UNDERSTANDING HOW ONLINE BEHAVIOUR INFLUENCES OFFLINE BEHAVIOUR KYLIE FUENTES HEAD OF DIGITAL PRODUCT MANAGEMENT, WESTFIELD

RETAIL: REDEFINED Today’s consumer is forcing retailers to rethink everything. But, making sense of it all remains elusive to most… even the biggest & the best on the global scale.

THE DRIVING FORCES BEHIND THE RETAIL REVOLUTION

TECHNOLOGY ADVANCEMENTS & ADOPTION The change of pace is faster than most business can keep up, but the customer is left wanting

24/7 ACCESS

SOURCING

SPEED

ABUDNANCE

COMMUNITY

TRANSPARENCY

INTERACTION

CONTROL

NEW SHOPPER EXPECTATIONS HAVE BEEN FORMED Shoppers are bringing online behaviour into store, changing their assumptions about what makes great retail delivery

SOURCE: Cisco Business Consulting, Retail Group. May 2011

CONNECTED SHOPPERS: INFLUENCE & POWER Word of mouth is stronger than ever, but now it’s fuelled by social platforms that give the consumer huge reach potential. More influential than any brand message or advert.

MORE SALES CHANNELS THAN EVER In-store, e-commerce, m-commerce, social commerce, subscription services, digital downloads… Consumers have more choice, but the offering is usually fragmented.

Adapted from Forrester Research, 2012

4%

1%

45%

50%

Online Only Store to Online (showrooming) Online to Store Store Only

OMNICHANNEL: IT’S INFLUENCE & PURCHASE Most retailers are measure channel performance in silos. This underplays their value, not considering the influence they have on driving sales across the total ecosystem. And the big game in town is still the physical store.

AU RETAIL SALES DISTRIBUTION BY CHANNEL

IMPLICATIONS ON THE SHOPPER JOURNEY

Discover Search & Find

Buy

Acquire

Use

Relationship

THE NEW SHOPPER JOURNEY Mindset: I don’t know what I’m

looking for, but want to understand my options

Needs: Inspire me & show me what’s available

Mindset: I know what I want, but am looking for the best solution for

my needs

Needs: Give me control & comfort that I’m making the right choice

Mindset: I know what I want & where I want to get it, but I want an easy

purchase experience

Needs: Easy, fast & range of payment options. Trusted & secure. Memorable store experience & customer service

Mindset: I’ve bought my goods, but I want convenient access to my

purchase Needs: Hassle free fulfillment,

ability to track purchases, pick up, delivery or hold. Accessibility

Mindset: The product I’ve purchased needs to meet (or

exceed) my expectations. I want to validate I made the right choice

Needs: Product support, value added extras, social sharing &

amplification

Mindset: Make my next time better.

Needs: Know my needs & personalise the experience to save me time. Give

me rewards for loyalty.

17.9%

68.4%

9.8%

3.9%

0.0%

9.3%

41.8% 38.3%

7.2%

3.4%

1 2 3 4 5

2002

2012

Source: Conlumino

Channels

% of Shoppers

MULTIPLE DEVICES FUEL THE PATH TO PURCHASE Your customers are exposed to a number of your channels. The challenge is providing a consistent brand experience but ensuring relevant content & utility to suit the channel.

NUMBER OF CHANNELS USED DURING

SHOPPING FOR FASHION

Source: Conlumino

52

23

5 3

89

16

4 2

Discovery Search Purchase Acquire

2002

2012

Duration of Purchase Time Spent on Process Purchasing

0.5 days 83 minutes

3.4 days 111 minutes

Minutes

Customer Experience Stage

AVERAGE DURATION & LENGTH OF PURCHASE PROCESS: DISCRETIONARY PRODUCT

EXTENDED DISCOVERY, FASTER SEARCH By the time the customer has reached the ‘search’ phase, they’re well informed & have considered their alternatives. Product search needs to be fast, intuitive & as simple as possible. In-store & online.

FOR RETAILERS, MOBILE IS THE LYNCHPIN THAT BRINGS IT ALL TOGETHER

MOBILE USAGE IS SKYROCKETING Australian shoppers have adopted mobile technologies at a higher rate than most of their global counterparts. YOY growth is still booming.

Source: Our Mobile Planet Australia, Think With Google 2012

Source: Our Mobile Planet Australia, Think With Google 2012

IMPACT ON RETAIL IS HUGE Australian smartphone users are actively searching for information about products & services. M-commerce conversion is still relatively low, its main function is to facilitate search & drive conversion to offline or desktop.

Australian Smartphone Users: What type of activity do you search for on your phone?

MOBILE IS LOCAL Mobile search is anchored in location. Omni Channel retailers are perfectly positioned to take advantage of this opportunity, using mobile to drive in-store visitation.

Source: Our Mobile Planet Australia, Think With Google 2012

TABLET PROVIDES DIFFERENT UTILITY Tablet combines the benefits of deeper richer experiences found on desktop with the portability of mobile, creating powerful opportunities for retailers. In-store & out of store.

Source: Mary Meeker, Internet Trends 2012

UNLEASHING THE POTENTIAL WITH DATA

SINGLE VIEW OF SHOPPER The holy grail of Omni Channel, it promises to unlock huge benefits for retailers. Both superior shopper insights to fuel business strategy & greater ROI for marketing investments due to better targeting.

RELATIONSHIP: EXCHANGE OF VALUE Not all shoppers want a relationship & not all retailers deserve one. Provide value for the shopper in exchange for their data & make sure they understand it. There’s a fine line between relevant messaging & invasion of space. Transparency & respect for the shopper is paramount

SHOPPER INSIGHTS & DATA APPLICATION Review the historical, aggregated data to form deeper shopper insights & fuel future business strategy. But just as importantly, integration into campaign management & content management platforms delivers real time, personalised shopper marketing capability, which drives greater ROI

Looking back & trying to predict the future

Moment of truth: Right message, right time, right channel

THINK BIG, BUT START SMALL Even the best of the best are grappling with how to sort & use their data set. But the ones who are most advanced have a few things in common.

• Platform first. A central, scalable data warehouse

• Aggregate sales, customer & location data around a unique ID. Big effort but big returns

• Data without intelligence is useless. Analytics integration into campaign management systems

• Make it easy for yourself. Use the same customer credentials across channels if possible

• Start with what you have. Implement retargeting or trigger based programs

• Test & Learn. Test & Learn. Test & Learn

GEOLOCATION: THE NEXT FRONTIER Location based data from mobile, WiFi & social will give retailers unprecedented ability to influence at the moment of truth. Beyond purchase data, it’s the most important lever.

Location contextual offers & content Location based services & utilities (including navigation) Retargeting from online browse & purchase behaviour Real time retargeting from showroom behaviour (while still in store!) Notifications to sales staff for high value customer visits Truly personalised in-store service In depth understanding of customer instore behaviour

SIX OBSERVATIONS FROM THOSE WHO

DO IT BETTER

1. REFRAME THE MEASURE OF SUCCESS Measure the performance of your ecosystem, not single channel revenue. Understand the value your online channels play in influencing your offline sales channels. Create KPI’s to support & instill this thinking into your organisation.

“For every $1 spent online influences $5.77 in store”

Terry Lundgren, CEO Macy’s, Apple

2. OPTIMISE YOUR MOBILE OFFERING Take advantage of your web traffic by optimising for mobile. You don’t need to take your whole web offering & mobilise it, but get your core information & location centric product search up and running.

Adapted from Forrester Research, 2012

3. LET THE CUSTOMER DECIDE Provide customers with the option to purchase in their channel of choice. Don’t force them to one or the other, but make sure you have a presence where & when they want it.

“Physical stores are still the primary way people acquire merchandise, and I think that will be true 50 years from now”

Ron Johnson, CEO J.C Penny ex SVP Retail Operations, Apple

4. NOT ALL DEVICES WERE CREATED EQUAL Shoppers use them in different ways along different stages of the path to purchase. Identify the role each device plays for your consumer, then create content & utility to suit. Everything everywhere is NOT the answer.

Discovery Tablet offers deeper, richer browsing experiences.

Broad Find & Search Desktop supports comprehensive search & product

comparisons

Local Find & Search Mobile is out of home & in-store

Location based search & navigation utilities

Buy

5. LEVERAGE THE STRENGTH OF YOUR ASSETS Converge the digital & physical experiences. Integrate across platforms to add value for your shoppers & play to the strength of your channels.

6. BE CLEAR ABOUT THE VALUE YOU PROVIDE If you’re not 100% sure what value you bring to your shoppers, you can’t expect them to know either. Don’t just venture into new influence or sales channels because you can, be clear about why you should.

IDENTIFYING SOME OF THE ROADBLOCKS

WAITING FOR ENLIGHTENMENT Many fall into the trap of wanting to have the perfect strategy, the final destination & the nirvana of technology at their disposal. The longer you wait, the bigger the missed opportunity. The key is to get in and try.

OVER-ENGINEERING YOUR DIGITAL CHANNELS It’s tempting to come up with feature sets that address every single possible thing that could be of benefit to your shopper. It’s MOST important you set your sights on the Minimum Viable Product that addresses the CORE needs perfectly.

DEFINING SUCCESS AFTERWARDS The key to getting your data & your channel strategy right is knowing what success looks like upfront. Often key components for data capture & channel measurement are tacked on as an afterthought. This usually leads to less accurate, more costly & more time consuming retrofits.

DROWNING IN DATA Data overload leads to poorer, not better decision making. Make sure you’ve got the capability to fuel your business by equipping the right people with the right information at the right time. Find time to turn data into insights. If you don’t, you’re not taking advantage of the opportunity

INFLUENCE & SALES CHANNELS: MEASURE THEM AS AN ECOSYSTEM

RIGHT CHANNEL, RIGHT EXPERIENCE THROUGH THE NEW SHOPPER JOURNEY

MOBILE MERGES ONLINE & OFFLINE: BUT MOST RETAILERS ARE BEHIND THE GAME

CREATE AN EXCHANGE OF VALUE WITH YOUR SHOPPERS TO BUILD RELATIONSHIP

BESIDES PURCHASE DATA, LOCATION DATA IS KING

DON’T WAIT FOR PERFECTION. GET IN & LEARN