REimaginging the Retail Store: GlobalShop 2011 Presentation

REimagining The Shopper's
Perspective

the retail store

Alan Treadgold Director of Retail Strategy
Leo Burnett Group

Bryan Gailey Retail Design Director
Arc Worldwide

GlobalShop: The Retail Solutions Event

BEFORE
Shoppers had to visit a store
to make a purchase.

© 2011 Leo Burnett and Arc Worldwide

NOW
They shop when they want,
where they want, however they choose.


INCREASINGLY
They are choosing not to go to stores at all.

33%
are purchasing more online
compared with a year ago*
* Deloitte Survey May, 2010


so we wanted to study from a
shopper's perspective . . .


What stores do shoppers like to visit and why?

What makes stores interesting and inviting
to shoppers?

What are their expectations for personal service
within the store?

What role does the store visit play within the
overall shopping process?

What role does price play when shopping in
a retail store?

How synergistic does the store need to be
with other shopping channels?

How does the use of technology inﬂuence and
enhance their store visit?


The Research


Quantitative Research

2200
US Adults
Online Survey

40 Retail Brands June 2010


Writing the obituary for
the retail store is very premature.


retailer product product
website availability reviews

However,
manufacturer
website a new shopper calculus
in stock or
requires retailers to
visit
store back order have a NEW MINDSET.
product
reviews
Facebook/ price
read blogs compare
news feed

complete
the deal


The relationship between retailer and shopper has changed.

In the past,
the store managed
the shopperʼs experience.

Now,
the shopper manages
her own shopping experience,
in-store and beyond.


Itʼs SHOPPERS,
not retailers, who are in control
of the buying journey.


Access to technology and
a recession mindset have prompted
shoppers to seize power.


Shoppers arrive at the store armed with information
and some have already decided what it is they are
going to buy. (or think they have)


!
It is crucial for all retailers to understand
the changed role of the physical retail
store in a multi-channel Internet
enabled world.


Shoppers are creating their own retail experiences,
using a variety of tools and resources

retailer/manufacturer
websites

social network mobile

store circulars
& catalogs TV sales


The web, while often used, is not necessarily preferred.
Shoppers still prefer some aspects of the traditional bricks and mortar store.

50%
Online alone just doesnʼt work.
vs 17%
I would prefer shopping online
and never go into a store.

43%
I like to touch and feel a
vs 23%
A storeʼs website is already a good
product before buying it. substitute for going into the store itself.

(Top-3 box agreement scores)


8 DYNAMICS
in 3 territories

Understanding Fixing Going beyond
the shopper the basics expectations


Understanding
the shopper


Key Finding Shoppers organize stores in terms of
the experiences they want to have,

1 not just the merchandise they want to buy.


These shopping experiences can be mapped by two dimensions.

Buying

Y: Are they in store to 'close the sale' or
to look around, gather ideas, immerse in
a theme, and maybe purchase something?

Self Retailer
Directed Guided

X: Are they handling their experience more or less on
their own, in a self-directed manner or are they letting the
store play a role guiding the purchase process?

Browsing


Shoppers organize their retail world by these two dimensions as well.

Buying
They group stores together,
Convenience not by merchandise
Strong value
category, but by how they,
as shoppers, interact
with the store.

Technology empowered Right brand and products

Cell phone reasonable
Friendly Returns
Self Retailer
Directed Me tailing Guided
Retail
Physical over virtual
Integration Effective service

Engaging ideas

Experimental
Environment

Browsing


A shopper-centric perspective is required
for retailers to better deliver on the
experiences desired by their shoppers.


The way that shoppers cluster stores is
very different from the way that retailers do.


Shoppers distinguish 6 types of stores.

Price Led All About Ease
Low prices important, self service can help. Convenience and Convenient locations. Get what you need in time. May include
good return policies. Store environment lacks inspiration. self-service. Don't tend to have good return policies. Don't offer
Service can be lackluster. In-store experience doesn't offer much inspiration, but doesn't matter. High penetration and frequency
that consumers can't find online. in physical store. Low web penetration.

All About Atmosphere Ideas Led
Extraordinary in-store experience. Fun for consumers, even if they A bit experimental. Have greater product selection than other
don't buy. Don't tend to sell wide array of products. Prices thought cluster. Appealing displays. Offer fresh ideas and unique products.
to be high.

Price Plus Efficient Errands
Good value on what they sell. interesting place to shop, but not Convenient locations with decent service. knowledgeable sales
as much so as other clusters. Frequently add new merchandise. people. Lack interesting environment. Seen as pick-up places.
Shoppers take their time. Offer a more seamless online and
offline experience.


How shoppers cluster stores.

Buying

Price Led

Price Plus All About Ease

Efﬁcient Errands

Self Retailer
Directed Guided

Ideas Led

All About Atmosphere

Browsing



Buying

Price Led
Neighborhood
market by Walmart
CVS
Walmart
Sears

Target
Best Buy TJ Maxx
Self Retailer
Directed Guided

Best Buy:
Price Led poster child

Browsing



Buying

Dollar General
7 Eleven

Chase Bank Local Grocery Store McDonaldʼs

Self
All About Ease Retailer
Directed Guided
7-Eleven:
All About Ease poster child

Browsing



Buying

All About
Self
Atmosphere Retailer
Directed Guided
Tiffanyʼs:
All About Atmosphere poster child
Nordstrom
Barnes and Noble
Abercrombie
Pottery Barn

Williams Sonoma
Tiffanyʼs
Bass Pro

Browsing



Buying

Self Retailer
Directed Guided Whole Foods:
Hallmark/Goldcrown Ideas Led poster child
Whole Foods Trader Joeʼs

Ideas Led

Browsing



Buying

Costco
B.B.&B
Kohlʼs
Self Retailer
Directed Guided Kohlʼs:
Nike Stores Price Plus poster child

Price Plus

Browsing



Buying

Walgreens

Autozone
Loweʼs
Verizon
Home Depot
Self Retailer Loweʼs:
Directed Foot Locker Guided Efﬁcient Errands poster child
GAP

Efﬁcient Errands

Browsing


Implication Understand which retailers your
shoppers are really judging you against.

1

Key Finding

2 Itʼs not just about price,
shoppers want everything else too.


Price is important. And so are quality and experience.

Price is the most important consideration in choosing a brand.
36%
The most important thing when shopping is to ﬁnd high quality products.
42%
When it comes to stores, itʼs important to me to go to those that have high quality products and excellent service.
42%


Implication
Price competitiveness gets you an invitation to the

2 party, but price alone wonʼt get you a dance.


Fixing the basics


Key Finding
Shoppers are disappointed in

3 retailersʼ inability to deliver the basics.


What matters most to shoppers: Importance
Convenient location 61%
Great selection of products 59%
Store I can trust 59%
Items in stock 56%
Has good value for the money 55%
Right mix of products 55%
Has a consistent online and in-store return policy 54%
Makes shopping quick and easy 53%
Good range of prices on the items I shop for there 53%
Prompt service 52%
Keeps prices lower than the competition 52%


What matters most to shoppers: Delivery
Convenient location 47% 61%
Great selection of products 47% 59%
Store I can trust 50% 59%
Items in stock 40% 56%
Has good value for the money 39% 55%
Right mix of products 43% 55%
Has a consistent online and in-store return policy 42% 54%
Makes shopping quick and easy 43% 53%
Good range of prices on the items I shop for there 40% 53%
Prompt service 38% 52%
Keeps prices lower than the competition 33% 52%


Successful retailers are making sure
they are delivering the basics their
shoppers are demanding.


Implication
It may not be sexy, but thereʼs work to do – and

3 proﬁt to be made – from making the basics better.


Key Finding Shoppers are largely unimpressed with in-store
service. Itʼs not just the delivery thatʼs weak

4 – itʼs the service proposition itself.


Shoppers want more.

Old school
(Acknowledgement)

New school
(Relevance)


They want real help to make better informed decisions.

They want easily accessible information in the store
46%
They want help when they need it, but to be acknowledged
and left alone when they donʼt 40%
They expect service personnel who are insightful and well informed
49%
They donʼt want to wait
52%

And stores can help shoppers with all of these,
! often without relying on store associates.


Shoppers donʼt
want to wait
on service

Apple store

Shoppers
want good
information


Shoppers want help when they need it,
but to be acknowledged and then
left alone when they donʼt


Shoppers only need to interact
with a person if that person is
going to add value to the transaction.

Sales associate at
Shibuya 109, Tokyo


Implication Reframe service from staff ʻjust being thereʼ
to service being truly effective and delivered

4 by both staff and the store environment.


Going beyond
expectations


Key Finding

5 Shoppers are promiscuous.
They shop around.
Their loyalty has to be earned every visit,
not just bought with a card in their wallet.


Loyalty to retailers is, for the most part, notably weak.

Q Use the scale below to indicate how much you feel you need to go
to that particular store or venue versus a competing store or venue.
Loyalty is limited
even among a storeʼs
current shoppers.

52% 48%
Deﬁnitely prefer to go to this store
or a competing store.
Donʼt have a strong preference.


Loyalty programs can emphasize
distinction and differentiation,
setting you apart from your competition.
The data collected can be analyzed to help retailers speak more
distinctly to their shopper segments about what is important to
that shopper . . . and itʼs often not just about price!


Loyalty can be strengthened
by a personalized experience.

At Samʼs Club, shoppers print out
a list of personalized special offers,
and the check-out register
recognizes them and rings up
the discounted price.
No coupon clipping required!


Loyalty programs are great, but
what really keeps a shopper
interested is a new and fresh
experience each time they visit.


Implication
Loyalty has to be truly earned by understanding

5 and delivering on the expectations of shoppers.


Key Finding Eataly, NYC

6
Shoppers look to stores to
deliver what the web cannot


The store performs better than the web
in some functional and emotional ways.

The physical store is better than their website for… Average store

Getting it
51% Stores excel at being
pick-up points and
time savers.
Returning it
47% They do relatively
poorly when it comes
to stimulation and
Saving time
42% learning.

Stimulating or entertaining me
32%
Learning about brands or products
26%
Saving money
25%

But physical stores can
offer experiences beyond
the reach of the web


Stores can become meeting
and gathering places for
like-minded enthusiasts.


Stores can offer learning
and participation opportunities.


Implication Dial up the attributes where stores can
by creating more engaging, entertaining

6 and ideas-oriented environments.


Key Finding Technology for technologyʼs sake is a low priority
for shoppers and often undermines

7 the shopperʼs relationship with the store.


In-store technologies are being used to deliver on basics,
but at the expense of emotional engagement between the shopper and the retailer.

Buying

Quick and easy self-
service checkout

Welcomes, tries to enhance
my cell phone use during A place to go pick up
in-store shopping something I've already
learned about online
Kind of store where I go on A store I can trust
Has put lots of technology
their website on my cell phone I can learn more about the merchandise
in the store to improve my
while I'm in the store in the actual store than online or catalog
information access
Makes it easier to Has ﬁgured out how much or little
order online & pick-up interaction I want with the sales
products at the store staff & has gotten it right
Self Retailer
Directed Guided
Allows me to shop
online but return in-store
When I leave the store, I always
Itʼs easy to move between feel good - like I got something out
their website and store - a lot of the experience above & beyond
of synergy between them any products I may have purchased

The kind of store where I go
there more because I want
to than because i have to

Browsing

Technology can enhance a shopperʼs relationship with the store
if it provokes a positive, emotional response.

Technology
for efﬁciency.
Technology to deliver more
enriching, engaging experiences.


Technology can be used to
help establish trust.


Technology can be used to reinforce
the breadth of selection.
Adidas virtual footwear wall features 4000 styles
of shoes, and links to Twitter and Facebook.


Technology can help ease shopper pain points.
Kohlʼs in-store kiosks will check stock inventory in other locations
and ship product directly to shoppers, free of charge.


Implication Use technologies in store and in the hands of
shoppers to enhance the relationship between

7 retailer and shopper, not undermine it.


Physical stores need to be made relevant
Key Finding with the Internet. Itʼs not stores or Internet,
itʼs stores and Internet.

8 +


The shopping journey (toothbrush shopping)

Dentist recommends a power
toothbrush and offers
purchase options.


The shopping journey (toothbrush shopping)

$

®

®
Loves her
new toothbrush!


Doll hair Dining
salon for dolls

Apparel for
kids and dolls

Web offer
Movie/
theater
Books


Product
email

In-store
support

Web offer

In-store
sale

Recycle
email


Shoppers want seamless integration
Implication between the physical and the virtual.

8 Make sure that every touchpoint is speaking
in the same voice, making the same offers,
and projecting the same emotional experience.


To conclude


8 DYNAMICS
in 3 territories ers must und
erstand in order to succe
ed.

...that retail

Understanding Fixing Going beyond
the shopper the basics expectations


Shoppers still want stores…


… but
retailers must be willing to REimagine
and reinvent to stay relevant
in the new shopper landscape.


The paradox in the 21st century retailing:
Playing safe might just be
the riskiest plan of all.


Winning retailers
break conventions...

IKEA

Victoriaʼs Secret Zara

Selfridge & Co.

Apple


and become more memorable and
meaningful to their shoppers.


...their integration
of physical and
web experience.
HOW? ...their use
of technology.
Winning stores are
always REimagining...

...their in-store ...their shoppersʼ
experience. expectations.
...their own service
proposition.


Thank you
and good luck.
Alan Treadgold Bryan Gailey
Leo Burnett London Arc Worldwide Chicago
+44(0)20 70711140 312 220 5959

REimaginging the Retail Store: GlobalShop 2011 Presentation

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