JIM OKAMURA MANAGING DIRECTOR OKAMURA CONSULTING LLC

Transcription

1 JIM OKAMURA MANAGING DIRECTOR OKAMURA CONSULTING LLC

2 COPYRIGHT NOTICE The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproduction of copyrighted material. Under certain conditions specified in the law, libraries and archives are authorized to furnish a photocopy or other reproduction. One of these specified conditions is that the photocopy or reproduction is not to be "used for other purpose than private study, scholarship or research." If a user makes a request for, or later uses, a photocopy or reproduction for purposes in excess of "fair use," that person may be liable for copyright infringement. DISCLAIMER The opinions of the contributors expressed herein do not necessarily state or reflect those of the National Association of Convenience Stores. Reference herein to any specific commercial products, process, or service by trade name, trademark manufacturer, or otherwise, shall not constitute or imply an endorsement, recommendation, or support by the National Association of Convenience Stores. The National Association of Convenience Stores makes no warranty, express or implied, nor does it assume any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, product, or process described in these materials.

3 OMNICHANNEL RETAILING

4 Agenda Global Trends in Digital Retailing The Omnichannel Response Global Best Practice and Innovation Omnichannel Challenges: Convenience Store Opportunities Future Omnichannel Scenarios for Convenience Stores

5 Ecommerce is the Foundation of Omnichannel Excellence 4 Omnichannel Capabilities Allowing customers access to information, services and products across channels & devices 3 2 Infrastructure Integration Integrated reporting, customer data and contact management across the customer lifecycle 1 Marketing: Coordinated planning and integrated messaging E Commerce Enablement Build channel knowledge & expertise But the critical path runs through retail store operations and back office.

6 Global Trends in Digital Retail and the Competitive Response: Omnichannel Retailing

7 Define the Strategic Role of Digital Market Factors > Digital channel growth > Customer expectations > Competitors strategy > Technology disruption Internal Factors > Sources of future growth > Customer experience strategy > Brand versus revenue goals > Investment and risk tolerance Year 1 Years 2 3 Years 3 5 Independent Ecommerce Omni Channel

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9 Source: Tuft University and MasterCard

10 Ecommerce Leaders Expand Their Global Share International North America E 2015E 2016E 2017E 2018E 2019E CAGR % 17% 33% 14%

11 But Digital Retail Is Still Young and Business Models Are Evolving 10% Ecommerce Executives Obsess About Conversion $15 $10 Ecommerce Expenses per Order Are Increasing 5% 2.69% $5 0% Ecommerce Conversion Rate (US) $0 Marketing Fulfillment Customer Care Source: State of Retailing Online 2015, Shop.org and Forrester Research

12 Omnichannel Advances Globally

13 Digital Investment Priorities (USA) Site Merchandising Priorities for 2015 Mobile Omnichannel Marketing International Expansion 20% 38% 34% 45% 58% 0% 20% 40% 60% Examples Responsive design, mobile site optimization, app development In store pickup, ship to store, cross channel inventory visibility Brand marketing, search optimization, acquisition, loyalty, CRM Content development, on site videos, personalization Ecommerce sales to international markets Source: State of Retailing Online 2015, Shop.org and Forrester Research

14 Walmart Invests Globally in Digital & Omnichannel Online product assortment Clear purchase options Inventory visibility Site to store Reserved parking spaces Special desk for order collect Knowledgeable sales associates Associate tools Mobile

15 Walmart s Omnichannel Merchandising Strategy Model of Retailer s Stages Towards Multichannel Category Management: Walmart s reaching to be here Its end goal Separate Assortment Operated as distinct channels with separate goals, metrics Some Overlap Limited coordination, lack of flexibility for shoppers to engage across Online Store Store assortment replicated online Some specific offers Extended Aisle Channels aligned, store assortment augmented with added inventory Endless Aisle Integrated Visibility online, instore to product availability across system, stores & warehouses Convenience stores should benefit from high growth Source: Kantar Retail research and analysis 16

16 Mobile Apps: Walmart versus Target Strong consumer value propositions, and for the retailer, rich data and customer insights

17 Target Store Manager Omnichannel Digital Device Workbench Store manager / Associate Digital Devices Employee ipod touch devices Bring your own apps (BYOA) Inventory Visibility Tools to boost sales, improve service, increase operational efficiency including: Inventory optimization Complete transactions Track store and associate performance Visual Merchandising/Store Management Visual merchandising tools Manager workbench Employee scheduling/training/hris

18 Omnichannel Has Favored Market Leaders, But Specialty and Mid market Retailers Are Investing Too

19 Click and Collect Drive Formats Have Rapidly Become the Standard in France

20 Mobile Dominates the Investment Agenda 21

21 Nordstrom Mobile POS Will Become Standard Associate Mobile Device Mobile POS Clienteling Inventory Visibility Take with/ship to in one transaction Customer App Shop and transact Items can be shipped or picked up at full line and Nordstrom Rack stores

22 Store Inventory Visibility is Foundational

23 Container Store Omnichannel Processes

24 Retail Innovations 10: Global Omnichannel

25 Marks & Spencer (Netherlands) Urban, small format store Mostly food, but many connected store touchpoints Extended aisle in fashion categories

26 Argos, UK

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29 Food and Convenience Omnichannel

30 Walgreens Customer Centric App Walgreens App allows customers to clip digital coupons to their device refill prescriptions by scanning the bottle with their phone s camera send photos directly from their camera roll to be printed at their local Walgreens chat with a pharmacist schedule an appointment at a Healthcare Clinic shop for items that can be picked up in stores or shipped.

31 Walgreens Buy Online, Pick Up In Store $20 minimum purchase for in store pick up

32 Walmarts Omnichannel Fulfillment is a Strategic Differentiator Lockers in the Neighborhood Market Fulfillment Revenue of Ship to Store has surpassed the store s traditional revenue in some cases. We made great progress on our priorities, including our global technology platform, next generation fulfillment network and the integration of digital and physical," Neil Ashe, Global ecommerce president and CEO Source: Kantar Retail store visits and analysis, company brochure, company presentation

33 Ocado s Effective Consumer Proposition: Convenience and Value Quick, easy to use Customer experience focused Growth and differentiation through private label and niche branded products Wider Range Price Fresher Produce Better Value Price and value leadership

34 My Muesli: Customized Cereals

35 Au bout du champ, France Hyper Local Omnichannel Click and collect food locker concept Combines the best of digital formats with traditional foods (local, fresh, natural products) Appeals to both the online and offline consumers. Click and collect customers receive a code to open the locker Promotes conscious consumption, and lower price points than traditional organic stores.

36 Emmas Enkel: Re invent a Category Neighborhood shops with a mix of an online shop (with home delivery) and traditional brickand mortar store

37 Starbucks Mobile App & Click and Collect Best Practice Mobile App Gift card accounts for 25% of US sales 16% of transactions on the mobile app My Starbucks Rewards 10+ million members Click & Collect Customers pre order to a specific time to skip the line

38 Whole Foods & Instacart Instacart shoppers embedded in stores to speed up delivery Competing against AmazonFresh, FreshDirect, and Peapod in grocery delivery wars

39 Amazon Fresh is a Threat to Traditional Food Retailers

40 Google Express: Friend or Foe?

41 Online/Mobile Food Delivery = Market Share Gains Delivery services e.g., GrubHub are proven high growth business models (200,000 Orders per day (May 2015) ~40% of national pizza chains orders placed via online/mobile, driving market share gains

42 Just in Time Product and Service Delivery Enabled by Mobile + Humans

43 Omnichannel Opportunities for Convenience Stores

44 How Can Convenience Stores Improve Ecommerce and Omni Consumer Shopping? Source: Shop.org, 2014

45 Omni Opportunities, Immature vs Mature Markets Immature Markets Building digital foundation Mobile first Market share goals Customer acquisition Performance based partnerships Mature Markets Decelerating ecommerce growth Moderate advanced omnichannel Profitability goals Customer retention / Personalization International ecommerce expansion Independent Ecommerce Omni Channel

46 Convenience Store Opportunities Omnichannel Challenge Customer experience Organization Marketing & Analytics Operations and payments Pricing and Profitability Issue Immature Mature End to end customer care, across digital devices and stores Specialized skills, structure, process and KPIs Converting data to insights, marketing programs and revenue Fulfillment and tendering as new sources of strategic advantage Price optimization and lowering variable expenses

47 Customer Experience Leadership Customer experience strategy, design and execution will become a core competency as well as a core tenet of every organization s culture 43% Stock Performance Convenience Stores May Impact the Customer Experience: Physical store coverage and reach In store marketing to stimulate demand Loyalty and customer insight programs Optimize inventory and supply chain Fulfillment and returns Customer care touchpoint 15% CXi Leaders S&P 500 Cxi Laggards 34% Source: Watermark Consulting

48 Omnichannel Merchandising Requires New Levels of Integrated Planning (Red Box Indicates C Store Influence) Product Lifecycle Ends Marke ng & Presentaon Demand Plans Fact Based Business Performance Management Supply Chain Mgmt Product Plans Inventory Flow Plans Inputs to Integrated Planning: Consumer Insights Industry Trends Historical and Forecasted performance by product/channel/customer segment Outputs: Assortments by Store, Channel Pricing & Promotions Open to Buy & Flow Timing Marketing Plans Enablers: Clear Benchmarks/KPIs Participation across the organization Tools, analytics and expert insights

49 Mobile engagement key part of 7 Eleven strategy to reach customers on the go 7 Eleven uses product (e.g. Slurpee Cups with short code to drive downloads of their app) Mobile app then used to deliver coupons, sweepstakes, surprise free product for loyalty, app download links, brand messages & share worthy content 50 Always striving for innovation, 7 Eleven & Japanese soft drink Pocari Sweat using BEACON technology in Singapore POCARI CROSS RUN app tracks runners progress and offers rewards when they pass one of the chain s locations

50 Organization: Digital and Analytical Talent Shortage, Outsourcing (Red Box Indicates C Store Opportunities) E commerce & Omnichannel GM Merchandising Leader Site Merchandising Director of Planning Leader Digital Marketing And Analytics Director Creative Production Director of Operations & Fulfillment Product strategy Pricing strategy Assortment plan Site Visual Merchandising strategy & execution Cross Sell/Upsell Online positioning Merchandise forecasting Receipt flow Open to buy Traffic strategy, performance & budget SEM, SEO, Affiliate, Partnerships, etc. Site & marketing analytics Brand right presentation and voice Messaging and SEO guidelines Navigation and User Experience Photo studio and image planning Service strategy, performance & budget Fulfillment Customer service IT Leader Site Strategy & Production

51 Marketing Attribution Challenges. Convenience Stores May Provide Key Inputs and Analytics Media Measurement is Disparate In Most Retailers Today Sale Sale Sale Sale Best Practice Channel Attribution Measurement 20% 30% 10% 40% Marketing and Channel Attribution Percentages used above are illustrative only Sale

52 Omnichannel Operational Best Practices it s all in the operational details The top performing retailers consistently Communicate the status of delivery and returns, Make the process as easy and convenient for shoppers as possible Delivery Pickup Returns Customer service Packaging fit and quality presentation

53 Omnichannel Fulfillment Ecosystem That Includes Convenience Stores Will Prove More Complex Retail Stores B2C Ecommerce Contact Center B2B POS/Special Orders, Transfers, Replenishment Web Sales Orders CSR Sales Orders EDI, Web, Phone Sales Orders POS ERP Ecommerce, Store Special Order, Call Center Applications Master Data Order Management Systems Transactional Systems Store Gateway Warehouse Management Supplier Enablement / Hub Mgt Retail Stores Carriers & Distribution Centers (Retail, DTC, 3PL) - Vendors - Factories - Drop shippers - 3PLs Supply Networks Customer Facing Back Office Distribution

54 Omnichannel Fulfillment Driving Traffic to Convenience Channel Fashion retailer Zalora Asia s On line Fashion Destination partnering with 7 Eleven Singapore Cash on Collection Model Zalora Shoppers order on line, ship to 7 Eleven, receive SMS when delivered, pay in cash in store

55 Dynamic Pricing Accelerates

56 7 Eleven Taiwan Provides Convenient Omnichannel Payment Solutions Customers can buy on the Yahoo Kimo Auction, ship & pay cash at 7 Eleven 57 Or, auction customers can receive a code, visit a 7 Eleven ibon machine, pay in cash & have item shipped to home Ibon machines allow customers to buy train tickets, concert tickets, pay telephone bills, top up phone and gaming credits and pay cash directly at the 7 Eleven counter after making purchase.

57 In Summary Omnichannel Challenge Customer experience Organization Marketing & Analytics Operations and payments Pricing and Profitability C Store Opportunities Store as the customer touchpoint for services, collection point, payments, endless aisle, returns, customer care Specialized skills e.g., data and analytics, store workforce management Rich transactional data, geo spatial, customer profiling, mobile enabled Omnichannel fulfillment partnerships, customer care, alternative payments Price optimization for omnichannel, expense reduction opportunities in marketing, fulfillment and customer care

58 Future Scenarios for Convenience Stores Immature versus Mature Markets 59

59 Omnichannel for Convenience Stores Will Have Many Paths Immature Markets Faster omnichannel development cycles Underbanked segments Fulfillment returns options proliferate Immature Markets Ship to home hubs Payments Ship to store Data and analytics Ship to store Endless aisle Returns Payments Marketing Data and analytics Mature Markets Endless aisle strategies Private label Squeezing costs/profitability in marketing, operations and customer care Mature Markets Ship to store Data and analytics Omni services Ship to store Returns Data and analytics Independent Ecommerce Omni Channel

60 Jim Okamura Managing Partner E jim@okamuraconsulting.com W okamuraconsulting.com