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The Future of Retail: Recasting the Retail Store in Today's Omni-channel World

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Deborah Weinswig
Deborah Weinswig

Deborah Weinswig presented on optimizing profit and productivity in the retail environment. She discussed declining foot traffic and rising e-commerce sales. To compete, retailers must create a seamless omni-channel experience with a single brand identity across online and physical stores. Successful retailers will integrate digital and physical shopping to engage customers through personalized experiences and community.

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1 Retailer Seminar: Optimize Your Profit and Productivity in the Shopping Center Environment October 23 – 24, 2014 University of Florida, Orlando Campus DEBORAH WEINSWIG Executive Director-Head, Global Retail Research and Intelligence Fung Business Intelligence Centre deborahweinswig@fung1937.com 646.839.7017 www.deborahweinswigresearch.com
2 The Issues • Foot traffic: -3.6% YoY in U.S. (Sept.) • U.S. Q2 e-commerce sales: +15.7% YoY (June, estimates) • Thinking about Holiday 2014, just remember Holiday traffic in 2013 was -14.6% YoY • Worldwide smartphone sales is expected to grow 11.5% CAGR from 2014 – 2018 • M-commerce exploding: 1/3 of Holiday 2013 on mobile, up from 20% in 2012; but social commerce did NOT as it was flat in 2013 at 2%
3 Physical Store Traffic is Falling Sales Traffic Trans. Conv. %Return ATV SPS (% points) (% points) September -2.4% -3.6% -3.6% 0.4% -1.1% 1.4% 1.5% August -4.0% -7.9% -5.9% 0.4% -1.0% 2.0% 4.2% July -4.5% -7.8% -9.5% -0.05% -1.1% 6.7% 3.5% June -5.8% -10.8% -12.0% -0.1% -0.8% 7.6% 5.5% May -5.7% -8.0% -11.6% -0.2% -0.6% 7.1% 2.6% Source: RetailNext, Comprehensive In-Store Analytics
4 Conquering the Omni-channel Arena • Retailers want a "single customer interaction platform" but have almost no idea how to get there • Creating a single brand identity across channels is the most important goals for retailers • Retailers should designate a single owner of the customer experience journey
5 The Future of Retail • Digital information is influencing more than 50% of our purchases • Retailers can create value by integrating retail channels with social media, online, and mobile channels • Omni-channel shoppers spend 50% more than single channel shoppers • O2O online driving offline transactions
6 Big Trends Changing Retail Marketing Today • Human connections are the only real metric for building institutional trust • Better storytelling is the secret weapon for when products are easily replicated • The best value from digital tactics comes by educating instead of trying to have a "dialogue"
7 The Future of Retail Marketing • 77% of consumers prefer email for permission-based promotional messaging • 39% of retailers used in-store signage to convert customers to digital • 44% of retailers do email acquisition at point-of-purchase
8 Recasting the Retail Store in Today's Omni-channel World • The majority of consumer shopping time is still spent in store at 61% per AT Kearney • Consumers spend more money when shopping in brick-and-mortar stores • There are multiple ways to research, verify, and purchase products
9 Physical Stores Maintain Their Importance
10 Converting Online Browsers to Buyers
11 What is Cyber Crime? • Crime committed using a computer and the internet to steal a person’s identity or illegal imports or malicious programs • Cybercrime is nothing but where the computer used as an object or subject of crime
12 Types of Cyber Crime Types of Cyber attacks, by percentage (source- FBI) •Financial fraud: 11% •Sabotage of data/networks: 17% •Theft of proprietary information: 20% •System penetration from the outside: 25% •Denial of service: 27% •Unauthorized access by insiders: 71% •Employee abuse of internet privileges: 79% •Viruses: 85%
13 Cyber Security • Cyber security will defend us from critical attacks • It helps us to browse the safe website • Internet security process all the incoming and outgoing data on our computer
14 How Do Retailers Compete US Customer Satisfaction Index 2013 1.0% 9.2% 9.9% 5.6% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Amazon Kohl's Macy's Walmart COMPANY SCORE Amazon 88 Nordstrom 83 Kohl’s 81 Dollar Central 80 JC Penney 79 Target 77 Macy’s 76 Walmart 71 FY 13 (ended January 2014) EBIT Margins FY14 P/E 122.0X 13.6X 13.0X 15.2X FY15 P/E 67.3X 12.3X 11.3X 14.3X As of Oct. 22, 2004 Source: SPCapitalIQ
15 Communication App • Personalization Engine • Making Shopping Fun Again • Driving Traffic to the Stores • Ability to offer Inspiration • Forming a Community • Inexpensive Marketing and Communication Tool
16 Q & A DEBORAH WEINSWIG Executive Director-Head, Global Retail Research and Intelligence Fung Business Intelligence Centre deborahweinswig@fung1937.com 646.839.7017 www.deborahweinswigresearch.com

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The Future of Retail: Recasting the Retail Store in Today's Omni-channel World

  • 1. 1 Retailer Seminar: Optimize Your Profit and Productivity in the Shopping Center Environment October 23 – 24, 2014 University of Florida, Orlando Campus DEBORAH WEINSWIG Executive Director-Head, Global Retail Research and Intelligence Fung Business Intelligence Centre deborahweinswig@fung1937.com 646.839.7017 www.deborahweinswigresearch.com
  • 2. 2 The Issues • Foot traffic: -3.6% YoY in U.S. (Sept.) • U.S. Q2 e-commerce sales: +15.7% YoY (June, estimates) • Thinking about Holiday 2014, just remember Holiday traffic in 2013 was -14.6% YoY • Worldwide smartphone sales is expected to grow 11.5% CAGR from 2014 – 2018 • M-commerce exploding: 1/3 of Holiday 2013 on mobile, up from 20% in 2012; but social commerce did NOT as it was flat in 2013 at 2%
  • 3. 3 Physical Store Traffic is Falling Sales Traffic Trans. Conv. %Return ATV SPS (% points) (% points) September -2.4% -3.6% -3.6% 0.4% -1.1% 1.4% 1.5% August -4.0% -7.9% -5.9% 0.4% -1.0% 2.0% 4.2% July -4.5% -7.8% -9.5% -0.05% -1.1% 6.7% 3.5% June -5.8% -10.8% -12.0% -0.1% -0.8% 7.6% 5.5% May -5.7% -8.0% -11.6% -0.2% -0.6% 7.1% 2.6% Source: RetailNext, Comprehensive In-Store Analytics
  • 4. 4 Conquering the Omni-channel Arena • Retailers want a "single customer interaction platform" but have almost no idea how to get there • Creating a single brand identity across channels is the most important goals for retailers • Retailers should designate a single owner of the customer experience journey
  • 5. 5 The Future of Retail • Digital information is influencing more than 50% of our purchases • Retailers can create value by integrating retail channels with social media, online, and mobile channels • Omni-channel shoppers spend 50% more than single channel shoppers • O2O online driving offline transactions
  • 6. 6 Big Trends Changing Retail Marketing Today • Human connections are the only real metric for building institutional trust • Better storytelling is the secret weapon for when products are easily replicated • The best value from digital tactics comes by educating instead of trying to have a "dialogue"
  • 7. 7 The Future of Retail Marketing • 77% of consumers prefer email for permission-based promotional messaging • 39% of retailers used in-store signage to convert customers to digital • 44% of retailers do email acquisition at point-of-purchase
  • 8. 8 Recasting the Retail Store in Today's Omni-channel World • The majority of consumer shopping time is still spent in store at 61% per AT Kearney • Consumers spend more money when shopping in brick-and-mortar stores • There are multiple ways to research, verify, and purchase products
  • 9. 9 Physical Stores Maintain Their Importance
  • 10. 10 Converting Online Browsers to Buyers
  • 11. 11 What is Cyber Crime? • Crime committed using a computer and the internet to steal a person’s identity or illegal imports or malicious programs • Cybercrime is nothing but where the computer used as an object or subject of crime
  • 12. 12 Types of Cyber Crime Types of Cyber attacks, by percentage (source- FBI) •Financial fraud: 11% •Sabotage of data/networks: 17% •Theft of proprietary information: 20% •System penetration from the outside: 25% •Denial of service: 27% •Unauthorized access by insiders: 71% •Employee abuse of internet privileges: 79% •Viruses: 85%
  • 13. 13 Cyber Security • Cyber security will defend us from critical attacks • It helps us to browse the safe website • Internet security process all the incoming and outgoing data on our computer
  • 14. 14 How Do Retailers Compete US Customer Satisfaction Index 2013 1.0% 9.2% 9.9% 5.6% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Amazon Kohl's Macy's Walmart COMPANY SCORE Amazon 88 Nordstrom 83 Kohl’s 81 Dollar Central 80 JC Penney 79 Target 77 Macy’s 76 Walmart 71 FY 13 (ended January 2014) EBIT Margins FY14 P/E 122.0X 13.6X 13.0X 15.2X FY15 P/E 67.3X 12.3X 11.3X 14.3X As of Oct. 22, 2004 Source: SPCapitalIQ
  • 15. 15 Communication App • Personalization Engine • Making Shopping Fun Again • Driving Traffic to the Stores • Ability to offer Inspiration • Forming a Community • Inexpensive Marketing and Communication Tool
  • 16. 16 Q & A DEBORAH WEINSWIG Executive Director-Head, Global Retail Research and Intelligence Fung Business Intelligence Centre deborahweinswig@fung1937.com 646.839.7017 www.deborahweinswigresearch.com