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Me-Commerce and the Future of Retail

DO STORES GET ME? "Me-Commerce" and the Future of Retail Retail success today is all about developing the tech, tools, and talent to be relevant to the individual consumer. TRENDS ROCKING THE RETAIL BOAT Under Pressure THEN 33% NOW amazon Walmart The amount Amazon is 15- 20% forcing retailers to cut from their The amount WalMart drove other retailers costs base today. to cut from their cost base. U Demographic shifts HISPANICS BABY BOOMERS will nearly double their retail spending are a source of big spending growth across several major categories, 2x in the next ten years including food MILLENNIALS 92% will account for one third of all retail spending and housewares 73% 1/3 by 2020 Consumer Tech Revolution 8% of all retail sales come from e-commerce channels of all e-commerce sales or 1.2% of all retail sales 15 are estimated to come via mobile devices. The New "Four Ps" D4 of Customer Behavior Pervasive 21% of all tablet use "Let me shop wherever I am." occurs in bed. Participatory 50% of users have created content online. "I have a voice now and I am going to use it." 35° of online buyers Personalized personal information to receive relevant coupons "Make it relevant to me." Prescriptive 44% of shoppers use their smartphones to look for the best "I'm in control of the price while in-store shopping process." MAKING THE JUMP TO “ME* Decode Each Customer Decision Journey 1018188 O. Evaluation 38% of shoppers have compared products online Consideration EUALUATE Purchase 50% 53% of shoppers search online of all retail purchases are influenced by digital channels for a product CONSIDER BUY BОЛD Loyalty ADVOCATE 23 EXPERIENCE Post-purchase experience 66% Each US household belongs to an average of 23 loyalty programs of consumers (Skin care) continue to research brand choice after purchase Bonding 25-45% telecoms customers go to stores after purchase Make Tech Work Harder ANALYZE: shopping behavior to provide tailored product 5-10% shopping volume increase recommendations % reduction in fixed and USE INSIGHTS: on customer preferences to improve supplier negotiations 1-2% unit costs point OPTIMIZE: pricing and promo scheduling based on multiple indicators margin +/- increase Google/Shopper sciences, Zero moment of macro study, Apil 2011; www.google.com/think/insights; N = 5,003 Find the Talent Great companies get creative about finding talent. HIRE IT: ACQUIRE IT: GET CLOSE TO IT: l'liT Massachusetts I'liT Massachusetts 85% Institute of Institute of Technology Technology Stanford University HARVARD UNIVERSITY of acquisitions by Top 5 players Staples built an e-commerce innovation center in UNIVERSITY OF OXFORD are focused A E UNIVERSITY OF CAMBRIDGE Cambridge, MA., (near Harvard and MIT) on IT THE “ME" PAY-FF ll 10% The increase in marketing ROI EBITDA growth rates for retailers who focus retailers see when they personalize ad campaigns and offerings based on purchase history. on customer analytics vs their main competitors: Grocery retailers: NETFLIX 75% of all content viewed 11% O 3% Vs personalized recommendations. Big box retailers: 10% O 2% of revenues driven by GILT 50% insights into customer preferences to Vs create specialized sites. McKinsey&Company McKinsey on Marketing & Sales @McK_MktgSales McKinseyonMarketingandSales.com SOURCE: McKinsey analysis, McKinsey iConsumer research, Euromonitor, Forrester, Kantar, Moody's, eMarketer, US Bureau of Economic Analysis, The Bureau of Labor Statistics, The Census Bureau, Marketing Prof, Google/Shopper Sciences %24 %24

Me-Commerce and the Future of Retail

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Retail success today is all about developing the tech, tools, and talent to be relevant to the individual consumer.

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