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4. INNOVATE LIKE ONLY ROMANIANS CAN
COPY MODIFY CREATE
Introduce global formats that already exist
Modify existing concepts to better match local needs
Develop new concepts, targeting specific local segments and needs
DEGREE OF INNOVATION
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BRANDS
Be the first to become friendly with your new customers
Help your existing distribution to « make the jump »
Pro-actively say goodbye to those who can’t or won’t innovate.
RETAILERS/INVESTORS
Be first to bring a (modified) format into the market
Come with something « unique » which internationals can’t offer
Get out of the way and sell as expensive as possible.
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THEN, GO TO WORK
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Source: IBM Business Consulting Services – The Retail Divide, 2004
BUT WE WILL START WITH INNOVATION FROM A STRATEGIC PERSPECTIVE
And to be more precise:
« customer centric retail innovation »
• Traditional Innovation is Broken
• Competition is Changing
• There’s not much to be done at retail anyway
Why Customer Centric?
• Traditional Innovation is Broken
• Competition is Changing
• There’s not much to be done at retail anyway
Why Customer Centric?
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CUSTOMER CENTRIC RETAIL INNOVATION
Customer Centric Retail Innovation
WHAT ABOUT THE CUSTOMER?
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Apple Retail 2001Sorry Steve, Apple Stores Won’t Work
(Business Week)
Apple Retail 2004: Fastest retailer ever to reach the
$1 billion mark a year
Apple Retail 2006Fastest retailer ever to reach
$1 billion/quarter mark
Apple Retail 2007Sales per sq.meter = $ 30,176
(as comparison: BestBuy = $10,643)
FUTURELAB
HOW DID THEY DO IT?
Watch video on http://www.youtube.com/watch?
v=m-Y7vZMEPrU
DRIVERS FOR RECOMMENDATION IN ICT
Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008 FUTURELAB
• Careful segmentation and focus on students, educators and creative professionals (even now consumer appeal broadens)
• A retail experience differentiated by service before, during and after sales (Genius bar)
• Scenario or lifestyle Marketing & Sales vs. Product « What do you want to do ? »
• Style & design
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THE RESPONSE
Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008
•No commissions
•Team bonuses
•Focus on experience
•Fashion & design people to run computer retail
•Hire for personality, attitude and customer fit … train the rest
•High identification: Tshirts, iPod, discounts, …
•3 week immersion at start of job ONLY on customer relationship skills and understanding customer needs/lifestyle
• All product training is online (except geniuses)
• Training on store computers or borrowed laptop
Ron JohnsonTarget
MickeyDrexlerThe Gap
BREAKING ALL THE RULES
FUTURELAB
Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008
Apple: 2007 Net Promoter Performance and 5 Year Trend vs. Overall B2C High Tech Computer Hardware Manufacturers
RESULTS
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Total Customer Value of an Apple advocate is almost twice that of the industry average
Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008FUTURELAB
RESULTS
13,8
6,5
24,3
8,46,2
0,8
5,5
HP Dell Apple Xerox Sun NCR Pitney Bowes
Revenue Growth % 2007 vs 2008Source: Fortune Magazine, May 5,2008
RESULTSFUTURELAB
CUSTOMER PERSPECTIVE
Flipchart TimeWhich are the steps in the customer journey when booking a holiday?
How could you innovate on them?
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THE CUSTOMER JOURNEY
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1. I dream of going on holiday2. I research my holiday3. I plan my holiday4. I select my holiday5. I purchase my holiday6. I receive travel documents & tickets7. I anticipate departure8. I prepare my trip9. I travel to my destination10. I discover my destination11. I experience my destination12. I record my memories13. I share my experience14. I travel back home15. I share my memories
LVMH - AOL Time Warner UBS - Richemont
CUSTOMER PERSPECTIVE
THE CUSTOMER JOURNEY
How Can You Innovate Now?
TRAVEL
Photo Nils Bremer, cc. 2.0
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BANKINGCARS FOOD
How About You?
CUSTOMER PERSPECTIVE
THE CUSTOMER JOURNEY
WHICH EMOTIONS ?
ARE ALL EMOTIONS EQUALLY STRONG?
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WHAT DO YOUR CUSTOMERS REALLY CARE ABOUT?
1. I dream of going on holiday2. I research my holiday3. I plan my holiday4. I select my holiday5. I purchase my holiday6. I receive travel documents & tickets7. I anticipate departure8. I prepare my trip9. I travel to my destination10. I discover my destination11. I experience my destination12. I record my memories13. I share my experience14. I travel back home15. I share my memories
PROCESSED FOODPHARMA
INNOVATORS SEEM TO DISAGREE
AIRLINES BANKS
COMPUTERS
UTILITIES
FUTURELABSource: The Doblin Group
1. I dream of going on holiday2. I research my holiday3. I plan my holiday4. I select my holiday5. I purchase my holiday6. I receive travel documents & tickets7. I prepare my trip8. I travel to my destination9. I discover my destination10. I experience my destination11. I record my memories12. I share my experience13. I travel back home14. I share my memories
THIS ALSO APPLIES TO CUSTOMER CENTRIC INNOVATION
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ObservationMost of the travel industry focuses on those areas which have least or most negative emotional involvement
Opportunities for meaningful
differentiation
Areas to keep up or stay ahead
Look at the nichesCopy when proven only
High
Low
Low High
Cus
tom
er E
ngag
emen
t
Innovation Intensity
CROSS YOUR INNOVATION LANDSCAPE WITH THE CUSTOMER ENGAGEMENT
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perception
80% of CEO’s believe of believe their brand provides a superior customer experience
8 % of their customers agree
(Bain & Company)
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We show that we value our customers by serving them well, putting their needs and interests at the center of everything we do.
(from the AOL mission statement)
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Watch video on:
http://www.youtube.com/watch?v=xaaAYVUWP0I
Source: Norton, D. Aligning your Strategy to the Customer Value Proposition, 13/9/2005
ONLY 5% OF THE WORKFORCE UNDERSTANDS THE STRATEGY (when innovating this gets even worse).
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76% of consumers don’t believe that companies tell the truth in advertisements
Yankelowich,2006
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5steps
To Customer Centric Retail Innovation
1. Take the Customer Perspective2. Get the Customer Heartbeat3. Focus Your Efforts4. Make Sure your People Are With You5. Start Swimming
INTERNET
IF YOU PLAY, GET THE BASICS RIGHT
“Out of 35 European premium brand dealers only 1 responded to an email enquiry from their own website … after 2 weeks”
2007 Retail Study for Customer Focused Excellence(N = 300 large online retailers)
•61% do not offer any information on the product page regarding in-stock availability
•38% of sites have difficult to read fonts
•Only 58% correctly answer an e-mail question within 24 hours
•Only 33% offer customer reviews.
•24% do not allow customers to enlarge the product image
Source: FutureNow, 2007
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INTERNET
LISTEN AND REACTFUTURELAB
Category %
Restaurant 79%
Hotels 87%
Travel 84%
Automotive 78%
Home 73%
Medical 76%
Legal 79%
US Online Review Users Identifying Review as Having Significant Influence on their Purchase
Source: Comscore Inc., the Kelsey Group, Oct. 2007
Hi Joel,Sorry if we weirded you or your friend out by following you on twitter. @JetBlue isn’t a bot, it’s merely me and my team keeping our ears to the ground and listening to our customers talk in open forums so we can improve our service to them. It’s not marketing, it’s trying to engage on a level other than mass broadcast, something I personally believe more companies should try to do.
Because corporate involvement in social media is a new and evolving discipline, I also take a specific interest on conversations revolving around our role here. I’d have DMd you and Lisa directly if you allowed DMs, so please also forgive me for following the link on your twitter page here to send you this note.You and Lisa are no longer being ‘followed’ as you seem to indicate.Again, my apologies
Morgan JohnstonCorporate CommunicationsJetBlue Airways
KEEP IT SIMPLE ON THE MOBILE FRONT
On-DemandSMS pushLocation Based Push
INFORMATIONAL(PART OF EXPERIENCE) PROMOTIONAL
!RELEVANCEPERMISSION
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IN-STORE INSPIRATION
Watch video onhttp://www.youtube.com/watch?v=gQBFaVfBi9w&feature=related#
Queen’s Arcade (Cardiff)
WATCH THE CONTENT
LESSONS IN NARROWCASTING
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McDonalds Amsterdam Veritas Antwerp
INSTORE
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COPY MODIFY CREATE DEGREE OF INNOVATION
Turnover of Retail Trade in Romania 2001-2007, 2010(€ billions)
ROMANIA IS ON THE VERGE OF SOMETHING BIG
For more information contact Alain Thys via info@futurelab.net
Or read up on the Futurelab blog at:
http://blog.futurelab.net
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