Capgemini Future Consumer Study_FINAL_web

7/28/2019 Capgemini Future Consumer Study_FINAL_web

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Consumer Products & Retail the way we see it

Future Consumer

How Shopper Needs and Behaviour Will Impact

Tomorrows Value Chain


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Contents

Introduction 3

Executive Summary 4

Consumer Needs: The Importance of Health and Sustainability 7

Consumer Behaviour: Using Technology, Expecting a Personalised Approach 11

Buying the Goods: Consumers Growing Preference for the Online Channel 16

Getting the Goods: Home Delivery Expected to Grow 19

Usage and Servicing: Consumers Will Seek On-Site Services 23

What Needs to Change? 26

Conclusion and Recommendations 33

2007 Capgemini. No part of this document may be modified, deleted or expanded by anyprocess or means without prior written permission from Capgemini.


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The objective of the Future Consumerresearch was to gain a better perspectiveon consumer needs and behaviour overthe coming years across eight productcategories:

Perishable food and beveragesNon-perishable food and beverages

Health and personal care

Do-it-yourself (DIY)

Electronics and appliances

Fashion and apparel

Sporting goods

Books and music

The research involved more than 2,000consumers in four countries: France,

the Netherlands, the United Kingdomand the United States. Interestingly,we found significant commonalitiesamong responses across the countries.This report highlights these results, aswell as country-specific differences.

The executive summary providesan overview of key findings fromthe Future Consumer study, and thesections that follow offer more in-depthdata and analysis of consumer needs

and behaviour; buying, delivery andusage preferences; and the changesconsumers would like to see in storesin the future.

We hope the findings of CapgeminisFuture Consumer study will provideconsumer products manufacturers andretailers with insights into changingconsumer dynamics and will lead themto gain a better understanding of howto successfully anticipate evolvingconsumer needs.

Our world is changing, consumersare changing. And the speed of changeis rapidly accelerating. Consumerbehaviour will be a primary factorin determining which direction this

change will take.

The vision report titled 2016: TheFuture Value Chain, published inlate 2006 by the Global CommerceInitiative (GCI), Capgemini and Intel,describes the trends and developmentsthat will impact the consumer productsand retail industry over the next 10years, with consumer behaviour beinga key driver of these changes.

This new report presents the results

of Capgeminis Future Consumerresearch. This study was designedto test some of the main hypothesesstemming from the 2016 report,including:

Health and wellnesswill be keyfactors influencing consumerbehaviour.

Consumers will increasinglyconsider sustainabilityaspectsin their buying decisions.

Consumers will become smarterin usingnew technologies.

Consumers will expect to enter atrue dialoguewith companies, andwill be willing to provide relevantinformation.

Consumers increasingly will valuepersonalisation.

Physical stores will remain important,but theonline channel will growrapidly.

Consumers will increasingly demand

the option ofhome delivery.

Future Consumer 3

Introduction



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Retailers and consumer productsmanufacturers are right to emphasisethat the consumer is boss and at thecentre of everything they do. Consumerstoday increasingly recognise their own

importance and, hence, influence overproducts and stores. It makes sense,then, to learn what shoppers willneed and expect from the industry inthe coming decade so companies canmake the changes and improvementsthat will be necessary to better servetheir customers.

The objective of the Future Consumerresearch conducted by Capgeminiwas to gain a better understanding ofconsumer needs and behaviour over

the coming years. Of course, it isimpossible to know how consumersreally will behave in the future they dont know this themselves.Nevertheless, it is important tounderstand the current preferencesand intentions of consumers as astarting point for a new dialogue.

Building on the 2016 Study

The research for this study wasfocussed on the main consumer-relatedhypotheses from the vision reporttitled 2016: The Future Value Chain,

published in late 2006 by the GlobalCommerce Initiative (GCI), Capgeminiand Intel. That study assessed thefuture value chain for consumer goodsand the forces that will shape it in10 years time, and defined a uniquevision of the total value chain frommanufacture to consumption. Acentral element in this vision is thenotion that consumers will drive thefuture value chain. In this context it isessential to have more factual evidenceabout the direction in which consumers

will influence the value chain.

The research explored the importanceof topics such as health and wellness,product traceability, environmentalissues, and the use of new/emergingtechnologies, and how these factorsmay impact the way consumers buy,receive and use products and servicesin the future. Improved knowledge intoconsumer buying behaviour shouldhelp companies develop and execute

more effective strategies in areas suchas marketing and advertising, storeformats, logistics and transportation,product installation and aftersalesservicing.

Executive Summary

4


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Sustainability and otherenvironmental issues willincreasingly influence shoppingbehaviour.Sustainability aspects thatwere identified as most important to

consumers in their future buyingdecisions were energy/water usage(named by 87% of respondents),waste reduction/management (85%)and sustainable manufacturingfeatures (84%). Although sustainabilitywas deemed to be important by mostconsumers, the majority were willing topay only a small price difference forproducts that supported these features.

Consumers appreciate receivingpersonalised offerings, although

this differs depending on theproduct category.More than halfof respondents said they wouldvalue personalised offerings (suchas special products and promotionsthat are focussed specifically onthe individual consumer and notavailable to everyone) for books/music and electronics, but onlyabout one-third would appreciatepersonalisation for perishable food.

Health and wellness will bea growing factor in consumerbuying decisions. More than eightout of 10 respondents said health andwellness issues (including diet andobesity care) would be important orextremely important to them overthe coming years.

Key Findings

How well did the hypotheses from the2016 report hold up? The key findingsuncovered through the consumerresearch tell the story:

Consumers are dissatisfiedwith their current shoppingenvironments. The importance ofbetter understanding consumer needsand demands in the coming decadewas underlined by the fact thatrespondents were largely dissatisfiedwith their existing shopping options.For example, just 9% of consumerssaid they were satisfied with theirperishable food outlets. At the highend of the satisfaction scale were

book and music stores, yet still only19% of consumers were happy withthese outlets.

Online shopping will grow rapidly.Although physical stores will remain thechannel of choice for most consumersin the coming decade (especially forfood products), the importance of onlineshopping will grow. This is particularlytrue in the case of books/music andelectronics: 38% of consumers said

they expect to buy all or the majorityof their books/music purchases onlinewithin the next five years; and 24%of respondents expect to buy all orthe majority of their electronics overthe Internet. The anticipated growthin online shopping may lead to theemergence of new delivery models. Forexample, while the bulk of consumerswant their online orders to be deliveredto their home, close to 20% said theywould like a neighbourhood pick-upmodel, particularly for perishablefood and DIY products.

Future Consumer 5


Consumers have virtually unlimited choice and ever-rising expectations for performance, quality and value. Theyexpect more from their shopping experiences and more from the brands and products they buy and use every day.They expect retai lers and manufacturers to listen to them more carefully, and to learn from them more often.1

A.G. Lafley, Chairman, President and Chief Executive Off icerThe Procter & Gamble Company, Global Commerce Ini tiative Co-Chairman

1 Industry Leaders Collaborate on Ten-Year Vision, Global Commerce Initiative and Capgemini press

release, Oct. 25, 2006.

The Future Consumer study was

designed to build on some of the

key findings from the 2016 vision

report, published in late 2006 by

the Global Commerce Initiative,

Capgemini and Intel.


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6

Is your company ready? Whatchanges will you need to make?

Companies must rethink theirstrategies in a number of areas,

as mentioned in the 2016 report:Shopper Dialogue, InformationSharing, Integrated Logistics andHome Delivery, SynchronisedProduction, Sustainability, andCompany Culture and BehaviouralChanges. For many organisations,this will require a different mindsetand different capabilities.

Companies will need to establish andmaintain a true two-way dialogue withindividual consumers and improve their

face to shoppers both in their physicaland online stores. This will requiremore frequent format and merchandiseassortment changes to keep up withthe pace of consumer change.

They will need to be transparent intheir information management andmanage consumer data effectively.Businesses will find it necessary toextend their distribution chain to theconsumers home. And they will need

to address sustainability in a seriousmanner. Most important, they willneed to be open to new ways ofworking driven by consumers.

Consumers behaviour will change inthe future. Will your business be ableto anticipate and adapt to this change?

Consumers are becoming increasinglyaware of a wide range of new andemerging technologies that can beused during the buying process athome, in stores and on-the-go.

Many respondents were familiar withtechnologies such as web ordering,blogs/web forums, in-store kiosks,payment via mobile phone and mobilealerts. However, it may take timebefore some of these technologiesgain significant traction. A smallerpercentage anticipated using thedifferent types of technology in thefuture, compared with the percentagewho had heard of the technologies.

Overall, consumers are willing to

share some types of information butthey are reluctant about sharingtheir contact details.About half ofrespondents said they would be willingto share with retailers and manufacturersinformation about their buying behaviourand lifestyle, but only 36% were willingto share contact information. Manyconsumers who were willing to shareinformation expected something inreturn, particularly special promotions.

What do these findings tell us? Theymake it clear that consumer behaviouris evolving and that retail and consumerproducts companies need to anticipatethese changes in order to be part of, oreven influence, the changes.

About the Study

Capgemini worked with SmartRevenue,

a Ridgefield, Connecticut-based research

firm, to conduct the Future Consumer

study. SmartRevenue surveyed more

than 2,000 consumers in four countries:

France, the Netherlands, the United

Kingdom and the United States. The

composition of the consumer sample in

each country was based on projectable

national samples representative of the

population from the standpoint of region,

age and gender. Additional demographic

factors examined included income,

education, marital status and the

presence of children.


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guidelines. The ability to share and/orcheck product experience was theleast important factor of those askedabout, with 52% of the respondentsconsidering this to be important.

The research uncovers some differencesbased on demographics. For example,

women were more likely to rankhealth and wellness as important incomparison to men. Nine out of 10women valued health and wellness,compared with eight out of 10 men.Furthermore, the older the consumer,the more likely they were to rankhealth and wellness as important.About 90% of consumers over 50valued health and wellness, comparedwith 82% of those in the youngestage group (18-34).

What will be important to consumersin the future? To what extent will issuessuch as wellness and sustainabilityplay a role in the buying process? Whatwill shoppers look for when they buyproducts and services? The answers tothese questions provide insight intothe needs of the future consumer.

Health and Wellness Will

Drive Consumer Decisions

The research makes it clear that healthand wellness will be the most importantunderlying need for consumers overthe coming years: 85% of respondentsconsidered health and wellness issues(including diet and obesity care) to beimportant or extremely important.Other health-related factors that weresomewhat less important included

product traceability and medical food

Future Consumer 7

Consumer Needs: The Importance

of Health and Sustainability


There should be more organic,fair trade products, better waysto distinguish such products

on the shelves and more

knowledgeable clerks.

U.S. consumer


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Sustainability Important

in Buying Decisions

The research shows that consumerswill strongly consider sustainabilityaspects in their buying decisions over

the coming years. Although all aspectsof sustainability were identified asimportant or extremely important bya significant number of respondents,there were some differences in thedegree of importance. The mostimportant factors were energy/waterusage (named by 87% of respondents),waste reduction/management (85%)and sustainable manufacturing featuressuch as limiting the use of scarce,

non-renewable resources (84%).Organic food ranked as the leastimportant aspect of those asked about,named by only 46% of respondents.

The importance of environmentaland sustainability issues came throughin consumer comments about theimprovements they would like to seein order for stores to better meet theirfuture needs. Several consumers fromthe Netherlands and France mentionedmore respect for nature and moreecological and reduced packaging asnecessary changes for food products.

Willingness to Pay a Higher Price for Products That Support Sustainability Requirements

(% who answered yes, a premium/yes, small price difference)

N Yes, a premium

N Yes, a small price

difference

0% 20% 40% 60% 80% 100%

Waste

reduction/management

Energy/water

usage

Environmentally

friendly packaging

Organic food

Sustainable

manufacturing features

Fair trade issues 24%

21%

20%

15%

14%

14%

61%

63%

64%

64%

62%

62%

Source: Capgemini

8

Consumer Needs

The Impact for Retailers

and Manufacturers

Find the most critical underlying

consumer needs that you can address

with your offerings. Bear in mind that

the most important consumer needs are

related to health and wellness issues.

Look to develop and market your basic

products as concrete solutions andservices that address the underlying

consumer needs in addition to just

selling the basic products themselves.

Sustainability should be addressed

in a serious manner and you should

communicate about it. Consumer

perceptions on how you deal with

sustainability issues will be important

for both public opinion and personal

buying behaviour. But be aware of the

economics: Consumers are not willing

to pay much extra for sustainability.


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respondents. However, there was nodifference in their willingness to pay ahigher price for sustainability features.

It is interesting to note how consumerneeds are evolving. But what do thesechanges tell us? In the future, consumerswill look for products and services thatemphasise sustainable aspects. If currentconcerns about issues such as globalwarming become more pronounced,consumers are likely to pay evengreater attention to sustainability.Manufacturers and retailers cananticipate this development byoffering products and services thatmeet sustainability requirements, butthey need to do so without increasing

the accompanying prices.

Its Not Just About

the Basic Products

The 2016 report found that theindustry will experience a shift [frombasic products] towards services andsolutions, leading companies to rethinkproduct development with an emphasison these aspects. The outcome of theconsumption experience, rather thanthe features and functions, will become

much more important to the shopper.

2

The consumer research confirmed thisfinding. Consumer demands are likelyto grow in the coming years as shopperslook for more than just the basics (forexample, staple grocery items such asbread or milk, and personal care itemslike toothpaste). In many categories,

Although consumers identifiedsustainability aspects as important,the majority of respondents were willingto pay only a small price difference forproducts that supported these features.

Most were not willing to pay a premium.Furthermore, consumers willingnessto pay extra did not necessarily matchthe importance ranking they applied tothe various sustainability features. Forexample, although energy/water usagewas identified as the most importantaspect of sustainability, consumerswere less willing to pay extra for it thanthey were for fair trade (providing better

trading conditions and fair wages toeconomically disadvantaged producersand farmers), sustainable manufacturingand organic food.

Demographic factors played a role tosome extent. Although income wasirrelevant in terms of ranking theimportance of sustainability aspects,respondents with an income higherthan US$100,000 were more willing topay a premium for these features. Agewas also a factor, with older consumersmore likely to rate sustainability aspectsas important, compared with younger

Just the Basics or Something More?

(% saying)

Sportin

ggood

s

Perish

able

food

Non

-perish

able

food

DIY

Fashio

n

Health

&pers

onalc

are

Book

s/m

usi

c

Ele

ctr

onic

s

0%

20%

40%

60%

80%

100%

67% 63%

46% 54% 41%57% 52%

27% 33%39% 38%

44% 22%

6% 4% 16% 8% 15% 21% 17% 26%

61%

22%22%

For each of the following types of goods and services that you might buy,

please indicate whether you would be looking for:

N Emotional experience

N Complete solution

N Basics

Source: Capgemini


2 2016: The Future Value Chain, Global Commerce

Initiative, Capgemini and Intel, p. 17.

Future Consumer 9


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they will want complete solutions (forexample, where a number of items oringredients are already combined)and an emotional experience (whereadditional services and/or information

are included or an environment iscreated) as well as the product itself.

Generally consumers agreed thatthe basics would be enough for foodproducts. However, they would be morelikely to seek an emotional experiencewhen buying fashion and books/music.Complete solutions would be sought inthe electronics category as well as inhealth and personal care and DIY. Thistrend will likely impact the approachthat retailers and manufacturers take

to marketing and advertising in thefuture as well as to how productsare developed and how they aremerchandised in the store, whetherphysical or online.

The research found variances by age.In general, younger shoppers were morelikely to want an emotional experience.When buying books/music, 30% ofconsumers between 18 and 34 werelooking for an emotional experience,

compared with 22% of the respondentsolder than 50. Conversely, olderconsumers were more interestedin just the basics.

Consumer Needs: What Makes Markets Different

Differences depending on nationality were apparent in the data focussed on consumer

needs. For example, French consumers valued health and wellness the most; Dutch

respondents the least. Another difference was especially pronounced for product

traceability: 84% of French consumers considered this to be important, compared with

47% of Dutch respondents.

There were also country variances in consumer responses regarding sustainability and

the environment. French consumers seemed to be the most concerned about these issues,

while U.S. respondents were in general the least concerned about sustainability. For

example, 88% of French consumers said sustainable manufacturing features would be

important to them in their future buying decisions, compared with 68% of U.S. consumers.

For Dutch consumers, organic food was not a major concern, but fair trade aspects were.

U.S. consumers said they would pay more for environmentally friendly packaging (recycled

content, biodegradable, reusable), organic food, and energy and water usage, but not for

fair trade issues. UK consumers were willing to pay more for sustainable manufacturing,fair trade and organic food. Dutch consumers were the least willing to pay more in every

category except sustainable manufacturing and fair trade. French consumers were also

willing to pay more for fair trade and sustainable manufacturing.

It was also clear that in some cases nationality can make a difference when looking at

basic products versus solutions. For example, consumers in France said they would seek

an emotional experience when it came to buying sporting goods, while consumers from

the UK and France want an emotional experience when buying health and personal care

products. And consumers in the Netherlands will seek an emotional experience when

buying electronics.

French consumers between 35 and 49 years old were most likely to say they would seek

an emotional experience in all categories except electronics and DIY. U.S. males were most

likely to say they would want just the basics in fashion, while French women were most

likely to say they would seek an emotional experience in the fashion category.

10


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Consumers will have more possibilitiesfor ordering products and makingpayments. In addition, new andemerging developments will provideinformation on products and servicesas well as advice.

The research shows that consumersare familiar with many of these

technologies. However, there is alarge difference between the mostwell-known technology (web ordering,which 89% of respondents said theyhave heard of) and the least known(ordering via television, which wasfamiliar to just 14% of consumers).

Consumer buying behaviour over thecoming years will be influenced byfactors such as new and emergingtechnologies, information sharing,personalisation and innovation.The success or failure of retailersand manufacturers in the future willdepend at least in part on their abilityto understand and maximise these

factors to benefit their customers.

Consumers Will Use New

Technologies

Consumers today are increasinglyknowledgeable and that trend isexpected to continue, due largely tothe prevalence of web-enabled andother new technologies. To what extentconsumers are currently aware of thesetechnologies and their willingness to usethem is valuable insight for companiesas they try to get a better handle onconsumer buying behaviour.

Future Consumer 11

Consumer Behaviour: Using Technology,

Expecting a Personalised Approach


Id like mobile alerts to tell mewhen my favourite authors havea new book released.

UK consumer


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compared with 73% of respondentsbetween 18 and 34. With the exceptionof digital personal offerings, informationvia kiosks and information via screenson shopping carts, consumers age 50and older were also the least likely tosay they would use technologies forbuying in the future.

New and emerging technologiesare likely to impact the retail andconsumer products industry as thesetools increasingly factor into consumerbuying behaviour. These technologiescan play a key role in marketing andadvertising and have the potential toinfluence purchase decisions. Theyalso may improve the efficiency of the

buying process, which ultimately mayresult in improved customer relations.

Being aware of a technology isone thing, but using it is another.Obviously it may take time beforesome of these technologies gainsignificant traction. In general, a

smaller percentage of consumersanticipated using the different typesof technology, compared with thepercentage who had heard ofthe technologies.

Men were more likely to have heardof the different technologies and tosay they would use them in the future,compared with women. Age also hadan impact on awareness and likelihoodto use. Consumers in the 50 and oldergroup were the least likely to have

heard of the different technologies.For example, 54% of the respondentsover 50 were aware of mobile alerts,

12

Likelihood To Use Various Types of Technology

(% saying likely/extremely likely)

Mobile alerts

Personal services via mobile phone in-store

Payment via moble phone

Personal web agents

Ordering via television

Blogs/web forums

Digital personal offerings

Information via kiosk

Information via screen on the shopping cart

Information via screen on the shelves

Web ordering 67%

56%

60%

57%

44%

38%

36%

37%

32%

30%

27%

83%

64%

61%

58%

47%

47%

30%

33%

34%

29%

30%

93%

77%

75%

71%

75%

72%

65%

60%

41%

46%

48%

77%

67%

60%

63%

54%

57%

44%

38%

43%

33%

33%

N US

N UK

N France

N Netherlands

Note: Base = all consumers who said they were aware of the technologySource: Capgemini

Consumer Behaviour


and Manufacturers

Take advantage of the emerging

technologies that consumers

increasingly will be using, such as

mobile or in-home technologies. These

tools will have significant impact on

purchase decisions, and should play

a key role in your marketing andcommunication activities.

Be transparent in your information

management. It is of vital importance to

accurately provide relevant information

whenever and wherever consumers

need this via whatever channel.

Manage consumer information in

an effective and trustworthy manner.

Consumers are willing to share

information, but only when they

know this is respectfully translated

into relevant offerings and promotions

fully in accordance with theirpreferences and needs.

Establish and maintain a true two-way

dialogue with individual consumers.

This will enable you to understand

their needs and preferences. If

possible, involve your consumers

in product development. Also, you

should personalise and innovate

your offerings according to individual

needs and preferences and be able

to deliver. Consumers will not only

appreciate this, ultimately they will

expect it.


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Sharing Information: The Key

to Unlocking Hidden Value

The ability to access shopper datasuch as contact details and informationabout buying behaviour and lifestyle is

critical for retailers and manufacturersas they attempt to understand consumerpreferences in order to provide thegreatest value to their customers.

The research shows that half ofconsumers were willing to shareinformation about their buyingbehaviour and lifestyle withretailers and manufacturers.Consumers were more reluctantto share contact information.

In general, males were somewhatless willing than females to shareinformation. For example, 53% ofmen and 60% of women said theywould share information about theirbuying behaviour with companies.

There is one catch when it comes todata sharing. Many consumers whowere willing to share informationexpected something in return.Shoppers were overwhelmingly in

favour of receiving a special promotionin exchange for sharing information(named by 79% of respondents). Newproducts (named by 45%) or specialservices (40%) were less popular.

Willingness to Share Information

(% saying)

0%

20%

40%

60%

80%

100%

Information about

lifestyle

Information about

buying behaviour

Contact

Information

36%

31%

32%

56%

23%

21%

50%

28%

22%

N Yes

N Maybe

N No

Source: Capgemini

Expectation in Return for Sharing Information

(% saying)

N Special service

N New product

N Special promotion

41%

45%

81%

38%

46%

81%

42%

45%

76%

Information about

lifestyle

Information about

buying behaviour

Contact Information

0% 20% 40% 60% 80% 100%

Source: Capgemini

Future Consumer 13



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Expecting a Personal Touch

Many consumers indicated that theywere interested in receiving relevantpersonalised products, services andpromotions, particularly those that

would not be available to everyone,such as their own design on a mobilephone or other product. Therewere, however, differences bycategory. For example, more thanhalf of respondents said they wouldvalue personalised offerings forbooks/music and electronics, butonly about one-third would appreciatepersonalisation for perishable food.

With the exception of electronics andsporting goods, women were more likely

than men to appreciate personalisedofferings. This was particularly truefor health and personal care, fashionand books/music.

Companies that want to offerpersonalised products or servicesneed to understand exactly whotheir shoppers are in terms of age,nationality, income, lifestyle and

other factors. However, personalisationcan be a double-edged sword giventodays privacy concerns. Companiesmust be certain they know who is opento this kind of approach and who is notin order to avoid alienating potentialbuyers. Accurate customer data willbe essential in this respect.

The Value of Innovation

In addition to personalisation,consumers indicated that innovationin new products and features will

be important to them in the future.However, the degree of importancevaried depending on the category.This makes sense because not everyproduct category is suitable for thesame degree of innovation.

Degree Consumers Would Appreciate Receiving Personalised Offerings

(% saying would appreciate/would greatly appreciate)

0% 20% 40% 60% 80% 100%

Sporting goods

Perishable food

Non-perishable food

DIY

Fashion

Health & personal care

Books/music

Electronics 59%

56%

52%

51%

44%

40%

37%

35%

Source: Capgemini

More than half of

respondents said they

would value personalised

offerings for books/music

and electronics.

14


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Innovation was valued most in theelectronics category (where 71% ofrespondents said innovation wasimportant/extremely important) butless so for perishable food (39%) and

non-perishable food (41%). However,investments in innovation by companieswill continue to be necessary in orderto deal with competition, even for thosecategories where consumers are lessdemanding of innovative products.

In terms of gender differences,women were more likely to say thatinnovation would be important infoods, health/personal care, fashionand books/music. Men were morelikely to look for innovation in

electronics and sporting goods.

What will this mean for retailersand manufacturers? For one thing,companies will likely look to new

sources such as partners to deliverinnovation. For example, accordingto the 2016 report, more newproduct/service ideas will bedeveloped in collaboration with

small and medium-size innovators.In some cases government willstimulate innovation by providinginnovation subsidies for this sector.3

And consumers themselves will likelyplay a greater role in driving innovationin the industry value chain. Notedthe 2016 study, Customer-drivenproduct development will be enabledby improved qualitative consumerinsights and direct customer feedback.Consumers increasingly will be pulled

into the R&D process, in much theway they are involved today in bringinginnovations to new-generation iPods,gaming and LEGO Mindstorms.4

Consumer Behaviour: What Makes Markets Different

In general, U.S. and Dutch consumers were less likely than those in France and the UKto have heard about the various new and emerging technologies. French consumers

appear to be the most eager to use the technologies in the future. Only for information

kiosks and payment via mobile phone did Dutch consumers in all age categories give

responses that were at or above average.

Regarding information sharing, French consumers were the most willing to share all the

different types of data, but were also the most likely to want to receive something in return.

French respondents were also the most likely to appreciate personalised offerings. Dutch

consumers were the least likely to want personalisation.

Some countries value innovation more than others. French consumers were more likely to

rate innovation highly, particularly in the sporting goods category, while Dutch consumers

were the least likely to say that innovation would be important to them.

3 2016: The Future Value Chain, Global Commerce Initiative, Capgemini and Intel, p. 16.


Future Consumer 15



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extent to which consumers plan to usethe web in the coming years is largelydependent on the product category.

For example, consumers said theyexpect to purchase books/music andelectronics via the online channelmore than other categories in thefuture. Consumers were also morelikely to say they would researchthese categories online. More thanhalf of respondents said they expectedto conduct all or the majority of theirproduct research in the electronicscategory via the Internet in thefuture, and 44% said they willresearch products online in thebooks/music category.

Some products will continue to bepurchased primarily in stores in thecoming years, especially food, health

and personal care and DIY.

Buying the Goods: Consumers Growing

Preference for the Online Channel

I am a customer at the real storesfor some products because of thepossibility to test them and for the

service when something breaks.

But with other, less expensive or

less complicated things it doesntmake much of a difference and

one can buy online.

Netherlands consumer

Although physical stores will remainan important outlet for consumers, theonline channel will continue to grow inthe next decade for buying as well asfor doing research prior to purchase.

This is not surprising given theexponential increase in the Internetpenetration rate, which stands at about70% in the U.S. and more than 50%in the European Union.5 These ratesare expected to continue to grow byleaps and bounds thanks to drivingforces such as low-cost Internet accessdevices, more widespread use of DSLand broadband connections, and anincrease in the number of wirelessInternet access points.

Online Becomes Mainstream

Consumers are increasingly using theonline channel for advance planning,

research and buying. However, the

5 Internet World Stats, Miniwatts Marketing Group, Nielsen/NetRatings.

16


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Online Buying Most Popular for Books/Music and Electronics

(% saying)

79%

60%

46%

22%

43%

14%

10%

19%

26%

22%

24%

16%

7%

2%2%

13%

5%

3%

7%

3%

6%

3%

17%

7%

12%

4%6%4%

26%

12%

24%19%

32%

30%

25%

32%

41%

29%

25%

25%

Sportin

ggood

s

Perisha

ble

food

Non

-perisha

ble

food

DIY

Fashio

n

Health

&perso

nalc

are

Book

s/m

usi

c

Electr

onic

s0%

20%

40%

60%

80%

100%

N All

N Majority

N Equal mix

N Minority

N Nothing

Please indicate for each of the types of goods and services that you

might buy, how much would you buy online in the future:

Source: Capgemini


Conduct Product Research Online

(% saying)

Sportin

ggood

s

P

erish

able

food

Non-

perish

able

food

DIY

Fashio

n

Health

&p

ers

onalc

are

Book

s/m

usi

c

Ele

ctr

onic

s0%

20%

40%

60%

80%

100%

31%

14%

18%

13%

26%

29%

14%

24%

11%20%

24%

18%

29%

11%

17%

11%

9%

24%

27%

28%

21%

16%

29%

20%

13%

23%

18%

30%

17%

12%

44%

18%

19%

9%

10%

55%

14%

14%

6%

11%

N All

N Majority

N Equal mix

N Minority

N Nothing

Source: Capgemini

Future Consumer 17

Buying the Goods


and Manufacturers

Integrate your online and offline

channels. The online channel will

increasingly be used in conjunction

with offline channels (stores). This mix

of channel usage (in different phases

of the buying process, for different

moments, in different situations, etc.)should provide a consistent consumer

experience. Look for the right level

of online/offline synergies but also

leverage the different characteristics

of each channel.

Anticipate and drive increased online

purchase volumes. Make sure your

online facilities are meeting consumer

expectations and easily facilitate the

buying process.

Carefully choose your brand and

channel differentiation in terms of five

key attributes: access, experience,price, product/assortment and service.


18/36

Surprisingly, the research shows thatit is not just the young generation whoexpect to buy online; the numbers aresimilar for all groups until the age of65. Regarding health and personal

care and non-perishable food, mostconsumers who will buy online arebetween the ages of 35 and 49.

In general, women were more likely tosay they would buy DIY items, books/music and electronics in a physicalstore, but food, health/personal careand fashion online. Male consumerssaid they would buy more electronicsand books/music online, comparedwith female consumers.

Price, Product andService Will Matter Most

There are some underlying factorsthat will drive consumers buyingpatterns in the future. To understandthe impact of these factors, consumerswere asked to rate the importance offive key attributes over the comingyears in deciding how and where tobuy products and services:

Access:Ease and simplicity of storelayout/traffic pattern, availability of

goods on the shelf, easy navigationon the website.

Experience: Being treated withdignity and respect in a pleasantand inspiring atmosphere.

Price:Fair, honest, consistent prices.

Product:Consistently good quality of

products, adequate assortment/range.Service: Good execution of servicebasics, such as returns policy,treatment of customers.

All five attributes were consideredcritical by consumers. The top-rankedattribute was price, mentioned by 91%of consumers as important or extremelyimportant. Price was followed closelyby product and service. In relativeterms, access and experience were

mentioned less often, but still eachhad a score above 80%.

A few variances appeared when lookingat demographic backgrounds. Olderrespondents rated each attribute morehighly than did younger consumers.And women also rated each attribute asmore important, compared with men.

Buying The Goods: What Makes Markets Different

Online research and buying preferences varied somewhat depending on nationality.

Consumers from France and the UK were more likely to indicate they would buy online.

French consumers were also more likely to research online, especially for fashion and

sporting goods. Respondents from the UK said they would buy their electronics andbooks/music from the Internet, while U.S. consumers said they would still buy these

products mainly in physical stores.

18

It is not just the young

generation who expect to

buy online; the numbers

are similar for all groups

until the age of 65.


19/36

two-thirds wanting home delivery forperishable food to more than 80%preferring it for books/music.

However, respondents also expressedinterest in having some type of

centralised neighbourhood pick-upsystem for certain types of goods. Thiswas most true for non-perishable foodand the DIY category.

The research also found that someconsumers believe retailers have notyet gotten the online ordering/pick-up/delivery formula quite right. Saidone U.S. respondent: Stores need tocome up with a delivery system thatallows people to order online and go tothe store and have the order all readyand bagged or have it delivered toyour home.

Will consumers want more homedelivery in the future? Or will theyprefer a centralised neighbourhoodpick-up location instead? How quicklywill they want to receive products?The answers to these questions can

provide valuable insight as retailersand consumer products manufacturersdevelop future strategies in areas suchas logistics and transportation.

The research makes it clear thatconsumers will no longer be preparedto act as the picking and deliveryagent for many of their shoppingneeds in the future. This will becomeincreasingly true as the online channelcontinues to grow for many types ofproducts. Consumers who buy via theInternet indicated a strong preferencefor home delivery, regardless of productcategory. Preferences ranged from

Future Consumer 19

Getting the Goods: Home Delivery

Expected to Grow


Fresh produce should bedelivered to customers ona daily basis.

UK consumer


20/36

Women Prefer Home Delivery

Although factors such as age, educationand income did not play a significantrole in consumers preferences, genderdid matter, with women preferring

home delivery more than men in manycategories. For example, 80% of womenrespondents said they would prefer toreceive deliveries of health and personalcare products at home, compared with71% of men.

The interest in home delivery may helpdrive one of the findings from the 2016study, which predicted the emergenceof a home-direct value chain model,where a significant percentage ofgoods, across many categories, would

move from production directly tothe consumers home.6 Based on thefindings of the consumer research,this type of model might appeal tosome consumers, at least for productspurchased over the Internet. A home-direct approach would not exist as theonly value chain model but rather asone alternative, in which manufacturers,retailers, logistics service providers,local postal services and specialisedlocal companies would play an

important role, with each one havingthe opportunity of becoming thedelivery agent.

Taken a step further, delivery ofproducts and services to the endconsumer could well see a merging ofdelivery agents from many differentsectors. Health care, postal, parcel,

social services (home meal services)and horticulture are just some of theexamples where a combined deliveryservice could meet consumer, industryand environmental needs.7

Delivery Time Tied to Product Life

Whether consumers in the future willprefer home delivery or neighbourhoodpick-up, one thing is clear: They willwant to receive their goods quickly. Forall categories except sporting goods,more than half of respondents said

they would want products delivered/picked up by at least the next day.

Consumers preferred delivery/pick-upschedule was largely related to thestorage life of the product. For example,nearly half of consumers said theywould prefer a two-hour deliverywindow for perishable food. Suggestedone UK consumer: Fresh produceshould be delivered to customers ona daily basis.



20

Getting the Goods


and Manufacturers

Extend your distribution chain all the

way to the consumers home. Anticipate

for a home-direct distribution model,

which will have different supply chain

requirements, including packaging

units, delivery volumes, delivery pricingand delivery times.

Consider new integrated approaches

for streamlining neighbourhood

services. This could encompass

further integration of different services

(such as postal services, health care,

social services, parcel services).


21/36

Receiving the Goods: Preferred Delivery Options

(% saying)

N Other

N Other locations

N Neighbourhood pick-up

N Deliveries at home

0%

20%

40%

60%

80%

100%

Sp

ortin

ggood

s

Perish

able

food

Non

-perish

able

food

DIY

Fashio

n

Health

&pers

onalc

are

Book

s/m

usi

c

Ele

ctr

onic

s

66% 68%75%

69%78% 73% 69%

82%

19%20%

16% 20%14% 16%

19%

13%9%7% 6% 8%

5% 8% 8%5%

5% 4% 3% 3% 2% 3% 4% 1%

For each of the following products and services that you might buy via

the Internet, please indicate which delivery option you would prefer:

Source: Capgemini

Preferred Delivery Schedule When Buying Online

(% saying)

43%

16%

4% 4% 3% 4%

27%

32%

18% 18%15%

18%

19%

30%

36% 36%

31%

36%

11%

21%

32%

44% 42% 42%51%

42%

8% 5%

24%

18%

36%

33%

0%

20%

40%

60%

80%

100%

Sportin

ggood

s

Perish

able

food

Non-p

erish

able

food

DIY

Fashio

n

Health&

pers

onalc

are

Book

s/m

usi

c

Ele

ctr

onic

s

N Weekly

N Next day

N Within 24 hours

N Within 2 hours

Source: Capgemini

Future Consumer 21


For all categories except

sporting goods, more than

half of the respondents said

they would want products

delivered/picked up by atleast the next day.


22/36

A 24-hour time frame for non-perishable food was preferred byabout one-third of respondents,with others willing to wait until thenext day or for a weekly schedule.

A consumer from the Netherlandsnoted that especially for food, onlineordering and delivery should be on thesame day, preferably at an agreed-upontime. The majority of respondentsconsidered the next day or a weeklytime frame acceptable for otherproduct categories.

However, even in non-food categories,consumers saw benefits to receivingproducts quickly. Said one respondentfrom the U.S. referring to the DIY

category: Fast delivery is important,so if one thinks of a project one wouldlike to quickly do, the materials arrivealmost immediately.

Older consumers and those in rurallocations were more interested inreceiving goods on a weekly schedulefrom most types of outlets. Urbanconsumers, by comparison, tended towant deliveries in a shorter time frame.

For example, 40% of respondents fromurban areas said they would want toreceive books and music the next day,compared with 30% of consumers inrural locations. The same is true for

fashion products but less so forperishable and non-perishable food;rural consumers, like others, wantto receive food products quickly.

Impact on Logistics

and Transportation

Consumers demands for short deliverytimes, combined with increased homedelivery and higher transport andenergy costs, will likely lead theindustry to consider new approachesto logistics and transportation. Those

might come in the form of integratedand geographic-centric logistics, ratherthan retailer brand-centric logistics,for example.

More efficient transportation andlogistics was on the minds of someconsumers. Said one U.S. respondent tothe survey: Id like to see more localsourcing to minimise transportation.

Getting the Goods: What Makes Markets Different

In general, respondents from the UK were the most interested in home delivery, while those

in the Netherlands and, to a lesser degree, France were open to a neighbourhood pick-up

approach. In the non-perishable food category, for example, 77% of UK respondents said

they would prefer home delivery, compared with 62% of Dutch consumers. Conversely,

27% of respondents from the Netherlands said they would like neighbourhood pick-up,

compared with only 15% of those from the UK.

Consumers in France and the Netherlands were especially keen on the two-hour delivery

window for perishables, although a significant number of respondents in all countries said

they simply were not comfortable buying perishable food products online.

Id like to see more local sourcingto minimise transportation.

U.S. consumer

22


23/36

or extremely valuable in the future ininfluencing their buying decisions. Lessvaluable to many consumers will beservice contracts, pay-per-use services(for example, metered or measuredInternet or music download services

where customers are charged accordingto each usage instead of a flat fee),replenishment contracts (such asautomatic monthly reorder systemsfor mineral water) and pre-cookedmeals. Of course, these services arevery much category dependent.

Demographic Differences

Stand Out

Variances based on demographicfactors were apparent. For example,

women were more likely to rate eachservice as valuable in comparison tomen. In some cases, the difference wasparticularly pronounced. In the UK,for instance, 74% of women said they

Visibility into the research, buyingand delivery stages of the value chainallows retailers and manufacturersto improve their understanding ofconsumer shopping behaviour.However, tracking what happens

after a consumer gets a producthome can be more difficult. Howwill the product be used? Whatkinds of accompanying serviceswill consumers want? Getting abetter handle on this missinginformation can impact tactics andstrategies in areas such as productinstallation and aftersales servicing.

The consumer research foundthat there will be an increasing

appreciation for services aroundthe product, particularly on-siteguidance, installation and assembling.Approximately 60% of respondentssaid those services will be valuable

Future Consumer 23

Usage and Servicing: Consumers

Will Seek On-Site Services


I really want to have productsdelivered to my home withlocal professional assistance

if required.

UK consumer


24/36

would value on-site product guidance,compared with 63% of men. And 72%of Dutch women respondents see valuein on-site assembling, compared with55% of the male respondents fromthe Netherlands.

Age also proved to be a factor in somecases. Except for pre-cooked mealsand pay per use, older consumers were

more likely to rate each service asvaluable, particularly in the case ofon-site product guidance, installationand assembling. For example, two-thirds of respondents in the 50-plusage group said they would value productassembling, compared with 53% ofthose in the 18 to 34 age group.

The youngest consumers (18 to 34)were more likely to rate pre-cookedmeals as valuable. For example, 37%of UK respondents in that age groupsaid they would value pre-cookedmeals, compared with 20% of UKconsumers in the 50-plus group.

Education and income level alsoplayed a role in consumers view of

some services. For example, consumerswith higher incomes and a highereducation level were less likely tofind service contracts valuable.

Value of Services When Buying Products Over the Coming Years

(% saying valuable/extremely valuable)

Pre-cooked meals

Replenishment contracts

Pay per use

Service contracts

On-site product assembling

On-site product guidance

On-site product installation

0% 20% 40% 60% 80% 100%

63%

63%

58%

53%

48%

39%

30%

Source: Capgemini

24

Usage and Servicing


and Manufacturers

Consumer satisfaction doesnt end with

the sale. Investigate how consumers

are using your product(s) how easy

is it to use your products and offerings,

and how satisfied are consumers with

using them?

Depending on the outcomes (and yourproduct categories), you should look for

ways to service your consumers before,

during or after the product usage, for

example by offering on-site guidance,

installation and assembling services,

interactive instructions, community links

with other users, and disposal services.


25/36

Desired Services

Vary by Category

Consumer comments demonstrate thatnot all product categories are viewedthe same when it comes to services.

Respondents were particularly likelyto mention the need for more on-siteguidance when talking about changesthey would like to see in the DIY andelectronics categories. Said one UKrespondent, referring to DIY stores: Ireally want to have products deliveredto my home with local professionalassistance if required.

That sentiment was echoed byanother consumer from the UK,again referring to DIY stores: Stores

should develop regional how-toguidelines for DIYers with help fromlocal planning authorities. And theyshould have specialists who can behired for guidance.

Consumers were also looking for bothin-store and aftersales assistance inthe sporting goods category. Said onerespondent from France: Particularlyfor heavy equipment, stores should

provide information about safety,demonstration, place of manufacture,maintenance and aftersales serviceonce you get it home.

A few consumers also mentionedthe importance of services relatedto product and packaging disposalor reversal as part of a growing focuson sustainability and environmentalissues that was apparent throughoutthe research. Consumer suggestionsincluded being able to return empty

packaging to the store, particularlyfor non-perishable food and healthand beauty care products.

Usage and Servicing: What Makes Markets Different

Regarding usage and servicing, there were considerable variances from one country toanother. For example, almost 70% of French respondents said pay per use would be a

valuable service for them in the future, compared with only 34% of those in the U.S. and

38% in the UK.

In the case of service contracts, almost two-thirds of French consumers and 60% of

Dutch respondents said they would be valuable, but just 40% in the UK and 47% in the

U.S. said this would be a valuable option. Replenishment contracts were of interest to

almost half of French consumers, but to only one-third of respondents in the Netherlands.

U.S. consumers showed the most interest in pre-cooked meals, with 40% viewing them as

a valuable service. In the other countries, less than 30% of respondents said pre-cooked

meals would be valuable to them in the future.

Future Consumer 25


Respondents were

particularly likely to

mention the need for

more on-site guidance

when talking aboutchanges they would like

to see in the DIY and

electronics categories.


26/36

If you think stores do not need tochange to keep up with consumerneeds and demands over the nextdecade, think again. Consumersare dissatisfied with their currentshopping environments (both onlineand physical stores). For example,just 9% of respondents said theywere satisfied with their perishable

food outlets. At the high end of thesatisfaction scale were book andmusic stores, yet still only 19%of consumers were happy withthese outlets.

Consumer concerns fell into fourprimary areas: products, stores/outlets, packaging/labels and prices.

Products: Product issues includeddemands for more variety/more brands,

innovation and improved quality.Product sourcing, product availabilityand natural/organic items were alsotopics on the minds of consumers.

Stores/outlets:Consumers focussedtheir comments about stores largelyon the online channel, better service,delivery issues and improvedaccessibility (for both physical andvirtual stores). Many respondents werelooking for more products online andan improved online experience.

Said one French consumer: Makea sort of virtual store layout online inorder for us to orient ourselves andallow us, like in a supermarket, to beattracted by other products; have asearch engine for people who wantto target specific items.

Consumers also expressed a desirefor new types of technology thatcould make the shopping processeasier. In the UK, one respondent

wanted mobile alerts to tell mewhen my favourite authors havea new book released.

What Needs to Change?

26

The possibility of creating acompilation CD yourself withan appropriate cover and at an

affordable price; a CD for 15 to

20 euros is much too expensive,

but at 10 euros, you would bemore likely to buy it.

French consumer


27/36

And a respondent from Franceasked for a connection with ourrefrigerators in order to know whatwe have on hand in real time andautomatically suggest to us what

we need from the supermarket.

Packaging/labels:Packaging concernscentred around less packaging,environmentally friendly packagingand easier-to-understand, accuratelabels providing more information,particularly about product sourcing.Said one UK consumer: Removesome of the unnecessary amountsof outer packaging.

Prices:Of course, many consumers

lamented todays high prices in all theproduct categories and wished for loweror more fair prices in the future. Saida French respondent: Id like to see

reasonable purchase prices incomparison with the prices paidto the producers. Added anotherconsumer from France: Go backto prices like they were at the time

of the franc.

Following is a look at some of thespecific changes consumers wouldlike to see in the different retailcategories in the coming decade.Their comments help underline thefindings that have been presented inthe previous sections of this report.

Perishable Food: Health

and Nutrition Dominate

Health and nutrition issues

dominated the consumer commentsabout the perishable food category.Consumers said they want healthierproducts and more nutritional

information. A consumer fromFrance would like to see lesspackaging and more informationabout the composition of the productand nutritional value.

Some consumers wanted to be able tobuy more perishable products online,but only if the items were fresh andthey had the ability to see the producton the screen before buying. However,many others said they would not becomfortable buying perishable itemssuch as produce over the Internet.[Perishables] is the most enjoyablepart of shopping for me, said arespondent from the U.S. Onlineordering takes the sensory experience

out of it.

Consumers in other countriesagreed. Said one respondent fromthe Netherlands: I would never buythese products [perishables] online,simply because I want to see thesethings before I buy them, so realstores are fine.

Environmental and ethical issues alsofactored into consumer comments

about the perishable food category.One U.S. consumer was looking foritems that are organic, sustainablyproduced, non-chemical; only offerthe real stuff.

And a UK respondent would liketo see more organic and fair tradeproduce become the norm ratherthan speciality; also more focus onseasonal goods to reduce the milesfood travels, and more informationon sourcing.

Future Consumer 27


Cant Get No Satisfaction

(% saying currently satisfied)

Book

s/m

usi

c

Sportin

ggood

s

Fashio

n

Ele

ctr

onic

s

DIY

Health

&pers

onal

care

Non

-perish

able

food

Perish

able

food

9% 11% 11% 11% 11%16% 16%

19%

100%

80%

60%

40%

20%

0%

Source: Capgemini


28/36

28

The growing interest in local producecame through repeatedly in consumercomments. Fresh produce should befrom local businesses and farms,in turn helping the local economy,

said a UK consumer.

Concerns about the cold chain andtraceability were also expressed. Saida French respondent: Increase thecommunication about the traceabilityof the products/produce and find away not to break the cold chainduring delivery.

Non-Perishable Food: Less

Packaging, More Convenience

There was much evidence

that consumers are consideringenvironmental and ethical factorsin their shopping decisions in thenon-perishable food category.One U.S. consumer asked formore organic, fair trade products,better ways to distinguish suchproducts on the shelves and moreknowledgeable clerks.

Packaging issues, including lesspackaging and better product and

nutritional information on labels,were also mentioned. Said a Frenchconsumer: Less packaging or thepossibility to return packaging tothe store, clear and precise labellingtelling me where the product camefrom, a nutritional information table,and packaging that isnt as tall (hardto store in pantries).

Convenience and innovative productsolutions were also on consumerswish list of changes. A consumerfrom the UK suggested that the

industry produce food in kit form,allowing certain ingredients to beomitted during cooking such as salt,preservatives, fats and oils.

Health and wellness concerns aroseas well. We should have morebrands available online and indicateimportant things like the amount ofcalories, fat, salt, etc., online as well,said a UK respondent.

Health and Personal Care:

Provide More Information

Comments concerning health andwellness as well as environmentaland ethical issues were particularlyprevalent for the health and personal

care category. Consumers askedfor more natural ingredients, noanimal testing, and more andbetter information.

In the Netherlands, one respondentsaid: Show how the product works;in other words, dont just say theointment is good for the skin, butexplain why and how. And a U.S.consumer noted that, We need toconcentrate more on the physical

natural health of skin rather thanslathering artificial products on it.

Some consumers were looking fortechnology to provide them withbetter, more personalised informationin this category. Said a respondentfrom the UK about purchasing healthand personal care products: Thereshould be the opportunity to have animmediate, face-to-face consultationwith a pharmacist using the Internetor VoIP [Voice-over Internet Protocol]video phone.

Show how the product works; inother words, dont just say theointment is good for the skin,

but explain why and how.

Netherlands consumer


29/36

Many respondents wanted the abilityto test products in some way beforepurchasing them. I want to be ableto smell and test certain items in thestore (e.g., lipstick) and perhaps receive

a free card with a perfume sample,said a Dutch respondent. It wouldbe interesting for online purposes tobe able to upload a picture of myselfand then test eye shadow, lipstick, etc.

Convenience and personalisationwere also common themes. One U.S.consumer suggested that retailersoffer customised product solutions:This is one area where havingso many choices has becomeoverwhelming. I love the idea of

complete packages based on personalneeds. Sort of like a personal shopperwho knows that I need sensitivetoothpaste for me and my husband,fluoride and great flavour appeal forthe kids, a vitamin supplement forwomen because of my age and health,and a different supplement for myteen-age son who runs track andswims.

Consumers also expressed concern

about the amount of packaging usedfor many health and beauty products.Said one French respondent: Lesspackaging for the beauty products orthe ability to return the empty packingto the store for re-use.

Do-It-Yourself: Order

Online, Pick Up at the Store

Comments regarding the need formore and better information anda more knowledgeable staff wereparticularly pronounced for the DIY

category. And many respondentsnoted that the information anddirections should be in the countrysnative language, which, they said,was not always the case today.

A large number of consumersindicated a preference to order DIYproducts online but pick them upat the store. And they suggestedways that DIY retailers could betterintegrate the Internet to improve thein-store experience. Said one U.S.respondent: Online help in planningand researching materials is needed.And another U.S. consumer noted:Stores need to have a site thatsuggests everything you would

need for a particular project andallows you to order the items youneed out of those suggestions andhave them delivered or available forpick up in the store right away.

Others suggested that DIY websitesoffer users the possibility of designinghome projects virtually so they couldsee how a finished project would lookbefore they bought the items. Theysuggested providing parameters for

different types of projects, differentsize houses or apartments, and soon, which could be input in orderto see a realistic result.

Innovation was another commontheme. Keeping up with the latestmarket trends is really important, saida U.S. consumer. If Im going to do abig home project, I dont want it out ofstyle by the next season. But smaller,decorative or seasonal projects couldbe the most current style or fad.

The importance of having aknowledgeable staff was echoed overand over. Said a UK respondent: Thereshould be in-store help from staff abouthow to complete DIY projects, whichtools would be needed, etc. Also, thereshould be a way of ordering items as

you need them for example, if yourein the middle of a project and needsomething but the nearest store ismiles away and you dont have time,you could order online and have itdelivered almost immediately.

Consumers also voiced environmentalconcerns. In the UK, one respondentwanted to see less use of corrosive,harmful chemicals/manufacturingprocesses where possible; also reducing

obsolescence and increasing thelifecycle of products; and recycling/minimising packaging to reduce waste.

Future Consumer 29



30/36

Electronics: Knowledge

for the Novice

Better information and a moreknowledgeable staff were consumerstop concerns regarding the electronics

category. Knowledge for the noviceplease! said a consumer in the U.S.My kids know more than me and,therefore, I am intimidated makingpurchases in this category. Maybeyou should market to kids andteens and strive to educate us lesstechnical-based bookworms!

Many consumers said they werentgetting the knowledgeable in-storehelp they needed. Electronics storesconsistently are understaffed. There

are too many options and they areconfusing; there needs to be someoneavailable to explain at all times, saida U.S. respondent.

At the same time, however, consumerswant employees to be less obtrusive.Noted a Dutch consumer: Dontapproach customers immediately whentheyre just looking at something. Idont want salespeople who appear outof nowhere asking Can I help you?

Consumers also want the abilityto compare prices, quality, featuresand specifications, including customerreviews. This was particularly truefor self-described non-techieshoppers. Comparisons betweendifferent models need to be madeeasier we shouldnt have to trawlthrough a hundred separate articles,said a UK consumer.

Reviews were mixed regarding theonline vs. physical channel in theelectronics business. A commonsentiment was expressed by a Dutchrespondent: I am a customer at the

real stores for some products becauseof the possibility to test them and forthe service when something breaks.But with other, less expensive or lesscomplicated things it doesnt make

much of a difference and one canbuy online.

Fashion: Looking for

Personalisation

Product comments led the list ofchanges consumers wanted to seein the fashion category. In particular,greater personalisation and the abilityto better preview products onlinewere key issues. Said a U.S. consumer,expressing a sentiment echoed by manyother respondents: It would be nice

to have three-dimensional models ofvarying sizes model the clothes fromdifferent angles so online consumerscould have a better view of what theirown body structures would look likein the clothes they are consideringpurchasing.

A frequent complaint was that themodels in store brochures and onlinesites are too thin and dont look likenormal people. Id like to see

online interactive models with mymeasurements that can model theitem I would like to buy, saidanother U.S. respondent.

A similar sentiment was expressed bya Dutch consumer: Not everythingshould be focussed on size 34, but itshouldnt become a store for plus-sizewomen either; the fashion trend has tochange completely!

A respondent from the UK noted thatthe technical capability to providethis type of service already exists:Online stores could have a flash/java

Id like to see online interactivemodels with my measurementsthat can model the item I would

like to buy.

U.S. consumer

30


31/36

mannequin where you could make alittle figurine of yourself and see whatclothes look good or go together.

One French consumer even asked for

smart clothing, saying, I would likeclothing capable of informing thewashing machine which program toselect or whether clothing items cannotbe washed together and a way to warnthe person.

Ethical concerns were voiced bysome consumers. Stores should carrymore fashions that are made locally,said a UK consumer. I would paymore for a locally made product thatwas employing people for a decent

wage than for something that I knowhas been made by people who arebeing exploited.

Sporting Goods: Newer Products

for Higher Performance

Product-related issues were importantto consumers when it came to sportinggoods. One U.S. consumer summedit up: Newer products for higherperformance are critical.

Better product information was also acommon theme. Honest reviews onproducts would be nice, both in storeand online, said a respondent from theUK.

Another UK consumer suggestedsmaller, more specialised formats:I would prefer fewer sporting goodssuperstores and more specialists withcustomer support and knowledge. Stillanother thought there was a need formore community-focussed sportinggoods stores that promoted localsports teams.

Many consumers said they werentcomfortable buying sports shoesonline, but would consider buyingsports clothing over the Internet.However, some indicated that they

would like the online option of acentral pick-up point for a reducedshipping cost.

Many consumers wanted more focuson sports and less on fashion. Noteda Dutch consumer: One does notneed a lot of luxury when it comes tosports, so dont sell any additionalbells and whistles.

Finally, high prices were a commoncomplaint. Said a consumer from the

UK: Prices are an issue; in mostsports shops no sports shirt is worth50 quid.

Books/Music: The

Internet Makes Inroads

The Internet has made significantinroads into the book and musicbusiness and many respondentswanted to see that continue. Said oneUK consumer: Make all new booksavailable as an MP3 or iPod download.

This eliminates de-foresting, reducesenergy costs, print runs, transport, etc.

However, other consumers saw a wayto use the online channel withoutlosing physical bookstores. Being anavid reader, I buy most of my booksfrom a local used bookstore, noted aU.S. respondent. So for me, an ideawould be an online swap shop thatdelivered used books to my home andallowed me to send my used booksto them for resale.

In fact, despite the gains made bythe Internet in this category someconsumers in all four countries stilllamented the gradual extinction ofindependent specialist book andmusic stores. Its hard to find anold-fashioned record store anymore,

noted one Dutch respondent.

Consumers also offered suggestions onhow to provide more personalisationin the category. A French respondentthought consumers should have thepossibility of creating a compilationCD yourself with an appropriate coverand at an affordable price; a CD for 15to 20 euros is much too expensive,but at 10 euros, you would be morelikely to buy it. Others suggested

doing something similar with iPoddownloads in the store.

Some consumers were frustrated bywhat they said are high prices in thebook and music category. A consumerfrom the Netherlands noted that sheoften buys books and music abroad orthrough auction sites such as eBaybecause of the lower prices.

Future Consumer 31



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32

At a Glance: What Consumers Want

Product Category

Type ofChange

Needed

PerishableFood

Non-PerishableFood

Health &Personal Care

DIY Electronics FashionSportingGoods

Books/Music

Products Fresherproducts

More variety

Improved quality

More local/organic/healthychoices

More variety

More organic/healthy choices

Fewer chemicals

Improved quality

More variety

Better products

More innovativeproducts

Naturalproducts/noanimal testing

Fewer chemicals

Morepersonalisation

Better/easyinstructions

More variety

More userfriendlyproducts/instructions

Improved quality

Fewer harmful

chemicals

Innovativeproducts

More variety

Improved quality

More userfriendlyproducts/instructions

Morepersonalisation

Products fornormal sizepeople

More variety

Improved quality

Local products

More variety

Newer/high-performanceproducts

More sports/less fashionfocus

More variety

Stores/Outlets Faster delivery

Better access/layout

Better service

Faster delivery


More productsonline

Improvedservice


Faster delivery

More productsonline

Moreknowledgeablestaff

Moreknowledgeablestaff

Faster delivery

More productsonline/pick up atstore


Better service

Betterinformation

Better service

Faster delivery

Knowledgeablestaff

More productsonline


Compareproducts

Betterinformation


Betterinformation

Better service

Fewersuperstores/more specialiststores

More productsonline

Morepersonalisation

Faster delivery


Packaging/Labels

More accurateinformation

Less packaging

Environmentllyfriendlypackaging

Less packaging

Environmentallyfriendlypackaging



Less packaging

Less packaging More accuratelabels

Moreinformationon labels

Moreinformationon labels


Price Lower/fair prices

Lower shipping/delivery charges

Lower/fair prices Lower/fair prices Lower/fair prices Lower/fair prices Lower/fair prices Lower/fair prices Lower/fair prices


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Take advantage of emergingtechnologies. Consumers willincreasingly use all kinds of new,especially mobile, technologiesduring the buying process. These

technologies will play a key role inmarketing and communication andhave the potential to significantlyinfluence purchase decisions.

Information Sharing

Be transparent in your informationmanagement.Consumers appreciatecompanies that can accuratelyprovide relevant information howand when they need it. Consumersincreasingly research their purchasesacross various channels and they

expect this information to be readilyavailable, adequate and consistent.

Manage consumer information(personal profiles) effectively.Consumers are willing to shareinformation as long as they cantrust that this information is beingtreated in a respectful manner and istranslated into relevant offerings andpromotions, fully in accordance withconsumers wishes and needs (for

example, in cases when a consumer isnot open to a personalised approach).

Synchronised Production

Personalise your offerings andbe able to deliver. Consumers areincreasingly expecting and appreciatingpersonalised products and services.In some cases, this requires differentscenarios to effectively and efficientlysynchronise the actual individualdemand with the capabilities toproduce, customise, assemble, fulfiland/or service these demands.

Consumer needs are indeed changing,and the way they behave in the futurewill be different from what we are usedto as an industry today. The researchhas shown clearly that the underlying

consumer hypotheses from the 2016:The Future Value Chain report are valid.

This means that in line with theopportunity areas identified in the2016 study companies need toanticipate these changes across anumber of dimensions:

Shopper Dialogue

Establish and maintain a truetwo-way dialogue with individualconsumers. This will be the most

valuable means to really understandyour consumers. Anonymous consumersurveys will not be sufficient. Consumerswill expect to have a true dialogue withcompanies as long as it is relevant andbrings them value. They will expectcustomised communication and inreturn they will provide valuableinformation about their true needsand preferences.

Improve your face to the shopper

both in physical stores and online.This will require more frequent formatand merchandise assortment changesto keep up with the pace of consumerchange. Consumers are not satisfiedwith their stores (both brick-and-mortarand online) and shopping experiences.Current shopper concerns relate to thingslike product issues (quality, availability),accessibility and navigation, packagingand information labelling (for example,in relation to health and wellness, whichis the number one consumer driver) aswell as price perception.

Future Consumer 33

Conclusion and Recommendations



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34

Integrated Logistics/

Home Delivery

Extend your distribution chain tothe consumers home. Consumerswill increasingly order online, and

they expect these orders to bedelivered to their homes. Thishome-direct distribution modelplaces some different requirementson the consumer products and retailsupply chain, compared with thestore-distribution model (for example,regarding delivery times), whichcompanies need to anticipate.

Consider new integrated approachesfor streamlining neighbourhoodservices. A significant proportion

of consumers are prepared to useneighbourhood pick-up facilitiesfor online orders. Consumers alsoindicated that they want additionalservices around the product (suchas on-site guidance and installation).Based on a broader set of consumerneeds, this could provide a basis forfurther integration of different services(for example, postal services, healthcare, social services, parcel services)into a new neighbourhood services

and distribution model.

Sustainability

Address sustainability in a seriousmanner and communicate aboutit. Consumers are concerned aboutthings like global warming and CO

2

emissions and they will take this intoaccount when making buying decisions.A companys ability to offer its productsand services in a sustainable mannerwill be input for both public opinionsand personal judgements. But be awarethat consumers are not willing to paymuch extra for products that meettheir sustainability requirements.

Company Culture and

Behavioural Changes

Be open to new ways of working

driven by consumers.Consumersappreciate the value of innovationand they are increasingly willing totake an active part in this process.Make sure that your solution andproduct development is driven bytrue consumer needs and if possibleinvolve consumers in your R&Dprocess using new technologies.

Addressing these challenges will not bepossible in a single step. This will be a

long journey and nobody really knowsexactly where it will lead. But companiesthat start this journey well prepared,will find this out themselves andconsumers will help point them in theright direction.


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How Capgemini Can Help

The Future Consumer report poses the question, Will your business be able to anticipate

and adapt to changes in consumer behaviour over the coming years? Capgemini is prepared

to help consumer products manufacturers and retailers answer that question using a number

of focussed tools, approaches and accelerators:

Capgemini believes the best way to respond to these challenges is through high-performance group creativity and collaboration. We have designed ourAccelerated

Solutions Environment (ASE) to fuse those two core principles in a way that unleashes

group genius and yields breakthrough solutions and action plans in days rather

than months.

Capgeminis Transformation Consulting (TC) helps companies adapt and respond

effectively to the challenges of a constantly changing world. We help companies

fundamentally transform their core purpose and/or business model, to realise their

corporate vision in light of these challenges.

Capgeminis Customer Relationship Management (CRM) solutions drive business

results for our clients by enriching the customer experience through marketing, sales

and service transformation. We are able to help companies effectively manage and

co-ordinate customer interactions across channels, departments, lines of business

and geographies to maximise the value of every customer interaction and provide aunique customer experience.

Capgeminis Supply Chain Management (SCM) solutions assist consumer products

and retail companies as they move from push-oriented supply chains to pull-oriented

demand chains, which are driven by consumer demand.


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www.capgemini.com/industries/retail

www.capgemini.com/industries/products

The Future Consumer study was written

by Kees J acobs, Loes Heinemans and

Priscilla Donegan.

For more information on the Future

Consumer study and how Capgemini can

help you apply the findings to your own

organisation, please contact:

Europe

Kees Jacobs

+31 6 53 292 832

[email protected]

North America

Brian Girouard

+1 952 212 0417

[email protected]

Capgemini, one of theworlds foremost providers ofConsulting, Technolog

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