The Future of Retail: Recasting the Retail Store in Today's Omni-channel World

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  • 1. 1Retailer Seminar: Optimize Your Profit andProductivity in the Shopping Center EnvironmentOctober 23 24, 2014 University of Florida, Orlando CampusDEBORAH WEINSWIGExecutive Director-Head, Global Retail Research and IntelligenceFung Business Intelligence Centredeborahweinswig@fung1937.com 646.839.7017www.deborahweinswigresearch.com

2. 2The Issues Foot traffic:-3.6% YoY in U.S. (Sept.) U.S. Q2 e-commerce sales:+15.7% YoY (June, estimates) Thinking about Holiday 2014,just remember Holiday trafficin 2013 was -14.6% YoY Worldwide smartphone sales isexpected to grow 11.5% CAGRfrom 2014 2018 M-commerce exploding: 1/3 ofHoliday 2013 on mobile, upfrom 20% in 2012; but socialcommerce did NOT as it wasflat in 2013 at 2% 3. 3Physical Store Traffic is FallingSales Traffic Trans. Conv. %Return ATV SPS(% points) (% points)September -2.4% -3.6% -3.6% 0.4% -1.1% 1.4% 1.5%August -4.0% -7.9% -5.9% 0.4% -1.0% 2.0% 4.2%July -4.5% -7.8% -9.5% -0.05% -1.1% 6.7% 3.5%June -5.8% -10.8% -12.0% -0.1% -0.8% 7.6% 5.5%May -5.7% -8.0% -11.6% -0.2% -0.6% 7.1% 2.6%Source: RetailNext, Comprehensive In-Store Analytics 4. 4Conquering the Omni-channel Arena Retailers want a "single customerinteraction platform" but havealmost no idea how to get there Creating a single brand identityacross channels is the mostimportant goals for retailers Retailers should designate asingle owner of the customerexperience journey 5. 5The Future of Retail Digital information is influencing more than 50% of ourpurchases Retailers can create value by integrating retail channelswith social media, online, and mobile channels Omni-channel shoppers spend 50% more than singlechannel shoppers O2O online driving offline transactions 6. 6Big Trends Changing RetailMarketing Today Human connections are the only real metric for buildinginstitutional trust Better storytelling is the secret weapon for when productsare easily replicated The best value from digital tactics comes by educatinginstead of trying to have a "dialogue" 7. 7The Future of Retail Marketing 77% of consumers prefer email for permission-basedpromotional messaging 39% of retailers used in-store signage to convertcustomers to digital 44% of retailers do email acquisition at point-of-purchase 8. 8Recasting the Retail Store in Today'sOmni-channel World The majority of consumer shopping time is still spentin store at 61% per AT Kearney Consumers spend more money when shopping inbrick-and-mortar stores There are multiple ways to research, verify, andpurchase products 9. 9Physical Stores Maintain Their Importance 10. 10Converting Online Browsers to Buyers 11. 11What is Cyber Crime? Crime committed using acomputer and the internet tosteal a persons identity orillegal imports or maliciousprograms Cybercrime is nothing butwhere the computer used asan object or subject of crime 12. 12Types of Cyber CrimeTypes of Cyber attacks, by percentage (source- FBI)Financial fraud: 11%Sabotage of data/networks: 17%Theft of proprietary information: 20%System penetration from the outside: 25%Denial of service: 27%Unauthorized access by insiders: 71%Employee abuse of internet privileges: 79%Viruses: 85% 13. 13Cyber Security Cyber security will defend usfrom critical attacks It helps us to browse the safewebsite Internet security process all theincoming and outgoing data onour computer 14. 14How Do Retailers CompeteUS Customer Satisfaction Index 20131.0%9.2%9.9%5.6%12.0%10.0%8.0%6.0%4.0%2.0%0.0%Amazon Kohl's Macy's WalmartCOMPANY SCOREAmazon 88Nordstrom 83Kohls 81Dollar Central 80JC Penney 79Target 77Macys 76Walmart 71FY 13 (ended January 2014) EBIT MarginsFY14 P/E 122.0X 13.6X 13.0X 15.2XFY15 P/E 67.3X 12.3X 11.3X 14.3XAs of Oct. 22, 2004Source: SPCapitalIQ 15. 15Communication App Personalization Engine Making Shopping Fun Again Driving Traffic to the Stores Ability to offer Inspiration Forming a Community Inexpensive Marketing and Communication Tool 16. 16Q & ADEBORAH WEINSWIGExecutive Director-Head, Global Retail Research and IntelligenceFung Business Intelligence Centredeborahweinswig@fung1937.com 646.839.7017www.deborahweinswigresearch.com