From Wall Street to Main Street

FUNG GLOBAL RETAIL & TECHNOLOGY Staples Inc. MARCH 26, 2016
From Wall Street to Main Street

Wall Street Career
• 17 years covering Wall Street
• Went through Regulation FD
• Global Recession
• Market crash
• Thought they would lock the doors
• Citigroup Tremors
• Compliance Focused

Disruption on Wall Street Post the Great
Recession
• A black cloud hovers
over financial services
profession.
• Wall Street no longer the
career of choice
• Fundamentals of
research have changed
• Heavy compliance
requirements saps talent
from research to legal
• Passion for research
drained 7600
7700
7800
7900
8000
8100
8200
8300
8400
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
All Financial Activities Employees (Thousands)
Source: Bureau of Labor Statistics

MBAs Migrate
• New talent gravitating
towards tech and
entrepreneurial pursuits
not financial service

Personal Crisis
• Leave Wall Street
• Passion for Tech remains
• Tradestone
• Profitect
• And Fashion
• Rubin Singer

Creating New Career
• CCO at Profitect
• Research and analytic skill set focused on entrepreneurial models
disrupting traditional retail
• Less financial statement analysis
• Focused on next solution for consumer need at the intersection of
technology and the broad categories of apparel beauty and home

And Loving it!
• IoT
• Connected consumers
• 3D Printing
• Robots and retail
• Avatars and holograms
• New ways to discover everything!

Top Trends
1. Experiential Retail
2. Smart Malls
3. Social Shopping
4. Resale economy
5. Sharing economy
6. Loyalty
7. Digital Smarts
8. Silver Economy
9. Evolving Pure Plays
10. Millennial car ownership
11. Healthy eating
12. Retail store openings and closings
13. Amazon growth
14. 3D Printing
15. Store Traffic
16. Subscription Economy
17. RFID Adoption
18. Wearables
19. Tech Investments
20. Social commerce in China
21. Online auction apps in Asia
22. Line Launches Debit Card
23. Walmart Lags in E-commerce

Urban Outfitters acquired
Vetri Family group of restaurants
in 2015
Club Monaco and Kohl’s are also
opening food and beverage shops in
their stores
Rebecca Minkoff offers interactive
mirrors as well as virtual reality headsets
Tommy Hilfiger stores have virtual
reality headsets to allow consumers to
experience runway shows
Lowe’s Holoroom allows customers to
see merchandise in different color
combinations and as they would appear
in a home
Proliferation of mobile apps to improve
in-store experiences,
such as: customizable shopping lists,
location-relevant promotions, and
product and inventory information
Food &
Beverages
Virtual
Reality Technology
1. Experiential Retail Brings Shoppers Back to Stores

Data enabled
personalized and
timely promotions
Track movements,
behavior and
preferences
Beacon enabled
location-based
advertising
2. Smart Malls: Reshaping the Physical Shopping
Experience

• HGTV partnered with Macerich shopping malls to launch virtual and
hand-on technology-based experiences
1
1
• RetailNext formed strategic alliance with StepsAway, an in-mall
mobile retail solution provider offering shoppers smartphone access
to hyperlocal in-store deals
• A Silicon Valley-based unit which designs and experiments with
innovations to improve the retail experience
2. Smart Malls: Reshaping the Physical Shopping
Experience

• Buy on social media platforms without switch apps or
websites
• Easy to curate content on social media
• “Buy button” helps prevent shopping cart
abandonment
• Youtube, Pinterest , Twitter and Google already have
buy buttons
• Wechat is a pioneer in social shopping
45%
44%
30%
25%
22%
20%
16%
Reading reviews, comments and feedback
Receiving promotional offerings
Viewing advertisements
Staying on top of current fashion and product
trends
Writing reviews, comments and feedback
Associating with particular brands and retailers
Purchasing products directly via a social media
channel
How Social Media Influences Shopping Behavior
Source:PWC
3. Social Shopping is Made Simpler

Disruptors: thredUP, Tradesy, The RealReal, Poshmark, Vestiaire
Collective
• VC backed online consignment at $300 million and growing
• Sustainable consumption trend
• Impacting apparel, luxury accessories, fine art, objets d’art, and
jewelry & watches
4. Explosion in Resale

• Next big industry to be disrupted is
healthcare, via startups such as
Doctor on Demand, Pager, Studio
Dental and MedZed
• Sector is maturing and becoming more
sophisticated
• Challenges: customer safety and
regulation battles
• Expanding scale in tandem with
Millennials and GenZ reaching
maturity
• 2016 may see the first big sharing
economy IPO Source: Company Reports/Analyst
Estimates
*
*
*Retail company
5. Sharing Economy

FUNG GLOBAL RETAIL & TECHNOLOGY Staples Inc. MARCH 26, 2016 15
• Retailers will refocus on loyalty, which has become
increasingly difficult to generate and maintain in the
omni-channel world.
• Walmart launched Savings Catcher in 2014 to give
customers the difference in price if product is cheaper
elsewhere
• Retailers frequently use clubs, memberships and
elements of gamification to help increase customer
loyalty in addition to personalize offering
• Currently, only 37% of retailers use internal and
external data to gain insights on their customers
• Smartphone apps are becoming more prominent in
loyalty programs – the days of a “card” may be
numbered.
More retailers will facilitate personalized experiences for customers via loyalty programs
6. Loyalty Programs: Keep Them Coming Back

• Smarter choices possible for everything
eating exercising shopping
• Let your fingers do the walking and sharing
• Retail investments focused on technology that touches consumers
from apps to payment, data security to fulfillment capability
• Mobile growing influence. A genius in my handbag.
7. Digital Smarts

• Silvers 60-85
• Super Silvers 85+
• More services, more experiences, more fun
• Senior population is growing across the globe
• US has the largest market for seniors: 2.2 trillion in 2014
• Older Consumers Are Increasingly Digitally Connected:
Increasing mobile device usage: Greatcall
• Boom of healthcare tech industry: UnaliWear
• Smart Home: healthcare and assisted living system
Source: UN Department of Economic and Social Affairs
7 10 15
12.3%
13.5%
16.5%17.0%
19.0%
23.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
0
2
4
6
8
10
12
14
16
2015 2020 2030
Estimated Senior Population and Spending, 2020 & 2030
Consumer spending by senior population(USD trillion)
Senior population as a % of total population
% of total worldwide spending
8. Silver Economy: Aging Population Creates An
Opportunity

1
8
AMAZON
BONOBOS
ATHLETA
CASPER
AYR
YOGIBO
HARRY’S INDOCHINO

Millennials prefer mono-brand brick-and-mortar stores, and they shift
between online and offline along the shopping journey
1
9
Retailer # of Stores
1
2
3
20
26

• A recent survey found that 20% of Millennials take public transit
once a week or more, compared with just 7% of Generation Xers
and 10% of Baby Boomers
• 35% of millennials indicated that they plan to purchase a vehicle
in the next 12 months compared to 25% of total U.S. adults.
• Millennials lease more than any other generation and are leasing
50% more often today than they were five years ago
10. Millennials Aspire to Car Ownership but Also Like
Sharing Plans

• Millennials believe that eating right
is the most important aspect to achieving
well-being
• Millennials are more concerned
with nutrition food labels regularly
Millennials Boomersversus
24% 12%
Exercise and
Eating Healthy
40% 33%
Artificial Ingredients
Source: Company Report
11. Active Pursuit for Healthy Eating Lift Organic Grocers’
Sales

• Multi-cultural cuisines
• Gluten-free baked goods
• Organics
• Avoid additives
• Less swayed by traditional nutritional markers such as calorie
count and health claims
• Buy frozen or prepared ‘healthy’ foods, adding fresh ingredients
and seasonings
• In 2015, Whole Foods Market revealed perhaps the first major
millennial-focused store format
• Prepared food departments are cooking to order, offering greater
variety, and healthier customized meals
11. Active Pursuit for Healthy Eating Lift Organic Grocers’
Sales

Retailer # of Announced Store Closings
Walmart 269
Mens’ Wearhouse 250
Sports Authority 140
Sears 50
Macy’s 40
Kohl’s 18
Retailer # of Announced Store Openings
Dollar General 900
Forever 21 600
Under Armour 200
Dick's Sporting Goods 135-150
Ulta 100
ALDI 45
Costco 32
Dollar Tree 13
Stein Mart 12
Target 11
Source: ICSC Research and PNC Research
2015
• There was a 7% increase YoY in store closure
announcements
• There was 29% less square footage associated with
announced store closures in 2015 versus 2014
2016
• Off-price/discount retailers are expected to see major
growth in 2016
• Foreign discount grocers Aldi and Lidl plan to push US
expansion
• E-commerce pure plays opening stores
12. Retail Store Closings and Openings Continue

• Accounted for $0.51 of every
$1.00 of growth in US e-
commerce in 2015
• Also generated 24% of total
retail growth in the United
States
(10%)
5%
20%
35%
50%
2003 2005 2007 2009 2011 2013 2015
Amazon Sales Growth US Total Retail Sales Growth
Source: Bloomberg and US Census Bureau
Amazon Annual Sales Growth
13. Amazon Sales Growth Far Outpaces US Retail Sales
Growth

AS A SERVICE:
• UPS launched in-store 3D-printing services in 2013
• Staples has offered 3D-printing services in stores since 2014
• The new millennial floor at the Macy’s NYC flagship store has a
3D-printing shop
14. 3D Printing: Retail (Make in the Store)

APPAREL, FOOTWEAR, CONSUMER ELECTRONICS
• 80/20 products:
- 80% of product mass produced
- 20% customized
• Shoes of Prey
- Design your own perfect shoes
• Mink Makeup Printer
- A sub-$200 desktop printer can print makeup
• Normal Headphones
- Custom-fit 3D-printed earphones
14. 3D Printing: Enterprises

• US store traffic is down 6.9% in February 2016
• US mall traffic has declined for 37 consecutive
months and continues to be challenging
• Malls have seen an average drop in traffic of
9.3% YoY
- High-end malls appear less affected
- GGP traffic up 2% in 2015
- Simon traffic up 1.5% in 2015
- Taubman traffic up in 2015
Source: RetailNext
Monthly US Store Traffic: YoY% Change
27
15. With Store Traffic Down, In Store Experience is Key

• Disrupters: Le Tote, Birchbox, Barkbox, Pijon, Stitch Fix
• Convenience and curated products for consumers
• Recurring revenue model for retailers
• Element of self-gifting
• Beauty is the biggest category
• Fashion styling subscriptions are becoming popular
16. Subscription Economy: Opportunity for Office Suppliers

• Radio-frequency identification (RFID) uses radio
waves to identify and track items
• RFID will supplement or replace barcodes
• Distributed Order Management is necessary for
Omni-channel operations
• Revenue Benefits:
- Eliminating out-of-stock situations
- Sales Lift from Inventory Management
- Better Inventory Management
• Adoption is speeding up:
- The number of retailers adopting RFID
increased by 23% in 2015
Global Market for RFID Tags (USD Bil.)
Source: Statista
17. RFID Adoption Gaining Momentum

• Fitbit: 22.2% share (#1) of the wearables market as of
3Q 15 (IDC)
• Apple Watch: 18.6% (#2) share of the wearables
market as of 3Q 15 (IDC)
• iFit ecosystem provides a game plan for exercising,
activity, nutrition and sleep
• Under Armour’s $400 HealthBox uses a wristband,
heart rate monitor and scale to track fitness, sleep and
nutrition
• Withings has a smart wristband heart monitor, scale,
sleep monitor and blood pressure monitor
18.Wearables

• In 2015, growth in online channel outpaced
growth in brick-and-mortar sales, spurring many
retailers to increase investments in digital
capabilities
• Target has announced $3.8 billion in technology
spending over the next 2 years
• Home Depot increased online presence with
initiatives such as buy online, pick up in store.
Walmart strong mobile growth was driven by
improving its app and simplify the checkout
process
• Spending areas will likely be mobile app
improvement, fulfillment capability, and payment
systems and data security
Source: Company reports
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
CVS
HomeDepot
JCPenney
Kohl's
Macy's
Nordstrom
Sears
Target
TJXCompanies
Walmart
Capex/Sales
USDBil.
2014 Tech Capex 2015 Tech Capex 2014 Capex/Sales (Right Scale)
Tech Spending at Major Retailers 2014 / 2015
19. Tech Investments: Help Feed the Digital Shopping
Habit

• $672.01 Billion e-
commerce sales 2015
• eMarketer predicts m-
commerce accounting
for 49.9% on online
retail sales
• 70% of Singles Day
sales from mobile
32
0
100
200
300
400
500
600
700
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
WeChat Monthly Active Users
(Millions)
20. Social Commerce Takes Off in China

21. Asia Based Auction Apps
• P2P shopping apps
• Shopee, Mercari,
Carousell
• List items for sale within
minutes
• Built in services:
• GPS
• Chat
• Payment
• Delivery

22.Line App Launches Pre-Paid Card
• Line has 68 Million
Japanese Users
• Credit Cards under-utilized
in Japan
• Card ties into spin-off Line
Pay app
• Linked to rewards service:
Line Points
• Add money or view
transactions from within app
34

23.Walmart Lags in E-Commerce
• 40 million customers per month
• 15th largest e-commerce
destination
• $2 Billion investment in e-
commerce
• 10% of overall capex
• Online traffic 7% of weekly store
traffic
• 2% of total sales
35
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
E-Commerce Sales YoY
Walmart.com US E-Commerce Market

From Wall Street to Main Street

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie From Wall Street to Main Street

Ähnlich wie From Wall Street to Main Street (20)

Mehr von Deborah Weinswig

Mehr von Deborah Weinswig (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (11)

From Wall Street to Main Street

Hinweis der Redaktion