10 game-changing retail trends Arun Bruce

26 Pages·2017·12.12 MB·English

10 game-changing retail trends
Arun Bruce
Middle East Retail Forum 2017
NOVEMBER 2017
Store closures at record
high in developed markets
 Malls closed in the US since 2011,
from 1'800 and to 1'100, and 300
700
additional malls expected to close
in the near future
 Stores are closing in 2017 in the
9,000+
US
 Decrease of footfall per year in
-4%
the US and Germany since 2011
Source: Bloomberg, Business of fashion
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US customers now shop more online
than in stores for Black Friday
22%

On Black Friday 2016, online sales
YoY online
totalled $3.34B
sales
growth
3m Compared to 2015, 3m fewer people
Fewer in- visited stores (99m), while 5.5m more
store
shopped online (109m)
customers
Mobile sales jumped 33% to account
​ 64% ​ 21% ​ 15%
$1.3B of online sales, including 70% of
Walmart's sales
​ Desktop ​ Tablet
​ Smatphone
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The Middle-East is seeing less disruption so far
Middle-Eastern brick-and-mortar retail is Ecommerce is growing quickly but no
still growing significant impact in near future
​ E-commerce sales1 ($B)
​ 8.6
​ Selling space1 (Million sq. m)
​ +23%
​ 7.0
​ +6% ​ 5.9
​ 57
​ 4.9
​ 53
​ 50 ​ 4.1
​ +6% ​ 47 ​ +31%
​ 44 ​ 3.1
​ 42
​ 37 ​ 40 ​ 2.3
​ 35 ​ 1.7
​ 32 ​ 33 ​ 0.8 ​ 1.0 ​ 1.3
​ 2011 ​ 2012 ​ 2013 ​ 2014 ​ 2015 ​ 2016 ​ 2017F ​ 2018F ​ 2019F ​ 2020F ​ 2021F
1.0% 8.6%
​ 2011 ​ 2012 ​ 2013 ​ 2014 ​ 2015 ​ 2016 ​ 2017F ​ 2018F ​ 2019F ​ 2020F ​ 2021F Share of e-commerce in the Globally
in total retail sales: Middle-East
1. Include Bahrain, Iraq, Jordan, Kuwait, Lebanon, Oman Qatar, Saudi Arabia, United Ara Emirates, Yemen
Source: Euromonitor International
The Boston Consulting Group ● Middle East Retail Forum | 4
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Omni-channel 2.0
Example: Sephora offers seamless experience that enables customers
to use the devices that is most convenient for them at the time
Omni-channel 2.0:
Customer envisions
In the end, she purchased
Purchase online with her cross-
his journey as simple channel basket
and convenient
Consideration
 Customers expect a consistent experience Awareness
across all channels:
•  Seamless experience and disappearing Consumer reads
about Sapphire,
boundaries, while moving between the color of the
year on Tumblr
channels
•  Customer journey customized and
independent from time and place
She browses products
on m.Sephora.com
and saves to her
Consideration basket
Awareness and
Social media informs her thought process
inspiration
and a quick stop in store on the way home
lets her see and try on the product
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1
Omni-channel 2.0
Retailers focus on erasing
boundaries between channels
Key imperatives for businesses:
 Fully integrated online and offline worlds:
Redefine the roles of channels
•  Free in-store click & collect service and pick-up
and align incentives across
points in 5000+ local shops
channels
Department •  Beacon store tracking to identify customers in
store
store and deliver personalized promotions Upgrade core IT capabilities
across the board
 Single view of customer data across channels
Re-think company-wide pricing,
•  All channels have access to the same CRM data
promo and liquidation strategies
and all contribute to data collection
due to transparency across
Upscale
department •  Personalization of promotion and experience channels
store
(e.g. size preferences)
 Seamless inventory management
•  Pooling of retail and online inventory
•  End-to-end visibility of entire inventory
allowing order fulfillment across all channels
Underclothes
and lingerie
Source: Company websites, press search, BCG analysis
6 | Disruption in Retail: 10 game-changing trends
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Personalization
Winning players master key personalization capabilities
Best performing brands leverage personalization as a ...rooted in a unique set of
competitive advantage... capabilities
Customer mapping and
Beacon sensors Virtual Artist on
visualization of customer
locate Sephora App to allow
customers in users to instantly try journeys
store and lip colors that
provide them complement their
context- based skin tone
messages
Fully developed predictive
Customer Lifetime Value and
churn models
MagicBands allow Netflix provides
visitors to pay for personalized
products and recommendations
Recommendation engine and
access their resort based on user data
rooms, and serve and advanced predictive next buy model
target offers analytics
accordingly
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Personalization
Leading retailers are already
personalizing experience at scale
Key imperatives for businesses:
 Personalization of promotions and of the
experience while in store: Centralize all data (transactions,
•  Weekly personalized offers and gamified product information, customer
loyalty, browsing patterns...)
experience based on order history
Coffeehouse
chain •  Partnership with Spotify to allow customers to
Win at gaining customer trust to
save songs heard in-store
get access to customer data
 Personalized website and mail:
Develop data and analytics
•  Data gathered on searches, transactions and
capabilities for the extensive use
brands customers follow
of real-time data
•  Delivery of product recommendations, fashion
Shoes and fashion
ecommerce tips and price comparison via website and app Couple analytics engine with
mailing/ SMS automation to
deliver 1:1 personalized
 Deep data pool with a human touch
messages across channels
•  Data-heavy customer profiles and list of
recommendations created by algorithm
•  Every customer paired with a stylist who
Apparel
shares tailored notes, tips and tricks
Source: Company websites, press search, BCG analysis
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Customization
3D printing enables retailers and shoppers to create
unique products
The 3D printing market is growing ...Creating new opportunities for
by 22% annually... retailers
Turn consumers into designers and
manufacturers
​ 3D printing global market ($B)
3D printing shop where
consumers can create iPhone
​ 4.8
cases and jewelry
​ +22%
Manufacture new types of products
​ 1.8 Broken parts and customized
cabinetry can be printed by
​ 0.6 customers
​ 2007 ​ 2012 ​ 2017 Creation of products that fit like a glove
Creation of 3D printed
 Decreasing cost of 3D printers is leading to higher adoption.
custom-fit wearable clothing
for annual fashion show
Source: Freedonia
9 | Disruption in Retail: 10 game-changing trends
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Customization
Brands encourage user generated
content through customization
Key imperatives for businesses:
 Bespoke garments based on body scan:
•  Pop-up shop where customer's body get scan Define the business model for
•  Customer can move patterns project on his customization and decide what
level of customization to offer
body to create his preferred design
(customer engagement vs. core
•  Bespoke garments can be manufactured in-
Sportswear business)
store in 4 hours
Keep customization experiences
 Customization of items for performance, fit and
simple and fun for customers
style (NIKEiD):
•  Customers can choose materials and colors and
Re-think customization as a
add personal messages on shoes and bags separate offering rather than as
Sportswear •  Delivery in 3-4 weeks an incremental add-on to
existing lines
 Customization and crowd-sourcing of products:
•  Customers can design their own Lego models
and order them for actual delivery
•  New ideas are shared with the Lego
Toys community, and products with 10,000+ votes
are considered for commercialization
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