Cedric Foray, managing partner of our Paris office and our top expert in Distribution was in Lisbon in the Mobile Forum Portugal 2013, organized by APDC, to share his vision regarding the main distribution trends and their connection to the digital arena.

1. International Management Consulting
Is there any future for physical distribution ?
July 3rd 2013
Cédric Foray +33 6 70 77 28 79
Mobile Forum Portugal 2013

2. 2© 2013
Greenwich Consulting is a top 10 international management consultancy with
a sector-based approach, leveraging clients growth
Thanks to this differentiation, Greenwich Consulting is a unique success story in
Europe, with a 35% CAGR in revenue over the last 10 years
Key differentiation aspects
Our focus allows us deep
industry insights and a precise
understanding of the challenges
ahead
Sector-based approach
Key differentiation aspects
Our focus and proximity with our
clients enable us to deliver
actionable insights for value
creation
Strategy into actionStrategy into actionInternational Footprint
We have experience and
credentials in more than 80
markets, more than 120 clients
and a global perspective
International Footprint
Telecommunications
Energy
Financial Services
Media

3. 3© 2013
Greenwich Consulting has conducted a prospective cross-sector study on
the evolution of physical distribution
Methodology Objectives of the study
• How will digital impact
distribution further?
• What will be the salesperson’s
role in store (assistance, advice,
sales, etc.)?
• Which client actions will be
prominent in stores?
• Which client actions will be
deported on other channels like
the web?
• Which positioning of the
distribution network by 2020?
• What are the associated
concepts?
• How many points of sales by
2020?
• Which technologies in your POS
to support/ accompany clients?
• Which interactions and
management rules between the
web and physical stores?
• Which key customer journeys?
Key questions
• Interviews of 20 large groups
in different sectors:
- Telecommunications
- Banking
- Optical
- Automotive
- Retail
- Shopping centers
- Design agencies
• Country scope:
- France
- Germany
- Northern America
• Identification of a common
vision of distribution market
trends and which future
outline by 2020
• Collect the strategic areas of
development of the
distribution in 2020, including
the following topics:
- Digitalization of the POS
- Point-of-sales (POS)
objectives
- Role in the client relationship
- Size and capillarity of the
physical distribution network
• Go beyond sectorial trends
and find common
perspectives shared by
different actors of distribution
with the 2020 horizon

4. 4© 2013
4 key trends will make traditional distribution evolve towards the 2020
horizon
Taking into consideration
the evolution of client
behavior and expectations,
the POS will become
digital and distribution
will become
Omni-channel
1
2
3 4

5. 5© 2013
What has changed in the last 8 years?
Source(s) : AP, NBC News, 2013

6. 6© 2013
How customers judge a successful customer experience? New reference of
excellence, induced by the Digital
Personalization
The offers that suit me
Autonomy
I drive the level of support that I want
Consistency of the points of contact
My interaction with the brand (commercial, services) make
SENSE in cross-channel, multi-channel, inter-channel,…
Multi-screens
I can find my services in each one of my screens
Socialization
What the brand says to me isn't enough
The unpredictable
Omni-channel
The augmented meeting
The benevolent Big Data
The new client expectations Impacts for Companies

7. 7© 2013
The development of Showrooming accentuates the threat of e-commerce
towards physical distribution
18% 17%
24%
5%
45%
72%
OtherEasier
to order
online
Prefers
home
deliveries
than
bringing
Out of
stock in
physical
store
To see the
products
before
purchasing
online
Better
prices
online
Price difference and product testing are the
main motivations for Showroomers1
• Flexibility and convenience
issues in relation to consumer
wishes
• Issue of capillarity and strategy
of the distribution network
Nearly half of customers have already
experienced Showrooming
40%43%
7%
Use their
Smartphones in stores
to compare prices
Have already
purchased a
product online
after having tested
in a physical store
Declaring themselves
as Showroomers
Casual
Showroomers
US consumers that answered “Yes” to the statements,
(% within a representative panel of consumers in 2012)
Regular and
convinced
Showroomers
Showrooming is defined by a visit from a consumer to the physical POS to collect product information (price, fitting,
counseling), followed by online shopping in order to find the lowest price
(1) % of consumers who already tested Showroomin
Sources : Access Panel LaSer from L’Echangeur, Nielsen, Harris Interactive, comScore

8. 8© 2013
The digitalization of POS should be part of an overall strategic approach to
choose the most relevant and useful levers
Different levers used in the
process of making
digitalization reflected as
useful and ergonomic
• « Audi City » is a concept of de
digital auto dealer that offers
clients the opportunity to choose
and customize their vehicle in an
interactive touch screen
Interactive screens
• Paypal has created physical
solutions of QRCode payment
• Tesco proposes in South Corea to
do shopping in the metro stations
via QRCode panels
Usage of QRCodes
• Apple offers a self-checkout in its
Apple Stores : scan of a code bar
with an iPhone and direct
payment with the iTunes account
Self service and
simplified payment
• Auchan has integrated into its
mobile apps geo-targeted
promotions geo (geo-referencing)
addressed to users closest to a
given supermarket
Brand loyalty
• Some Grosbill stores enable
ordering and paying the
purchases on interactive kiosks
with direct access to the online
store
Extensions of
product ranges
• Vodafone UK installed in its stores
interactive kiosks allowing
customers to do simple customer
care operations
Vending machines and kiosks

9. 9© 2013
The success of “Audi City” in London illustrates the need to propose a
digital consistent experience between the store and the web
The interior of “Audi City” is a beautiful place with 4 wide-screens, 4 tactile interactive tables and private rooms
Each table is
disposed in front of
the wide screen
which shows
instantly a 3D
model of the
personalized car
that visitor is
“creating”. They
can also show
videos of car
models.
All the material for customization of the vehicle are available in samples so
that the clients can make an informed decision
Customers leave the store with an Audi USB key
containing the project they created , in order to continue
their buying experience at home via the web channel

10. 10© 2013
POS Digitalization answers 4 major issues
Inform consumers about the products they are interested in
even if not shown in the catalogue or shelf
1
Encourage consumers to purchase independently of the channel used to finalize the sale2
Enhance the value proposition of the store and provide immersive experiences
around the product and the brand
3
Facilitate the salesperson access to customer data and trace the customer journey, via dedicated
tools in the store, to simplify the buying process and make them live an unique experience
4

11. 11© 2013
The Omni-channel distribution offers an identical and homogenous
experience to the client in all channels
Approach in silos
• Same process and same message in
independent channels
• Each service request has to start,
proceed and finish in the same
channel
• No opportunity to resume process
on other channels (no references in
other channels)
Channel Management
Multi-Channel
Integrated approach
• Consumers live the same
experience through all the
channels
• All channels are equivalent
offering the same information
and service levels and no
discrimination is made between
them.
• Consumer can switch channel at
any moment of his purchase
process, based on his
convenience (smooth and
seamless experience)
Omni-Channel
CALL
CENTER
STORE INTERNET MOBILE
Cross-Channel
Connected approach
• Consumers have an experience
within interacting channels
• Consumer is encouraged to
navigate between channels via the
offer of other options(e.g. : click-to-
call)
• It is a tailored approach aiming to
target the most accurate consumer
segments for each channel
• Example Online buying, in-store
delivery
CALL
CENTER
STORE INTERNET MOBILESTORE INTERNET CALL
CENTER
MOBILE

12. 12© 2013
The Kooples proposes to reserve items in the preferred store from the
website and then to live an unique in-store experience
Possibility to book the products directly in a store from the website of The Kooples
Stock visibility of each store in lists or maps via geo- referencing of the consumer
Monitoring the booking process through SMS
Each reservation is valid for 2 business days
When the consumer arrives in store to withdraw the order, the
seller invites him to try the clothes and offers complementary
products

13. 13© 2013
Second trend: Hyper-personalization at the center of an Omni-channel
Distribution
Taking into consideration
the evolution of client
behavior and expectations,
the POS will become
digital and distribution
will become
Omni-channel
Hyper-personalization
will be developed in the
center of Omni-channel
placing companies closer to
client needs
1
2
3 4

14. 14© 2013
In order to ensure clients have a unique in-store experience, retailers
will develop customized offers and hyper-personalized interactions
The hyper-personalization induces the transition from a logic of "knowledge of my clients"
to the "knowledge of each of my clients“, where the overall vision
is taken over by a very refined granular level of the individual
Customizing the final
product or service
Customizing
communication
with the client
Customizing the
content pushed
after-sales
Customizing the
client relationship
Customization
along all the
client lifecycle
21
4 3

15. 15© 2013
“My Sephora” enables salespersons to identify customers with their
loyalty card to tailor their recommendations and product suggestions
• « My Sephora » is a cross-channel digital tool available to
Sephora’s sales representatives
• 8 000 000 online client profiles clients can be
accessed online through ipod touch by sales reps to
identify customers with a loyalty card and access their
purchase history
• The salesperson can propose new products based on
cloud-powered recommendations and chooser whether the
clients likes the product or not in order to update the profile
• The experience has been deployed in over 200 stores in
France, making an average upsell increase of 20% to
30% on clients bills

16. 16© 2013
Third trend: POS reinvention in order to achieve a complete brand experience
with consumers
Taking into consideration
the evolution of client
behavior and expectations,
the POS will become
digital and distribution
will become
Omni-channel
Hyper-personalization
will be developed in the
center of Omni-channel
placing companies closer to
client needs
POS will be reinvented in
order to accomplish a true
brand experience with
consumers
1
2
3 4

17. 17© 2013
Some companies have already reinvented their physical store concept
Stores as entertainment areas Stores as advice and services areas Stores as demonstration areas
Bass Pro transformed its stores into
« experience centers » where
clients can eat and train for
climbing and shooting
IKEA Customers can create their
kitchen online by themselves and
then get help and advice in store
using their project reference
Apple stores enable customers to
access freely to the products and
try them

18. 18© 2013
Beyond the transformation of POS concepts, sales force profiles and
financing of physical spaces should be rethought
• New profiles and competencies will be required from sales forces to be able to demo
products, communicate their passion, make customers live a unique in-store experience
- The commissioning model must be rethought to take these new roles into account as well
as Omni-channel client journeys
• The physical sales area must also be rethought as an opportunity to address customer
relationship and to provide brands with communication space
- A larger part of the communication and the customer relationship budgets should be
directed to stores and integrated into their revenues
- A better balance should be reached with brands to finance physical vitrines of their
products
Salespersons
profiles
Financing of
physical stores

19. 19© 2013
Forth trend: integration of a new distribution network structure to create a
unique experience in physical stores
Taking into consideration
the evolution of client
behavior and expectations,
the POS will become
digital and distribution
will become
Omni-channel
Hyper-personalization
will be developed in the
center of omni-channel
placing companies closer to
client needs
POS will be reinvented in
order to accomplish a true
brand experience with
consumers
A new structure for the
distribution network and
physical stores will be
put in place, creating a
unique POS experience
1
2
3 4

20. 20© 2013
Different types of physical spaces will coexist to meet the various
customer needs
Sources : Analysis Greenwich Consulting
+
–Point of Sales area
Relay points
Proximity
stores
Large
stores
Experience
Centers &
Flagships
Stores
Services
Customer’s
perception
of brand
• Product pick-
up and deposit
• Product Sale
• Product pick-
up and deposit
• Service Center
• Product Sale
• Product pick-
up and deposit
• Experience
creation
• Product
demonstration
A brand that
generates
excitement
A brand that
takes care of its
customers
A brand close to
its customers
A brand that
makes its
customers
life easier
Pop-up and
Virtual Stores
Dynamic brand
that is close to
its customers
• Very limited
range of
products

21. 21© 2013
Retail business model will evolve
Omni-channel
development
New store concepts
and new network
capilarity
The value of catchment
areas will be reviewed
Physical distribution’s
role will need to be
reinforced in the brand’s
communication strategies
• Pressure on revenues generated per square
meter in physical stores
• Pressure on lease costs
• Opportunity to regain leverage opportunities
on margins
• Value and develop further the brand’s
exposure
• Drive customer awareness on shop
windows in the long run
Increasing in-store
client relationship
management for
certain brands
Increased objectives of
client relationship in-store
vs. pure sales objectives
• More assistance-oriented and advice-giving
persons
• New and adapted models of remuneration
• Uncontrolled distribution models (franchise,
associate) will be put into question

22. 22© 2013
Our three main conclusions from this study
Physical stores will keep a prominent place in the distribution for brands, in order to show and
demo their products as well as have customer live unique experiences with the brands
1
Digitalization is an opportunity for brands in terms of product promotion and building a closer
relationship with customers in physical stores
2
The business model of physical stores must be rethought
to face the increasing risk of decreasing sales in POS
3

23. 23© 2013
Greenwich Consulting supports distribution players on 8 key issues
Customer behavioural
observatory
Analysis of customer traffic
among channels and
management optimization
Customer traffic generation
Driving customer until the target
channels (Marketing, concepts stores,
com.)
Channel Excellence
Platform Reorganization, Process and
Customer journeys optimization
Commercial Approach
Commercial Approach consolidation on
the most effective channel(s)
Business Model Optimization
Business Model Optimization and geo-
marketing, Contract mix optimization
Digital Strategy
Introduction of digital in points
of sales and into customer
journeys
Global distribution strategies Operational impact
1
2
Network Strategy
Definition of target channel
mix and capillarity of the
network
Omni-channel Strategy
3
5
6
7
8
Business Model
Business Model Evolution
(catchment area, client
relationship and sale,
communication)
4

24. Your personal contacts:
International Management Consulting
Cedric Foray – Managing Partner Paris office
Mobile: +33 6 70 77 28 79
e-mail: cedric.foray@greenwich-consulting.com
Didier Collignon – Managing Partner Lisbon office
Mobile: 351938123693
e-mail: didier.collignon@greenwich-consulting.com
Greenwich Consulting | Lisbon
Rua Castilho 44 – 10º, 1250-071 Lisboa
Tel/Fax : + 351 21 390 92 20 / + 351 21 390 92 22
www.greenwich-consulting.com
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