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EURO RSCG WORLDWIDE




                             VOL 5 | 2009




the future of shopping
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the future of shopping | vol 5



 2   Introduction: 21st-Centur y Retail
 3   Four Imperatives for the Retail Brand of the Future
23   The Internet and the Rise of the Smart Shopper
The Future of Shopping
2




           “I am the world’s worst salesman; therefore, I must make it easy for people to buy.”
                                                                                                                                      –F.W. Woolworth (1852–1919)




→ INTRODUCTION: 21st-Century Retail
 Frank Winf ield Woolworth revolutionized retail in the 20th century, bringing goods out
 from behind the counter and into the open, where customers were free to inspect and
 touch the merchandise prior to purchase. His f ive-and-dime stores were the precursor
 to today’s big-box discounters, and, like Wal-Mart today, he was accused of driving local
 merchants out of business by undercutting prices.
                      By its 100th anniversary in 1979, Woolworth’s had                                          And there’s precious little room for missteps,
                      become the largest department store chain in the                                           especially in difficult economic times. It’s little
                      world. Fewer than 20 years later, in 1997, Woolworth’s                                     wonder, then, that the International Council of
                      department stores were no more (though chains                                              Shopping Centers estimates there will be 5,770
                      using the name continue to operate outside the                                             store closings in the U.S. alone in 2008, up 25
                      U.S.). Unable to compete with the new generation of                                        percent from 2007.
                      discount retailers, F.W. Woolworth’s company changed
                                                                                                                 This issue of Prosumer Report explores the future
                      its name to Venator Group and now survives as
                                                                                                                 of the retail category, with an emphasis on how
                      sporting-goods retailer Foot Locker, Inc. Woolworth’s
                                                                                                                 evolving customer demands and behaviors are
                      fall stands as a reminder of just how competitive the
                                                                                                                 changing the shopping experience. The report
                      retail category has become. There are many more
                                                                                                                 draws on findings from Euro RSCG Worldwide’s 2008
                      formats, more goods (about 180,000 new products a
                                                                                                                 The Future of Shopping study. The online survey
                      year), and more players. At the same time, retailers
                                                                                                                 was conducted by Market Probe International in
                      are facing increasingly demanding stakeholder
                                                                                                                 four markets: the United States (n=700), France
                      groups, ranging from everyday customers to NGOs
                                                                                                                 (n=700), the United Kingdom (n=700), and
                      and influential bloggers. They’re under constant
                                                                                                                 China1 (n=700). Prosumer breakouts are included
                      pressure to deliver innovative new products, services,
                                                                                                                 throughout the report as indicators of where the
                      environments, and experiences.
                                                                                                                 sector will be heading next.



                      1
                          Prosumers in the China sample were identified using an algorithm refined for that market. In addition, the Chinese sample in general should be
                          considered as representing the upper tiers of Chinese society rather than the mainstream, given that all respondents completed the survey online.
                          At present, China has an Internet penetration rate of approximately 16 percent, according to the China Internet Network Information Center;
                          that compares with rates of 69.7 percent in the United States, 55 percent in France, and 61 percent in the United Kingdom.
3   Four Imperatives for theRetail
    Brand of the Future
    Retail is a constantly evolving category, mutating in response to new ideas, pressures,
    technologies, and opportunities. Looking back over the centuries, one can see a
    progression that begins with basic survival and eventually morphs into something
    far more complex. The most primitive retail customers (and they still exist in every
    market) are concerned only about survival. Their focus: price and accessibility. Simply
    put, they look for the cheapest food they can buy at the nearest location. At the next
    stage, consumers focus on pleasure. In an environment of mass consumption, they
    want more than just low prices, and they’re making more purchases unrelated to basic
    needs (e.g., home furnishings, entertainment). These consumers value access to a
    variety of products and brands, and are looking for great deals with lots of extras.


          SURVIVAL              PLEASURE                          MISTRUST                    MINDFULNESS




                            E V O LV I N G A P P R O A C H E S TO C O N S U M P T I O N



    The next progression is marked by varying levels of                                   on economic circumstance:
    mistrust–typically coinciding with a period of soft                                   As finances become tighter, an individual
    growth and collective pessimism. Consumers are                                        may decide considerations other than price
    more informed and marketing savvy, and they begin                                     are less important. It’s essential, therefore,
    to question everything from brand promises and                                        to be cognizant of where individual consumers are
    corporate practices to excess consumption. They                                       along the spectrum at any given time, because that
    seek a sense of direction and control–to know that                                    will determine how to target –and serve – them most
    their purchases aren’t made blindly and without                                       effectively.
    real benefit. And, finally, many consumers are now
                                                                                          Taking into account these differing consumer
    reaching a stage of mindfulness, a point at which
                                                                                          attitudes and need states, The Future of Shopping
    they make the choice to become more responsible
                                                                                          has uncovered four actions retailers must take
    consumers. These more mindful shoppers prefer
                                                                                          to stand out and thrive in tomorrow’s ever more
    simplicity to excess and search for brand partners
                                                                                          competitive environment: They must engage
    that offer a sense of humanism, moral values, and
                                                                                          consumers, they must help consumers, they must
    authenticity. For them, shopping isn’t just about the
                                                                                          motivate consumers by creating stronger incentives
    goods; it’s also about the people who produce and
                                                                                          to purchase, and they must target consumers based
    sell the goods, and the impact one’s purchases have
                                                                                          on their individual priorities and preferences. Each
    on the broader world.
                                                                                          of these imperatives would seem to be common
    While it’s possible to identify large populations of                                  sense, but precious few retailers have managed to
    “survivors” in undeveloped markets and “mindfuls”                                     address one on a consistent basis, much less all four.
    in more mature markets, each type of consumer                                         This section of the report showcases retailers– and
    actually exists in every country. Moreover, any one                                   retail initiatives– that offer a glimpse of the best
    person may act according to any of these pillars                                      practices of the future.
    when making different consumption decisions. In
    one product category, an individual might be focused
    solely on price, while in another, he or she is looking
    for something more. This can also change depending
4   What’s a Prosumer?
    Prosumers are the most inf luential men and women within any
    market. Empowered by new technologies and improved access
    to information, they have tipped the scales of power away from
    manufacturers and retailers, and toward themselves. They are
    highly knowledgeable and demanding consumers who expect
    their brand partners to acknowledge their value and treat them
    accordingly. Prosumers typically make up 15 to 25 percent of any
    market. Euro RSCG Worldwide has made them an ongoing focus,
    because, beyond their own economic impact, prosumers influence
    the brand choices of others. Simply put, what prosumers are
    doing today, mainstream consumers are likely to be doing six
    to 18 months from now.

    KEY PROSUMER TRAITS

    » Embrace innovation–curious                      » Are marketing savvy and plugged
      to try new things, challenges,                    in to multiple media sources
      and experiences
                                                      » Demand top-notch customer service
    » Keen on new technology and gadgets                and access to information
    » Transport new attitudes, ideas,                 » Proactively seek to maximize control
      and behavior–they are “human media”               over their lives through information,
                                                        communication, and technology
    » Pursue timeless value
                                                      » Constantly seek information and
    » Recognize their value as consumers and            opinions; eager to share their views
      expect brand partners to do likewise              and experiences with others

    RETAIL CATEGORIES IN WHICH
    PROSUMERS YIELD MOST INFLUENCE*

    » Food and Beverage
    » Computers and Peripheral Equipment
    » Home Electronics
    » Health and Wellness
    » Travel Services
    » Beauty and Grooming


    * Based on responses of “among the first to try” and “my friends come to me for advice.”
5   Imperative 1: Engage
    In the past few years, engagement has emerged as one of the advertising
    industry’s favorite buzzwords. The idea, of course, is to get consumers who
    are beyond the “survival” stage more involved with brands – and even brand
    creation – rather than simply bombard them with brand messaging.
    In the retail sector, we’ve identified three primary means of engagement:
    1. Create experiences that engage consumers in the brand
    2. Provide opportunities for communication and connection
    3. Offer endless innovation



    The Retail Brand of the Future                         Ian Schrager’s Gramercy Park Hotel in
                                                           New York City provides conversational currency
    (RBoF) Of fers More Engaging                           by giving guests a key to the city’s only private
    Experiences                                            park, offering a unique experience, a sense of
                                                           elitism, and something to talk about upon their
    With so many choices available, mature                 return home. London’s Selfridges provides plenty
    consumers are gravitating toward retailers that        of cocktail-party fodder with its Wonder Room–a
    offer a fundamentally different experience or          place where shoppers can find such high-end
    little extras that elevate a mundane activity          purchases as a sip of Pétrus Bordeaux ($66), a
    into something more. Consider the difference           first edition of Sylvia Plath’s The Bell Jar, or a
    between picking up a bar of packaged soap at           handcrafted winged saddle from Hermès.
    a discount store and purchasing a freshly made
    and cut Figs and Leaves handmade soap at Lush.         Indulging the senses is another way to create
    Everything about the experience is different,          engaging experiences. In London, Tiffinbites
    from the sights and scents to the level of pleasure    uses aromas to turn lunchtime into a cultural
    derived. The former is an errand, while the latter     adventure. New York City’s Chop’t uses the sounds
    is an indulgence.                                      of simple kitchen tasks to draw diners in to the
                                                           beauty of making something fresh. Consumers
    There are all sorts of ways to create retail           also are being enticed with varying levels of visual
    experiences that engage and indulge. Single-           hypnotism, both inside and outside the store.
    focus retailers such as Apple Store and Ethel’s        Think: the displays at Dylan’s Candy Bar in New
    Chocolate Lounge offer plenty of scope to              York, the edible art created by Pierre Hermé in
    support and encourage connoisseurship and              Paris, and the architectural art that can be seen
    a deeper brand experience. On Paris’s Champs           in Apple’s flagship New York store and Selfridges’s
    Elysées, Heineken has created an immersive             Birmingham location.
    experience centered on beer in hopes of reaching
    a more sophisticated crowd than is generally           As prosumers gravitate toward more experiential
    found in sporting arenas and pubs. Culture Bière       shopping, a growing number of retailers are
    combines a sophisticated restaurant, three             turning their venues into living, breathing
    bars, a terrace, a boutique, and a gallery. In         lifestyle statements, reflecting the values of
    China, Beijing’s Lenovo Brand Experience Center        both brand and consumer. London’s Microzine
    provides an interactive experience that immerses       store features a constantly changing array of
    consumers in the brand, offering insights into         upscale fashion, art, furniture, and technology,
    the company and its technological achievements,        all geared toward the tastes (and aspirations)
    while also letting visitors get a taste of the         of the readership of such magazines as GQ and
    digital life in home and business settings.            Arena. And in France, SFR’s new store doesn’t just
                                                           sell mobile phones; it also contains a concert
    Starbucks was quick to recognize the value of          hall, a design-focused restaurant and lounge
    conversational currency. By providing a glimpse        with free Internet access, and the Fashion Room,
    of the people and processes behind its products,       containing trendy phone accessories.
    the retailer was able to turn coffee into a cultural
    adventure.
6   Retailer Websites Offer a Reliable Channel to Prosumers
    In each market surveyed, the vast majority of prosumers –
    and large percentages of mainstream consumers –already
    are engaged in communication with retailers online. They
    visit corporate websites to download coupons, sign up for
    newsletters and special offers, and enter sweepstakes. Every
    visit is an opportunity for the retailer to learn more about its
    customers and discover more compelling ways to keep them
    involved with the brand.


    How often do you do each               Indicate your involvement
    of the following?                      with each online activity
    FREQUENTLY/SOMET IMES                  DO IT NOW

    sign up to receive coupons or          request or download coupon
    other store promos via e-mail          or coupon code




    p: 88%   77%    82%        87%         p: 96%   78%    88%     80%
    0: 78%   66%    68%        71%         0: 86%   61%    74%     72%


    FREQUENTLY/SOMET IMES                  DO IT NOW


    sign up to receive info/news           subscribe to a retailer’s
    from a retailer or manufacturer        e-newsletter




    p: 77%   71%    82%        81%         p: 90%   89%    93%    91%
    0: 64%   56%    66%        67%         0: 77%   80%    75%    76%


    FREQUENTLY/SOMET IMES                  DO IT NOW


    go to a company’s website to arrange   enter an online sweepstakes
    for service on a product i own




    p: 52%   66%    43%        87%         p: 75%   93%    38%    68%
    0: 36%   45%    33%        67%         0: 70%   89%    33%    52%




    p: prosumers   o: others
7   The RBoF Brings People                                      The RBoF Keeps It Fresh
    Together                                                    Innovation is arguably this century’s most
                                                                important driver of business and brand growth–in
    Smart retailers understand brand engagement is
                                                                every category. In the retail sector, innovation
    all the more potent if it brings people together,
                                                                allows companies to develop entirely new
    creating dialogue and encouraging collaboration
                                                                business models (e.g., eBay, Netflix), to regain
    and communal action. It can be as simple as
                                                                or grow market share (e.g., Apple), and to get
    providing communal dining spaces, as the
                                                                noticed. It’s also an increasingly important
    Wagamama noodle-bar chain does in more than a
                                                                component of financial performance: According to
    dozen countries, or as involved as creating cause-
                                                                Boston Consulting Group, the top 20 percent of
    focused events, such as Avon’s annual Walk for
                                                                innovative companies deliver up to four times the
    Breast Cancer.
                                                                shareholder return of the bottom 20 percent.
    Taking a cue from Starbucks, more retailers are
                                                                Keeping it fresh at retail is what flash goods
    creating hangouts where customers can get
                                                                and pop-up stores are all about. By limiting the
    together around shared interests. Club Libby Lu
                                                                time most items stay in stores, apparel retailer
    (U.S.) provides a space for girls ages five to 12 to
                                                                Zara averages 17 store visits per customer a year,
    shop, socialize, and even hold birthday parties.
                                                                compared with an industry average of three to four.
    In New York, Nike and Foot Locker have teamed
                                                                Rather than follow the standard pop-up route of
    up to create a retail/socialization venue called
                                                                renting empty storefronts, Japan’s UNIQLO drove
    House of Hoops. The concept store features a
                                                                two shipping containers around New York City,
    hardwood basketball half-court with backboard,
                                                                opening daylong stores in various locations to give
    Nike Basketball merchandise, and exclusive limited-
                                                                shoppers a taste of their logo-free apparel. Bonne
    edition products.
                                                                Maman, a company that makes jams and preserves,
    Claseo is billing itself as the world’s first invitation-   targeted its next generation of customers during
    based fashion label. Members receive a limited              a two-week appearance in a trendy Parisian
    number of invitations to share with friends, who            neighborhood by offering cartoons introducing
    must enter a code and make a purchase to become             young children to “jam culture.”
    members themselves. Every item is emblazoned
                                                                Limited-edition merchandise also drives interest
    with a unique ID code that allows members to
                                                                and demand. Carlsberg 900 launched in just a few
    recognize one another and learn more about people
                                                                select bars in Stockholm. Nike opened a pop-up
    of interest by entering the wearer’s code on the
                                                                store in SoHo for just four days with the sole
    website.
                                                                purpose of selling 250 pairs of $250 Zoom LeBron
                                                                IV NYC basketball shoes. Chinese convenience-
                                                                store chain KEDI had great success with a
                                                                promotion that allowed customers to preorder a
                                                                limited-edition Hello Kitty MP3 player.
                                                                In the U.K., restaurant chains Itsu and Leon are
                                                                experimenting with flexible spaces, changing
                                                                their environments and offerings according to the
                                                                time of day. In the mornings and afternoons, they
                                                                cater to a crowd looking for fast, fresh, healthy
                                                                fare, while in the evenings they behave more like
                                                                traditional restaurants.
                                                                Innovative ideas that shake up a category can
                                                                prove a substantial boon to a retail business.
                                                                Recent examples include Wal-Mart’s decision to
                                                                sell hundreds of generic prescription drugs for just
                                                                $4 apiece, and Bank of America’s Keep the Change®
                                                                program, which rounds up purchases to the nearest
                                                                dollar and transfers the difference from the user’s
                                                                checking account to his or her savings account. The
                                                                company matches 5 percent of savings, up to $250
                                                                a year.
The Future of Shopping
Prosumers Can Make or Break New Stores
Online and off-, prosumers are both early adopters of retailers
and influential in drawing others to (or away from) new retail
options. Prosumers’ more varied retail experience and overall
enjoyment of shopping make them the go-to source for
mainstream consumers.


New online store
among the first to try                 my friends come to me for advice




p: 71%      67%         80%      64%   p: 55%   63%   62%    60%
0: 44%      43%         41%      49%   0: 30%   34%   24%    57%




New brick-and-mortar store


among the first to try                 my friends come to me for advice




p: 61%      72%         54%      84%   p: 44%   51%   32%    53%
0: 33%      54%         26%      67%   0: 22%   31%   12%    50%




p: prosumers         o: others
10




                                          The RBoF Is a Consumer Advocate
                                          Today’s more proactive consumers are demanding
                                          more from their corporate partners, a reaction to
                                          both unprecedented levels of distrust in business
                                          and heightened expectations regarding the
                                          social role corporations should play. Retailers are
                                          responding by providing information and services
                                          that position them as consumer advocates and
     IMPER AT I VE 2: HELP                helpmates.
                                          In the U.K., Pret A Manger has taken transparency
     As everyone knows, consumers         to new levels: The trendy deli chain is sharing its
     are more demanding today. With       trade secrets by offering its sandwich and soup
                                          recipes online, in a cookbook (Food On The Move),
     so many choices available to them,   and printed on packaging and postcards.
     they’re in a position to choose to   Retailers are also taking steps to help their
     do the bulk of their business with   customers make smarter choices. In the U.S., the
                                          Hannaford supermarket chain has created the
     retailers that respect their time,   Guiding Stars system, which uses between one and
     offer value-added conveniences,      three stars to let customers see which items in the
                                          store have “good,” “better,” and “best” nutritional
     and conduct business in a way that   value. The Meijer supermarket chain has created
     is both ethical and supportive       a Gas Alert program, letting customers sign up for
                                          text messages alerting them to upcoming gasoline
     of customers.                        price hikes. And France’s Leclerc has launched a
                                          website that lets consumers compare prices on
                                          more than 2,000 goods in 246 stores (Leclerc
                                          stores and those of eight national competitors).
                                          As part of their customer-engagement efforts,
                                          more retailers are also offering learning
                                          opportunities. Apple Stores offer workshops
                                          ranging from product instruction to podcast
                                          creation and the basics of Web design. Tesco’s
                                          website includes expert advice and forums on
                                          going “green” at home. Done right, such efforts
                                          don’t just push product and strengthen the bond
                                          between company and consumer; they also bring
                                          customers together in an organic community that
                                          adds life to the brand.
11




     The RBoF Offers Convenient                              A growing number of retailers are serving
                                                             as“editors,” creating collections that carry the
     Solutions                                               cachet of the retailer’s approval. In the U.K.,
     There are two things most modern-day                    Topshop prides itself on being an arbiter of “mass
     consumers feel are in short supply: time and            cool,” partnering with some of today’s leading
     money. Smart retailers are finding ways to save         designers to offer fashion and accessories that
     customers one or both.                                  meet its criteria for cutting-edge style. At the
                                                             premium end, Priscilla Carluccio (sister of design
     For many retailers, self-service has become an          icon Terence Conran) has opened Few and Far, a
     economical way to cut down on lines and wait            shop of vintage and new merchandise that reflects
     time. In the U.S. and Canada, consumers spent           the owner’s style and taste. She has been quoted in
     an estimated $525 billion at self-checkout lanes,       Vogue as saying nothing is sold at the shop “unless
     ticketing kiosks, and other self-service machines       I think it’s really lovely and would have
     in 2007, up from $438 billion in 2006, according        it myself–that’s my only benchmark.”
     to IHL Consulting Group. Tesco’s Fresh & Easy
     stores in the U.S. are 100 percent self-checkout.       We’re also seeing more efforts to let shoppers try
     And VinoVenue automated wine bars let customers         before they buy –an option that can work to the
     select and serve their own wine using prepaid           advantage of both parties. Appliance maker Maytag
     cards. No more time wasted trying to flag down          has “tryout” stores in which potential buyers
     a waiter.                                               can run a load of laundry, bake cookies, etc. To
                                                             connect with potential customers, Senseo Coffee
     Efforts to simplify shopping can be seen                installed machines at European bus and tram stops,
     across the category. In the grocery sector,             offering waiting passengers a cup of fresh-brewed
     the U.S.’s Piggly-Wiggly chain is revamping its         coffee. And Sleep Number has installed its beds in
     stores to make shopping more convenient for             every guest room at Radisson hotels and resorts
     customers. Rather than have all dry goods in one        throughout the U.S., Canada, and the Caribbean.
     section and frozen in another, for instance, the
     stores arrange items based on food types and meal       Taking “try before you buy” to an entirely new
     solutions. So, for example, all fresh, frozen, and      level, France’s Celio, a men’s apparel retailer, keeps
     canned vegetables and fruit are in one location,        17 “fit models” on staff. Ranging in age from 19 to
     and one-stop stations offer such items as ground        63, these male staff members come in all shapes
     beef, hamburger buns, marshmallows, potato              and sizes, and are available to try on individual
     chips, and beer for backyard barbecues.                 garments or entire outfits. That way, female
                                                             shoppers can be sure they’re buying the right sizes
     Other retailers are simplifying the shopping            for the men in their lives.
     process through the use of new technologies.
     Bloomingdale’s department stores have installed
     interactive mirrors that let shoppers try on virtual
     outfits and e-mail the images to friends for an
     instant thumbs-up or thumbs-down. Through its
     ScanExpress program, France’s Géant Casino lets
     shoppers scan their groceries as they add them to
     the cart. The system helps customers keep track of
     their tabs as they go, removes the need to empty
     and refill carts at checkout, and offers privacy from
     cashiers when buying personal items.
The Future of Shopping
13
                                             The RBoF Is Moving Toward
                                             Sustainability
                                             Results of The Future of Shopping show the extent
                                             to which both prosumers and mainstream consumers
                                             have become more eco-conscious at retail. Large
                                             majorities in each country already purchase
                                             environmentally friendly products, and most intend
                                             to do so more often in the future.
                                             Responding to pressures from environmentalists
                                             and everyday consumers – as well as to the
                                             financial incentives that come from cutting
                                             energy consumption and reducing waste– more
                                             retailers, big and small, are taking steps to become
                                             environmentally responsible. There’s also a growing
                                             understanding that when consumers can choose
                                             from among comparable products and retail venues,
                                             an eco-friendly come-on may provide the incentive
                                             to choose one product – or store – over another.
                                             To reduce packaging costs and waste, Wal-Mart
                                             now scores its 60,000 worldwide suppliers on their
                                             ability to develop eco-packaging and conserve
                                             natural resources; the practice has resulted in an
                                             estimated corporate savings of $3.4 billion. Beyond
                                             that is the enhanced reputation that comes from
     IMPER AT I VE 3: MOT I VATE             associating the much-maligned retailer with a
                                             popular cause.
     For some consumers, motivation
                                             Ice-cream maker Ben & Jerry’s brand identity
     at retail begins and ends with price:   has always been tied to social action, including
     They want to get as much as they        environmentalism. Now, with its “Lick Global
                                             Warming” campaign, it’s moving beyond monitoring
     can for the least amount of money.      its own carbon footprint to getting consumers
     But that’s no longer the case for a     involved. Among other initiatives, the retailer
                                             partnered with the Dave Matthews Band and Save
     growing number of consumers.            Our Environment to launch its One Sweet Whirled
     As was confirmed by Euro RSCG’s         flavor; purchases support the band’s global
                                             warming– focused Bama Works Fund. The GE Money
     The Future of the Corporate Brand       Earth Rewards credit card allows customers to
     study (2008), shoppers around           do good effortlessly: GE matches up to 1 percent
                                             of credit card purchases with greenhouse gas
     the world are increasingly taking       emissions offsets. Britain’s Marks & Spencer stores
     into consideration more than how        have given consumers an extra push toward eco-
                                             responsibility by charging five pence for each bag
     they personally benefit from the        distributed at checkout. Since the initiative began,
     things they buy. They have come to      bag use at M&S has decreased 80 percent.

     understand the broader impact of        Retailers are also putting more effort into
                                             communicating sustainability to customers
     their consumption choices, and they     through the use of natural materials, skylights,
                                             muted colors, and other nature-based cues.
     are intent on limiting the damage       This is particularly evident in the grocery sector,
     their purchases inflict on other        as more mainstream stores use visual distinctions
                                             to carve out niches and stores-within-stores
     people and on the environment.          for organic and natural foods. Retailers are also
     Though noble intentions don’t           taking cues from farmers’ markets, using bushel
                                             baskets, handwritten signs, and other “home-style”
     always translate into noble actions,    measures to make their spaces seem less corporate
     the trend toward more mindful           and more local.
     consumption is clear.
14   Buy environmentally friendly products
     do it now                                  do it now and likely to do it
                                                more in the future




     p: 85%   92%        82%       89%          p: 64%   73%     45%   72%
     0: 79%   76%        78%       77%          0: 45%   54%     42%   55%




     Buy energy-efficient lightbulbs
     do it now                                  do it now and likely to do it
                                                more in the future




     p: 82%   90%        85%       96%          p: 70%   82%     55%   81%
     0: 76%   82%        83%       85%          0: 53%   63%     51%   64%




     Bring reusable bags to the grocery store
     do it now                                  do it now and likely to do it
                                                more in the future




     p: 50%      98%     76%       75%          p: 42%     79%   55%   51%
     0: 44%      93%     78%       62%          0: 29%     78%   59%   44%




     p: prosumers      o: others
15   Buy/refuse to buy a product based on the company’s expressed
     values or political/social activities
     do it now                                    do it now and likely to do
                                                  it more in the future




     p: 71%   68%     47%       79%               p: 45%   50%   24%      45%
     0: 52%   44%     39%       57%               0: 27%   26%   18%      31%




     Make purchase decisions based on country of origin
     do it now                                    do it now and likely to do
                                                  it more in the future




     p: 59%   85%     49%       84%               p: 40%   59%   16%      49%
     0: 50%   52%     41%       78%               0: 25%   30%   18%      45%




     Avoid buying products from a particular country/region
     do it now                                    do it now and likely to do
                                                  it more in the future




     p: 54%   73%     54%       59%               p: 37%   45%   24%      35%
     0: 45%   47%     38%       45%               0: 23%   26%   17%      22%




     I avoid shopping at stores that don’t treat their employees fairly



     p: 70%   73%     32%       85%

     0: 56%   56%     38%       77%




     I am willing to pay a bit more for a product if a portion of the
     proceeds goes to a good cause



     p: 60%   74%     28%       87%
     0: 52%   46%     28%       68%




     p: prosumers   o: others
16   The RBoF Has a Purpose
     Beyond Profit
     Being more conscientious about consumption                 Rather than create one-off promotions,
     choices isn’t just about concern for the environment.      more leading retailers are creating long-term
     Consumers are also looking to vote with their              partnerships in support of a particular cause.
     pocketbooks, supporting those companies (and/or            In the U.S., Target stores have supported the
     countries) that share their values while refusing to       Red Cross for more than a decade through donations
     do business with those that don’t.                         to relief efforts, employee volunteerism, and sales
                                                                of a first-aid and emergency-preparedness kit, all of
     The survey results show significant majorities of          which benefit the organization. Nike is a founding
     prosumers in the U.S., France, and China avoiding          partner of ninemillion.org, a U.N. Refugee Agency–
     retailers that don’t treat their employees fairly and      led campaign committed to raising awareness and
     making purchase decisions based on a company’s             funds for education and sports programs for refugee
     values or socio-political activities. A majority of        youth around the world. In Northern Ireland,
     prosumers in each market avoid buying products from        Musgrave Retail Partners (SuperValu and Centra
     a particular country or region, and many expect to do      stores) has partnered with Action Cancer since 2001
     so more in the future.                                     to operate a mobile unit offering onboard digital
     In looking at the country breakdowns, Americans            breast screening, and cancer prevention and health
     are significantly more likely to boycott a particular      promotion education and services.
     company rather than an entire country or region,           Getting consumers involved is key to furthering
     while respondents in the U.K. appear least inclined        the cause and further engaging the consumer in
     to make purchase decisions based on socio-political        the brand. Some retailers make it easy for consumers
     stances or even the treatment of store employees.          to participate by creating product lines benefiting
     French respondents stand out as the most likely to         specific causes. The Body Shop’s Daisy line, for
     factor provenance into purchase decisions.                 instance, benefits organizations working against
     A majority of prosumers in each market but                 domestic violence. In Japan, retailers host charity
     the U.K. are willing to pay extra for a product if         vending machines, which enable users to specify
     a portion of the proceeds goes to a good cause.            which of a number of causes they’d like their
     A willingness to pay more is particularly evident in       purchases to benefit.
     France and China.
     From Apple and Toyota to Starbucks and Whole Foods,
     many of today’s leading retail brands have one thing
     in common: a strong set of beliefs that are clearly
     articulated. Such beliefs are all the more compelling
     at a time when consumers are reconsidering the
     social role corporations should play – and raising their
     expectations of corporate conduct and contributions.
     At retail, brands are expressing shared values through
     messaging, promotions, and cause-linked activities.
     Lush stores post a list of brand beliefs, ranging from
     no testing on animals and making products fresh
     by hand to “making our mums proud.”As part of an
     antipoverty initiative, China’s Intime department
     stores provide financial aid to help needy children
     complete their compulsory education.
17




         IMPER AT I VE 4: TARGET

         The ability to segment shoppers to uncover new opportunities is crucial to
         staying competitive in the retail environment now and next. It’s no longer
         enough to know when and where people are shopping; leading retailers are
         also tracking how and why people make purchase decisions in order to find
         new ways to reach and engage them. Messaging that would appeal to a person
         in “survival” retail mode would be unlikely to capture the attention of someone
         currently taking a “pleasure” or “mindful” approach to shopping. It’s important
         to be clear on the motivations behind any behavior.
         Euro RSCG’s The Future of Shopping study has uncovered a new market
         segmentation that will help retailers better understand and communicate with
         their customers and targets. These segmentations, ranging in size from 10 to 35
         percent of the population of each market, offer fresh insights into how and why
         certain individuals shop, the benefits they seek, and the extent to which they
         are adopting new channels. Savvy retailers will use these segmentations for
         precision targeting of communications and sales tactics.

         EXPERIENCERS: The golden grail of the retail sector.                   Rhapsody, and Nordstrom in the U.S.;
         Making up between 10 and 15 percent                                    Starbucks, Monoprix, Sephora, and The Body
         of the population, this group loves the shopping                       Shop in France; H&M, New Look, and Next in
         experience and has the knowledge and resources                         the U.K.; and Sohu, Tesco, Best Buy, IKEA, and
         to participate fully. Not surprisingly, the group                      Lenovo in China.
         skews somewhat young (18–34), upscale, and
         decidedly female (60 percent). They are the first to
         try most new products and services, and frequently
         are called upon for their advice and expertise.
         Experiencers shop online and off-, wherever they
         can maximize their enjoyment.
         Experiencers are a prime target for e-retail;
         already, 40 percent of them make 20 or more online
         purchases a year.
         Favorite retailers2 include Apple Store, Sephora,

     2
         Sample of favorite stores based on Euro RSCG Brand Momentum data and
         insights from local Euro RSCG category experts.
The Future of Shopping
The Future of Shopping
20   PLANNERS: Constituting 10 percent to
     15 percent of the population, these people
                                                            possible. Generalist e-retailers such as Amazon.
                                                            com are a boon to this segment, giving them
     don’t love to shop, but they’re good at it.            a broad array of merchandise and a quick-and-
     They approach shopping pragmatically,                  easy shopping experience, including “one click”
     fully researching purchases online and offering        purchases.
     personal information to marketers
                                                            Favorite retailers include Lowe’s, CVS, and
     in exchange for clear benefits. Many influence
                                                            Walgreens in the U.S.; Lidl, Amazon, and MUJI
     other shoppers by being early adopters of products
                                                            in France; MUJI, Amazon, and Tesco in the U.K.;
     and services, and posting their own reviews. The
                                                            and Dangdang, Taobao, OCJ.com.cn, and KEDI in
     group is better educated than average and skews
                                                            China.
     somewhat male.
                                                            MODERN MIDDLERS: The largest group
     To effectively target Planners in a tough economic
                                                            (roughly 30–40 percent of the population),
     climate, retailers must offer something extra–
                                                            Modern Middlers represent the core values
     added value that gives these men and women more
                                                            in each country we studied. Their scores on most
     reason to buy than abstain. One way to do this
                                                            demographics and attitudes were average, and
     is by offering products that are environmentally
                                                            they neither love shopping nor seek to avoid it. In
     responsible or by adding a socially conscious
                                                            a testament to how mainstream online shopping
     element to the purchase. More than any of the
                                                            has become, these people have made the Internet
     other identified groups, Planners aspire to
                                                            an important part of their shopping process (even
     conscientious consumption.
                                                            when they plan to make the purchase at a brick-
     Favorite retailers include Whole Foods,                and-mortar retailer). They seek out customer
     Trader Joe’s, and Barnes & Noble in the U.S.; eBay,    reviews online when making purchase decisions
     Franprix, and Cdiscount in France; ASDA, Marks         and consider shopping a game in which whoever
     & Spencer, John Lewis, and Waitrose in the U.K.;       gets the best price for the least amount of effort
     and eBay, H&M, Li-Ning, IKEA, and China Mobile         wins.
     in China.
                                                            Like Planners, Modern Middlers are open to
     ESCAPE ARTISTS: Like Experiencers, this group          environmentally focused come-ons and are even
     loves to shop, but they’re more focused on fashion     willing to spend a bit extra (1–5 percent) for
     and grooming–categories in which they are often        products that are eco-friendly. While always happy
     innovators. Somewhat less well educated and less       to score a great deal, this group now expects more
     upscale than the overall respondent base, this         than just discount pricing.
     group views shopping as a bit of an escape from
                                                            Favorite retailers include Target and Wal-Mart in
     boredom and the ordinary. Representing roughly
                                                            the U.S.; Decathlon, IKEA, Leclerc, and Celio in
     15 percent of the population, Escape Artists skew
                                                            France; B&Q and M&S in the U.K.; and HaoYouDuo,
     younger and female (75 percent).
                                                            Gome, Suning, and Yole in China.
     Escape Artists are rejecting more expensive
                                                            STRAGGLERS: Older and with fewer economic
     department stores in favor of discount-oriented
                                                            resources, Stragglers do not like to shop and have
     general merchandisers. Above-average Internet
                                                            resisted the Internet. This is a group that’s best
     shoppers, they look to online retailers to create
                                                            targeted by such traditional price-focused tactics
     engaging experiences. They enjoy being part
                                                            as discount coupons, two-for-ones, and sales.
     of online communities of customers who share
     opinions and information about companies and           Favorite retailers include Dollar Tree,
     brands – a clear opportunity for fashion brands to     Wal-Mart, Kroger, and Home Shopping Network in
     get on their radar.                                    the U.S.; C&A, Conforama, Intermarché, and La
                                                            Halle in France; Ocado, Superdrug, and Netto in
     Favorite retailers include Whole Foods,
                                                            the U.K.; and Dangdang, Taobao, KEDI, and
     Trader Joe’s, IKEA, Sephora, Old Navy,
                                                            China Mobile in China.
     H&M, and American Eagle in the U.S.; Fnac,
     Nature et Decouverte, L’Occitane, and Carrefour
     in France; Boots and B&Q in the U.K.; and KFC,
     M-zone, and Taobao in China.
     AVOIDERS: This group hates to shop, regarding
     it as a major hassle. They are frequent users of
     the Internet, as it lets them bypass much of the
     retail shopping experience. Making up roughly 15
     percent of the population, Avoiders skew male (60
     percent) and are more highly educated than most.
     Getting Avoiders to part with their cash, especially
     in difficult economic times, requires making the
     entire transaction as simple and hassle-free as
21         Prosumers Inhabit Two
           Segments
           Where do prosumers fit into this shopper
           segmentation? They make up the bulk of two
           important groups: Experiencers and Planners. This
           is in keeping with our understanding of prosumers
           as people who both enjoy shopping and are good at
           it. They approach significant purchases carefully,
           conducting research and soliciting the opinions of
           others online. And they serve as a source of advice
           and recommendations for those less willing to put
           in the time to fully vet a product or brand prior to
           purchase.
           The segmentation also shows two important
           groupings based on shopping motivations:
           Experiencers and Escape Artists are both emotional
           shoppers. They derive more pleasure than average
           from the act of shopping and scoring a good deal.
           These are the people who will be most receptive to
           creative retail experiences and environments, and
           most open to innovative promotions. At the other                Targeting today’s most proactive consumers–the
           end of the spectrum are the Planners and Avoiders,              Experiencers and Planners who make up the
           both of whom fall into the category of pragmatic                prosumer segment–makes sense in any category
           shoppers. Though Planners approach shopping                     and economic climate. That’s why they’ve been an
           with far more interest and gusto than do Avoiders,              ongoing focus of study for Euro RSCG since 2002.
           both groups welcome opportunities to gather                     This newest study also spotlights the value to be
           information easily and quickly. When shopping                   gained by accurately targeting two other groups:
           online, they’ll favor sites that offer customer                 the Escape Artists and Avoiders. Together, these
           reviews, detailed product descriptions, and hassle-             two groups make up a quarter of the population
           free purchases (e.g., free shipping, easy returns,              in each market, and they’re more likely than
           stored customer information).                                   Experiencers and Planners to change their
                                                                           shopping behaviors during economic downturns.
                                                                           These are the customers who could most easily
                                                                           be lost to retailers who don’t take the time to
                                                                           understand their motivations and meet their
                                                                           unique needs.


                           s
                         er
                       pp
                     ho
               a   ls             escape artists
          n
          io
       ot
     em




                                                         modern middlers
                   experiencers                co
                                                    ns
                                                      um
          um         ers                                    ers
     pros
                                       avoiders
                   planners                                                stragglers



                   pragmatic shoppers
More than 80% of our food products
                     in France are made in France*.
                           When in France, buy French, and when in Brazil, buy Brazilian. It’s the logical way to shop,
                     especially when it comes to groceries. At Carrefour, most of the foods for our locations around the world
                              are produced locally. And most of our products come from small or midsize businesses.

                                  At Carrefour, to be useful every day is to commit to local producers
                                                   and small and midsize businesses.

                                                                        www.groupecarrefour.com




*Percentage of French Carrefour food products produced locally in France.
23   The Internet
     and the Rise
     of the Smart
     Shopper
     It would be difficult to overstate
     the impact of the Internet on
     shopping behaviors and attitudes.
     Virtually all prosumers and the vast
     majority of mainstream consumers
     in each market said the Internet
     has become an important part of
     their shopping and their first step    In and of itself, online retail has become a key
                                            competitor in the category over the past decade.
     in major purchase decisions. This      When asked how often they shop at 15 types
     response rate is up significantly in   of retailers, respondents ranked the Internet
                                            among the top five overall, behind only grocery
     every market compared with data        stores, discount chains, super centers, and
                                            drugstore chains. In most markets, respondents
     from Euro RSCG’s 2004 Prosumer         are more likely to shop online than in department
     Pulse® study. The increase in people   stores (traditional or discount), warehouse
                                            stores, convenience stores, or independently
     using the Internet to research         owned stores and boutiques. Prosumers in the
     major purchase decisions is up most    U.K. actually cited the Internet as their most
                                            frequented type of retailer; 74 percent shop online
     dramatically in France, rising 42      somewhat often/often, up 20 percent since
     percent among prosumers and 36         the 2004 Prosumer Pulse survey.

     percent among others in the four       Perhaps more important than the migration to
                                            online shopping is the impact the Internet is
     years since the previous study.        having on shopping in general. Large majorities
                                            in each market indicate they conduct a lot of
                                            consumer research online–much of which arguably
                                            would not have occurred prior to the Internet.
                                            Virtually all consumers and approximately eight
                                            in 10 mainstream consumers search for customer
                                            reviews while making purchase decisions,
                                            and most indicate they will do so even more
                                            in the future.
                                            Actually writing and posting product/retailer
                                            reviews online is an activity in which a majority
                                            of prosumers are already involved–testament
                                            to their proactive natures. It’s interesting to
                                            note that even mainstream consumers are inclined
                                            to join an online community of customers who
                                            share opinions about companies and brands,
                                            suggesting further scope for consumers to band
                                            together online as a means of increasing their
                                            clout at retail.
24   Even if I don’t make purchases               I do lots of [consumer]
     online, the Internet is a very               research online
     important part of my “shopping”              strongly/somewhat agree
     strongly/somewhat agree


                                                  p: 88%   70%    84%    88%
     p: 99%   88%    92%        92%               0: 67%   42%    65%    66%
     0: 81%   76%    78%        81%




     For major purchase decisions,                The Internet has had little
     my first step is usually the Internet        to no impact on my shopping
     strongly/somewhat agree                      strongly/somewhat agree




     p: 92%   94%    92%        88%               p: 6%    17%    5%     25%
     0: 75%   71%    75%        71%               0: 10%   22%    11%    21%




     I read consumer feedback/reviews             I would like to be part of an online
     before making a purchase                     community of customers who
     frequently/sometimes                         share opinions and information
                                                  about companies and brands
                                                  strongly/somewhat agree
     p: 91%   90%    87%        95%
     0: 79%   67%    72%        90%

                                                  p: 74%   68%    78%    93%
                                                  0: 46%   48%    53%    83%




     I search for customer reviews while making purchase decisions
     do it now                                    do it now and likely to do it
                                                  more in the future




     p: 96%   98%    96%        97%               p: 74%   65%    69%    79%
     0: 86%   85%    79%        87%               0: 57%   38%    41%    65%




     I write online product or retailer reviews
     do it now                                    do it now and likely to do it
                                                  more in the future




     p: 71%   72%    55%        80%               p: 38%   34%    31%    47%
     0: 46%   53%    32%        61%               0: 21%   15%    13%    36%




     p: prosumers   o: others
Search for airline/car rental/hotel information and/or make

25   reservations
     do it now                                do it now and likely to do
                                              it more in the future




     p: 96%   98%     93%       95%           p: 85%   77%   64%     79%
     0: 91%   92%     81%       80%           0: 67%   52%   44%     57%




     Search online for financial information and/or purchase
     financial products
     do it now                                do it now and likely to do
                                              it more in the future




     p: 65%   71%     87%       89%           p: 41%   29%   53%     65%
     0: 58%   56%     75%       77%           0: 28%   17%   35%     52%




     How often do you do each of the following?

     Visit company website                    Use online coupon in
     to locate store near me                  brick-and-mortar store
     frequently/sometimes                     frequently/sometimes




     p: 96%   84%     87%       85%           p: 82%   71%   77%     77%
     0: 89%   75%     82%       88%           0: 76%   61%   57%     64%




     Research purchase online                 Visit retailer with info
     before visiting store to buy it          printed from website
     frequently/sometimes                     frequently/sometimes




     p: 95%   88%     97%       97%           p: 79%   92%   69%     72%
     0: 89%   82%     82%       88%           0: 70%   76%   56%     61%




     See product in store and then            Return online purchase to
     wait to order online                     brick-and-mortar store
     frequently/sometimes                     frequently/sometimes




     p: 62%   73%     72%       87%           p: 42%   26%   31%     45%
     0: 50%   58%     58%       71%           0: 35%   19%   25%     34%




     p: prosumers   o: others
26




     ADVAN TAGE: SHOPPER                                     The Interplay of Online and Off-
     There are all sorts of ways consumers are using         Successful retailers of the future will
     the Internet to their advantage when shopping.          understand – and make full use of – the interplay
     Price and product/service comparisons are an            between online and brick-and-mortar stores. As
     obvious choice, and nearly all respondents are          mainstream consumers become more proactive
     making use of this capability in at least one retail    shoppers, the line is blurring between the virtual
     sector. Researching purchases in areas that offer       and “real” worlds. Even people who intend to
     a sometimes confusing array of choices and that         make purchases at a local store will visit the
     have potentially serious consequences for wrong         company website to research a product prior to
     choices is particularly prevalent. Two of these         purchase, download a discount coupon, and/or
     categories are Travel/Hospitality and Finance.          get directions to the store. It’s also common
     Nearly all prosumers – and almost as many               for people to see a product in a store and then
     mainstream consumers – turn to the Internet             wait to order it online, whether for reasons of
     when making travel plans. Most indicate they            convenience or based on the assumption that a
     will do so even more in the future. In looking at       lower price can be found on the Internet. Retailers
     the percentages of respondents who search for           will want to take steps to ensure the offline-online
     financial information online, it’s telling that the     transition is seamless and that each medium fully
     gap between U.S. prosumers and mainstream               supports the other.
     consumers has narrowed dramatically since the
     2004 study. Four years ago in the U.S., 68 percent
     of prosumers and 43 percent of others searched for
     financial information online – a gap of 25 points. In
     the current study, the gap is just seven percentage
     points, illustrating the extent to which what
     used to be leading edge is now mainstream. It’s
     also worth noting the tremendous jump in online
     financial research in France and China. In both
     markets, the prosumer scores rose 33 percent from
     2004, while mainstream consumer scores rose 27
     percent and 29 percent, respectively.
27




     Conclusion: Reaching the Retail
     Target of the Future
     The Future of Shopping study makes clear that, in the future, shopping
     will be more proactive and considered. Consumers will continue to
     seek new and better ways to research products and services prior
     to purchase–and smart companies will help them do so. We can expect
     increased consumer-to-consumer communication via online reviews,
     recommendations, and consumer blogs, as well as new mechanisms
     through which individuals can work together to elicit better deals. This
     study also confirms the shift to more mindful consumption– a trend that
     will influence how retailers package, present, and promote their goods.
     In the background of each of these shifts is the Internet, a tool that has
     forever changed how people shop. Virtual shopping baskets will grow
     heavier, as e-retailers continue to compete on cost, convenience, and
     selection. And retailers will continue to find new ways to engage their
     customers so as to add value to the brand and to the shopping experience,
     both online and off.
     With change taking place at such a rapid clip, retailers are well advised
     to keep an eye on the prosumers in their markets. These men and women
     continue to offer a glimpse of the future in terms of both how people will
     shop and what they’ll be buying.
28




     When home electronics
          misbehave,
        we tame them.
       PC Services. Home Theater Services. Wireless and more.




                Your digital home companion.


       1.800.firedog    www.firedog.com      available at
Prosumer Reports is a series of thought leadership publications by Euro RSCG Worldwide – part of a
global initiative to share information and insights, including our own proprietary research, across the
Euro RSCG network of agencies and client companies.

Euro RSCG Worldwide is a leading integrated marketing communications agency and was the first
agency to be named Global Agency of the Year by both Advertising Age and Campaign in the same year.
Euro RSCG is made up of 233 offices in 75 countries and provides advertising,marketing, corporate
communications, and digital and social media solutions to clients, including, Air France, BNP Paribas,
Charles Schwab, Citigroup, Danone Group, Heineken USA, IBM, Kraft Foods, Lacoste, L’Oréal, Merck,
PSA Peugeot Citroën, Pernod Ricard, Reckitt Benckiser, sanofi-aventis, and Volvo. Headquartered
in New York, Euro RSCG Worldwide is the largest unit of Havas, a world leader in communications
(Euronext Paris SA: HAV.PA).

For more information about Prosumer Reports, please visit www.prosumer-report.com or contact
Naomi Troni, global chief marketing officer, at naomi.troni@eurorscg.com.

Follow us on Twitter @prosumer_report

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The Future of Shopping

  • 1. EURO RSCG WORLDWIDE VOL 5 | 2009 the future of shopping
  • 2. © 2007 Valspar Corporation BRING THE BEAUTIFUL, DURABLE COLORS OF NATURE HOME. After 200 years in the paint business, we’ve created the ultimate combination of beauty and performance. Valspar Paint: thick one-coat coverage, a lifetime warranty and thousands of colors that stand the test of time, just like nature itself. valspar.com the beauty goes on available at
  • 3. the future of shopping | vol 5 2 Introduction: 21st-Centur y Retail 3 Four Imperatives for the Retail Brand of the Future 23 The Internet and the Rise of the Smart Shopper
  • 5. 2 “I am the world’s worst salesman; therefore, I must make it easy for people to buy.” –F.W. Woolworth (1852–1919) → INTRODUCTION: 21st-Century Retail Frank Winf ield Woolworth revolutionized retail in the 20th century, bringing goods out from behind the counter and into the open, where customers were free to inspect and touch the merchandise prior to purchase. His f ive-and-dime stores were the precursor to today’s big-box discounters, and, like Wal-Mart today, he was accused of driving local merchants out of business by undercutting prices. By its 100th anniversary in 1979, Woolworth’s had And there’s precious little room for missteps, become the largest department store chain in the especially in difficult economic times. It’s little world. Fewer than 20 years later, in 1997, Woolworth’s wonder, then, that the International Council of department stores were no more (though chains Shopping Centers estimates there will be 5,770 using the name continue to operate outside the store closings in the U.S. alone in 2008, up 25 U.S.). Unable to compete with the new generation of percent from 2007. discount retailers, F.W. Woolworth’s company changed This issue of Prosumer Report explores the future its name to Venator Group and now survives as of the retail category, with an emphasis on how sporting-goods retailer Foot Locker, Inc. Woolworth’s evolving customer demands and behaviors are fall stands as a reminder of just how competitive the changing the shopping experience. The report retail category has become. There are many more draws on findings from Euro RSCG Worldwide’s 2008 formats, more goods (about 180,000 new products a The Future of Shopping study. The online survey year), and more players. At the same time, retailers was conducted by Market Probe International in are facing increasingly demanding stakeholder four markets: the United States (n=700), France groups, ranging from everyday customers to NGOs (n=700), the United Kingdom (n=700), and and influential bloggers. They’re under constant China1 (n=700). Prosumer breakouts are included pressure to deliver innovative new products, services, throughout the report as indicators of where the environments, and experiences. sector will be heading next. 1 Prosumers in the China sample were identified using an algorithm refined for that market. In addition, the Chinese sample in general should be considered as representing the upper tiers of Chinese society rather than the mainstream, given that all respondents completed the survey online. At present, China has an Internet penetration rate of approximately 16 percent, according to the China Internet Network Information Center; that compares with rates of 69.7 percent in the United States, 55 percent in France, and 61 percent in the United Kingdom.
  • 6. 3 Four Imperatives for theRetail Brand of the Future Retail is a constantly evolving category, mutating in response to new ideas, pressures, technologies, and opportunities. Looking back over the centuries, one can see a progression that begins with basic survival and eventually morphs into something far more complex. The most primitive retail customers (and they still exist in every market) are concerned only about survival. Their focus: price and accessibility. Simply put, they look for the cheapest food they can buy at the nearest location. At the next stage, consumers focus on pleasure. In an environment of mass consumption, they want more than just low prices, and they’re making more purchases unrelated to basic needs (e.g., home furnishings, entertainment). These consumers value access to a variety of products and brands, and are looking for great deals with lots of extras. SURVIVAL PLEASURE MISTRUST MINDFULNESS E V O LV I N G A P P R O A C H E S TO C O N S U M P T I O N The next progression is marked by varying levels of on economic circumstance: mistrust–typically coinciding with a period of soft As finances become tighter, an individual growth and collective pessimism. Consumers are may decide considerations other than price more informed and marketing savvy, and they begin are less important. It’s essential, therefore, to question everything from brand promises and to be cognizant of where individual consumers are corporate practices to excess consumption. They along the spectrum at any given time, because that seek a sense of direction and control–to know that will determine how to target –and serve – them most their purchases aren’t made blindly and without effectively. real benefit. And, finally, many consumers are now Taking into account these differing consumer reaching a stage of mindfulness, a point at which attitudes and need states, The Future of Shopping they make the choice to become more responsible has uncovered four actions retailers must take consumers. These more mindful shoppers prefer to stand out and thrive in tomorrow’s ever more simplicity to excess and search for brand partners competitive environment: They must engage that offer a sense of humanism, moral values, and consumers, they must help consumers, they must authenticity. For them, shopping isn’t just about the motivate consumers by creating stronger incentives goods; it’s also about the people who produce and to purchase, and they must target consumers based sell the goods, and the impact one’s purchases have on their individual priorities and preferences. Each on the broader world. of these imperatives would seem to be common While it’s possible to identify large populations of sense, but precious few retailers have managed to “survivors” in undeveloped markets and “mindfuls” address one on a consistent basis, much less all four. in more mature markets, each type of consumer This section of the report showcases retailers– and actually exists in every country. Moreover, any one retail initiatives– that offer a glimpse of the best person may act according to any of these pillars practices of the future. when making different consumption decisions. In one product category, an individual might be focused solely on price, while in another, he or she is looking for something more. This can also change depending
  • 7. 4 What’s a Prosumer? Prosumers are the most inf luential men and women within any market. Empowered by new technologies and improved access to information, they have tipped the scales of power away from manufacturers and retailers, and toward themselves. They are highly knowledgeable and demanding consumers who expect their brand partners to acknowledge their value and treat them accordingly. Prosumers typically make up 15 to 25 percent of any market. Euro RSCG Worldwide has made them an ongoing focus, because, beyond their own economic impact, prosumers influence the brand choices of others. Simply put, what prosumers are doing today, mainstream consumers are likely to be doing six to 18 months from now. KEY PROSUMER TRAITS » Embrace innovation–curious » Are marketing savvy and plugged to try new things, challenges, in to multiple media sources and experiences » Demand top-notch customer service » Keen on new technology and gadgets and access to information » Transport new attitudes, ideas, » Proactively seek to maximize control and behavior–they are “human media” over their lives through information, communication, and technology » Pursue timeless value » Constantly seek information and » Recognize their value as consumers and opinions; eager to share their views expect brand partners to do likewise and experiences with others RETAIL CATEGORIES IN WHICH PROSUMERS YIELD MOST INFLUENCE* » Food and Beverage » Computers and Peripheral Equipment » Home Electronics » Health and Wellness » Travel Services » Beauty and Grooming * Based on responses of “among the first to try” and “my friends come to me for advice.”
  • 8. 5 Imperative 1: Engage In the past few years, engagement has emerged as one of the advertising industry’s favorite buzzwords. The idea, of course, is to get consumers who are beyond the “survival” stage more involved with brands – and even brand creation – rather than simply bombard them with brand messaging. In the retail sector, we’ve identified three primary means of engagement: 1. Create experiences that engage consumers in the brand 2. Provide opportunities for communication and connection 3. Offer endless innovation The Retail Brand of the Future Ian Schrager’s Gramercy Park Hotel in New York City provides conversational currency (RBoF) Of fers More Engaging by giving guests a key to the city’s only private Experiences park, offering a unique experience, a sense of elitism, and something to talk about upon their With so many choices available, mature return home. London’s Selfridges provides plenty consumers are gravitating toward retailers that of cocktail-party fodder with its Wonder Room–a offer a fundamentally different experience or place where shoppers can find such high-end little extras that elevate a mundane activity purchases as a sip of Pétrus Bordeaux ($66), a into something more. Consider the difference first edition of Sylvia Plath’s The Bell Jar, or a between picking up a bar of packaged soap at handcrafted winged saddle from Hermès. a discount store and purchasing a freshly made and cut Figs and Leaves handmade soap at Lush. Indulging the senses is another way to create Everything about the experience is different, engaging experiences. In London, Tiffinbites from the sights and scents to the level of pleasure uses aromas to turn lunchtime into a cultural derived. The former is an errand, while the latter adventure. New York City’s Chop’t uses the sounds is an indulgence. of simple kitchen tasks to draw diners in to the beauty of making something fresh. Consumers There are all sorts of ways to create retail also are being enticed with varying levels of visual experiences that engage and indulge. Single- hypnotism, both inside and outside the store. focus retailers such as Apple Store and Ethel’s Think: the displays at Dylan’s Candy Bar in New Chocolate Lounge offer plenty of scope to York, the edible art created by Pierre Hermé in support and encourage connoisseurship and Paris, and the architectural art that can be seen a deeper brand experience. On Paris’s Champs in Apple’s flagship New York store and Selfridges’s Elysées, Heineken has created an immersive Birmingham location. experience centered on beer in hopes of reaching a more sophisticated crowd than is generally As prosumers gravitate toward more experiential found in sporting arenas and pubs. Culture Bière shopping, a growing number of retailers are combines a sophisticated restaurant, three turning their venues into living, breathing bars, a terrace, a boutique, and a gallery. In lifestyle statements, reflecting the values of China, Beijing’s Lenovo Brand Experience Center both brand and consumer. London’s Microzine provides an interactive experience that immerses store features a constantly changing array of consumers in the brand, offering insights into upscale fashion, art, furniture, and technology, the company and its technological achievements, all geared toward the tastes (and aspirations) while also letting visitors get a taste of the of the readership of such magazines as GQ and digital life in home and business settings. Arena. And in France, SFR’s new store doesn’t just sell mobile phones; it also contains a concert Starbucks was quick to recognize the value of hall, a design-focused restaurant and lounge conversational currency. By providing a glimpse with free Internet access, and the Fashion Room, of the people and processes behind its products, containing trendy phone accessories. the retailer was able to turn coffee into a cultural adventure.
  • 9. 6 Retailer Websites Offer a Reliable Channel to Prosumers In each market surveyed, the vast majority of prosumers – and large percentages of mainstream consumers –already are engaged in communication with retailers online. They visit corporate websites to download coupons, sign up for newsletters and special offers, and enter sweepstakes. Every visit is an opportunity for the retailer to learn more about its customers and discover more compelling ways to keep them involved with the brand. How often do you do each Indicate your involvement of the following? with each online activity FREQUENTLY/SOMET IMES DO IT NOW sign up to receive coupons or request or download coupon other store promos via e-mail or coupon code p: 88% 77% 82% 87% p: 96% 78% 88% 80% 0: 78% 66% 68% 71% 0: 86% 61% 74% 72% FREQUENTLY/SOMET IMES DO IT NOW sign up to receive info/news subscribe to a retailer’s from a retailer or manufacturer e-newsletter p: 77% 71% 82% 81% p: 90% 89% 93% 91% 0: 64% 56% 66% 67% 0: 77% 80% 75% 76% FREQUENTLY/SOMET IMES DO IT NOW go to a company’s website to arrange enter an online sweepstakes for service on a product i own p: 52% 66% 43% 87% p: 75% 93% 38% 68% 0: 36% 45% 33% 67% 0: 70% 89% 33% 52% p: prosumers o: others
  • 10. 7 The RBoF Brings People The RBoF Keeps It Fresh Together Innovation is arguably this century’s most important driver of business and brand growth–in Smart retailers understand brand engagement is every category. In the retail sector, innovation all the more potent if it brings people together, allows companies to develop entirely new creating dialogue and encouraging collaboration business models (e.g., eBay, Netflix), to regain and communal action. It can be as simple as or grow market share (e.g., Apple), and to get providing communal dining spaces, as the noticed. It’s also an increasingly important Wagamama noodle-bar chain does in more than a component of financial performance: According to dozen countries, or as involved as creating cause- Boston Consulting Group, the top 20 percent of focused events, such as Avon’s annual Walk for innovative companies deliver up to four times the Breast Cancer. shareholder return of the bottom 20 percent. Taking a cue from Starbucks, more retailers are Keeping it fresh at retail is what flash goods creating hangouts where customers can get and pop-up stores are all about. By limiting the together around shared interests. Club Libby Lu time most items stay in stores, apparel retailer (U.S.) provides a space for girls ages five to 12 to Zara averages 17 store visits per customer a year, shop, socialize, and even hold birthday parties. compared with an industry average of three to four. In New York, Nike and Foot Locker have teamed Rather than follow the standard pop-up route of up to create a retail/socialization venue called renting empty storefronts, Japan’s UNIQLO drove House of Hoops. The concept store features a two shipping containers around New York City, hardwood basketball half-court with backboard, opening daylong stores in various locations to give Nike Basketball merchandise, and exclusive limited- shoppers a taste of their logo-free apparel. Bonne edition products. Maman, a company that makes jams and preserves, Claseo is billing itself as the world’s first invitation- targeted its next generation of customers during based fashion label. Members receive a limited a two-week appearance in a trendy Parisian number of invitations to share with friends, who neighborhood by offering cartoons introducing must enter a code and make a purchase to become young children to “jam culture.” members themselves. Every item is emblazoned Limited-edition merchandise also drives interest with a unique ID code that allows members to and demand. Carlsberg 900 launched in just a few recognize one another and learn more about people select bars in Stockholm. Nike opened a pop-up of interest by entering the wearer’s code on the store in SoHo for just four days with the sole website. purpose of selling 250 pairs of $250 Zoom LeBron IV NYC basketball shoes. Chinese convenience- store chain KEDI had great success with a promotion that allowed customers to preorder a limited-edition Hello Kitty MP3 player. In the U.K., restaurant chains Itsu and Leon are experimenting with flexible spaces, changing their environments and offerings according to the time of day. In the mornings and afternoons, they cater to a crowd looking for fast, fresh, healthy fare, while in the evenings they behave more like traditional restaurants. Innovative ideas that shake up a category can prove a substantial boon to a retail business. Recent examples include Wal-Mart’s decision to sell hundreds of generic prescription drugs for just $4 apiece, and Bank of America’s Keep the Change® program, which rounds up purchases to the nearest dollar and transfers the difference from the user’s checking account to his or her savings account. The company matches 5 percent of savings, up to $250 a year.
  • 12. Prosumers Can Make or Break New Stores Online and off-, prosumers are both early adopters of retailers and influential in drawing others to (or away from) new retail options. Prosumers’ more varied retail experience and overall enjoyment of shopping make them the go-to source for mainstream consumers. New online store among the first to try my friends come to me for advice p: 71% 67% 80% 64% p: 55% 63% 62% 60% 0: 44% 43% 41% 49% 0: 30% 34% 24% 57% New brick-and-mortar store among the first to try my friends come to me for advice p: 61% 72% 54% 84% p: 44% 51% 32% 53% 0: 33% 54% 26% 67% 0: 22% 31% 12% 50% p: prosumers o: others
  • 13. 10 The RBoF Is a Consumer Advocate Today’s more proactive consumers are demanding more from their corporate partners, a reaction to both unprecedented levels of distrust in business and heightened expectations regarding the social role corporations should play. Retailers are responding by providing information and services that position them as consumer advocates and IMPER AT I VE 2: HELP helpmates. In the U.K., Pret A Manger has taken transparency As everyone knows, consumers to new levels: The trendy deli chain is sharing its are more demanding today. With trade secrets by offering its sandwich and soup recipes online, in a cookbook (Food On The Move), so many choices available to them, and printed on packaging and postcards. they’re in a position to choose to Retailers are also taking steps to help their do the bulk of their business with customers make smarter choices. In the U.S., the Hannaford supermarket chain has created the retailers that respect their time, Guiding Stars system, which uses between one and offer value-added conveniences, three stars to let customers see which items in the store have “good,” “better,” and “best” nutritional and conduct business in a way that value. The Meijer supermarket chain has created is both ethical and supportive a Gas Alert program, letting customers sign up for text messages alerting them to upcoming gasoline of customers. price hikes. And France’s Leclerc has launched a website that lets consumers compare prices on more than 2,000 goods in 246 stores (Leclerc stores and those of eight national competitors). As part of their customer-engagement efforts, more retailers are also offering learning opportunities. Apple Stores offer workshops ranging from product instruction to podcast creation and the basics of Web design. Tesco’s website includes expert advice and forums on going “green” at home. Done right, such efforts don’t just push product and strengthen the bond between company and consumer; they also bring customers together in an organic community that adds life to the brand.
  • 14. 11 The RBoF Offers Convenient A growing number of retailers are serving as“editors,” creating collections that carry the Solutions cachet of the retailer’s approval. In the U.K., There are two things most modern-day Topshop prides itself on being an arbiter of “mass consumers feel are in short supply: time and cool,” partnering with some of today’s leading money. Smart retailers are finding ways to save designers to offer fashion and accessories that customers one or both. meet its criteria for cutting-edge style. At the premium end, Priscilla Carluccio (sister of design For many retailers, self-service has become an icon Terence Conran) has opened Few and Far, a economical way to cut down on lines and wait shop of vintage and new merchandise that reflects time. In the U.S. and Canada, consumers spent the owner’s style and taste. She has been quoted in an estimated $525 billion at self-checkout lanes, Vogue as saying nothing is sold at the shop “unless ticketing kiosks, and other self-service machines I think it’s really lovely and would have in 2007, up from $438 billion in 2006, according it myself–that’s my only benchmark.” to IHL Consulting Group. Tesco’s Fresh & Easy stores in the U.S. are 100 percent self-checkout. We’re also seeing more efforts to let shoppers try And VinoVenue automated wine bars let customers before they buy –an option that can work to the select and serve their own wine using prepaid advantage of both parties. Appliance maker Maytag cards. No more time wasted trying to flag down has “tryout” stores in which potential buyers a waiter. can run a load of laundry, bake cookies, etc. To connect with potential customers, Senseo Coffee Efforts to simplify shopping can be seen installed machines at European bus and tram stops, across the category. In the grocery sector, offering waiting passengers a cup of fresh-brewed the U.S.’s Piggly-Wiggly chain is revamping its coffee. And Sleep Number has installed its beds in stores to make shopping more convenient for every guest room at Radisson hotels and resorts customers. Rather than have all dry goods in one throughout the U.S., Canada, and the Caribbean. section and frozen in another, for instance, the stores arrange items based on food types and meal Taking “try before you buy” to an entirely new solutions. So, for example, all fresh, frozen, and level, France’s Celio, a men’s apparel retailer, keeps canned vegetables and fruit are in one location, 17 “fit models” on staff. Ranging in age from 19 to and one-stop stations offer such items as ground 63, these male staff members come in all shapes beef, hamburger buns, marshmallows, potato and sizes, and are available to try on individual chips, and beer for backyard barbecues. garments or entire outfits. That way, female shoppers can be sure they’re buying the right sizes Other retailers are simplifying the shopping for the men in their lives. process through the use of new technologies. Bloomingdale’s department stores have installed interactive mirrors that let shoppers try on virtual outfits and e-mail the images to friends for an instant thumbs-up or thumbs-down. Through its ScanExpress program, France’s Géant Casino lets shoppers scan their groceries as they add them to the cart. The system helps customers keep track of their tabs as they go, removes the need to empty and refill carts at checkout, and offers privacy from cashiers when buying personal items.
  • 16. 13 The RBoF Is Moving Toward Sustainability Results of The Future of Shopping show the extent to which both prosumers and mainstream consumers have become more eco-conscious at retail. Large majorities in each country already purchase environmentally friendly products, and most intend to do so more often in the future. Responding to pressures from environmentalists and everyday consumers – as well as to the financial incentives that come from cutting energy consumption and reducing waste– more retailers, big and small, are taking steps to become environmentally responsible. There’s also a growing understanding that when consumers can choose from among comparable products and retail venues, an eco-friendly come-on may provide the incentive to choose one product – or store – over another. To reduce packaging costs and waste, Wal-Mart now scores its 60,000 worldwide suppliers on their ability to develop eco-packaging and conserve natural resources; the practice has resulted in an estimated corporate savings of $3.4 billion. Beyond that is the enhanced reputation that comes from IMPER AT I VE 3: MOT I VATE associating the much-maligned retailer with a popular cause. For some consumers, motivation Ice-cream maker Ben & Jerry’s brand identity at retail begins and ends with price: has always been tied to social action, including They want to get as much as they environmentalism. Now, with its “Lick Global Warming” campaign, it’s moving beyond monitoring can for the least amount of money. its own carbon footprint to getting consumers But that’s no longer the case for a involved. Among other initiatives, the retailer partnered with the Dave Matthews Band and Save growing number of consumers. Our Environment to launch its One Sweet Whirled As was confirmed by Euro RSCG’s flavor; purchases support the band’s global warming– focused Bama Works Fund. The GE Money The Future of the Corporate Brand Earth Rewards credit card allows customers to study (2008), shoppers around do good effortlessly: GE matches up to 1 percent of credit card purchases with greenhouse gas the world are increasingly taking emissions offsets. Britain’s Marks & Spencer stores into consideration more than how have given consumers an extra push toward eco- responsibility by charging five pence for each bag they personally benefit from the distributed at checkout. Since the initiative began, things they buy. They have come to bag use at M&S has decreased 80 percent. understand the broader impact of Retailers are also putting more effort into communicating sustainability to customers their consumption choices, and they through the use of natural materials, skylights, muted colors, and other nature-based cues. are intent on limiting the damage This is particularly evident in the grocery sector, their purchases inflict on other as more mainstream stores use visual distinctions to carve out niches and stores-within-stores people and on the environment. for organic and natural foods. Retailers are also Though noble intentions don’t taking cues from farmers’ markets, using bushel baskets, handwritten signs, and other “home-style” always translate into noble actions, measures to make their spaces seem less corporate the trend toward more mindful and more local. consumption is clear.
  • 17. 14 Buy environmentally friendly products do it now do it now and likely to do it more in the future p: 85% 92% 82% 89% p: 64% 73% 45% 72% 0: 79% 76% 78% 77% 0: 45% 54% 42% 55% Buy energy-efficient lightbulbs do it now do it now and likely to do it more in the future p: 82% 90% 85% 96% p: 70% 82% 55% 81% 0: 76% 82% 83% 85% 0: 53% 63% 51% 64% Bring reusable bags to the grocery store do it now do it now and likely to do it more in the future p: 50% 98% 76% 75% p: 42% 79% 55% 51% 0: 44% 93% 78% 62% 0: 29% 78% 59% 44% p: prosumers o: others
  • 18. 15 Buy/refuse to buy a product based on the company’s expressed values or political/social activities do it now do it now and likely to do it more in the future p: 71% 68% 47% 79% p: 45% 50% 24% 45% 0: 52% 44% 39% 57% 0: 27% 26% 18% 31% Make purchase decisions based on country of origin do it now do it now and likely to do it more in the future p: 59% 85% 49% 84% p: 40% 59% 16% 49% 0: 50% 52% 41% 78% 0: 25% 30% 18% 45% Avoid buying products from a particular country/region do it now do it now and likely to do it more in the future p: 54% 73% 54% 59% p: 37% 45% 24% 35% 0: 45% 47% 38% 45% 0: 23% 26% 17% 22% I avoid shopping at stores that don’t treat their employees fairly p: 70% 73% 32% 85% 0: 56% 56% 38% 77% I am willing to pay a bit more for a product if a portion of the proceeds goes to a good cause p: 60% 74% 28% 87% 0: 52% 46% 28% 68% p: prosumers o: others
  • 19. 16 The RBoF Has a Purpose Beyond Profit Being more conscientious about consumption Rather than create one-off promotions, choices isn’t just about concern for the environment. more leading retailers are creating long-term Consumers are also looking to vote with their partnerships in support of a particular cause. pocketbooks, supporting those companies (and/or In the U.S., Target stores have supported the countries) that share their values while refusing to Red Cross for more than a decade through donations do business with those that don’t. to relief efforts, employee volunteerism, and sales of a first-aid and emergency-preparedness kit, all of The survey results show significant majorities of which benefit the organization. Nike is a founding prosumers in the U.S., France, and China avoiding partner of ninemillion.org, a U.N. Refugee Agency– retailers that don’t treat their employees fairly and led campaign committed to raising awareness and making purchase decisions based on a company’s funds for education and sports programs for refugee values or socio-political activities. A majority of youth around the world. In Northern Ireland, prosumers in each market avoid buying products from Musgrave Retail Partners (SuperValu and Centra a particular country or region, and many expect to do stores) has partnered with Action Cancer since 2001 so more in the future. to operate a mobile unit offering onboard digital In looking at the country breakdowns, Americans breast screening, and cancer prevention and health are significantly more likely to boycott a particular promotion education and services. company rather than an entire country or region, Getting consumers involved is key to furthering while respondents in the U.K. appear least inclined the cause and further engaging the consumer in to make purchase decisions based on socio-political the brand. Some retailers make it easy for consumers stances or even the treatment of store employees. to participate by creating product lines benefiting French respondents stand out as the most likely to specific causes. The Body Shop’s Daisy line, for factor provenance into purchase decisions. instance, benefits organizations working against A majority of prosumers in each market but domestic violence. In Japan, retailers host charity the U.K. are willing to pay extra for a product if vending machines, which enable users to specify a portion of the proceeds goes to a good cause. which of a number of causes they’d like their A willingness to pay more is particularly evident in purchases to benefit. France and China. From Apple and Toyota to Starbucks and Whole Foods, many of today’s leading retail brands have one thing in common: a strong set of beliefs that are clearly articulated. Such beliefs are all the more compelling at a time when consumers are reconsidering the social role corporations should play – and raising their expectations of corporate conduct and contributions. At retail, brands are expressing shared values through messaging, promotions, and cause-linked activities. Lush stores post a list of brand beliefs, ranging from no testing on animals and making products fresh by hand to “making our mums proud.”As part of an antipoverty initiative, China’s Intime department stores provide financial aid to help needy children complete their compulsory education.
  • 20. 17 IMPER AT I VE 4: TARGET The ability to segment shoppers to uncover new opportunities is crucial to staying competitive in the retail environment now and next. It’s no longer enough to know when and where people are shopping; leading retailers are also tracking how and why people make purchase decisions in order to find new ways to reach and engage them. Messaging that would appeal to a person in “survival” retail mode would be unlikely to capture the attention of someone currently taking a “pleasure” or “mindful” approach to shopping. It’s important to be clear on the motivations behind any behavior. Euro RSCG’s The Future of Shopping study has uncovered a new market segmentation that will help retailers better understand and communicate with their customers and targets. These segmentations, ranging in size from 10 to 35 percent of the population of each market, offer fresh insights into how and why certain individuals shop, the benefits they seek, and the extent to which they are adopting new channels. Savvy retailers will use these segmentations for precision targeting of communications and sales tactics. EXPERIENCERS: The golden grail of the retail sector. Rhapsody, and Nordstrom in the U.S.; Making up between 10 and 15 percent Starbucks, Monoprix, Sephora, and The Body of the population, this group loves the shopping Shop in France; H&M, New Look, and Next in experience and has the knowledge and resources the U.K.; and Sohu, Tesco, Best Buy, IKEA, and to participate fully. Not surprisingly, the group Lenovo in China. skews somewhat young (18–34), upscale, and decidedly female (60 percent). They are the first to try most new products and services, and frequently are called upon for their advice and expertise. Experiencers shop online and off-, wherever they can maximize their enjoyment. Experiencers are a prime target for e-retail; already, 40 percent of them make 20 or more online purchases a year. Favorite retailers2 include Apple Store, Sephora, 2 Sample of favorite stores based on Euro RSCG Brand Momentum data and insights from local Euro RSCG category experts.
  • 23. 20 PLANNERS: Constituting 10 percent to 15 percent of the population, these people possible. Generalist e-retailers such as Amazon. com are a boon to this segment, giving them don’t love to shop, but they’re good at it. a broad array of merchandise and a quick-and- They approach shopping pragmatically, easy shopping experience, including “one click” fully researching purchases online and offering purchases. personal information to marketers Favorite retailers include Lowe’s, CVS, and in exchange for clear benefits. Many influence Walgreens in the U.S.; Lidl, Amazon, and MUJI other shoppers by being early adopters of products in France; MUJI, Amazon, and Tesco in the U.K.; and services, and posting their own reviews. The and Dangdang, Taobao, OCJ.com.cn, and KEDI in group is better educated than average and skews China. somewhat male. MODERN MIDDLERS: The largest group To effectively target Planners in a tough economic (roughly 30–40 percent of the population), climate, retailers must offer something extra– Modern Middlers represent the core values added value that gives these men and women more in each country we studied. Their scores on most reason to buy than abstain. One way to do this demographics and attitudes were average, and is by offering products that are environmentally they neither love shopping nor seek to avoid it. In responsible or by adding a socially conscious a testament to how mainstream online shopping element to the purchase. More than any of the has become, these people have made the Internet other identified groups, Planners aspire to an important part of their shopping process (even conscientious consumption. when they plan to make the purchase at a brick- Favorite retailers include Whole Foods, and-mortar retailer). They seek out customer Trader Joe’s, and Barnes & Noble in the U.S.; eBay, reviews online when making purchase decisions Franprix, and Cdiscount in France; ASDA, Marks and consider shopping a game in which whoever & Spencer, John Lewis, and Waitrose in the U.K.; gets the best price for the least amount of effort and eBay, H&M, Li-Ning, IKEA, and China Mobile wins. in China. Like Planners, Modern Middlers are open to ESCAPE ARTISTS: Like Experiencers, this group environmentally focused come-ons and are even loves to shop, but they’re more focused on fashion willing to spend a bit extra (1–5 percent) for and grooming–categories in which they are often products that are eco-friendly. While always happy innovators. Somewhat less well educated and less to score a great deal, this group now expects more upscale than the overall respondent base, this than just discount pricing. group views shopping as a bit of an escape from Favorite retailers include Target and Wal-Mart in boredom and the ordinary. Representing roughly the U.S.; Decathlon, IKEA, Leclerc, and Celio in 15 percent of the population, Escape Artists skew France; B&Q and M&S in the U.K.; and HaoYouDuo, younger and female (75 percent). Gome, Suning, and Yole in China. Escape Artists are rejecting more expensive STRAGGLERS: Older and with fewer economic department stores in favor of discount-oriented resources, Stragglers do not like to shop and have general merchandisers. Above-average Internet resisted the Internet. This is a group that’s best shoppers, they look to online retailers to create targeted by such traditional price-focused tactics engaging experiences. They enjoy being part as discount coupons, two-for-ones, and sales. of online communities of customers who share opinions and information about companies and Favorite retailers include Dollar Tree, brands – a clear opportunity for fashion brands to Wal-Mart, Kroger, and Home Shopping Network in get on their radar. the U.S.; C&A, Conforama, Intermarché, and La Halle in France; Ocado, Superdrug, and Netto in Favorite retailers include Whole Foods, the U.K.; and Dangdang, Taobao, KEDI, and Trader Joe’s, IKEA, Sephora, Old Navy, China Mobile in China. H&M, and American Eagle in the U.S.; Fnac, Nature et Decouverte, L’Occitane, and Carrefour in France; Boots and B&Q in the U.K.; and KFC, M-zone, and Taobao in China. AVOIDERS: This group hates to shop, regarding it as a major hassle. They are frequent users of the Internet, as it lets them bypass much of the retail shopping experience. Making up roughly 15 percent of the population, Avoiders skew male (60 percent) and are more highly educated than most. Getting Avoiders to part with their cash, especially in difficult economic times, requires making the entire transaction as simple and hassle-free as
  • 24. 21 Prosumers Inhabit Two Segments Where do prosumers fit into this shopper segmentation? They make up the bulk of two important groups: Experiencers and Planners. This is in keeping with our understanding of prosumers as people who both enjoy shopping and are good at it. They approach significant purchases carefully, conducting research and soliciting the opinions of others online. And they serve as a source of advice and recommendations for those less willing to put in the time to fully vet a product or brand prior to purchase. The segmentation also shows two important groupings based on shopping motivations: Experiencers and Escape Artists are both emotional shoppers. They derive more pleasure than average from the act of shopping and scoring a good deal. These are the people who will be most receptive to creative retail experiences and environments, and most open to innovative promotions. At the other Targeting today’s most proactive consumers–the end of the spectrum are the Planners and Avoiders, Experiencers and Planners who make up the both of whom fall into the category of pragmatic prosumer segment–makes sense in any category shoppers. Though Planners approach shopping and economic climate. That’s why they’ve been an with far more interest and gusto than do Avoiders, ongoing focus of study for Euro RSCG since 2002. both groups welcome opportunities to gather This newest study also spotlights the value to be information easily and quickly. When shopping gained by accurately targeting two other groups: online, they’ll favor sites that offer customer the Escape Artists and Avoiders. Together, these reviews, detailed product descriptions, and hassle- two groups make up a quarter of the population free purchases (e.g., free shipping, easy returns, in each market, and they’re more likely than stored customer information). Experiencers and Planners to change their shopping behaviors during economic downturns. These are the customers who could most easily be lost to retailers who don’t take the time to understand their motivations and meet their unique needs. s er pp ho a ls escape artists n io ot em modern middlers experiencers co ns um um ers ers pros avoiders planners stragglers pragmatic shoppers
  • 25. More than 80% of our food products in France are made in France*. When in France, buy French, and when in Brazil, buy Brazilian. It’s the logical way to shop, especially when it comes to groceries. At Carrefour, most of the foods for our locations around the world are produced locally. And most of our products come from small or midsize businesses. At Carrefour, to be useful every day is to commit to local producers and small and midsize businesses. www.groupecarrefour.com *Percentage of French Carrefour food products produced locally in France.
  • 26. 23 The Internet and the Rise of the Smart Shopper It would be difficult to overstate the impact of the Internet on shopping behaviors and attitudes. Virtually all prosumers and the vast majority of mainstream consumers in each market said the Internet has become an important part of their shopping and their first step In and of itself, online retail has become a key competitor in the category over the past decade. in major purchase decisions. This When asked how often they shop at 15 types response rate is up significantly in of retailers, respondents ranked the Internet among the top five overall, behind only grocery every market compared with data stores, discount chains, super centers, and drugstore chains. In most markets, respondents from Euro RSCG’s 2004 Prosumer are more likely to shop online than in department Pulse® study. The increase in people stores (traditional or discount), warehouse stores, convenience stores, or independently using the Internet to research owned stores and boutiques. Prosumers in the major purchase decisions is up most U.K. actually cited the Internet as their most frequented type of retailer; 74 percent shop online dramatically in France, rising 42 somewhat often/often, up 20 percent since percent among prosumers and 36 the 2004 Prosumer Pulse survey. percent among others in the four Perhaps more important than the migration to online shopping is the impact the Internet is years since the previous study. having on shopping in general. Large majorities in each market indicate they conduct a lot of consumer research online–much of which arguably would not have occurred prior to the Internet. Virtually all consumers and approximately eight in 10 mainstream consumers search for customer reviews while making purchase decisions, and most indicate they will do so even more in the future. Actually writing and posting product/retailer reviews online is an activity in which a majority of prosumers are already involved–testament to their proactive natures. It’s interesting to note that even mainstream consumers are inclined to join an online community of customers who share opinions about companies and brands, suggesting further scope for consumers to band together online as a means of increasing their clout at retail.
  • 27. 24 Even if I don’t make purchases I do lots of [consumer] online, the Internet is a very research online important part of my “shopping” strongly/somewhat agree strongly/somewhat agree p: 88% 70% 84% 88% p: 99% 88% 92% 92% 0: 67% 42% 65% 66% 0: 81% 76% 78% 81% For major purchase decisions, The Internet has had little my first step is usually the Internet to no impact on my shopping strongly/somewhat agree strongly/somewhat agree p: 92% 94% 92% 88% p: 6% 17% 5% 25% 0: 75% 71% 75% 71% 0: 10% 22% 11% 21% I read consumer feedback/reviews I would like to be part of an online before making a purchase community of customers who frequently/sometimes share opinions and information about companies and brands strongly/somewhat agree p: 91% 90% 87% 95% 0: 79% 67% 72% 90% p: 74% 68% 78% 93% 0: 46% 48% 53% 83% I search for customer reviews while making purchase decisions do it now do it now and likely to do it more in the future p: 96% 98% 96% 97% p: 74% 65% 69% 79% 0: 86% 85% 79% 87% 0: 57% 38% 41% 65% I write online product or retailer reviews do it now do it now and likely to do it more in the future p: 71% 72% 55% 80% p: 38% 34% 31% 47% 0: 46% 53% 32% 61% 0: 21% 15% 13% 36% p: prosumers o: others
  • 28. Search for airline/car rental/hotel information and/or make 25 reservations do it now do it now and likely to do it more in the future p: 96% 98% 93% 95% p: 85% 77% 64% 79% 0: 91% 92% 81% 80% 0: 67% 52% 44% 57% Search online for financial information and/or purchase financial products do it now do it now and likely to do it more in the future p: 65% 71% 87% 89% p: 41% 29% 53% 65% 0: 58% 56% 75% 77% 0: 28% 17% 35% 52% How often do you do each of the following? Visit company website Use online coupon in to locate store near me brick-and-mortar store frequently/sometimes frequently/sometimes p: 96% 84% 87% 85% p: 82% 71% 77% 77% 0: 89% 75% 82% 88% 0: 76% 61% 57% 64% Research purchase online Visit retailer with info before visiting store to buy it printed from website frequently/sometimes frequently/sometimes p: 95% 88% 97% 97% p: 79% 92% 69% 72% 0: 89% 82% 82% 88% 0: 70% 76% 56% 61% See product in store and then Return online purchase to wait to order online brick-and-mortar store frequently/sometimes frequently/sometimes p: 62% 73% 72% 87% p: 42% 26% 31% 45% 0: 50% 58% 58% 71% 0: 35% 19% 25% 34% p: prosumers o: others
  • 29. 26 ADVAN TAGE: SHOPPER The Interplay of Online and Off- There are all sorts of ways consumers are using Successful retailers of the future will the Internet to their advantage when shopping. understand – and make full use of – the interplay Price and product/service comparisons are an between online and brick-and-mortar stores. As obvious choice, and nearly all respondents are mainstream consumers become more proactive making use of this capability in at least one retail shoppers, the line is blurring between the virtual sector. Researching purchases in areas that offer and “real” worlds. Even people who intend to a sometimes confusing array of choices and that make purchases at a local store will visit the have potentially serious consequences for wrong company website to research a product prior to choices is particularly prevalent. Two of these purchase, download a discount coupon, and/or categories are Travel/Hospitality and Finance. get directions to the store. It’s also common Nearly all prosumers – and almost as many for people to see a product in a store and then mainstream consumers – turn to the Internet wait to order it online, whether for reasons of when making travel plans. Most indicate they convenience or based on the assumption that a will do so even more in the future. In looking at lower price can be found on the Internet. Retailers the percentages of respondents who search for will want to take steps to ensure the offline-online financial information online, it’s telling that the transition is seamless and that each medium fully gap between U.S. prosumers and mainstream supports the other. consumers has narrowed dramatically since the 2004 study. Four years ago in the U.S., 68 percent of prosumers and 43 percent of others searched for financial information online – a gap of 25 points. In the current study, the gap is just seven percentage points, illustrating the extent to which what used to be leading edge is now mainstream. It’s also worth noting the tremendous jump in online financial research in France and China. In both markets, the prosumer scores rose 33 percent from 2004, while mainstream consumer scores rose 27 percent and 29 percent, respectively.
  • 30. 27 Conclusion: Reaching the Retail Target of the Future The Future of Shopping study makes clear that, in the future, shopping will be more proactive and considered. Consumers will continue to seek new and better ways to research products and services prior to purchase–and smart companies will help them do so. We can expect increased consumer-to-consumer communication via online reviews, recommendations, and consumer blogs, as well as new mechanisms through which individuals can work together to elicit better deals. This study also confirms the shift to more mindful consumption– a trend that will influence how retailers package, present, and promote their goods. In the background of each of these shifts is the Internet, a tool that has forever changed how people shop. Virtual shopping baskets will grow heavier, as e-retailers continue to compete on cost, convenience, and selection. And retailers will continue to find new ways to engage their customers so as to add value to the brand and to the shopping experience, both online and off. With change taking place at such a rapid clip, retailers are well advised to keep an eye on the prosumers in their markets. These men and women continue to offer a glimpse of the future in terms of both how people will shop and what they’ll be buying.
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  • 32. Prosumer Reports is a series of thought leadership publications by Euro RSCG Worldwide – part of a global initiative to share information and insights, including our own proprietary research, across the Euro RSCG network of agencies and client companies. Euro RSCG Worldwide is a leading integrated marketing communications agency and was the first agency to be named Global Agency of the Year by both Advertising Age and Campaign in the same year. Euro RSCG is made up of 233 offices in 75 countries and provides advertising,marketing, corporate communications, and digital and social media solutions to clients, including, Air France, BNP Paribas, Charles Schwab, Citigroup, Danone Group, Heineken USA, IBM, Kraft Foods, Lacoste, L’Oréal, Merck, PSA Peugeot Citroën, Pernod Ricard, Reckitt Benckiser, sanofi-aventis, and Volvo. Headquartered in New York, Euro RSCG Worldwide is the largest unit of Havas, a world leader in communications (Euronext Paris SA: HAV.PA). For more information about Prosumer Reports, please visit www.prosumer-report.com or contact Naomi Troni, global chief marketing officer, at naomi.troni@eurorscg.com. Follow us on Twitter @prosumer_report