Adapting Omni-Channel Strategies to Modern Consumer Behaviour
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Adapting Omni-Channel Strategies to Modern Consumer Behaviour
- 1. The NPD Group, Inc. | Proprietary and Confidential Adapting Omni-Channel Strategies to Modern Consumer Behaviour Presented by: Sandy Silva, Fashion Industry Analyst The NPD Group Sponsored by MasterCard for Retail Council of Canada June 3, 2014
- 2. The NPD Group, Inc. | Proprietary and Confidential The image should fill up the entire space of the gray box, no gray should be seen The NPD Group, Inc. | Proprietary and Confidential 2005St. Peter’s Square Change
- 3. The NPD Group, Inc. | Proprietary and Confidential The image should fill up the entire space of the gray box, no gray should be seen The NPD Group, Inc. | Proprietary and Confidential 2013St. Peter’s Square
- 4. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 4 EV LUTION OF RETAIL 1900s Corner Stores Limited choice People walked 1900-1940s Department Stores Automobile: travel farther In-home refrigeration: stock more 1950-1970s Malls Time of the true mall 1990-2013 Ecommerce 1970-1990 Big Box Stores Driving smaller merchants out of business
- 5. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Retailers offer products, hoping consumers buy them. 5 What’s changed is how we talk to them before they get to the store.
- 6. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 6 Conversion 300 75 Conversion Rate 25%
- 7. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential Touch points 7 www. STORE www. BRAND IN-STORE displays, product info, store associates RETAIL FLYERS STORE WEBSITES WORD OF MOUTH BRAND WEBSITES PRODUCT REVIEWS ONLINE STORES/ AUCTION SITES
- 8. The NPD Group, Inc. | Proprietary and Confidential 8 Bought a brand Among first considered 74%of purchases are planned 18 Dayspassed between first thought of buying product and making purchase 52 Bought at Retailer among first considered 73 1.4 2.2 Brands in mind Retailers in mind % % Snapshot of Path to Winter Apparel Purchase
- 9. The NPD Group, Inc. | Proprietary and Confidential 9 24% Touch points Usage Canadians still rely on in-store to make their winter apparel purchase decisions 42% 24% 20% PC electronics
- 10. The NPD Group, Inc. | Proprietary and Confidential 10 Identified additional brands Ruled out brands Didn’t learn anything new Impact on Brand Consideration Word of Mouth information impacts brand consideration. Consumers use online brand/product reviews to rule brands out. 56 43 39 30 40 30 30 31 41 %
- 11. The NPD Group, Inc. | Proprietary and Confidential 11 Impact on Retail Consideration Word of Mouth also impacts stores and websites consideration. Identified additional stores/websites Ruled out stores/websites Didn’t learn anything new% 48 41 18 25 33 24 35 36 62
- 12. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential How many days on average did it take to make a purchase? Are you wondering why? 12 18days Remember this?
- 13. The NPD Group, Inc. | Proprietary and Confidential 13 Among the 42% who rely on in-store information, their in-store visit was not always the final step in the path to purchase! In-Store Visit PRE IN-STORE POST IN-STORE 16 17 7 7 8 5 42%
- 14. The NPD Group, Inc. | Proprietary and Confidential How Can Retailers Convert More Shoppers? Good news: most consumers only consider two retailers. If you have the right strategy, you should be able to convert consumers… 14
- 15. The NPD Group, Inc. | Proprietary and ConfidentialThe NPD Group, Inc. | Proprietary and Confidential 15 1900s Corner Stores 1900-1940s Department Stores 1950-1970s Malls 1990-2013 Ecommerce 1970-1990 Big Box Stores Take It Back to Basics: WORD OF MOUTH! 01
- 16. The NPD Group, Inc. | Proprietary and Confidential 16 Word of Mouth Usage Family, friends, and coworkers are the most important followed by Facebook. 01 93 18 10 8 8 2 1 3 88 23 8 5 4 4 3 9 Talked to friend, family or coworkers Facebook Pinterest Professional Blogs Personal Blogs Twitter Discussion Forums All Other Sources Talked to friend, family or coworkers Facebook Personal Blogs Discussion Forums Professional Blogs Twitter Pinterest All Other Sources WINTER APPAREL PC ELECTRONICS Total Digital Touch points
- 17. The NPD Group, Inc. | Proprietary and Confidential Provide access to interactive digital displays in the store to allow shoppers to learn more about the brands and products 17 Optimizing Time In-Store 02
- 18. The NPD Group, Inc. | Proprietary and Confidential 18 Interactive Display Order from Store Website 73 69 66 76 78 % of Yes Winter Apparel (698) Personal Accessory (555) Beauty (699) PC/ Electronics (793) Beverage DA (592) 53 58 52 66 71 Optimizing Time In-Store 02
- 19. The NPD Group, Inc. | Proprietary and Confidential 19 79 64 52 48 41 Prices, sales, promotions Product information Availability User reviews Brand information 67 54 50 48 32 79 55 47 44 33 Prices, sales, promotions Shipping costs Product information User Reviews Brand information % Product information Prices, sales, promotions User reviews Brand information Availability Types of Information Sought After (Top 3) 03
- 20. The NPD Group, Inc. | Proprietary and Confidential 20 METHODOLOGY: Online survey fielded from Jan. 23 to Feb. 7, 2014 to a Canadian representative sample of 3,337 panelists aged 18-64, representing Canadian adult demographics. To qualify, respondents indicated a planned purchase of one of the following products in the past month: i. Winter Apparel n=698 (Winter coat or jacket n=362, Winter boots n=336) ii. Personal Accessory n=555 (Watch n=409, Handbag, purse or satchel n=146) iii. Beauty n=699 (Face or beauty cream n=699) iv. PC/ Electronics n=793 (Headphones n=403, Tablet computer n=212, Notebook/ laptop/ desktop computer n=179) v. Beverage Domestic Appliance (DA) n=592 (Single serve coffee machine n=340, Juicer/ Juice extractor n=108, Espresso machine n=76, Soda maker n=69)
- 21. The NPD Group, Inc. | Proprietary and Confidential The image should fill up the entire space of the gray box, no gray should be seen The NPD Group, Inc. | Proprietary and Confidential 21 Early Retail… EV LUTION OF RETAIL
- 22. The NPD Group, Inc. | Proprietary and Confidential The image should fill up the entire space of the gray box, no gray should be seen The NPD Group, Inc. | Proprietary and Confidential 22 EV LUTION OF RETAIL Change Are you ready?
- 23. The NPD Group, Inc. | Proprietary and Confidential 23 Contact us Sandy Silva Director, Client Development – Fashion and Prestige Beauty The NPD Group sandy.silva@npd.com 647.723.7760 Silvia Xoyon Director, Business Development – Fashion and Prestige Beauty The NPD Group silvia.xoyon@npd.com 647.723.7765
Notes de l'éditeur
- We’re going to talk about a word that everyone is familiar with regardless of industry - change. The pace of change is incredibly fast. It’s important to keep your finger on the pulse of the only constant – change. St. Peter’s Square in 2005 when Pope Benedict first greeted the public.
- in 2013, when Pope Francis first greeted the public. What a difference 8 years makes.
- What’s the next era going to be? Multichannel commerce? Mobile commerce? Connected Commerce? Change in retail is inevitable, one thing remains important: conversion.
- We started by talking about change Has retailing changed?
- Retail conversion measures the proportion of visitors to a retail outlet who make a purchase. If 300 people visit your store in a day, but only 75 buy something, the conversion rate is 25 percent. To measure retail conversion, you must measure numbers of visitors and understand how to interpret the data. You can use the retail conversion rate to assess the affect of other marketing or operational actions, such as changing store layout, employing more staff, increasing stock levels or running promotions. If a store layout change results in an improved conversion rate of 35 percent, the change represents a successful strategy.
- In-Store Touchpoints generally dominate although Store Websites for PC/Electronics and Word of Mouth sources for Beverage Domestic Appliances are relied on more often. Beauty customers are the least likely to utilize information sources to inform their purchase decision. ZZ In no product segment is touchpoint usage less than in Beauty. At 25%, In-store information sources are the most utilized. At 35%, Store Websites appear to be the most utilized touchpoint among customer of PC/Electronics. Usage levels for the remaining touchpoints are all within 10% of one another.
- How are retailers using word of mouth in their strats
- How many retailers do you think customers have in mind when making one of the previously mentioned purchases on average?
- Among those who rely on in-store information, many do not make a final purchase decision at their store visit and go on to explore other touch points. This may be one of the biggest leakages (opportunity)
- What’s the next era going to be? Multichannel commerce? Mobile commerce? Connected Commerce? Change in retail is inevitable, one thing remains important: conversion.
- Customers want to learn more about the brand/retailer in the store. 53% winter apparel consumers said they wanted an interactive display in store that educates them on what they’re about to purchase. Remember we said it takes 18 days? How can you decrease that time – interactive displays, accessibility to store website in-store. How do you make sure consumers complete their path to purchase in store? Brands should play support role to retailers wrt interactive displays Another strategy is to allow shoppers to purchase products from a store’s website if the product, model, size or colour was not available I Varying by category, two-thirds or more would like to be able to purchase products from a store’s website as part of their in-store transaction
- Information on Price indexes high as a reason for touchpoint utilization among users of Store Websites, Online Stores w/o Store Location and In-Store touchpoints. Product information indexes high with users of Brand and Manufacturing Websites and Online Brand and Product Reviews. Brand information should highlight performance on key purchase selection criteria, establish brand differentiation while guiding consumers to specific products that fit their willingness to spend Converting consumers to purchase a brand can be a little more challenging… Some categories revealed a tremendous opportunity for brands to enter the consideration set and rise above the competitors For example, conversion rates were only 52% in Winter Apparel and 60% in Personal Accessories It is not enough to simply drive brand awareness and earn initial consideration
- Online, 3000+, big Run through categories so people know what “winter apparel” is
- Local culture – the Corner Store: 1900s If you start back from the 1900s, local corner stores dominated retail. There were some catalogs, but the overwhelming shopping experience was at the corner store. People walked to the store to get the basics. Choice was limited. In some of the bigger cities, you could find more but you were basically limited by what you could carry back to your home.
- Local culture – the Corner Store: 1900s If you start back from the 1900s, local corner stores dominated retail. There were some catalogs, but the overwhelming shopping experience was at the corner store. People walked to the store to get the basics. Choice was limited. In some of the bigger cities, you could find more but you were basically limited by what you could carry back to your home.
- We will be exhibiting and hosting a panel of high-profile retailers.