WindowOn... Multi-Channel Retailing (2012 Issue 13) by Shoppercentric

Multi-channel Retailing the essential guide to shopper trends from Shoppercentric

Shopping in a Multi-channel World Understand multi-channel retailing from the shopper point of view: In this world of 24/7 shopping it’s easy to focus on business needs. Shoppercentric report from the other side of the fence, exploring the shoppers needs.

It’s not just about seamless retail, it’s about tailored retail Are bricks & mortar stores the dinosaurs of tomorrow? The curators of choice in the wide world of the web Plus new regular features and revealing interviews

ISSUE ISSUE

thirteen

february 2012

thirteen

february 2012

www.shoppercentric.com

ISSUE 13

FEBRUARY 2012

Since 2004 we have been conducting our own research to look at emerging shopper trends. During that time a huge amount of change has taken place in the shape of emerging channels and touchpoints. So this latest edition of WindowOn takes a look at how these new channels and touchpoints are impacting on the journey that a shopper takes from trigger to transaction. Our research includes: ● Extensive desk research ● Depth interviews among 12 shoppers who have already adopted a range of new channels and touchpoints ● Online interviews among 1001 adults aged 18+

ISSUE ISSUE

thirteen

february 2012

thirteen

february 2012

PUBLISHED BY: Shoppercentric EDITOR: Alice Synge DESIGN: Mike Higgs

e: mikehiggs@mac.com

We welcome ideas for future articles and reports. Guidelines on our preferred format and style are available from Alice Synge e: alice.synge@shoppercentric.com

© Shoppercentric 2012 All copyright is vested in Shoppercentric unless expressly stated otherwise. No permission is granted for reproduction, use or adaptation of the material, save as to provide for under Statute, and any such use must be accompanied by the appropriate accreditation.

Welcome... Trends Research... Shopping gets Personal Danielle Pinnington,

Founder & Owner, Shoppercentric

Welcome to another edition of WindowOn... This is our thirteenth edition, and given sensibilities around that number perhaps we should have chosen an easier subject for this latest trends piece. Multi-channel retailing is a huge subject, and one that is evolving as we write. It’s fair to say our efforts to summarise the shopper perspective have required some long, hard thinking, and still we know there is so much more we could say beyond the pages provided here. And yet the effort required to distill our thinking has confirmed to us what an exciting stage the retail environment is at as we start 2012. The economy may be sluggish, but the ideas and initiatives impacting on the retail sector are extraordinary, and we hope that the learnings we share with you here help you understand how to make the most of the opportunities that are emerging. Best wishes

Danielle

The internet may have enabled many brands and retailers to go global, but shoppers on the ground are stamping their feet to be treated like individuals, not homogenised ranks of robots.

Are Bricks & Mortar Stores the Dinosaurs of Tomorrow?

As the economic situation continues to challenge the retail sector, there has been much doom mongering about the future of traditional stores. We believe there’s much life in the high street yet, and explain why.

The Retailer’s Role: Curating Choice in the Wide World of the Web

Getting a range right can make or break a retailer, and poor ranging has often been cited as the reason behind set backs in retail success. We look at how the internet is impacting the skill of displaying a range.

The Long and Winding Road to Retail Success

A modern shopper’s pathway to purchase is no longer a series of channel silos. It is a web of opportunities. Retail businesses need to take their blinkers off and really play with the opportunities.

Regular Features... We design tailor made, interactive training sessions to deepen understanding of shopper insight.

www.shoppercentric.com

5 Diary Dates... 6 The BIG Picture... 9 Shopper Talk... An Experts Own View... 10 From the High Street... 13

WindowOn... Issue 13, February 2012

FEATURE

Shopping gets Personal The internet may have enabled many brands and retailers to go global, but shoppers on the ground are stamping their feet to be treated like individuals, not homogenised ranks of robots. By Penny Ericson

If we, at Shoppercentric, got a penny every time a client said they wanted “seamless integration” of all their channels, we’d all be very rich indeed. However, this aspiration will soon be upgraded to another Holy Grail: to provide “tailored” shopping experiences. So, what does this mean? The easiest way to explain it is if you imagine you are buying a suit. You want one which is so well put together that you can’t see the joins between the different bits of fabric. But you’re a demanding shopper and you’ve got used to getting this seamless integration. You now want more. You want your suit to be tailor-made: not only do you want the joins to be invisible, but you also want the suit to mould your body shape exactly, so it’s totally unique to you. In a similar way, modern shoppers expect all retail channels to flow smoothly from one to the other, but they also increasingly expect an individualised shopping experience, perfect for them.

WindowOn... Issue 13, February 2012

This is a tricky trend for the major multiples to get their heads around. After all, for the last few years they’ve worked doggedly to provide a consistent, generic experience across all their different and growing channels. They’ve tirelessly plotted the “customer journey” on flowcharts from browsing the internet to purchasing in-store, so they can create templates, which can then be rolled out across their stores to achieve huge economies of scale. But these retailers are overlooking one crucial consideration: shoppers are human beings. As such, they cannot be pigeonholed and do not often follow a neat, linear path. In this new 24/7 shopping world, what works for one shopper may not work for another. In fact, what works for one shopper in one category, may even not work for that same shopper buying into another category. Shoppers have a multi-faceted perspective of the various channels now available. They pick and choose on the basis of what they want, where

SHOPS

Access points used in last month as part of purchase journey (%)

DESKTOP PC/MAC

LAPTOP/NETBOOK

Total Male Female

they are, who they are with and even how much time they have. Any change in these factors can impact on which channel they choose to use, or even which combination of channels. Because of this, it is increasingly hard to make sweeping generalisations about shopping habits. Yes, men do tend to be the shoppers most likely to turn to the internet, but that doesn’t mean they don’t want to use stores, nor does it mean women aren’t avid internet shoppers.

TABLET

INTERNET TV

LANDLINE

TOUCHSCREEN IN-STORE

SMARTPHONE

CATALOGUES

It seems to us that businesses are in danger of taking a rather one-dimensional view of the roles different channels play. Typically, they see a channel’s primary role as being about selling, with various channels being seen to target different stereotypes of shoppers. The real opportunity comes when businesses use this emerging kaleidoscope of retail environments to create tailored experiences, enabling each channel to flex to the needs of the shopper interacting with it. It’s no longer about seamlessness (that’s a given), the retail winners will be those that make flexibility their mantra.

Tailoring in a nutshell Seamlessness is simply about each channel sharing information. Tailoring is ﬂexing each channel to take the shopper from the purchase, through to the actual sale, however many channels that may involve and in whatever order. The key to tailoring is understanding that channels have multiple roles for shoppers; they aren’t just where shoppers buy products, they are where they go for inspiration, information, advice, range, prices, offers, and product experience in order to make a purchase. The business that is able to use all the channels at its disposal to meet shoppers’ needs is the business that delivers a tailored retail experience.

Examples of tailoring: ● the commuter who uses smartphone apps to window shop on the train home can also use his smartphone to access information instore from a QR code ● the mum who can’t face trawling jeans shops with her kids in tow can order online but return the jeans to a store if they don’t fit. Or, if she does make it to the store in the first place, the sales team can order her size to be delivered home.

WindowOn... Issue 13, February 2012

FEATURE

Are Bricks & Mortar Stores the Dinosaurs of Tomorrow? As the economic situation continues to challenge the retail sector, there has been much doom mongering about the future of traditional stores. Iona Carter explains why, we at Shoppercentric, believe there’s much life in the high street yet. By Iona Carter

Yes, sales figures certainly show that online shopping is growing at a quicker pace than the more traditional face of retail. But the leap from slower sales to obsolescence is, to our minds, a leap too far.

brighter than it currently seems? What can we learn from shoppers to help us create a rejuvenation of fortunes in this area? The answer is simple: retailers need to tap into a shopper’s emotional side.

The new shopping channels have undoubtedly changed the retail world. They have given us so much more flexibility in terms of what we buy, when we buy and where we buy. They have made products and retailers more accessible than ever, giving us almost universal choice and access.

There is absolutely no point in traditional stores even trying to compete with the online retail model of pile it high, sell it cheap. By competing on these grounds, bricks & mortar stores are actually ignoring their greatest benefit; the ability to deliver a more emotionally engaging shopping experience.

Yet 45% of shoppers agree with the statement “I will always love going to the shops, no matter what new technologies are available”, rising to 53% among women. One respondent summed it up: “I still love the retail experience. As long as I’m in the mood, I like a shop!”

How can they do this?

So, if bricks and mortar stores do have a future, what is going to make that future

WindowOn... Issue 13, February 2012

By creating interesting, engaging, inspirational and even aspirational environments. By laying out products in a way that actively sells, rather than displaying row upon row of packs on a shelf. By using staff to present the human face of the brand. Those are just a few ideas for starters. We have plenty more.

2012

I still love the retail experience. As long as I’m in the mood, I like a shop!

I will always love going to the shops, no matter what new technologies are available

MARCH Diary to JULY Dates...

Henley Centre for Customer Management Workshop Series Workshop 1, 8th March 2012 Danielle Pinnington “Retailing Evolution and the impact of the Multi-Channel Shopper” MRS Retail & Shopper Research Conference 3rd May 2012 – London “Optimising Your Multi-Channel Retailing Strategy”

The bricks & mortar shops that are able to deliver an emotionally engaging environment will be the shops that better meet the challenge from the clicks channels. Visiting a shop is not just about needing to make a purchase, it is also about enjoying the process. A return to the fundamentals of shop keeping may well be the making of our nation of shops.

The Horse’s Mouth: what are shoppers really saying? Our shopper research clearly shows that the key benefits which bricks & mortar stores offer over “clicks” companies are all emotional: ● “Great when you want to talk to someone”: 70% state Shops, only 13% state Online ● “Where you can experience before you buy”: 73% state Shops, only 13% state Online ● 81% expect good customer service from Shops vs. 40% from Retailer / Brand websites ● 66% expect good returns policy from Shops vs. 48% from Retailer / Brand websites In comparison, the dislikes associated with clicks channels include the lack of a human face, having to go through a registration process, and concerns about security of information – all factors which reﬂect an inherent question mark relating to trust.

Screenmedia Expo 2012 16-17th May 2012 Danielle Pinnington “Any time, any place, anywhere – How shopping habits are changing, and where screenmedia fits into the new shopper landscape” In-Store Show & Insights Show 27-28th June 2012 – Grand Hall, Olympia, London This year there is a dedicated Shopper area at the show which signaled clearly that it was time to get involved. Come and visit Shoppercentric on stand G106. Independent Retailer Month July 2012 Shoppercentric are proud to be sponsors of Independent Retailer Month, a global ‘Shop Local’ campaign that runs throughout July. The campaign highlights the important role smaller, local, independent retailers’ play in their communities, in the economy and in the retail sector as a whole. Shoppercentric on YouTube Did you miss Danielle speaking live on BBC News? If you did, and you are interested in what the Shoppercentric MD has to say about the Tesco Christmas 2011 figures then get your smartphone out, scan this QR code and watch the clip on our YouTube channel.

WindowOn... Issue 13, February 2012

thebigpicture By Danielle Pinnington

Between 1st and 5th December last year eBay opened a pop up store on Dean Street, so we decided to pop down and take a look. It’s fair to say we weren’t really sure what to expect, as it isn’t often an internet retailer moves into bricks & mortar, even less often one based on a business model like eBay. Whatever we were expecting, we were in for a surprise. This was less of a shop, and far more of an event. Whilst there were items for sale, an actual purchase required scanning the QR code to then buy the item from the eBay website. This is the kind of functionality that Tesco Korea and John Lewis achieved using posters on walls, so it begged the question of why open a shop to do this? The answer is likely to lie in the way the ‘shop’ was laid out. Themed rooms, such as a woman’s boudoir, and a lads den, allowed eBay to create a more inspiring environment than is typical on their website. In addition ranges from various retailers such as HoF, BooHoo and Karen Millen were highlighted, suggesting eBay also saw this as an opportunity to raise awareness of their website as an additional route to market for other retailers. So, given this was a fact finding mission for us, we came away with more questions than answers. This was clearly a genuine pop-up shop as a marketing initiative rather than a trial store. We aren’t expecting eBay to surge into the bricks & mortar market just yet.

WindowOn... Issue 13, February 2012

FEATURE

The Retailer’s Role: Curating Choice in the Wide World of the Web Getting a range right can make or break a retailer, and poor ranging has often been cited as the reason behind set backs in retail success. Just think of Marks & Spencer in the early ‘00s. Louise Lear looks at how the internet is impacting the skill of displaying a range. By Louise Lear

There was a time, before the internet was even a glint in Sir Tim Berners-Lee’s eye, when the average shopper could only see the product range displayed in their local store. Now, with the arrival of the web, surfing-shoppers can tap into the “long tail” of ranges. This means they can see far beyond the slimmed-down selection, usually the bestsellers, on offer in-store. As one shopper we interviewed said: “Even if you went to somewhere as big as Westfield and went to every store you wouldn’t get the choice [of the internet]”. At times this unlimited choice can feel overwhelming to shoppers. Success for retailers going forward will be less about presenting the long tail, and more about helping shoppers access the best range to suit their needs. But all too often, shoppers are faced with very basic search functions which result in seemingly endless pages of options.

WindowOn... Issue 13, February 2012

This approach smacks of the ‘shove it on shelf and it will sell’ mentality that ruled our shops for far too long. Retailers must step up to the role of ultimate curator of choice. This is where the search functions and web-page layouts are absolutely vital. Shoppers, particularly males, gravitate towards online shopping because they want to quickly cut through the clutter to the products that are most meaningful to them. The most effective websites not only show shoppers what is available, but also provide more, or less, information according to the individual shopper’s needs. They are adept at narrowing choice from a whole range of variables to home-in on the detail important to the shopper, which could be anything from type of clothing and style to food category and nutritional content. The best even present additional purchase ideas where relevant.

SHOPS

Widest Range

CATALOGUES

Range tailored to suit me

Shopper Talk...

30 22

RETAILER WEBSITES

BRAND WEBSITES

RETAILER APPS

BRAND APPS

SHOPS

CATALOGUES

Real words from the high street. Brought to you from the keen ears of the Shoppercentric team... Yeah, I know you want to go to the card shop – but that’s it... that’s all you need to do, you don’t need to bloody take up residence there. Even if you have a lot of money it’s better in your pocket nowadays.

16 46

RETAILER WEBSITES 33

BRAND WEBSITES RETAILER APPS BRAND APPS

26 28

Expectations of sales channels (%)

Online I get no snotty assistant looking down their nose at me. I’m still a fan of the old fashioned way of shopping in a store, especially for fashion where you can talk to a shop assistant – if they’re not too busy playing Angry Birds. It’s (NPD concept) better than the standard – the worry is none of us have noticed the standard! Where have they been hiding those?” (On seeing retailer’s current OL range)

Shoppers have never had it so good in terms of the options available to them: able to shop anytime, anywhere; able to access the best range based on their individual needs; and able to find the best price. The combination of all this choice, combined with the economic downturn, means that shoppers are increasingly considered in their purchasing. A more thoughtful shopper is evolving. Retail and manufacturing brands would be well advised to incorporate this change into their thinking and planning. If you’re a retailer or retail brand, the question you should be asking yourself is: how can we help shoppers make the best choices for them?

iPad docks on trolleys so men can watch the footie? You have got to be joking – I would look like a complete loser watching/pushing the trolley while my wife shops. I’d be worried about myself if I needed a GPS to find the aisle in Tesco’s, I’d hope I’d be more human and ask someone. I saw a young Waitrose partner carrying an elderly lady’s shopping all the way to her front door from the store. Now, that’s service! Sometimes I think there is too much choice – it’s more of a chore when there is too much to choose from.

What have you heard? Tweet us at @shoppercentric with the tag #shoppertalk

WindowOn... Issue 13, February 2012

An Experts Own View Name: Matt Ramsey Job title: Managing Director Sector: Marketing

Matt Ramsay, Managing Director of Activation, a marketing agency specialising in digital activation for FMCG, consumer and retail brands, gives us his thoughts on multi-channel retailing. The last few months have seen some real innovation in multi-channel retail. Diesel in Italy, have been using in-store QR codes prominently featured next to individual garments – scanning these puts an immediate ‘like’ and link to the product on the consumer’s Facebook page. The scanable virtual shopping aisles in subway stations, used by Tesco Homeplus in Korea, has been a complete innovation. This ground-breaking approach enables the consumer to do their grocery shopping from their mobile, on the move, and is now expanding across bus stops in Seoul. We need a better way to connect the consumer from the out-of-store experience, to the in-store experience. We need to arm consumers with the tools to actively seek out brands and products in store, driven by out of store advertising. Mobile devices hold the key to this, and retailers need to find innovative, interesting and creative ways to connect their stores to the consumer’s mobile device. The most interesting area of innovation seems to be coming from the mobile space, with a raft of augmented reality apps and QR campaigns springing up in-store. Notable applications include the Blippar augmented reality activity for Heinz, Marmite and Cadbury’s. Retailers seem to prefer the Aurasma augmented

WindowOn... Issue 13, February 2012

reality app, with recent campaigns for M&S and Clarks. What is really interesting here is how retailers and brands are finding innovative, interesting and creative ways to connect their stores to the consumer’s mobile device. We’ve even seen Tesco announce an augmented reality trial in stores and online as it looks to sell more bulky products, including consumer electronics, without sacrificing shelf space. A joined up, multi-channel strategy could certainly revive high streets, but retailers need to rethink what the most appropriate role for each channel is. We could see a High Street that is simply for experiencing and collecting products which have been researched and purchased on line. This could work particularly well for big-ticket items, where consumers really need to ‘try before they buy’. This approach would take the emphasis off each store to ‘sell’ and be more focused on delivering a brilliant consumer experience, based on brand and service. Ultimately leading to a more focused retail operation and a more interesting experience for shoppers.

FEATURE

The Long & Winding Road to Retail Success A modern shopper’s pathway to purchase is no longer a series of channel silos. It is a web of opportunities. As Danielle Pinnington reports, retail businesses need to take their blinkers off and really play with the opportunities. By Danielle Pinnington

At its most basic level the purchase journey has typically been identified as having three stages: pre store; in-store; and post store. But, in our brave new world of multichannel retailing, this kind of language sounds archaic, since so much shopping now takes place nowhere near an actual store. Surely, a purchase journey that looks at the activities taking place, rather than where they happen, is far more useful to businesses? A new model such as this allows businesses – both retailers and manufacturing brands – a better sense of what needs to be said or done and when. The ‘where’ is the dimension that multichannel then brings to the piece. This probably feels scary for some marketers. After all, this way of thinking challenges the whole structure of marketing communications, which is predicated on

having a line which activity is either ‘above’ or ‘below’. Multi-channel marketing has obliterated this line and the only communications which will really resonate with shoppers today are those that go right through this line. But, rather than be intimidated, marketers should be excited about the prospect of being able to make an impact on the purchasing journey in many more ways than before. The opportunity to change shopper behaviour is better than it has ever been. Granted, it is no longer as simple as aligning a particular communication channel to a particular point. And, of course, there are stronger and weaker relationships between channels but, as the table below demonstrates, retailers and brands alike can impact on all points in the shoppers’ purchase journey. continued overleaf...

WindowOn... Issue 13, February 2012

The Long & Winding Road to Retail Success continued from previous page And there’s more. As if that wasn’t complex enough, there is a raft of new communications tools available now to throw into the marketing mix too. Take social media, apps, QR codes and NFC to name a few, not to mention the fact that channels themselves can be communication tools. Let’s take QR codes as an example. These could be used in a magazine advert to trigger a purchase by enabling shoppers to access an exclusive voucher. They could also be used to access a complex URL and detailed product information when looking at TV screens in a department store.

Or QR codes could be used to actually purchase a product directly from a poster, as trialled by Tesco in Korea, and John Lewis on Oxford Street. Even the polarising medium of social media has its opportunities. As one shopper told us: “Social media has made me more aware of the options and variety [of products] available.” From the shopper perspective everything is possible and business needs to catch up. Retailers and brands now have a jigsaw of options to persuade shoppers to consider their products. What they need to do now is put all the pieces together in the right way. If they don’t, they will surely lose the multi-channel game.

WHAT ARE THE NEW GENERATION SAYING ABOUT SHOPPING? Whilst it would be tempting to think that the new generation entering the shopping world will be breaking new ground, it seems that in terms of general shopping attitudes they aren’t too different from their parents. Our research shows that:

of 18-24 year olds agree that “I want to see what I’m buying, so online is a last resort” – compared to 31% of 55-64 year olds

47%

of 18-24 year olds agree that “I will always go to the shops, no matter what new technologies are available” – compared to 46% of 55-64 year olds

12 2

WindowOn... Issue 13, February 2012

The big difference is their willingness to engage with new tools:

62%

of 18-24 year olds agree that “I love all the new technology being used in the retail industry” – compared to 45% of 55-64 year olds

What does the future hold? Well, we think that it’s going to be about using an increasingly varied range of solutions, rather than simply using new technology for new technology’s sake. We also don’t think that new technology is going to make traditional retailing approaches surplus to requirements either. But to find out more about this, and other trends we’re predicting, why not meet us for a chat?

An Independent Retailer Perspective

A View from the High Street

Louise Lear talks to Tim Sheehan, owner of Franklin’s Restaurant & Farm Shop, East Dulwich, SE London

mushrooms?’ so when the opportunity came up we thought we could do something”. It’s an amazing shop complete with old cookbooks you can browse through for inspiration and 19th century copper pans that came from the Savoy.

East Dulwich is a corner of South East London neighbouring Peckham that, on paper, might seem an unlikely spot for a thriving High Street. Yet in recent years a fishmonger, a butcher (offering a butchery master class course that is always fully booked) and a farm shop have opened and if the queues outside on a Saturday morning are anything to go by they are certainly bucking the trend of high streets turned ghost towns. So, what is the secret of their success?

They all pride themselves on offering the best quality and range sourced as locally as possible. Tim Sheehan set up Franklin’s restaurant in November 1999 and it rapidly built up a reputation as a top class neighbourhood restaurant using very local produce – all its vegetables come from farms in Kent, pork and beef from rare breed farms in Gloucestershire and Suffolk and fish is hand-caught from British waters. Three years ago an old tyre shop opposite the restaurant became vacant and Tim jumped at the opportunity to open the farm shop “People were always asking for stuff we used in the restaurant like ‘can you get me wild

But is there much call for cavolo nero (that’s black cabbage to you and me) in the economic downturn? If anything, Tim has seen the shop get busier “If you are going to spend money, a certain section of people want to spend their money wisely so will spend on better quality. And more local is our thing, absolute quality, the best of everything”. But is this just a local East Dulwich phenomenon? It appears not; M&S has recently invested £600m in revamping 14 stores complete with a new deli counter, rustic-looking bakery and fresh pasta machine and is hoping the investment will help increase its sales by more than £1bn over the next 3 years (source: Speciality Food Magazine). In fact, some of Tim’s suppliers have been approached by M&S “The multiples go with the trends – they will have seen there is more interest in farmers markets nowadays, artisan stuff, chefs on TV banging on about good quality olive oils and good quality cheeses. I used to worry if we had something that you could get in Waitrose but actually I think the opposite is true in that if people see it in Waitrose and then see it in here they think ‘ooh it must be good as they’ve got it in Waitrose’!” Britain’s high streets apparently now have more discount shops than bookshops but if M&S’s plans are anything to go by the next few years could see a rise in demand for quality as well as value and, as we’re seeing in East Dulwich, the traditional local high street is in a strong position to offer this. www.franklinsrestaurant.com

WindowOn... Issue 13, February 2012

thelastword... We thought we’d let our clients have the last word by telling you what they think of us...

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Thanks very much for this. We did a big presentation of the work to clients and the rest of the agency yesterday, which went very well. So thanks for doing a great job. Research Director, Media Agency

Last year we were able to demonstrate to our customers through these successful workshops that despite the tough economical climate shoppers continue to trade up. Category Development Manager, Manufacturer

The richness of what you’ve said today is already miles ahead of other agencies. Consumer Insight Manager, Manufacturer

We have found that these workshops have offered us a point of difference when communicating to our customers and building our plans for the future. The vox pops collated through ﬁlming shoppers during the workshop have also allowed us to appear credible in that we have listened to our shoppers. Category Development Manager, Manufacturer

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01582 468047 info@shoppercentric.com www.shoppercentric.com