The relevance of Stores for Digital Shoppers. Kees Jacobs September 2014

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1 The relevance of Stores for Digital Shoppers Kees Jacobs September 2014

2 Consumers increasingly weave in and out of multiple channels, including stores, during the All-Channel Shopping Journey Moments of Truth Personal Relevant Caring Flexible Rewarding Exciting Innovative Convenient Trusting Novel Engaging Value for Money Shoppers are no longer loyal to an individual channel but rather to an experience across all channels All-Channel Experience Capgemini. All rights reserved. 2

3 It s important to follow your customer s voice 56% of companies described themselves as customer centric. Only 12% of their customers agreed All-Channel Experience Capgemini. All rights reserved. 3

4 Digital Shopper Relevancy is about understanding shopper needs and perceptions across 5 Key Attributes Illustrative Access Experience Price Product Service Traditional Relevancy Criteria for Physical Channels Easy to reach stores Easy to navigate stores Maximum opening hours Friendly and clean store No damaged goods in store Inspirational Atmosphere Competitive pricing Compelling promotions Wide and deep assortment Freshness/ Quality Availability (no stock-outs) Customer Service Complaints handling / return policy Loyalty program Additional Relevancy Criteria for Digital Channels e-commerce (mobile, social, web) Flexible deliveryoptions ( home, store-pick-up etc.) Mobile in-store Shopping support Inspirational Content Community engagements (share experiences) Social Shopping Dynamic Pricing Location-based pricing Personalized Pricing Solution Pricing Price Comparison Wider and deeper assortment Advanced / visualized product information and (usage) advice Product Comparison Personalized offers Technologyenabled staff support in-store Interactive service via digital channels (e.g. click-to-chat, social media) All-Channel Experience Capgemini. All rights reserved. 4

5 How Can You Be Most Relevant to Digital Shoppers? 2. Differentiate on a compatible value attribute Illustrative 1. Dominate on one value attribute 3. Maintain parity on others Access Experience Price Product Service Successful companies dominate on one attribute, differentiate on a second and compete at parity on the remaining three All-Channel Experience Capgemini. All rights reserved. 5

6 food DIY tablets service electronics kiosks price But: what is relevant for your Digital Shoppers? Sweden Finland Mexico Canada USA Brazil UK Spain France Portugal Netherlands Germany Italy Russia India China Japan Australia product access shopping journey all-channel experience web apps fashion social media e-commerce digital channels 18 countries* 18,000 consumers health & personal care smartphones experience technology-enabled consumers All-Channel Experience Capgemini. All rights reserved. 6

7 There is no one digital shopper We found 4 distinct behaviour patterns in mature markets Reluctant Digital Shopper (11%) Not comfortable using technology; prefer physical stores Value-Conscious Digital Shopper (29%) Prefer in-store shopping, but comfortable using the Internet & Socially-Engaged Digital Shopper (41%) Heavy users of digital technologies and comfortable using Social Media True Digital Shopper (19%) Purchases online most frequently, use apps, sacrifice personal data for customized deals. All-Channel Experience Capgemini. All rights reserved. 7

8 Sweden is in the middle-group in terms of digital shopper savvyness All-Channel Experience Capgemini. All rights reserved. 8

9 In the early phases of the shopping journey, internet has surpassed stores as preferred channel Importance of different channels to learn about products and promotions : Most important 2nd most important 3rd most important 4th most important 5th most important 6th most important Least important Australia Traditional store Internet site In-store technology Smartphones Social media Phone call center Canada Traditional store Internet site In-store technology Social media Smartphones Phone call center Finland Traditional store Internet site In-store technology Smartphones Social media Phone call center France Traditional store Internet site In-store technology Smartphones Social media Phone call center Germany Traditional store Internet site In-store technology Smartphones Social media Phone call center Italy Traditional store Internet site In-store technology Smartphones Social media Phone call center Japan Internet site Traditional store In-store technology Smartphones Social media Phone call center Netherlands Traditional store Internet site In-store technology Smartphones Social media Phone call center Portugal Internet site Traditional store In-store technology Social media Smartphones Phone call center Spain Traditional store Internet site In-store technology Smartphones Social media Phone call center Sweden Internet site Traditional store In-store technology Smartphones Social media Phone call center UK Traditional store Internet site In-store technology Smartphones Social media Phone call center USA Traditional store Internet site In-store technology Smartphones Social media Phone call center Brazil Internet site Traditional store In-store technology Social media Smartphone Phone call center China Internet site Traditional store Smartphones In-store technology Social media Phone call center India Internet site Smartphones In-store technology Social media Traditional store Phone call center Mexico Internet site Traditional store In-store technology Social media Smartphone Phone call center Russia Internet site Traditional store In-store technology Social media Smartphones Phone call center Total Internet site Traditional store In-store technology Smartphones Social media Phone call center All-Channel Experience Capgemini. All rights reserved. 9

10 Nevertheless, physical stores still reign for now Store is still the favored destination; 72% of shoppers saw the store as important or very important compared to 67% for the Internet Only 14 per cent of shoppers strongly indicate that physical stores have become less important for them. However, in the future, the majority of shoppers (51 percent) say they will spend more money online than in-store. In addition to the smartphone s ubiquitous growth, in-store digital interactions (eg via kiosks) are popular amongst shoppers, suggesting that the introduction of more technology into retail stores would be a welcome shift for the consumer. The relevance of the physical store in the purchase and payiment of a product All-Channel Experience Capgemini. All rights reserved. 10

11 How should stores anticipate digital shopper behaviours? ClientAssist 2014 Copyright Capgemini All Rights Reserved 11

12 For example via Clienteling: merging in-store and digital customer engagement CLIENTELING (N) - A CAPABILITY TO MANAGE PERSONAL CUSTOMER ENGAGEMENT IN A WAY THAT DRIVES TRAFFIC TO YOUR STORE, PROVIDES AN EXCEPTIONAL IN-STORE SHOPPING EXPERIENCE AND KEEPS YOUR CUSTOMERS COMING BACK FOR MORE. The store is the best place to work all senses ClientAssist 2014 Copyright Capgemini All Rights Reserved 12

13 ClientAssist Engage Customers Across Clicks and Bricks to Improve Sales and Loyalty

14 A new and differentiating approach to Clienteling: ClientAssist Mobile Clienteling Technologies In-Store Single View of Customer Single View of the Customer Focus on the Store Via Proven Hothouse Methodology Cloud-Based Integration Platform Actionable Insights & Campaigns ClientAssist 2014 Copyright Capgemini All Rights Reserved 14

15 This requires more than throwing technology into the store Resistance From Stores to Digital Changes Store managers and store staff feel uncomfortable with digital tools and perceive it as a threat Lack of Customer Focus Stores do not understand how to maintain relationships with customers beyond transactional interactions Pilots Hardly Make It to Full Rollout Costly new technology-driven initiatives are continually tested but in many cases never rolled out further Benefits Disappear After Initial Focus After the initial push, stores return to old ways of working ClientAssist 2014 Copyright Capgemini All Rights Reserved 15

16 The best way to prove succes is via a Hothouse: a bottom-up change approach that enables direct, small-scale doing and learning Regional Scope (focus on selected customers) Where the top-down vision and strategy meets the bottom-up change mobilisation Traditional Hothouse Focus on Quick Results (managing high impact) Grow Share of Heart: Grow Share of Wallet: Grow Share of Market: Deep Customer Insights (contextual understanding) increase loyalty by truly taking care of customers increase spending of current customers attract new customers, grow current customers Mgt. Central Ops Region Channel Customer Piecemeal Scope (create optimal conditions) Agile Implementation (scrum-team iterations) Collaborative Approach (multiple disciplines with common focus) Showing the tangible business value in real-life! ClientAssist 2014 Copyright Capgemini All Rights Reserved 16

17 Case Story: Clarks (UK) Best Industry Innovation Award UK 2014 Life Changing Store Manager Don t ever take this away from me Sales Assistant Incredible, what has been achieved in just 12 weeks Head of UK&I Retail Operations In-store conversion increase: from 11% to 25% See separate reference deck ClientAssist 2014 Copyright Capgemini All Rights Reserved 17

18 THANK YOU! The relevance of Stores for Digital Shoppers

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