Deliverance by Clear

DELIVERANCE STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

ONE ALMIGHTY CHALLENGE Twentieth century shopping just can’t seem to change fast enough for shoppers in the twenty first century. This is reflected not just in shoppers’ rapid adoption of e-commerce, but also in their rising desire for those brands that are fulfilling their needs online. These online brands, increasingly enabled by mobile technologies, have set new standards for shopping – the ability to compare prices and reviews, to pre-check inventory, to checkout with ease, even to get great customer service. Where even only three years ago we were yet to be convinced about online brands, they have raised the ante so far and fast that we now simply expect all our shopping to meet the standards they’ve set. But to suggest this is a battle between online and real world shopping is misleading. This isn’t about supremacy of one over the other. It’s about making retail experiences more relevant.

PERCENT OF LAST PURCHASES REPORTED BY CHANNEL CLICKS

AVERAGE BRAND DESIRE INDEX SCORE: BRICKS VS CLICKS BRANDS CLICKS

BRICKS

2012

27% Source: IBM Institute for Business Value study 2014

72%

2011

100

103

2013

2012

105

119

84%84% 112

14%

2013

Source: Clear’s Brand Desire survey 2011-2013, US & UK

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

RELEVANT RETAIL Though near perfect shopper experiences of e-fulfillment integrated with real world interaction are still tantalizingly rare, when they do happen it’s extremely potent for shoppers. But that potency cannot accurately be described as ‘omnichannel’. It’s a term that doesn’t accurately reflect the needs and expectations of the shopper. Shoppers are omnichannel but that doesn’t mean they expect retailers to be. What shoppers now expect – all that they expect – is for their shopping experiences to come together in the right way at the right time and in the right place.

“ DIGITAL IS AT ITS VERY BEST WHEN IT PROMOTES REAL WORLD INTERACTIONS” JACK DORSEY + founder of Twitter and Square

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

RELEVANT RETAIL Delivering interaction relevance has become retail’s latest greatest challenge. It involves understanding and designing retail experiences around three very specific needs:

TRANSACTIONAL

SERVICE

EXPERIENTIAL

Each of these shopper needs has different levels of relevance across different sectors and occasions. Each can be optimized, both in its own terms, as well as by stretching into adjacent drivers, to deliver competitive advantage in retail.

SHOPPER NEED

TRANSACTIONAL

SERVICE

EXPERIENTIAL

VALUE DRIVERS

BROWSABILITY PRICE ASSURANCE

CONVENIENCE ADVICE

SAMPLING SOCIABILITY

OPTIMUM CHANNEL

OFFLINE ONLINE Source: Clear’s Shopperfection model

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

RELEVANT RETAIL When the performance of brands stretching into each of these driver types is compared, the value of meeting extra shopper needs is clear to see. Retailers that get this mix right, and augment their transactional offer with relevant service and experiential elements, are winning – their brands are more desirable.

DESIRABILITY OF TRANSACTIONAL, SERVICE AND EXPERIENTIAL RETAIL BRANDS

TRANSACTIONAL

96 139

SERVICE

EXPERIENTIAL

149

Source: Brand Desire data (UK & US 2013) for Transactional, Service and Experiential type retailers (representative buckets of type brands)

But again, this isn’t about delivering everything across all channels, it’s about delivering relevance in shopping experience - trading off price vs experience, advice vs browsability, convenience vs experience. It’s about deliverance.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

DELIVERANCE WHO’S BRINGING IT? TRANSACTIONAL BROWSABILITY PRICE ASSURANCE

Photo Source: Flickr, Sainsbury, J

Photo Source: techorange.com

SAINSBURY’S BRAND MATCH

AMAZON’S SCANNER APP

Sainsbury’s proprietary automated price matching mechanic is helping it win in UK grocery wars. Shoppers get realtime payback with this permanent price checking offer.

Showrooming has rapidly become a major revenue stream for Amazon, as app-enabled shoppers stroll Main St getting the best prices delivered to their door with a single touch.

Photo Source: Theverge.com

Photo Source: Gizmodo.com

WALMART APP

MACY’S AND SHOPKICK

According to Walmart, its appwielding customers make twice the shopping trips and spend 40% more than non-app users.

Macy’s has partnered up with Shopkick app and Apple’s iBeacon to trial “flag and tag” – sending contextual, personalized information and offers to its shoppers as they step in store.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

SERVICE CONVENIENCE ADVICE

Photo Source: Youtube, Kindle

Photo Source: BBC News / http://www.bbc.com/ news/business-22342626 - © [2013] BBC

KINDLE FIRE’S MAYDAY

THE HOINTER TOUCH TAG

Customer help’s evolving beyond face-to-face and tele-conversations, enabling interactions to happen on shoppers’ terms - like Kindle’s on-demand support with the push of a button.

Startup Hointer promises to revolutionize in-store fulfillment, not least with its touch tag that uses NFC technology to fit you to the right clothes and feed socially mediated ratings.

Photo Source: Youtube, VenmoTV

Photo Source: Vimeo, Catherine Rigod

VENMO TOUCH

MACY’S MICRO DISTRIBUTION

Venmo’s one-touch mobile wallet makes mobile shopping transactions feel more personal and enjoyable, allowing customers to keep their focus on the excitement of their new purchase.

500 stores now do double duty as fulfillment centers so customers can order and pick up from any location, same day if needed already 10% of online sales are fulfilled from stores.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

SERVICE CONVENIENCE ADVICE

Photo Source: Vimeo, Gin Lane Media

Photo Source: Flickr, Atomic Taco

BOSTON PROPER, BURBERRY, AMAZONFRESH Amazon’s new grocery service J CREW Smart apparel retailers are using smart data interfaces to provide personalized advice based on shopper preference and behavior. Clothes buying’s no longer left to a rack trawl.

delivers fresh, however shoppers want it – next day, local pickup, even on Sundays. All priceassured and with a single touch. Watch this space...

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

Photo Source: Tumblr, Lowes

LOWE’S FIX IN SIX The big box store is sharing DIY tips into 6 seconds videos on Vine. Learn how to unscrew a gnarly, stripped screw using a rubber band, or how to save money and time on paint tray clean-up. There’s also great cost-saving advice.

EXPERIENTIAL SAMPLING SOCIABILITY

Photo Source: Youtube, National Retail Federation

Photo Source: Flickr, VirginMoney

KATE SPADE SATURDAY

VIRGIN MONEY LOUNGES

eBay teamed up with women’s fashion retailer Kate Spade to give new meaning to window shopping – 24hr shoppable store windows, promising 1-hour delivery anywhere in NYC.

Members now get to use their local bank as a place to meet up with friends, get advice, and get involved in local enterprise.

Photo Source: Flickr, Techvibes

Photo Source: Blogspot, sandinourstilettos

INDOCHINO & WARBY PARKER

THE BURBERRY EXPERIENCE

Two very exciting startups with similar stories – ecommerce concept now opening experiential stores and setting the standard for merging online and real-world shopping.

Take a trip to London’s Regent Street and drink in this ‘web experience made live’ at the Burberry store: from selection-activated catwalk videowall to iPad enabled sales staff.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

EXPERIENTIAL SAMPLING SOCIABILITY

Photo Source: Flickr, Mark Morgan Trinidad

Photo Source: Facebook, Lululemon

Photo Source: Youtube, DVF

FOURSQUARE CHECK INS

LULULEMON STORE YOGA SESSIONS

DIANE VON FURSTENBURG’S HANGOUT

The seemingly unstoppable trendy yoga kit store has done lots of people lots of favors, and created a real buzz, with the free yoga classes it puts on outside its stores regularly.

DVF’s fashion video interview lets viewers tune in to live inspirational talks by the designer herself, while getting the opportunity to buy limited edition outfits as they appear on screen.

Foursquare’s location-based social platform may now be coming of age, alerting users of nearby haunts and offers based on your and your friends’ past activities.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

DELIVERING RELEVANCE Of course, the realities of delivering to shoppers’ rapidly evolving expectations are huge. Not just in terms of infrastructural change, and the cap-ex involved in that, but, crucially, organizational too. Recent research conducted by Clear shows us that what’s delaying the realization of that innovation opportunity is retailer organizations’ abilities to gather and deploy resources in the right way. They need to be agile. Our research shows that more than half of retailers surveyed either struggle to see beyond their own internal workings or to adapt to external change. THE AGILITY CHALLENGE EXTERNAL CONCERN STURDY BUT BLINDLY FOLLOWING

46%

39%

11%

INWARDLY FOCUSED

WALLOWING INTERNALLY

REACTIVE

PROACTIVE

SETTING THE BAR

INTERNAL CONCERN Source: Clear’s 2014 Cost of Change survey of 103 business leaders. DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

DELIVERING RELEVANCE Specifically, our findings point to critical differences in organizational approach, from providing sufficient stimulus for decision making to actually putting the right actions in place. What did our survey identify as the three greatest differences between proactive and reactive organizations – the things that really deliver relevance? Stimulating the organization with insight; projecting the direction of travel of shoppers’ needs; and energizing the shopping experience via staff.

DIFFERENTIATING BEHAVIORS OF AGILITY

STIMULUS

PEOPLE

PROCESS

ACTIONS

70% 60% 50% 40% 30% 20% 10% 0% Competitive strategy goes beyond reviewing research reports

Insights are communicated effectively thru the organization

Our insights team is ahead of the trends that matter most

Proactive organizations

We are well incentivized to deliver on actionable insights

Employees are empowered to make their own decisions

There is consensus from the top on the goals of the company

Industry trends are quantified for potential business impact

Our structure New allows initiatives for fluid are properly socialized across the company

Measurements are in place to benchmark success

Clear action plans accommodate new initiatives

Success is defined at the start of every new project

Reactive organizations

Source: Clear’s Cost of Change survey of 100 organizations: Differentiating behaviors

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

AGILITY RULES

#1. STIMULATE

Agile retailers are feeding their culture the right stuff. They are allowing themselves to be driven by insight. Not only that, but they’ve set up internal communication paths that enable rapid and widespread dissemination of those insights across the whole business – not just within the insight dept. Given shoppers’ rapidly changing expectations and behavior, a great place to start is on shopper missions. How are they changing, what’s the impact of digital, where is your brand’s core territory in people’s minds?

WHAT WE DID

Clear helped a global electronics retailer reach a single view of consumer and shopper needs. We enhanced 30 markets’ existing U&A data with fresh shopping mission and journey mapping. We compiled our findings into a set of compelling insights and stimulus, socialized across the business using mobile platform apps.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

AGILITY RULES

#2. PROJECT

Agile retailers have recognized the dynamic nature of their market and plotted ahead of the curve so they can drive the business in the right direction. They’ve taken into account the discontinuities going on in their space, identified all the possible places they could compete, and established which ones they should compete in. Since the retail marketplace is very much not a static one right now, defining what shoppers’ core value drivers are now, and quantifying how they are changing, is critical.

WHAT WE DID

Clear helped a global credit card provider evaluate how people’s money needs and behaviors were changing. We established a fresh view of how shoppers view lending and spending, and sized the growth potential of different types of borrowing. This exercise meant we didn’t just find out where they should play but also how to win there.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

AGILITY RULES

#3. ENERGIZE

You’ve only got to look at the retailers that are winning to see they’ve got a clear steer on what differentiates their brand, and how that focuses the shopping experience. That focus ultimately defines what moments the shopper remembers, and that energize their people to live the brand loud. Ultimately your staff should be your most differentiating, productive touchpoint. So your brand should be acting as a change agent: use it to get your people aligned on those key areas, to hire and train the right talent, to ‘deliver the goods’.

WHAT WE DID Clear helped a leading European restaurant chain to define a fresh vision for its category. Then we established where their brands should be working hardest, and redefined them as cultural drivers. This energized the overall guest experience, in particular by directing staff on how to engage.

DELIVERANCE: STRATEGIES FOR RETAIL SUCCESS IN THE EARLY 21ST CENTURY | WEARECLEAR.CO

ABOUT CLEAR CLEAR IS A MARKETING STRATEGY CONSULTANCY WITH OFFICES IN NEW YORK, LONDON, SINGAPORE AND SYDNEY. IT SPECIALIZES IN INSIGHT-LED STRATEGY AND INNOVATION AND HAS DELIVERED PROJECTS FOR RETAIL CLIENTS SUCH AS WALGREENS, ASDA-WALMART, JOHN LEWIS AND BOOTS.

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