch of salt
Asking shoppers about their needs and wants is vitally important for fine-tuning your execution but itrsquos only one piece of the puzzle and can fall short when yoursquore planning how to differentiate your business
Thatrsquos because sometimes consumers canrsquot see the potential of the new and disruptive Some resist change and itrsquos the job of pioneering companies to forge ahead and show them the benefits Steve Jobs said it best ldquoA lot of times people donrsquot know what they want until you show it to themrdquo7
Similarly book lovers (and booksellers) said time and again that they would never abandon the smell and experience of traditional printed books for cold clinical ebooks mdash but some have as have film lovers and music buffs It just took a little time to persuade consumers about the convenience of digital media and to change their buying behaviour The Amazons Spotifys and Apples of the world had to take the lead and challenge the status quo overcoming legal and commercial barriers along the way
Retailers face the same opportunity and challenge to innovate Wersquove already seen the disruption that e-commerce has created reshaping the entire shopping experience What other processes and consumer interactions are going unchallenged yet are ripe for reinvention How can you disrupt shopper behaviour to get ahead of your competitors and unlock new business opportunities
Quick Take More than a third of consumer spending goes through shops
British Retail Consortium2
ldquoCustomers are the most reliable guiderdquo
Sir Terry Leahy Tesco CEO 1997ndash20114
7KEEP CHALLENGING November 2013
About this researchThis is our first UK-specific report but Cognizantrsquos fourth annual shopper study During H1 2013 we conducted online quantitative and qualitative interviews with 499 UK shoppers covering a representative spread of
bull Ages from 18 to over 65
bull Incomes from less than pound15000 to over pound135000 per year
bull Education levels from no qualifications to advanced degrees
In some questions where particularly important we asked about specific categories of purchases in detail mdash for instance groceries or electronics In most questions we asked about two main retail groupings mdash ldquoconsumablesrdquo (including groceries and health and beauty products) and ldquospecialityrdquo (including categories such as fashion homeware and entertainment products)
The quotations throughout this report are from real respondents and have been edited for grammar and spelling only
Quick Take Check out the US version of the Shopper Study and additional retail content on our dedicated microsite
httpcognizantcomretail
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
7KEEP CHALLENGING November 2013
About this researchThis is our first UK-specific report but Cognizantrsquos fourth annual shopper study During H1 2013 we conducted online quantitative and qualitative interviews with 499 UK shoppers covering a representative spread of
bull Ages from 18 to over 65
bull Incomes from less than pound15000 to over pound135000 per year
bull Education levels from no qualifications to advanced degrees
In some questions where particularly important we asked about specific categories of purchases in detail mdash for instance groceries or electronics In most questions we asked about two main retail groupings mdash ldquoconsumablesrdquo (including groceries and health and beauty products) and ldquospecialityrdquo (including categories such as fashion homeware and entertainment products)
The quotations throughout this report are from real respondents and have been edited for grammar and spelling only
Quick Take Check out the US version of the Shopper Study and additional retail content on our dedicated microsite
httpcognizantcomretail
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
8 GETTING PERSONAL WITH SHOPPERS
ldquoI want a nice store with good prices mdash you can keep your self-service tillsrdquo
Self-service checkouts are an established part of the retail environment mdash but shoppers arenrsquot big fans
ldquoAll I want is to be able to buy the goods I want be served politely and check out easilyrdquo
Customers expect the fundamentals to be right mdash product availability price and customer service are the top three factors in purchase decisions
The basics really matterBefore you can earn the right to a shopperrsquos engagement and loyalty you need to deliver the fundamentals that underpin every retail transaction
ldquoI object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
The right product selection and price are critical factors in every purchase More than 60 of people say theyrsquod leave a store if the price was uncompetitive
ldquoThe main point of the in-store experience for me is whether they have the right selection of brandsrdquo
Shoppers biggest dislike is products being out of stock If they canrsquot find what they want theyrsquoll buy from somewhere else at least 47 of the time
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
9KEEP CHALLENGING November 2013
Availability and price are most important
We asked shoppers what factors influence their in-store purchase decisions They said they want two things most of all the right product selection at a competitive price (see Figure 1) This holds true across all retail categories and across all demographic groups
You only get one chance
If pricing and availability arenrsquot up to their expectations consumers often wonrsquot give you a second chance to win their business If they canrsquot find the product they want theyrsquore more likely to leave the store than to ask an assistant for help (see Figure 2) Yoursquore likely to lose a sale to a competitor
How much do each of the following factors influence your in-store purchase decisions
28
1 2 3 4 5
4344
4341
4038
35
27
25
20
3236
Speciality
Consumables
Competitive pricepromos etc
Right productselections
Quality ofcustomer service
Other customersrsquoratings and reviews
Compelling loyaltyprogramme
Comments onsocial media sites
Figure 1
If you canrsquot find what you want in a store what do you most often do
0 20 40 60 80 100
4
3
3
5
7
6
6
Ask an assistant to help you locate the right item
Go home and order it online
Leave the store and look for the same product elsewhere
Purchase an alternative item available in that store
Leave the store and look for the same product during
a future visit
Use your mobile phone to identify the product elsewhere
Check the retailerrsquos in-store kiosk (if available)
37
39
28
16
14
21
10
Speciality
Consumables
Figure 2
Quick Take Consumables purchases mdash such as groceries and toiletries mdash tend to be more urgent than speciality purchases and consumers still prefer to buy them in physical stores So consumers are less likely to leave the store to order online and more likely to simply buy an alternative product in the store there and then
Shoppers said they want two things most of all the right product selection at a competitive price
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
10 GETTING PERSONAL WITH SHOPPERS
If they locate the product but think that the price is uncompetitive shoppers generally wonrsquot tell you and give you the chance to respond They will simply walk away and the opportunity will be lost Across all categories at least 65 of people had not asked for a single price match in the three months prior to our survey (see Figure 3) Price matching is only widely used in electronics purchases
More than 60 of respondents say that if the price isnrsquot competitive theyrsquoll just leave to go online or go to another store (see Figure 4) This is particularly true of younger customers
Price matching is not the answer
While most retailers have limited their commitment to matching other high street stores some have tried using price matching to combat showrooming One example is Currys which offers to beat prices from the websites of its main competitors But this data suggests that if yoursquove got an issue with stock availability or pricing you wonrsquot get much of a chance to fix the problem You wonrsquot necessarily even know that there is a problem until itrsquos too late and so this is not the answer Whether against online competitors other bricks and mortar stores or your own online channel price matching should be a tool of last resort
Electronics
0 20 40 60 80 100
35
21
23
18
Consumables
Home furnishings
Fashion
Shoppers using price matching (once or more in last three months)
Figure 3
When the price for an item in your store is higher than what you think you can obtain elsewhere what are you most likely to do
0 20 40 60 80 100
4
6
30
30
28
15
13
13
10
8
9
35
Speciality
Consumables
Leave the store and look for the same item at a lower
price in another store
Leave the store and look for the same product for a
lower price online
Ask an assistant to price match
Use your mobile phone to check prices at another store
andor e-commerce sites
Purchase an alternative cheaper item available
in that store
Purchase the item at the listed price
Figure 4
Showrooming is the practice of examining merchandise in a
traditional bricks and mortar store but then going online to find a better price and buy it
Customers will simply walk away mdash the opportunity will be lost
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
11KEEP CHALLENGING November 2013
Where price-matching offers can work is as a marketing message Publicising your price-matching policies or low-price guarantees can reassure customers that yoursquore competitive discouraging them from shopping around And in some value-led commoditised categories mdash such as supermarkets mdash a price guarantee is now an essential part of playing in that market Look at the Asda Price Promise or John Lewisrsquos ldquoNever knowingly undersoldrdquo
Focus on the fundamentals
Stock availability assortment and merchandising pricing and promotions store layout and signage are all retail fundamentals Many UK retailers are extremely advanced at building resilient responsive supply chains and in-store processes to ensure that shelves are never empty that prices match rivals to the penny and that transactions are quick and easy
But mistakes still happen whether thatrsquos a data-entry error causing a mispricing a lost order a supplier failing to meet demand a problem in warehousing and logistics mdash or simply failure to spot a sudden market movement for instance a competitorrsquos big sale or a huge spike in demand
Customers donrsquot tolerate these mistakes They donrsquot understand the huge complexity behind the scenes in a retail operation and they donrsquot care about the challenges that you face in maintaining a well-stocked store
All they see is that yoursquore out of stock of ice cream on a hot day that the TV theyrsquore eyeing is pound50 more expensive in your shop than from the cheapest e-tailer and that they canrsquot find the latest shoes in their size
Data is the key to getting the fundamentals right
New retail and shopping practices such as personalised promotions inter-store stock transfers lsquoclick and collectrsquo social shopping and nationwide price-matching initiatives are straining stock and pricing processes more than ever What can you do to get even better Data is the key
In terms of companies using data retailers are already among the most advanced Many gather data from enterprise resource planning (ERP) systems and loyalty schemes to forecast demand and feed that intelligence into ordering and stock systems This will continue with new data sources (such as social media sentiment and real-time tracking of people flows around stores) new analytics tools mdash and new ways of translating the resulting insights into the store environment too
For example Tesco is already trying ldquovirtual merchandisingrdquo using a 3D virtual model of a store complete with stock on shelves allowing it to try different combinations and test out new ideas8
Quick Take Want to learn more about the latest possibilities for managing your supply chain Start here httpcognizat17JGwRV
ldquoI do object to storesrsquo price changes The shelf prices donrsquot always tally with the tillrdquo
Respondent
Retailers are already among the most advanced companies at using data
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
12 GETTING PERSONAL WITH SHOPPERS
ldquoIt doesnrsquot matter how good the products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Shoppers want a personalised shopping experience that recognises their status and gives them tailored service and offers
ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Unavailable or distracted cashiers are the top annoyance for shoppers An inefficient checkout process is unforgivable
People power countsThroughout our research shoppers repeatedly raised the importance of staff awareness attitude and availability Customer service is vitally important to nearly every customer interaction
ldquoI prefer to deal with a human rather than a machinerdquo
When they have a question shoppers head straight to an assistant And for solving problems they also look to a person for help mdash an assistant or manager
ldquoIrsquom fed up with shop assistants who donrsquot know or are uninterestedrdquo
Shoppers use signage and packaging to help them make informed purchase decisions mdash they think that staff lack product knowledge
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
13KEEP CHALLENGING November 2013
People-led retail experiences count
Quality of customer service was the third most important factor influencing in-store purchase decisions just behind price and product availability As one respondent said ldquoIt doesnrsquot matter how good products are mdash if the service isnrsquot good then itrsquos not a shop I like to go tordquo
Taking payment is perhaps the most critical customer-facing role for staff and indeed the top annoyance at the checkout is a cashier being unavailable (see Figure 5)
Failure at the checkout directly translates into lost revenue 15 of those that decided to complete their purchase online said they did so because shop assistants were unavailable
And the solution is not self-checkout ndash shoppers donrsquot see it as a replacement for people As one respondent said ldquoI get infuriated with self-checkout It would be better to have more staffrdquo
Shoppers want staff to give help not information
Packaging and shelf information are the primary sources of buying information particularly in consumables with store associates ranking right at the bottom of the list Why In part itrsquos because many consumers feel that shop assistants are ill-informed One study found that two-thirds of UK consumers say they notice the lack of assistantsrsquo knowledge and 63 of staff said theyrsquove lied to customers because they lack knowledge10
ldquoShop assistants are often not familiar with the products they sell particularly in many cosmetics clothing and electronics stores Most of all I would like to have a discussion with a knowledgeable store assistant mdash nowadays I go to the store for either instant purchase advice or to inspect the product before buyingrdquo
Respondent
How much do you dislike each of the following aspects of the checkout process at a store
Figure 51 2 3 4 5
44
42
41
41
39
38
38
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Personal information request during transaction
Cashier tries to sell more products
Discountcredits not quickly processed
Cashiers canrsquot make customer service decision
Waiting in line
Self-checkout is not available
ldquoMore than two-thirds of the 1024 shoppers surveyed complained that self-scan tills always went wrong usually blaming problems in the bagging area They also felt the tills did not save them any time only 29 claimed their overall shopping experience was enhanced by self-scanrdquo
thegrocercouk9
Shoppers donrsquot see self-checkout as a replacement for people
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
14 GETTING PERSONAL WITH SHOPPERS
Quick Take For more on the importance of information to successful business mdash and how to avoid
the many pitfalls of using data mdash check out page 26 or visit
httpcognizantcomcode-rules to learn more about our concept
of Code Halostrade
But when a shopper needs help for instance with a price match or to find or return a product the first place they go is to the customer service desk (see Figure 6) And when they have a complaint the top options for getting help are to tell an assistant or ask to speak to the manager
Empowering your staff
Our research showed that consumers value a personalised shopping experience even more than consistency and interactivity They like to get special treatment in return for their loyalty tailored offers and recognition of their valued-customer status when they enter the store The onus is on retailers
While recruiting rewarding and training the right people is clearly important to delivering the better more personalised service that customers are asking for itrsquos only part of the answer You also need to give your staff access to information If a customer has a question about a product where can the assistant look for answers How can an assistant recognise an important high-value customer when they walk through the door
The ldquosingle view of the customerrdquo is critical Consumers donrsquot care that your retail division is managed separately from your e-commerce unit if they have a question about an order theyrsquove placed they want answers there and then And when the employee can anticipate their needs and greet them by name theyrsquore going to be delighted
To achieve this you have to arm employees with devices that give them access to real-time integrated data drawn from across the business and beyond mdash that single view of the customer Data is not a gimmick itrsquos core to omnichannel delivery mdash the complete and seamless integration of online and offline channels Wersquoll discuss the importance of data later on in this paper
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
39Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Onlinevideo chat
Social media page
Mobile chatmobile messaging
26
24
21
16
16
Figure 6
Omnichannel retailing is having a seamless approach to the
consumer experience through all available shopping channels
When a shopper needs help the first place they go is to the
customer service desk
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
15KEEP CHALLENGING November 2013
Supercharging the in-store experienceWith the right products price and people in place retailers have a solid foundation from which to evolve the role of the store and use technology to improve the customer experience
ldquoI canrsquot wait for lsquoproperrsquo payment apps for smartphones in the UKrdquo
Mobile payments and digital wallets arenrsquot widely used today mdash but younger age groups and men are much more likely to use them
Kiosks are the most popular in-store technology for shoppers needing assistance
Video mobile chat and social media arenrsquot widely used overall but younger shoppers are much more enthusiastic users of new service channels
Showrooming is real
More than 80 of respondents say they shopped in store then purchased online at least once in the three months previously 10 say theyrsquod use their smartphones to check prices while actually in store
ldquoIt is quite handy to collect [the product] in storerdquo
More than 60 of shoppers have used lsquoclick and collectrsquo in the past three months a quarter had used it more than once a month
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
16 GETTING PERSONAL WITH SHOPPERS
Technology powers the next-generation store
Our research shows that expectations for consistency interactivity and personalisation in the in-store experience are growing The younger lsquodigital nativersquo consumer has higher expectations than older age groups and expectations have also increased since our 2012 survey (see Figure 7)
You donrsquot have to look far to find inspiring case studies about how retailers are using new technologies to meet these demands redefining and streamlining key customer interactions throughout the retail journey
Look at Hointer a US fashion store It targets a clear customer problem using fitting rooms is stressful and inconvenient And itrsquos reimagined the process of trying on clothes from scratch with technology at its core When customers want to try a garment on all they need to do is tap it with their smartphone or scan a QR code This automatically prepares a fitting room complete with the clothes in the right sizes ready for the shopper when they have finished browsing11
And itrsquos not just fashion retailers that are starting to put new technology to work in exciting ways Homeware retailers like IKEA are building augmented reality features into their apps so that customers can picture how furniture will look in their rooms12 Hobby DIY and office supply stores like Staples are using 3D printing to offer a nearly unlimited range of products to customers mdash highly personalised and highly relevant13
How much would you like to have the following featuresservices available when shopping
65 and over 46ndash64 34ndash45 18ndash33
Consistent experiences and information
Interactive experiences
Personalised in-store experiences
2824
26+04
+03
30+03
+02
+01
-02
+04
+02
+02 +04
34
+02
3122
34 36 39 38
36
2013 2012
00
Figure 7
The younger lsquodigital nativersquo consumer has higher
expectations
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
17KEEP CHALLENGING November 2013
Not quite tipping point
Despite the successes that some of these pioneering retailers have achieved many new technologies havenrsquot yet reached a critical mass with shoppers We looked at several technologies in detail at different stages of the shopping journey
Online social and mobile tools
When researching purchases in store shoppers use packaging and signage most often making little use of offers from loyalty programmes online reviews and social media comments Use of social media is low even for complaints They also werenrsquot swayed by location-based services and local deals
Click and collect
People arenrsquot yet using lsquoclick and collectrsquo regularly and they donrsquot expect it to be available Although more than 60 of respondents had used it in the three months prior to our survey only a quarter had used it more than once a month (see Figure 8) But the experience can have value As one respondent said ldquoIt is quite handy to collect it in store so that you can return it straight away if it does not meet your expectationsrdquo
Quick Take Argos and eBay are trialling a new lsquoclick and collectrsquo service together which will enable consumers to collect their eBay orders from Argos stores Therersquos still plenty of room for experimentation as this unconventional onlineoffline partnership shows14
For many in-store technologies House of Fraser is a great example Already 35 of its online sales are collected in store15 despite it only having 60 UK stores It offers visibility of in-store stock on its website and in its apps
Now House of Fraser is trialling an enhancement to lsquoclick and collectrsquo mdash virtual queuing16
Shoppers will check in at a kiosk to enter a virtual queue An SMS will inform them of their estimated wait time to collect their order They can go off and browse instead of queuing and will get a notification when staff have packed their order for collection Itrsquos a real example of how technology can change buyer behaviours mdash and an illustration of how still-emerging retail concepts like lsquoclick and collectrsquo have plenty of room for evolution
ldquoEarly signs are that customers enjoy the experience and prefer to be given the option to browse the store or enjoy a coffee rather than wait in a queuerdquo
Andy Harding Executive Director of Multichannel House of Fraser
How many times in the past three months did you purchase online and pick up in store
0 20 40 60 80 100
28
5
55
3
Not all all
1ndash3
4ndash6
7ndash9
10 or more times
1615
3542
3936
Speciality
Consumables
Figure 8
More than 60 of respondents had used lsquoclick and collectrsquo in the three months prior to our survey
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
18 GETTING PERSONAL WITH SHOPPERS
The impact of technology on in-store service
Mobile payments can speed up the checkout experience mdash or even eliminate the need to queue at all But most consumers are still using cards and cash most of the time digital mobile wallets are by far the least popular payment option (see Figure 9) However theyrsquore more popular with younger shoppers and men
Shoppers arenrsquot using self-checkout extensively either Compared to other annoyances in the checkout experience the absence of self-checkout ranked last (see Figure 10)
In terms of technology only in-aisle price scanners and kiosks show broad use Social media mobile chat and video chat ranked low (see Figure 11)
How likely are you to use the following payment methods if available when making in-store purchases
1 2 3 4 5
A digital wallet via a personal mobile device
Bank issued credit card
Cash
18
35
3231
29
3740
4144
1714
65 and over
46ndash64
34ndash45
18ndash33
11
Figure 9
How much do you dislike each of the following aspects of the checkout process at a store
1 2 3 4 5
44
42
28
Cashier not available or distracted
Checkout process is inefficient or inaccurate
Self-checkout is not available
Figure 10
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
26
39
21
24
16
16
Onlinevideo chat
Social media page
Mobile chatmobile messaging
Go to in-store customer service desk
Price scanner in aisle or in-store kiosk
Call customer service number
Figure 11
Most consumers are still using cards and cash most of the time
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
19KEEP CHALLENGING November 2013
The tipping point
We believe that many in-store technologies are ripe for a tipping point Already younger consumers are much more likely to use store tablets and mobile apps to make purchase decisions and to use social media mobile and video to get help throughout the retail experience (see Figure 12)
When you need assistance while shopping how likely are you to use the following customer service options
1 2 3 4 5
2325
2730
1618
2427
1518
20
14
1821
65 and over
46ndash64
34ndash45
18ndash33
11
12
Price scanner in aisle or in-store kiosk
Onlinevideo chat
Mobile chatmobile text message
Social media
Figure 12
In a typical month how often do you use the following resources to help you make informed purchase decisions
Figure 13310 2 4 5
1807
24
0414
21
07
1718
65 and over
46ndash64
34ndash45
18ndash33
03
03
02
Social media
Storersquossmartphone app
Storersquos tablet
Many in-store technologies are ripe for a tipping point
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
20 GETTING PERSONAL WITH SHOPPERS
Adoption depends on execution
And we believe that much of the reticence shown in our survey responses reflects two key factors
bull The poor implementation of new technologies to date Look at self-checkout mdash wersquore sure that yoursquoll be familiar with the phrase ldquounexpected item in bagging areahellip please wait for assistancerdquo If as a consumer you have a frustrating experience with such technology and feel like the retailer is deploying it to avoid having to employ more staff yoursquore unlikely to use it again One in three shoppers has walked out of a store after problems at a self-service till17
bull Poor levels of integration Where retailers have tried new technologies theyrsquore often experimental pilots not yet an integrated part of the shopping landscape and customer journey For example the mobile shopping experience isnrsquot yet fully integrated with the whole range of in-store stock or the e-commerce channel to create a truly seamless omnichannel retail journey
Success depends on rebuilding a customer interaction around technology not just bolting it on However even the best implemented new technology will take time to gain acceptance and become part of the habitual shopping behaviour establishing a new normal Just look at e-commerce there are rewards for those that spot the potential first such as Ocado and Amazon but most purchases are still made in stores even 15 years after e-commerce began
Some categories will show natural leadership in technology
bull Electronics captures a gadget-minded audience mdash already you can pay for purchases from your phone in the Apple store and avoid the conventional checkout entirely
bull Fashion retailers particularly those targeting tech-savvy younger customers will look to get the wow factor with in-store tech for showing product demonstrations UNIQLO and others are already trying interactive ldquomagic mirrorsrdquo 18 Diesel and Selfridges have deployed a real-world ldquomobile bookmarkingrdquo tool called Tapestry which lets users scan products in store to get more information offers and social features19
bull High-paced coffee shops and supermarkets will forge ahead with self-service and loyalty kiosks because their consumers value a fast checkout experience mdash more than 10 of Starbucksrsquo transactions are now mobile
But from those pioneering categories all retailers will eventually have to follow suit
Quick Take For more ideas on how to
transform your stores with technology visit
httpcognizat1bByCLu
One in three shoppers has walked out of a store after
problems at a self-service till
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
21KEEP CHALLENGING November 2013
Electronics leads the way
54 of shoppers would prefer to buy speciality products online than in store And electronics leads mdash itrsquos the first category where the majority of purchases are already made outside of the traditional store environment
Conventional PCs are still the most popular device for online shopping
Theyrsquore the first choice for 80 of shoppers But mobile devices play a valuable supporting role in our multi-screen lives
Digital goes mainstreamSo far wersquove mainly talked about the real-world experience that shoppers have In the online and virtual space wersquore seeing parallel trends
Getting delivery right
The most important factor in online purchase decisions is delivery cost Convenience is important too And delivery is an area of huge innovation mdash some providers now offer one-hour delivery for example
ldquoI find websites useful but social media sites not at allrdquo
Most shoppers pay little attention to social media and social shopping services when researching purchases finding offers and buying online conventional websites are the most widely used sources
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
22 GETTING PERSONAL WITH SHOPPERS
Online shopping
E-commerce is here to stay UK online sales are expected to top pound10bn per month in December 201320 When purchasing speciality products 54 of shoppers say they prefer to buy online Even for consumables which includes groceries 32 say they prefer to buy online
Online channels have grown massively year on year even for groceries and household For electronics purchases by males online is now a bigger channel than in-store mdash we have passed a tipping point
The top driver of buying online is getting a better price However the convenience of delivery is also an important factor for UK consumers much more so than our US respondents This may be down to the heavy traffic and poor parking in many UK towns
For the following category(s) of product what is your preferred method of shopping assuming all products are available in store and onlinemobile
Speciality Consumable
Onlinemobile54
In store46
Onlinemobile32In store
68
Figure 14
What percentage of your annual purchases for each of the following types of goods do you make through the following channels
0 20 40 60 80 100
Electronics
Fashion
Health and beauty
Grocery
Household
In-store point of sale
In-store kiosk or assistant-aided
Internet websites
Phone
Mobile (using smartphone)
Other
Figure 15
Quick Take Not all retailers are onboard
with e-commerce despite its popularity with shoppers
According to Exane BNP Paribas of the 100 biggest luxury brands just 56 have
transactional (e-commerce)websites21
When purchasing speciality products 54 of shoppers
say they prefer to buy online
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
23KEEP CHALLENGING November 2013
Getting the basics right online
Just as in bricks and mortar stores consumers want e-tailers to get the basics right first The top influencers in online purchase decisions are delivery cost price and promotions and having the right product selection
Delivery issues are a significant long-term problem Consumers expect online to be cheaper and they have little toleration for paying for delivery or for the inconvenience of long delivery windows and slow shipments Yet recent studies have shown that in the grocery category an online shop costs the store pound12ndash15 to pick pack and ship much more than the supermarkets charge their customers22 mdash so in-store shoppers are subsidising online shoppers
Clearly as more transactions move online and as fleet running costs and postal charges grow this will be unsustainable mdash and e-commerce providers will have to make painful readjustments (much as Amazon has started to do with its add-on items) or through investments in local pickup points or partnerships with retail stores
Mixed messages for mobile
Our survey found that mobile purchases are still less than 5 in all categories itrsquos an overhyped trend for the moment Shoppers still use PCs for most online shopping itrsquos the first choice for 80 of shoppers beating the iPad into a distant second at 11 (although the iPad is the most popular second-choice shopping device)
Yet this doesnrsquot mean the mobile is not a powerful contributor to e-commerce House of Fraser reported that nearly half of its online traffic comes from touchscreen devices23 Shopping behaviours span channels so even if a transaction is completed on a PC that doesnrsquot mean the tablet or smartphone web or app interface wasnrsquot involved at some stage
But what we can consider is whether poor mobile browsing or payment interfaces or other factors are holding people back from clicking lsquobuyrsquo on their mobile devices
Quick Take ldquoI have never seen anything
happen as fast as mobilerdquo Christopher North Managing
Director of Amazoncouk
The speed with which mobile shopping has become a force has caught many retailers by surprise By Christmas 2013
John Lewis expects more shoppers to visit its site from mobile than from desktops24
Marks amp Spencer is another retailer seeing great results from building mobile into its multichannel strategy In the first three months after launch its mobile site had more than 12 million visitors and processed more than 13000 orders The success is partly due to strong integration between the main website and the mobile site mdash visitors can complete web transactions from their mobile devices and vice versa seamlessly which has made shoppersrsquo lives easier and increased the average order size25
Delivery issues are a significant long-term problem
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
24 GETTING PERSONAL WITH SHOPPERS
Social shopping behaviours are still emerging
Many retailers put a lot of effort into social media for customer service and promotions and for working with online partners in a whole host of categories mdash such as group buying (Groupon) location-based services (Foursquare and Shopkick) product comparison member discounts and so on Our respondents showed little interest in these services reflecting perhaps a lack of trust poor quality and volume of information or difficulty accessing them
Online and offline interactions the omnichannel challenge
No retailer can afford to ignore the online world mdash not only is it a growing source of sales in its own right itrsquos also a major influencer of in-store purchases ldquoWebroomingrdquo or reverse showrooming is a major trend many consumers do research online at retailer sites and then buy in store26 Consumers do a lot of research online both for their physical purchases and e-commerce purchases Store websites and internet searches are the top two sources of information in speciality purchases (see Figure 16)
In a typical month how often do you use the following resources to help you make informed purchase decisions of products in the following category(s)
310 2 4 5
Speciality
Consumables
Other Internet searches and websites
Friends and family
Television
Print materials
Storersquos website
46
29
43
27
21
21
22
23
18
20
Figure 16
Conversely many online purchases are supported by ldquoshowroomingrdquo research in store
bull More than 80 of respondents say they shopped in store then purchased online at least once in the three months prior to our survey
bull 46 showroomed for speciality products more than four times in those three months (the number is lower for consumables)
However only 10ndash13 of respondents say theyrsquod use their smartphones to check prices while actually in store
ldquoI find websites useful but social media sites not at all and never use themrdquo
Respondent
Webrooming describes a person researching a product on the
internet and then buying it from a physical store
Many consumers do research online at retailer sites and
then buy in store
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
25KEEP CHALLENGING November 2013
Keep challenging keep innovating
Soon there wonrsquot be a distinction in consumersrsquo minds between lsquomobilersquo and lsquoonlinersquo shopping Already younger people use mobile devices more as their primary shopping device and theyrsquore much more enthusiastic about social and online partnerships (see Figure 17) Retailersrsquo omnichannel strategies will be critical
These changing behaviours will also disrupt how retailers organise themselves internally Does it count as an e-commerce purchase if a customer orders from an in-store kiosk Does it count as a retail purchase if they lsquoclick and collectrsquo Retailers will increasingly conceive of their sales models through an omnichannel mindset and so will consumers Those such as Burberry mdash voted ldquobest omnichannel experience on the UK high streetrdquo27 mdash that break free of the organisational silos sooner will push their onlineoffline advantage to win over competitors For some this may involve unconventional partnerships or major expansion
Already many non-bricks and mortar retailers are moving into the physical world Madecom has opened a showroom29 Screwfix went from catalogue to retail sites30 Amazon has Lockers where customers can pick up their orders and Oak Furniture Land has moved into retail park stores which now account for a large part of its sales31
How important is it for you that your favourite stores work with the following types of partners to provide you with better experiences more products or promotions
1 2 3 4 5
1821
2529
1623
1416
1928
13
16
2125
1720
24
2626
65 and over
46ndash64
34ndash45
18ndash33
11
Group buyingdeals
Member discount
Product comparison smartphone app
Geolocation
Social networkingmedia
Figure 17
Quick Take In October 2013 eBay announced its acquisition of Shutl bringing one-hour delivery to the UK28 Some fashion retailers such as Oasis already offer 90-minute e-commerce delivery within a certain radius of the store These companies are challenging the notion that ldquonext dayrdquo is as good as delivery gets
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
26 GETTING PERSONAL WITH SHOPPERS
Plotting a course in the age of the customerCustomer data is a valuable asset for retailers looking to compete mdash and consumers know it But you will need to tread carefully as data-driven interactions become ubiquitous
The customer experience is the golden rule
Shoppers are habitual theyrsquore intolerant of anything that inconveniences them while shopping they have high standards and theyrsquore reluctant to try new things without proof of the benefits to them
Nowhere is this more evident than in the use of data Retailers already collect a huge amount of data about customers openly with the intention of using it to personalise offers Itrsquos a ldquogive to getrdquo situation for consumers The trouble is many people donrsquot see the ldquogetrdquo in return for what theyrsquore giving mdash yet
As a result shoppers are generally reluctant to share more personal data People donrsquot like being asked for personal information at the point of checkout Theyrsquore not yet willing to share highly personal data mdash like location tracking phone number cookies and the like mdash with retailers in order to get a more personalised experience (see Figure 18)
The price of anonymity
Younger shoppers are much more willing to share their data (see Figure 19) mdash perhaps because theyrsquove grown up with social media and targeted marketing or perhaps because they simply havenrsquot yet had a bad privacy experience
ldquoItrsquos extremely annoying that special offers for loyalty card holders are not connected to what we are buying For example I told Nectar that I donrsquot have a car yet they provide me with coupons for car insurance and AA membership Tesco has customised coupons so I value it more than Sainsburyrsquos even though I like Sainsburyrsquos quality morerdquo
Respondent
ldquoI would not want to be pestered by lots of offersrdquo
Respondent
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
31Information tracked by loyalty number
Name address emailfor website account
Email collectedat point of sale
Have cookies placed on your computer
Your location tracked by geolocation services
Information tracked by credit card number
Phone number collected at point of sale
25
23
20
17
17
17
Figure 18
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
27KEEP CHALLENGING November 2013
But it does suggest that we may be heading for a two-tier shopping environment where a younger generation gets special pricing fast-track shopping and tailored service while older shoppers persist in a traditional (yet anonymous) mode
Collection without consent
The tension between data collection and value offered is only going to get more complicated as the amount of data and the number of data sources grows Retailers will start sharing data across their own business units and with partners suppliers and their customers Bricks and mortar retailers now have the potential to get online-style analytics about real-world shopping mdash everything from dwell time and repeat visits to eye tracking is on the cards much of it without explicit consent Consumers arenrsquot ldquogivingrdquo data mdash information about their moments of interaction with retailers is simply being captured correlated and some of it analysed to generate meaning
Consumers arenrsquot yet widely aware of how much this kind of data collection is happening particularly in the physical stores but when they do find out the backlash can be enormous
US retailer Nordstrom discontinued its in-store Wi-Fi surveillance in July 2013 after negative coverage32 the City of London has banned ldquosmart binsrdquo that tracked usersrsquo smartphones for advertising33 and camera-equipped mannequins have been branded as ldquocreepyrdquo for ldquospyingrdquo on shoppers mdash and may even be illegal34
How willing are you to share the following information with retailers in order to have a more personalised shopping experience
1 2 3 4 5
26
15
14
1616
21
1618
22
1722
24
2119
2527
2931
35
65 and over
46ndash64
34ndash45
18ndash33
13
Email collected atpoint of sale
Information tracked by loyalty number
Cookies placed onyour computer
Phone number collected at point of sale
Your location tracked by geolocation services
Figure 19
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
28 GETTING PERSONAL WITH SHOPPERS
In November 2013 Tesco announced that it was rolling out a targeted advertising solution in 450 petrol stations using cameras to identify shoppersrsquo age and gender as they queued Tesco was careful to emphasise that the solution would not store any data and that it would enhance the customer experience35
The response to a potential privacy backlash is not to stop collecting or using data mdash retailers have proven its value in segmentation marketing campaigns and the like for more than 20 years In the week after Tesco launched Clubcard across the UK in the mid-nineties it outperformed the industry by 1036
Forward-thinking retailers are already using the latest big data and analytics capabilities in interesting and potentially hugely disruptive ways to advance their competitive edge and the value they offer customers For instance Morrisons has used big data about consumer journey patterns to increase footfall to local stores by 15037 in a project it calls ldquoSmart Stepsrdquo And TopShop has worked with Google and Facebook on digital fashion shows that gather huge amounts of information about buyersrsquo behaviours and preferences38
Privacy from day one
So data is hugely valuable yet consumers are concerned How can you resolve this tension What you need to do is make data privacy a core part of your data decisions Be upfront about security privacy and ethics and eventually consumers will catch up and become more comfortable with treating their data as a portable asset in a ldquoGive to Getrdquo mode
Reengineering around data
Thatrsquos not to say that privacy (and the legal protections that will grow up around it) is the only data pitfall mdash far from it Therersquos a significant challenge in getting data from ecommerce partners payment companies mobile operators in-store systems warehouse and supply chain systems (including those of partners) CRM plus social media and other public sources such as weather and economic indicators and getting them all normalised integrated and delivered as actionable insights to the decision-makers that need them in real time Such system integration is fundamental to a true omnichannel single view of the customer and to benefiting from the halo of data that surrounds all your customers Yet itrsquos potentially expensive and difficult to execute Donrsquot underestimate the challenge or the consequences
ldquoBy 2017 80 of consumers will collect track and barter their personal data for cost savings convenience and customisationhellip the escalation of consumer awareness of data collection practices has set the stage for offering consumers more control over the disposition of personal data mdash collected both online and offline As increasing demand and scarcity drives up the value of such data incentives grow to entice consumers to share it voluntarilyrdquo
Gartner39
Quick Take Find out more about how data
can transform your business at httpcognizat19EqaK5
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
The opportunity is nowUK retail is world-class However our research shows that the retail and consumer goods market is in transition after a difficult few years Consumers have clear likes and dislikes and are not as advanced in their behaviours and technology adoption as many vendors and commentators would suggest or hope All of our findings suggest that adoption of new retail initiatives is lagging mdash partly because consumers are still waiting for retailers to get the basics right and partly because it simply takes time for new technologies to move beyond the pilot and for consumers to get used to them
Today not every shopper is showrooming using mobile deals and experimenting with augmented reality But that doesnrsquot mean you can delay your technology initiatives Now itrsquos not enough to just offer the right product at the right price mdash thatrsquos just meeting basic expectations It is by providing more authentic convenient and personalised shopping experiences that will put you ahead of your competitors
And itrsquos technology that will transform the interactions you have with your customers at every touchpoint technology based on a single omnichannel almost omniscient view of your operations and your customer While consumer technology adoption and attitudes lag now is the opportunity for you to get ahead It will take time to work out issues mdash such as the optimum mix of channels the right user interfaces data capture analytics and extracting meaning mdash to make sure that the experience you offer meets your customersrsquo high standards and goes beyond the gimmicky
By being a first-mover in these technologies you gain a strong defensive position By the time your competitors try to imitate yoursquoll have already been through the teething troubles optimised your processes and engineered out costs
If you manage to do this yoursquoll not only be ready for the demand when it comes but actually be able to shape new expectations to fit your own business models and even have the opportunity to reshape the retail industry itself And therersquos no better way to lock out competitors and assure your long-term success
Find out moreTo discuss these findings and what they mean for your business get in touch with our retail experts Email infoUKcognizantcom
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
30 GETTING PERSONAL WITH SHOPPERS
References1 httpwwwbrcorgukbrc_stats_and_factsasp
2 httpwwwbrcorgukbrc_stats_and_factsasp
3 httpwwwtheguardiancombusiness2013nov14uk-retail-sales-high-street-data
4 httpwwwamazoncoukManagement-10-Words-Terry-Leahydp1847940897
5 httpwwwftcomcmss08f43e4b4-4adc-11e3-8c4c-00144feabdc0htmlaxzz2kcNfq7UQ
6 httpqzcom123247why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us
7 httpwwwwiredcomgadgetsmaccommentarycultofmac20060370512currentPage=all
8 httpwwwunevenlydistributedcomarticledetailstesco-looking-to-augment-your-reality-legallyUl0BD2RDufQ
9 httpwwwthegrocercoukcompaniessupermarketstwo-thirds-of-shoppers-claim-they-hate-using-self-service-checkouts229835article
10 httpwwwbizreportcom201308ill-informed-store-staff-lie-to-customers-or-hide-in-storehtml
11 httpwwwunevenlydistributedcomarticledetailssuits-youUl0A62RDufQ
12 httpwwwgizmagcomikea-augmented-reality-catalog-app28703
13 httpwwwforbescomsitesrakeshsharma20131004staples-office-depot-and-3d-printing
14 httpwwwtheguardiancombusiness2013sep24ebay-argos-click-and-collect-service
15 httpwwwretail-weekcomcompanieshouse-of-fraserretail-week-live-house-of-fraser-on-the-hunt-for-more-click-and-collect-only-stores5047347article
16 httpinternetretailingnet201309house-of-fraser-trials-virtual-queue-for-its-buy-collect-service
17 httpwwwdailymailcouknewsarticle-2460012Self-service-check-outs-driving-customers-awayhtml
18 httpretail-innovationcomuniqlos-magic-mirror
19 httpguidedcocomtapestry
20 httpwwwessentialretailcomnewsarticle5278c02223bef-december-e-tail-spend-to-surpass-C2A310bn-despite-retail-website-problems
21 httpwwweconomistcomnewsbusiness21588087-why-burberrys-boss-perfect-fit-apple-catwalk-credentials
22 httpwwwtelegraphcoukfinancepersonalfinanceconsumertips10320914How-in-store-supermarket-shoppers-subsidise-those-onlinehtml
23 httpwwwretail-weekcompeopleanalysis-how-are-etailers-investing-and-innovating-to-rip-down-barriers-to-online-shopping5054318article
24 httpwwwtelegraphcoukfinancenewsbysectorretailandconsumer10434370Tablets-and-smartphones-have-changed-Christmas-shopping-foreverhtml
25 httpclickaccenturecomarticlekeeping-multichannel-consumerc=glbbtwt_10000972ampn=smc_0713AccentureClicksf18966481
26 httpbusinesstimecom20131016look-out-amazon-more-shoppers-browse-online-then-purchase-in-storessf18746979=1
27 httpomni-channelretailingcomitemphpnews_id=7299
28 httpthenextwebcomapps20131022ebays-new-features-look-find-happy-middle-etsy-amazon-shopping-experiencel
29 httpwwwdezeencom20120924online-retailer-made-com-launches-physical-showroom
30 httpwwwbbccouknewsbusiness-22404652
31 httpwwwbbccouknewsbusiness-22404652
32 httpwwwnytimescom20130715businessattention-shopper-stores-are-tracking-your-cellhtml
33 httpwwwbbccouknewstechnology-23665490
34 httpnewscnetcom8301-17938_105-57553272-1no-dummy-this-mannequin-is-spying-on-you
35 httpwwwmarketingmagazinecoukarticle1219303tesco-scan-customers-faces-ad-targeting-scheme
36 httpwwwbbccouknewsmagazine-23988795
37 httpblogdigitaltelefonicacompress-release=smart-steps-morrisons
38 httpadagecomarticlecmo-interviewstopshop-raises-digital-bar-fashion-world240100
39 httpwwwgartnercomnewsroomid2603215
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
Cognizant (NASDAQ CTSH) is a leading provider of information technology consulting and business process outsourcing services dedicated to helping the worldrsquos leading companies build stronger businesses
Headquartered in Teaneck New Jersey (US) Cognizant combines a passion for client satisfaction technology innovation deep industry and business process expertise and a global collaborative workforce that embodies the future of work
With over 50 delivery centers worldwide and approximately 166400 employees (as of September 30 2013) Cognizant is a member of the NASDAQ-100 the SampP 500 the Forbes Global 2000 and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world
Visit us online at wwwcognizantcom or follow us on Twitter Cognizant
About Cognizant
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone +44 207 297 7600
infoUKcognizantcom
copy Copyright 2013 Cognizant All rights reserved No part of this document may be reproduced stored in a retrieval system transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the express written permission from Cognizant The information contained herein is subject to change without notice All other trademarks mentioned here are the property of their respective owners