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Copyright © 2015 Aptos, Inc. All rights reserved.
1© 2015 Aptos, Inc. All rights reserved. 1© 2015 Aptos, Inc. All rights reserved.
Engaging Customers DifferentlyNew and Potentially Disruptive Experience Models that Drive Traffic and RevenueDave Bruno, Marketing Director
June 25, 2015
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Today’s Panel
Joe SkorupaEditor in Chief
RIS News
Jay ShieldsDirector, Solution Consulting
Aptos
Dave BrunoDirector, Marketing
Aptos
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Nothing Lasts ForeverThe pace of change in retail is accelerating, causing competitive advantage to erode more rapidly than ever before…
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Image: Norton Ip
100Department Stores:
years
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Image: Amanda Bengston
50Category Killers: years
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Image: Mike Seyfang
1995
????
Eventually, reinventionAll models require
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Image: Jim Bowen
New retail models are emergingConstantly
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Image: Sharon Michele Ursno
To differentiate,
People no longer GO shopping…people are ALWAYS shopping
essentialExperience is
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Don't sell! No! That's a turn-off. Build an amazing brand experience, and then selling will just naturally happen.
“-Angela Ahrendts SVP Retail and Online Stores Apple
Image: CGP Grey
experienceRethinking
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Today’s Agenda1.Subscription Boxes2.Mobile Commerce 2.03.Showrooming, Redux4.Lifestyle Curation
Image: Sharon Jan Inge
Potentiallydisruptiveexperiences
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Monthly Subscription Boxes“Discovery Commerce Comes of Age”
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Along legacyin retail
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"Reimagining beauty retail online."
Image: Jeanna
retailing is born
“Little Box”September 2010:
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Image: Angie Six
Initial e-mail to
40friends
$10/month
A few curated samples
Source: Inc. Magazine
beginnings
humbleBirchbox takes root from
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Image: Angie Six
results
Global subscribers800,000
Annual Sales$96MSource: Forbes
impressiveBirchbox today:
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Image: Angie Six
phenomenonBirchbox spawned a global
US Subscription Services6002013 VC Investments$300M
Source: Subbly
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Virtually limitlessvarietyEverything you need to take a much-needed
getaway without leaving home
Toys, collectibles, t-shirts and other
"geeky" things
4-5 carefully selected products & presents from Austin, Texas every month
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shoppers
“It's like Christmas! I’m never sure what's going to be in
there.”
The Thrill of the Hunt
“I get exposed to things I wouldn’t know about. I recently got a bronzer that I’m addicted
to.”
Personalized Curation
“If I end up liking the whole box, then I’ve hit the jackpot.”
Value Potential
“If you walk into a big-box store, there are aisles and aisles...
It can be overwhelming.”
Decision Fatigue
The appeal to
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investorsThe appeal to
“Acquiring a transaction means acquiring a customer for the long
term, rather than a single purchase.”
Greater Lifetime Value
“You have a very close idea of how much stock you need,
shipping costs, the spread of delivery destinations, and likely
future income.”
Greater Predictability
“Customers automatically ‘buy’ each month, without the need to
bring them back via display retargeting, social, email, etc.”
Lower Retention Spend
“A company built on recurring revenue is usually viewed as more attractive than the same company
without the near-guarantee of income.”
Company Value
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TargetNordstromAmazonCVSBergdorf GoodmanDrugstore.com
Not surprisingly, big brands have begun toinvest
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First 5 Enabling Technologies to Consider• Recurring order functionality• Commerce• Recurring billing• Order management
• Integrating via the store• CRM/Clienteling
• Analytics-driven Personalization/Curation• Related items month-to-month• Build a story via a series of boxes• Measure monthly boxes (“baskets”)• Inventory management/forecasting/staging
• Commissions for high-performing stylists• Loyalty/CRM/Point tracking
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Do you consider monthly subscription services to be hip…or hype?
o Hipo Hype
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Has your organization ever offered a subscription service?
o Yes, we have investedo Planned investment 12 -
24 moso No plans
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Subscription Service Poll Results: Aptos CIO’s
Hip Hype Have Invested Plan to Invest No Plans
67%
33%
Hip…or Hype?
78%
11%
11%
Investment Plans?
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Mobile Commerce 2.0“Back to the Future?”
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“Mobile Retail” is on a roll
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Retail trucks arrived
Fashion Truck PioneerStacey Steffe
circa 2010
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Now more than in the USSource: American Mobile Retailing Association
400 trucks
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In allshapes & sizes
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In countless categories
High fashion Toys and tees Footwear
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“It’s very cute and inviting. It’s just
so adorable how it’s set up, it makes you just want to go
inside.”
The Treasure Hunt
“Truck-hopping is a fun, stress-free way to go shopping
with your girlfriends.”
It’s Fun and Social
“I love the quirkiness of the fashion trucks and it feels a lot more personal than going to a
traditional store.”
It’s Personal
“I like the convenience of fashion coming to me.”
It’s Convenient
shoppersThe appeal to
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entrepreneursThe appeal to
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“Invest a few thousand in a truck to have it retrofitted and you have a mobile boutique that can go anywhere.”
Low Barriers to Entry
entrepreneursThe appeal to
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“Facebook and Twitter are integral to our business, but we've also made it inviting for walk-in customers. I set out a Welcome sign, along with a few items...”
CheapMarketing
entrepreneursThe appeal to
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No Rent to Pay
entrepreneursThe appeal to
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investingNot surprisingly, big brands are
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First 5 Enabling Technologies to Consider• Mobile POS/Cloud POS• Assortment Planning• Analytics/CRM to drive location/mapping• Micro-level analytics • Similar to using catalog/commerce deliveries to drive store needs?
• Enterprise Inventory (endless aisle)• Omni-channel considerations?• Store versus showroom?
• Promotion Planning/Mgmt
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technologyEnabling
Mobile POS (Cloud)Assortment Planning
AnalyticsCRM
Endless Aisle
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Do you consider mobile retail outlets to be hip…or hype?
o Hipo Hype
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Do you have any current or planned investments in mobile retail outlets?
o Already investingo Planned investment 12 -24
moso No plans
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Mobile Retail Poll Results: Aptos CIO’s
Hip Hype Have Invested Plan to Invest No Plans
78%
22%
Hip…or Hype?
45%
33%
22%
Investment Plans?
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Showrooming, Redefined?“Bricks Like Clicks”
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TUPPERWARE PARTIES
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showroomHow to shop a
1.Browse the collections
2.Try on/sample the merchandise
3.Make assisted online purchases
4.Head home and wait for purchases to arrive
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Bonobos GuideshopsThe benchmark:
Web site visitorconversion rate5%Store shopperconversion rate83%2xSuits sell the online rate
Sq. ft. showrooms1,500Sources: Retail Wire 2014, Forbes 2014
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Indochinosews up space
Custom suits for men100%Weeks, under4 $500
150,000Online customers
6profitable stores today
On-site “Style Guides”Fabrics to explore Custom fittings
Pop-up strategy evolved into permanent location plan
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showroomWhy open a
1.Additional saleschannels
2.Wider assortment, smaller footprint
3.Product testing labs
4.Return locations & help desks
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Birchbox“hybrid” store builds brand
Store Carries Inventory, but Shopping Experience
Mirrors their Web SiteInstead of arranging
products by brand, they sort them by
category
The “Cheek” shelf, where all blush options are in a neat row, is like
clicking “Cheek” in a drop-down menu
Touchscreen simulates the algorithm
Birchbox.com uses to send monthly samples
The store exists to create a brand experience that builds loyalty, brand and
buzz.“
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Enabling Technologies• Omni-channel• Commerce• Store-centric Micro site• Self checkout
• Order Management/Fulfillment• Enterprise Inventory• Drop ship option
• Warehouse Management• Clienteling/CRM
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Has your organization ever considered opening a showroom?
o Already investingo Planned investment 12 -24
moso No plans
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Showroom Poll Results: Aptos CIO’s
Have Invested Plan to Invest No Plans
86%
14%
Investment Plans?
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Stores as Points of Experience“Lifestyle Curation”
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Lifestyle Curation defined
Offering related services and experiences that go beyond products to foster deeper connections with shoppers
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pioneerA true lifestyle
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shoppersThe appeal to
“Our relationship to our favorite retailers
is built on this idea that their products and ethos
embody our own values and
outlook.
We rely on these shops to bring our point of view to
life be it through
product, decor, or otherwise…
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Significant successMany experience pioneers have achieved
$400M$600M$2.2B
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experienceA look at several recent attempts to transform the store from errand to…
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Massage SpaGarden Paths
Design ClassesFarm to Table Cafe
Private EventsCoffee Shop
Wine Tastings
Terrain
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GalleryLibrary
Floral BoutiqueCinema Room
Wine BarBilliards Lounge
Sculpture Garden
Restoration HardwareFormer Museum of Natural History
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Expert TipsTraining Classes
Shoe RentalLockersShowers
Adidas
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Store managers host monthly supper club
parties for the “Creative
Community”
“What’s one thing you’ve done that you’ve never told your parents?”
REAL TALK
Kit & Ace
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Retail StoresPop-Up ShopsPerformance
SpaceArt GalleryRestaurants
Films & Concerts
Space 15 Twenty
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Integrated & Interactive
Internet of Things Studio
Home SecurityFitness
AppliancesGrillsTools
Heating/Air
Sears3,900 sq. ft. demo home
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Enabling Technologies•Marketing driven • Deeper Analytics into customer• Customer influencers and who they influence• Likes/dislikes• Art/music
•Mobile POS for open spaces• Tools to connect differently
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Do you think curated lifestyle experiences are relevant to your
target customer?
o Very relevanto Somewhat relevanto Not relevanto Not sure
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Do any of your stores offer curated lifestyle experiences?
o Some storeso All storeso Planned investment 12 -24
moso No plans
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Lifestyle Curation Poll Results: Aptos CIO’s
Hip Hype Have Invested Plan to Invest No Plans
78%
22%
Hip…or Hype?
45%
33%
22%
Investment Plans?
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Engaging Customers Differently
How Aptos Can Help
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Enabling Solutions from Aptos
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Q&A
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Thank you