From clicks to bricks driving footfall in store through digital innovation - capgemini consulting - digital transformation

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  • From Clicks to BricksDriving footfall in-store through digital innovation

  • In-StoreisStillthePrimaryRevenueEarner

    Consumersgloballyhaverapidlyadopteddigitalretailchannels.OnlineretailsalesintheUSareexpectedtoreach$370billionin2017,upfrom$231billionin2012.However,thisdoesnotringadeathknellforbrick-and-mortarretailstores.Despitetherapiddouble-digitgrowthrateofe-business,onlinechannelsareexpectedtocontributetoonlyaround10%ofallUSretailsalesby20171.Thephysicalstorestillremainstheprimarypointofsaleforalargeproportionofconsumers.

    Figure 1: Percentage of Consumers Preferring In-store vs. Online Experience

    Source: Wanderful Media Research, December 2012

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    During 2011, US store sales conversion rates were 14 times higher than their e-business counterparts.

    Online channels are expected to contribute to only around 10% ofall US retail sales by 2017.

    In-store Online

    16%40%

    13%50%

    12%51%

    Bettercustomer service

    Getting answersfor questions

    Establishing relationshipwith merchant

    Majority of Consumers Prefer to Shop In-StoreAUSsurveyshowsthatconsumerspreferthein-storeexperienceforavarietyofreasons(seeFigure1)2.Physicalstoreshelpconsumersestablisharelationshipwiththemerchant,getimmediateanswerstoquestionsandgetaccesstobetterservice.Fromaretailerperspective,thishighlightstheareaswheretheyneedtocontinueinnovatinginordertostayrelevanttothedigitalconsumer.

    In-Store Sales Conversions are Higher Compared to OnlineAnotherkeyfactorthatmakesphysicalstoresindispensabletoretailersisthehighersalesconversionratesthattheyachieve.Astudyindicatesthatduring2011,USstoresalesconversionrateswere14timeshigherthantheire-businesscounterparts3.Drivingmoretracin-storehasanimmediateimpactonacceleratingsales.

    Digitaltechnologiescanhelpretailersmatchconsumerinterestinonlinechannelswiththehigher

    salesconversionbenetsofphysicalstores.

    Inthenextsection,wediscusswhichdigitalserviceshavethepotentialtodrivein-storetracandincreaserevenues.

  • DigitalToolsDriveAdditionalIn-StoreRevenues

    Digitaltechnologieshavepervadedallsegmentsoftheconsumerpurchasecycle.Theyallowcustomerstomakepurchasedecisions,locateretailstoresoravaildiscounts.Weidentiedasetof13suchdigitalservicesthatconsumerscanuseacrossthepurchasecycle.Alloftheseservicesarerelevantatdierentpointsofthepurchasecyclefromcustomercommunicationtoafter-salescustomerrelationships(seeFigure2).

    Interestingly,retailersarealreadyusingsomeofthesedigitalservicesandseeingpositiveresults.Forinstance,inmid-2011,Seattle-basedfashionandbeautyretailerNordstromrolledout6,000mobilepaymentdevicesacross117ofitsstores.

    Thesedevicesenableemployeestocheck-outconsumersfromanywhereinthestorewhiletheapponthedevicealsoallowsassociatesaccessintothecompanysinventory.Thisresultedinanincreaseintheaveragesellingpriceandthenumberofitemssoldin2011ascomparedto2010.TheuseofmobiledeviceshadanimpactonthetotalretailsalesforNordstorm,whichjumpedby15.3%intherstquarterof2012ascomparedtothesameperiodinthepreviousyear4.

    These13servicesindependentlyhavetheabilitytodrivebothtracandrevenuesforaretailer.However,ourexperienceintheretailsectorindicateshighestinterestlevelsforAppointment

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    Figure 2: Digital Shopper Services and the Consumer Purchase Cycle

    Source: Capgemini Consulti ng Analysis

    Communication Sales promotion Sales Customerrelationship

    Dig

    ital

    shop

    per s

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    ces

    mee

    ting

    thes

    e ex

    pect

    ation

    sCu

    stom

    erex

    pect

    ation

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    To nd information

    about a retailer easily

    To be advised and

    reassured in their choices

    To benet from

    discounts

    Virtual product trials

    Service comparison tool

    e-/m-coupons

    Online personal shopping / coaching

    Store Locator Appointmentbooking

    Shopping list apps M-payment Multichannel loyalty

    programmes

    Retargeting

    Click & ReserveStore

    happenings

    Product Locator

    To prepare the purchase

    To facilitate the

    transaction

    To be supported after their purchase

    In a survey conducted with more than 1,000 North American shoppers, 48% indicated that helpful store associates motivated them to spend more in-store.

    BookingandOnlineShoppingListservices.Boththeseserviceshavehighup-sellingpotentialandprovidestrongdierentiationintermsofcustomerexperienceagainstcompetitors.Inaddition,

  • Appointment Booking Service: Home Depot In-Store Appointment Maker

    HomeDepot,inaneorttoprovideaconsultativedimensiontoitsself-service/DIYproducts,hasimplementedanin-storeappointmentmakerapplication.Theappisverydetailed,allowingcustomerstoidentifytheirnicherequirementsbasedonspecictypesofproducts,viaanonlineform.Userscanalsoselectstoresanywherebetween5-100milesfromwheretheylive.Theappalsoprovidesanoptiontomakethatstorethedefaultchoicesothatthenexttimethecustomerhastoaccesstheapp,itavoidsduplicationofeortsinllingoutallthedetailsonceagain.Theusersubsequentlyschedulestheappointmentbyselectingaconvenientdateandtime.

    Source: Home Depot website

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    theavailabilityofmaturetechnologiesforboththeseservicesfacilitatetechnicaldeploymentandeasierserviceadoptionwithseveralmonthsleadtime.Webelievethesetwoservicesshouldformtheinitialfocusforanyretailerthatislookingtowardsdigitaltechnologiesasameansofdrivingphysicalin-storetrac.

    Appointment Booking Service Drives Up-sellTheAppointmentBookingservicerevolvesaroundtheconcept

    ofin-storesalesadvisorswhoassistshoppersandrecommendrelevantproductsinlinewiththeirrequirements.This,inturn,canencouragecustomerstoincreasetheirspend.Infact,inasurveyconductedwithmorethan1,000NorthAmericanshoppers,48%indicatedthathelpfulstoreassociatesmotivatedthemtospendmorein-store5.

    TheAppointmentBookingserviceprovidesadierentiatedoeringcomparedtopureonlineplayersduetothepresenceofdedicatedsalesadvisors.Theservicealso

    increasestheconsumersaverageshoppingbasketsizeduetoup-sellingofcomplementaryproducts.Italsorecordsconsumerdatapriortoscheduling,whichcanbeusedforfollow-upsinthecaseofnoshowsornopurchase.SeveralretailershavestartedimplementingAppointmentBookingservices.HomeDepotisonesuchretailerthathasalreadyimplementedanin-storeappointmentmaker;theserviceallowscustomerstoscheduleappointmentsthroughthewebsite(seeinsert)6.

    Schedule your initial in-store appointment with a Home Depot specialist.To schedule an appointment with a particular associate or to schedule a follow-up appointment, please contact the store directly.

    1. Select Product & Store

    Product:

    Store: Select a Store

    2. Select Date & Time

    3. Enter Contact Information

    Select a Product

    In-StoreAppointmentMaker

  • Online Shopping List Service Catches the Customer Early in the Purchase CycleTheOnlineShoppingListserviceallowsconsumerstocreatelists,plantheirpurchasesinadvanceandgetrelevantinformationonselectedproducts,suchasavailabilityandoers.Once

    thecustomerisin-store,theapplicationalsoinformsaboutusefulrelevantproductspreviouslynotconsidered,therebyincreasingthestoresup-sellpotential.Onlineshoppinglistserviceshelpsecurebrandloyaltybynarrowingdownthecustomerinteractiontooneparticularchannel.Itincreasestheaverageshoppingbasketbyrecommendingrelevant

    productsaccordingtoconsumersshoppingrequirements.TescoisonesuchretailerthathasalreadyimplementedanonlineshoppinglistservicecalledTescoFinderthatenablescustomerstocreateandsharelistsonline,andaddproductstothelistinreal-timewhileatthestore(seeinsert)7.

    Online Shopping List: Tesco Finder

    Tesco,initseortforprovidingcustomerswithadierentiatedexperience,hasintroducedseveraldigitalservices.OneoftheseservicesisaDigitalShoppingList;thisserviceisloadedwithmanyfeaturesallowinguserstoeasilyidentifytheirneedsandgoaboutfulllingthemwithease.

    TheDigitalShoppingListservice,namedTescoFinder,inadditiontondingthenearestTescostore,alsoallowsconsumerstobuildashoppinglistbybrowsingthroughvariousproductcategoriesanddepartments,sharethelistwithfriendsandaddproductstothelistwhiletheyareinthestore.Theservicedisplaysspecialoersonproducts,storetimings,productavailabilityintheselectedstoreandproductdetails.Consumerscanusethemobileversionoftheservicetolocateproductswithinthestoreandaddthemtothelistbysimplyscanningthebarcode.

    Afewoftheotherfeatures,suchasvoice-enabledproductsearchandin-storenavigation,letconsumerssavetimeinllingupthelistorpickingupproductsfromthestore.Thein-storenavigationfeaturecreatestheshortestroutewithinthestorebasedonproductsintheconsumersshoppinglist.

    Tescorealizestheimportanceofusingdigitaltechnologyinbringingconsumerstothestore.ThisisconcurredbyitsCIOMikeMcNamara,whenhesays,Idontthinkwehaveanonlinestrategy,wehavearetailingstrategythatisincreasinglydigital.Onlineisbecomingpartofthecorebusiness.

    Source: Tesco website

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    Groceries

    Book details

    Add itemShopping list

    Milk

    Rice akes

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