Shifting Shopper Preferences: Analyzing The Latest Data on Cross-Channel Trends

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Troy Brown Retail Practice Leader Demandware, Inc.

Debbie Hauss Executive Editor Retail TouchPoints

Jim Bengier Global Retail Executive Sterling Commerce an IBM Company

© 2010 IBM Corporation

Agenda for Cross-Channel Brand Interaction 2010 Consumer Preference Survey

  Introductions

  Key Results from the Survey

  Survey Released at Shop.org Annual Summit

  Sterling Commerce’s point of view

  Demandware’s point of view

  The Future of Cross-Channel

  Questions

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Overview of the 2010 Consumer Preference Survey

  2010 versus 2007 consumer expectations

  Importance of Cross-Channel to the Consumer

  Required Cross-Channel Capabilities

  UK versus US Consumer Expectations

5


Consumers Cross-Channel Expectations Have Changed

6 6

2007-2010 Comparisons1

Cross-Channel Consumer Expectations 2007 2010 Complete an order anywhere 55% 61% Modify an order anywhere 65% 74% Track an order anywhere 56% 87% Shipping Notice (via any combination of channels) 94% 88% Shipping Delays (via any combination of channels) 91% 91% Delivery Notice (via any combination of channels) 78% 79% Cross-channel return to store 90% 84%

1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare


They’ve Raised The Bar Even Higher

7 7


85% of respondents “expect a seamless

experience across all channels for a retailer”. 1


And, The “Spoiled” Consumer’s Expectations Have Expanded

8 1 Source: “Cross-Channel Brand Interaction: 2010 Consumer Preferences,” Sterling Commerce, DemandWare

Importance Of Cross-Channel Capabilities 1

Notify when item is ready for in-store pickup (important to very important) 91% A negative experience online gives me a negative impression of the retailer over all 62%

Notify when frequently-purchased item will be on sale (important to very important) 59%

Maintain cross-channel customer history (important to very important) 53%

What impact does your online shopping experience on a retailer's website have on your overall perception of the retailer's brand? 48%

Importance of social media when shopping online or via mobile (important to very important) 22% Access product reviews when shopping online or via mobile (important to very important) 75% Chat with CSR when shopping online or via mobile (important to very important) 53%

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Consumer Expectations in UK Versus US

9 © 2010 Sterling Commerce intellectual property. All rights reserved.


2010 Comparisons1

Cross-Channel Consumer Expectations UK US Have high expectations of a seamless cross channel experience 87% 85%

Want in store pick up/returns 78% 83% UK consumers less likely to buy extras while picking up at store 23% 40%

Experience frequent OOS for promotional products 32% 32%

Uncomfortable making purchases on mobile phones 71% 69% Use mobile to more to assist than to buy

Check product availability Purchase products

29% 12%

28% 7%

Market place is the most useful mobile shopping app 69% 66%


Survey Was Released at 2010 Annual Shop.org Summit

  Tuesday Afternoon Invitation Only Executive Summit – 125 Senior Level Retail Executives – Key Note Speaker was Terry Lundgren, Chairman and

President of Macy’s

  Comments – Terry referred to the new “Omni” channel and Macy’s IT

budget – Executives took notes on customer preference – Everyone was in agreement on the required cross-

channel focus

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Sterling Commerce Point of View

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On-Line

Cross Channel

Omni

Compete against pure play

Customers shop

Technology view

New customer touch point

Integrate Channels

New Relationships

Retail Transformation

Singe touch point

Primary shopping venue

Store


Three Key Findings From the 2010 Customer Preference Survey

  Meet the “Rewired” consumer –  No longer separate channels, but consumers use

touch points –  Connectivity is the answer

  Convenience and flexibility are deciding factors for the consumer

–  66% consider it important to be able to determine in-stock availability before visiting a store

  Technology in the consumer’s hands is Leading retailers –  Mobile capabilities for price, 30%; specials, 28%;

availability, 26%; item location, 16%

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© 2010 IBM Corporation 14

Order Management System: The “Brains” of Your Cross-Channel Fulfillment Must Provide:

Flexible Fulfillment

Management By Exception

Inventory Optimization

Real-time Decision Support (SmartApps™)

Source: AMR, “Unlocking Cross-Channel Benefits Through Advanced Order Management”, September 20, 2009

© 2010 IBM Corporation © 2009 Sterling Commerce intellectual property. All rights reserved. 15

Our Customers Are Investing in Cross-Channel Technology


Four Areas Where Retailers Are Investing in Cross-Channel Technology

  Inventory Visibility & Available to Promise – Consolidate inventory information across multiple systems, enterprises, and participants –  Intelligent sourcing engine optimizes inventory use across the extended enterprise to

provide best Available-to-promise (ATP ) dates

  Orchestrate Inventory Fulfillment – Coordinate complex fulfillment across the extended enterprise – Provide a single order repository to modify, cancel, track, and monitor the order lifecycle

in real-time – Configurable, adaptive processes

  Returns and Exchanges – Enable cross-channel returns and exchanges – Automate returns disposition such as return to stock, return to supplier, or destroy – Link return requests to original sales orders, to enable lifecycle tracking

  Delivery, Service and Scheduling – Ability to schedule delivery, installation, and other add-on services at time of order

transaction – Rules-based promising, provider selection and crew allocation –  Integrated control of inventory, delivery and services execution 16


What Is the Future of Cross-Channel?

  Terminology- “Omni” seems to be taking hold

  Technology will continue to lead retailers

  Seamless customer experience regardless of start and stop points

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Copyright 2010Demandware, Inc. - Confidential

Your Brand. Your Consumer. Demandware.

Demandware Strongly Branded eCommerce Since 2004

Innovated merchant-centered tools to support strongly branded customer experiences

Delivered on a shared success business relationship that builds long-term partnership

Relieved IT burden with first SaaS eCommerce platform with continuous innovation, full customization and utility-level reliability


Your Brand. Your Consumer. Demandware.

Demandware Strongly Branded eCommerce Since 2004

19


Brands Extend eCommerce Branded Consumer Engagement


Branded Engagement Brand Strength In Every Consumer Experience

Expresses your brand through every aspect of the consumer experience

Delivers relevant experiences across consumer’s need

Builds an emotional and rational bond between the consumer and your brand

Branded Engagement

Brand Values Brand Promise

Marketing

Sales

Service

Merchandising


Branded Engagement Foundational Considerations

•  Focus investment at the branded engagement application level versus expensive integration and throwaway custom code

•  Flexibly integrate merchandising, sales and service at the business process level, enabling rapid response to changing consumer demands

•  Unified data underpins the lifecycle of browsing, consideration, purchasing, service

–  Customer, product, orders, inventory

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Shifting Shopper Preferences: Analyzing The Latest Data on Cross-Channel Trends