The future of retail in a digital world

A Strategic Vision for a Retail Future // September 2012

A Strategic Vision for a Retail Future

© Matt Butterworth 2012


AGENDA FOR TODAY

1.  Retail + Commerce
2.  Digital context + Implications
3.  Connected everything
Context
4.  Strategic framework
5.  Conceptual execution
6.  Strategic Roadmap
7.  Questions and answers



BACKGROUND

Many traditional retailers have not effectively adopted multi-channel retail
experiences and remain exposed to the signiﬁcant risk of being left behind by
more agile, digitally-savvy competitors. And yet there is another reality that of
the shopper. One might use words like “empowerment, transparency, ease-of-
use and convenience” to describe the evolving experience for the digitally-
savvy-shopper,
"
This presentation will provide a snapshot of both these realities, it will showcase
trends that are driving change within retail and can be leveraged by retailers to
compete in the modern retail marketplace.



WHAT IS COMMERCE

The current market place
Walk down any High Street and you can see the biggest forces
revolutionising shopping habits as the meteoric rise of Google, Amazon,

Apple and Facebook (or the Gang of Four as they are known) have fast
become a normal part of our day-to-day lives."
"
These and other innovative companies have changed our expectations
about shopping and are forcing regular High Street retailers to up their
game in response."
"
The future offers shoppers the best of both worlds, with smart retailers
adopting the digital innovations from these companies to create an even
more compelling experience for customers."
"
"We're standing on the edge of a new digital era"
Those retailers that can effectively harness the power of digital will find
that their high street stores go from strength to strength”
"
"
"
!
!


WHAT IS COMMERCE

Commerce is at the heart of
everything, otherwise there is no
point in being a retailer….
Ecommerce is everything from personalised
recommendations to full transactions"

Include instore and point of sale"
Online - pervasive and consistent customer
experiences  
Why should an in-store experience differ from an on-
line experience"
"
!
!



“empowerment, transparency,
ease-of-use and
convenience” describe the
evolving experience for the
“digitally”-savvy-shopper….

So it got me thinking…..!



CASE STUDY

Convenience for consumers
The ground-breaking mail order operation, next
directory catalogue launched in 1988 with a hardback

book containing 350 pages, creating the blueprint for
catalogue retailing."
"
Its changed the industry overnight"
"
Cutting edge design (Why not Associates)"
"
This year this sales at its online and catalogue
business have smashed through the £1bn barrier for
the ﬁrst time. the group's 25-year-old Next Directory
is also set to deliver a 16 per cent rise in operating
proﬁt to £257m over the year to 28 January.  
This means the FTSE 100 company's catalogue unit
made more money than the John Lewis Partnership's
eponymous department store and nearly as much as
the JLP-owned grocery chain, Waitrose, over the
same period"
"
!
!


CASE STUDY

Convenience for consumers

Tesco QR Code Subway Store
Subway / billboards walls are plastered with posters that
resemble the aisles and shelves of a supermarket. "
They’re lined from top to bottom with the products you’d
normally see while grocery shopping. "
The only difference is that you can’t just grab the product
and check out. "
The groceries each have a QR code which the shopper
scans with a smartphone camera and adds to a shopping
list. "
When the shopper has scanned all the codes for all the
groceries needed, he pays using his phone and the
groceries are then delivered to his home.
"
"
"
!


Digital Context



DIGITAL CONTEXT

Fragmentation will get worse"
before it gets better…

Context



DIGITAL CONTEXT

We are moving towards the
‘always on’ digital age…
Microsoft predicts that by 2014 mobile internet access will
overtake PC internet access"

Tablet sales are forecast to outstrip PC sales by 2015*"
Context from stationary to ubiquitous computing
We have moved



DIGITAL CONTEXT

Fragmentation and the always
on consumer present brands
with serious challenges
- Multi- Platform / Format Content"

Context

- Attention"
- Speed"
- Understanding



DIGITAL CONTEXT

Understanding context will
become paramount

Context



DIGITAL CONTEXT

Real time marketing requires an
end to siloed thinking
“Marketers’ long-standing challenges — such as
siloed measurement, disjointed customer

experiences, and ﬂawed attribution — are still
Context
serious problems, and the convergence of
several market factors puts the online marketing
suite back on the table” "  “Management of digital strategy and
Forrester 2011!
communications remains siloed...”  
! Forrester 2011

!
!
!
!



DIGITAL CONTEXT

The near future…enterprise
organisations will manage
communications through an
interconnected digital hub
Context



Digital implications



DIGITAL IMPLICATIONS

Develop a deeper understanding of the"
retail audience
Depth interviews/ethnography"
Tap into private communities to gain a deeper understanding of the impact of digital
technologies on behaviours and expectations"
Context purchase path behaviours through attribution modelling"
Understand
!
!




Use insight to develop core personas and
intelligence that inform digital strategy




Use this insight to
develop touch-point
models for each persona "
(or segment depending
on your preference)




One size doesn’t ﬁt all….

Different territories have different

requirements"
Perception of brands"
Context
Channel Behaviour"
Cultural differentiation"
"
"
"
!
!




Begin to plan for the age of real-time marketing - remove
channel silos, focus on data integration and mining and begin
to develop a digital nerve centre for retailers


Retail and the future of
(e)commerce…



RETAIL AND THE FUTURE IN A DIGITAL WORLD

Ideas
Utility
Context
Inspiration
Curation




Disruption has become the norm

Amazon Kindle"
revolutionised " Facebook"
App store"
publishing" Social "
Transformed mobile"
(Age: 2yrs 3 months)" communication"
(Age: 4 years)"
(Age: 5 ¾ years)"

iPad" YouTube"
1st successful tablet" iPlayer" Online video"
(Age: 2 years)" Mainstream online " (Age: 6 years)"
Viewing"
(Age: 3 yrs 3 months) "


And its about to
accelerate…




We are moving into the
age of the digital eye…ﬁrst
with our phones…




But soon with very trendy
eyewear




The world will be augmented by a
wealth of virtual data…introducing
us to new experiences (and total
strangers!)…
“Sonar is a mobile application that helps you learn about
and connect with likeminded people nearby." "
"
It works by geotracking your current location à la
Foursquare check-ins and aggregating public information
from your social networks (Facebook, Twitter, Foursquare,
etc)"
"

!



DIGITAL CONTEXT

Our phone and glasses will know
everything about us

Context



DIGITAL CONTEXT

In time….

Context




Payment will be contactless…///
NFC is a short-range wireless technology that
enables devices to exchange data without an
internet connection"




Retailers products and
marketing collateral will act as
a gateway to a wealth of
product and brand information


Connected everything




Over 1/3 of Europeans will
have a connected TV by 2014
In the eyes of the viewer content simply
becomes content, accelerating the move
towards rich, high quality branded experiences"
(think Audi TV, BMW TV)"
"
"
"
"




We will soon be buying from
our favourite shows
The contents of shows will become searchable.
The metadata will include everything about the
show but also about the clothes, products, and
locations…"
BUY NOW




And when in the real world, we
will share our shopping
experiences with our social
group in real time




And retailers will provide
realtime instore CRM
Real time CRM with"
personalised…"
"
-  Guides"
-  Content "
- Offers"
-  Discounts"

Based upon cross-channel behaviours, previous
responses, browsing behaviour, social network"
"



From e-Commerce to
Social Commerce
“social commerce is the next area to really blow up”"
Mark Zuckerburg



SOCIAL COMMERCE

Trickle of brands selling through
Facebook is threatening to become
a deluge

Social shopping is gathering
momentum

Mobile sharing apps will soon
become commonplace



SOCIAL COMMERCE

Revenue forecasts support the
hype around social commerce &
the audience (particularly young
adults) are open to inﬂuence and
sharing…

Source: JWT 2012!

Source: emarketer 2011!


So why don’t Retailers
just dive in…..?



SOCIAL COMMERCE

Social networks are primarily
about communication, not
shopping…..

Source: Forrester 2011!



SOCIAL COMMERCE

Results from social commerce
initiatives are poor & unsurprisingly
social has not proved a great
acquisition tool



SOCIAL COMMERCE

And privacy remains a huge
concern
When asked about personalised recommendations based
upon Facebook proﬁles (US and UK)"
72% said “it feels like big brother is watching me”"
56% “feel violated”"
76% “prefer to ﬁnd things on my own”"

Source: JWT!



So what role should digital play for
Retailers?


Create brand differentiation &
preference for Retailers



CURRENT STATE OF PLAY




For retailers, it is critical to
differentiate your products at
the moment of truth
Even Google accept that the original
FMOT is still often critical to the buying
decision"




FMOT: " ZMOT:
A consumer would get to the shelf, pick up a bag Consumers are going to the internet and
of Chocolate Chip Cookie Mix and follow the researching the cookie recipe in advance of
recipe on the back of the bag, possibly keeping buying a bag of Chocolate Chip Cookie Mix from
the physical bag to keep a record of the recipe." a store shelf.

Consumers found out about a retail promotional Consumers become aware of these events in
event (like 20% off all Autograph selection)) via advance either through e-mail newsletters,
stumbling upon it, or by seeing a ﬂier posted in becoming fans on networking sites, or following
the paper brands on sites like Twitter. Not only that, but they
can tell hundreds of their friends and family all
about it in real time with one quick social
networking status post."
."
Consumers waited for their monthly Retail Consumers are going online to ﬁnd inspiration for
magazine issue to arrive, to learn about the next their own looks, and to get tips and tricks from
season's hot looks" experts -- or to take their cues from a favourite
celebrity or friend.


Some initial ideas….



A PROPOSED ROADMAP FOR Retailers

1. Service with an opt in…
Give me personal attention and better service…"
"
Retailers ask shoppers to trade personal data to
receive a better service"



A PROPOSED ROADMAP FOR M&S

Neiman Marcus
Location aware app provides sales-staff with customer
preferences to create heightened level of personalization to its
in-store shopping experience"
"
Program the app’s preferences to automatically alert sales
staff when they enter a store."
Provide staff with instant access to their shopping history and
Facebook proﬁle image."
“Check-in” whenever they are ready for assistance. "
"
The app also allows shoppers to see which sales associates
are in-store, message and make appointments with an
associate of their choice, scan QR codes to unlock product
information and trends as well as mark their favorite products
– all of which, can automatically be made available to staff,
helping associates make smarter recommendations about
which products are right for each of their customers."




2. Auto Curated shopping
Let me shop for what I like"
"
Retailers leveraging shoppers social data and
purchase history to create customized browsing
experiences"
"
Glimpse by ﬁnd"
A Facebook shopping discovery app that is built
on top of Facebook “like” data. The app curates
shopping pages for users based on their likes, as
well the stuff their friends like."
"
When a Glimpse user likes a page, the service
can determine what product the URL is referring
to, can pull up the most recent availability and
pricing data and also ﬁt it into different styles and
trends"
"
"




3. Group power is being harnessed
with crowd led product ranges

“Let me help decide what’s being sold”"

"
New affordable clothing range"
Launched at New York Fashion week with a cat walk

parade"

Designs voted on by the eBay community"

Most popular designs go into production"




4. Mass customisation &
personalization

NIKEiD allows customers to design their own trainers,
specifying every aspect of the design"

"
Moving forward, consumers will expect higher levels of
personal design choices"
"
Positives and negatives"

"
Pricing done what people will pay for it"

"
!




Modcloth
Stylists look to your past purchases to tailor advice to make
more personalized product recommendations"
"
Integrated a live-chat feature on its Facebook page which
allows customers to submit personal data and receive
recommendations based on their unique preferences and
spending habits"
"
Shoppers to submit information around their interactions with
the brand, including past purchase history, ‘loved’ items and
current wishlists"
"
Recently launched a Make the Cut Contest, where customers
submitted their sketches, went through a social media voting
process, and the actual garments were brought to life and
sold on the site.




5. Virtual Sampling

Help me choose the perfect fit"
"

Upcload is a webcam enabled Algorithim ensuring
customers find the right fit online"
"
"

!


Strategic Roadmap….




Insight - where is the store in the
conversation?
Today bricks & mortar stores still generate the lion share
of revenues for most retailers…"
"
Yet the store gets little attention in the cross channel
discussion ….why?"
"
Store systems are too old and too inﬂexible to add much
value to the cross channel discussion."
"
Today, old, clunky, POS & store systems force you to treat
everyone the same - one size ﬁts all…"
"
Meaning you can’t react quickly to changing customer or
business needs"
"




Phase One
Providing the tools and content that
meet the expectations of today’s digital
consumer and providing a solid digital
platform for future development."

Phase Two
Providing a demonstrably differentiated
and superior customer experience that
delivers on the brand proposition across
each and every digital interaction."


So in conclusion!!



CONCLUSION // STRATEGIC TAKEOUTS

1.  Don’t remain exposed to the signiﬁcant risk of being left behind by more agile,
digitally-savvy competitors.

2.  Fragmentation will get worse before it gets better

3.  Real time marketing requires an end to siloed thinking

4.  Develop a deeper understanding of the retail audience

5.  Develop a rigorous governance model

6.  Prepare for a world that will become interconnected

7.  Don’t run before you can walk

8.  Data, Data, Data


Matt Butterworth 
Email mattbutterworth@live.com"
Mobile +44 (0) 7842 632 341"

Twitter:- @silverdog72


The future of retail in a digital world

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