Electrical retail and disruptive technologies · need for security . Reduce cost, improve speed ....

1 © GfK 2018 | TCG Retail and disruptive technology | TCG Summit 2018

Electrical retail and disruptive technologies Markus Tuschl, Global Director Digital Retail, GfK

Technical Consumer Goods Summit Berlin 2018


Where to find growth in the TCG markets

1

How to build strong

relationships with customers

2

How retailers invest in

(disruptive) technology

3


Where to find growth in the TCG markets

1

4 © GfK 2018 | TCG Retail and disruptive technology | TCG Summit 2018 Source: GfK, EU Commission, values rounded

Widely positive consumer sentiment – relevant for durables shopping

> +5

> +20 0 to +20 0 to -20 < -20

1 to 5

-1 to +1

-5 to -1

< -5

Change of the indicator: September to December 2017

+/-0 -1

+14 +1

+22 -1

-7 -3

+20 +5

+23 +5

+57 +/-0

+32 +13

+14 -6

+/-0 -12 +23

-1

-23 +4

+8 -8

+22 +3

+31 +11

+21 +5

Indicator

Propensity to buy in Europe, December 2017

EU total

+21


Source: GfK TEMAX and GfK Value Added Services; TCG (CE, PH, IT, MDA, SDA, TC, OE) growth % refers to Q1-Q4 2016:2017 in local currency | Forecast for TCG 2017 in local currency excl. SDA market; Total value converted to € for all countries

213 billion € of TCG sales – moderate overall growth. Selectively, highly dynamic markets

2.2% 2.8%

1.2%

27.9%

14.4%

14.0%

7.3%

-1.7%

-1.1%

5.3% 1.4%

1.1%

-10.2%

2.0%

9.1%

1.7%

2.2%

-1.9%

1.0%

-1.8%

Positive Negative

Growth Decline

Growth 2017 vs. 2016

Forecast 2018


Europe 18

Source: GfK POS Tracking, growth value MAT Jan16-Dec17 vs. previous year in m€ and %; EU 18: AT, BE, CH, CZ, DE, ES, FI, FR, GB, HU, IT, NL, PL, PT, RU, SK, UA, number of countries can differ between product groups

Smart phones and smart home delivered the biggest growth. Additional growth categories to focus on.

2812 1687

624 575

480 364 356 261 244 222

-167 -280 -313

-438 -608

-1155

Smart/ Mobile phones (incl. Phablets)Smart Home TotalMobile Computing

HeadsetsWashing MachinesVacuum Cleaners

Comm. DeviceCore Wearables

CoolingSet-top Boxes

Car Navigation

Laser Cartridge

Storage

PTV

Media Tablets Software

(+11%)

(+6%)

(+3%)

(+33%)

(+50%)

(+25%)

(+10%)

(+22%)

(+124%)

(+296%)

(-23%)

(-6%)

(-7%)

(-2%)

(-10%)

(-10%)

+

Positive Negative

Growth absolute (m€) and % 2017 vs. 2016


Visual cams

€282m +24% Vac.

cleaners €143m +186%

Air treat./cond.

€92m +>100%

Washing machines €1,449m

+50%

2017 Value €, growth

Source: GfK POS Tracking, growth value MAT Nov16-Oct17 vs. previous year EU 18: AT, BE, CH, CZ, DE, ES, FI, FR, GB, HU, IT, NL, PL, PT, RU, SK, UA, number of countries can differ between product groups; GfK TEMAX

Growth segments have distinct meanings for consumers and will drive the shopper trends impacting retail.

Laser cartridge

-€279m -6%

LED lamps €77m +89%

Smart

TV: UHD/4K €2.5bn +30%

Mobile comp. ultrathin

€2.1bn +37%

OLED display

€1,134m +107%

Drones €316m +61%

Smart/ Mobilephones

€47bn +6%

Wearables

€1.432 bn +22% Virtual

reality €319m +45%

Voice interaction

>100%

Robot vac. cleaner

€460m +23%

Added value

Behaviour changing


How tobuild strong relationships with customers

2


41

28

74

45

31

80

World Europe China

20162017

Focus on early adopters to learn, while there is still time

Source: GfK FutureBuy 2017, n=1,000 per country; EU13 in 2017 and EU 8 in 2016

Chinese shoppers are in the lead. EU shoppers catching up slowly

% of respondents agreeing

Gen Z 45%

“My mobile device is quickly becoming my most important shopping tool.”


Therefore, the mobile shopping shift in Europe will accelerate

Source: GfK Point of Sales Tracking, 1 EU 18: AT, BE, CH, CZ, DE, ES, FI, FR, GB, HU, IT, NL, PL, PT, RU, SK, UA, 1 MAT 17 Jan- Dec 17

Sales of large screen smartphones that lead to convenience in shopping rise

EU1 137 Mio units

China 433 Mio units

56%

36%

7%

1% <4.5‘‘

4.5 – 5.0‘‘

20%

-51%

19%

-10%

+82% +37%

+6%

>5.5‘‘

5.0 – 5.5‘‘


The channel focus depends on the category

Source: GfK FutureBuy 2017, data for consumer durables

The mobile shift is a huge opportunity for traditional store retail, particularly in Europe

48

37 46 47

57

World Europe NorthAmerica

LatinAmerica

APAC


31

21

28

40 34

42

29

23

35 37

43 38

Smartphones Major homeappliances

Audio devices Wearables

Channel where category was shopped

Exclusively online Exclusively in a store Both

I can see a future where traditional stores are not a big factor in how I shop


Are shoppers ready for it?

Multichannel shopping includes the option of being tracked


44

29 36

52

World Europe NorthAmerica

APAC

Source: GfK FutureBuy 2017; Word: n=35,000; Europe n=13,000; North America n=2,000; APAC n=11,000

In Europe, personalize marketing will evolve more as 1. readiness to being tracked is growing and 2. younger generations see the benefit


20

25

30

Europe

2015 2016 2017

0

20

40

All Gen Z Gen Y Gen X Boomers Silent

I like it when a website keeps track of my visits and recommends things to me.


IF…security of personal data is given – strong requirement in all generations

This opens the opportunity for personalized marketing and other big data driven solutions

0

50

Allrespondents

Gen Z Gen Y Gen X Boomers Silent

Source: GfK Futurebuy study, 2017 European results n=13,000.

I am more concerned about the security of my personal information when shopping online than I am when shopping in a store.


How retailers invest in (disruptive) technology

3


Expected business outcome/ impact Impact on retail today

Investment relevance gap

Future invest. focus

31

30

29

26

25

23

31%

35%

30%

25%

31%

40%

62%

65%

59%

51%

56%

63%

Checkout-less stores

Augmented reality

Virtual reality

Facial recognition

Robotics

Artificial intelligence

Improve shopping experience/service, reduce cost

Entertainment experience, increase footfall in stores

Improve personalized marketing, need for security

Reduce cost, improve speed

Focus is needed on the ones that fit your strategy

Source: GfK Retail Trend Monitor Study 2017

Technologies with the potential for disruption are on the future investment agenda of retailers

Reduce cost, personalized marketing

17 © GfK 2018 | TCG Retail and disruptive technology | TCG Summit 2018 http://www.sueddeutsche.de/wirtschaft/saturn-geschaeft-ohne-kasse-1.3897672 (Foto: Klaus Maislinger) 12.3.2018


Gen Z and Y are attracted by Virtual Reality in store

GfK Futurebuy study, 2017 European results n=13,000.

I would be more likely to visit a retail store offering Virtual Reality

0

20

40

The opportunity in VR for retail will grow

19 © GfK 2018 | TCG Retail and disruptive technology | TCG Summit 2018 Source: techcrunch.com, March 2018

47.3 million US adults using

voice interaction based

AI devices


Expected business outcome/ impact Impact on retail today

Future invest. focus

14

14

70%

69%

84%

83%

Big data analytics

Mobile shopping app

Improve personalized marketing and service levels,

drives need for security

Drive traffic online, better multichannel experience,

improve personalized marketing

Tapping the potential of personalized marketing

Source: GfK Retail Trend Monitor Study 2017.

Big data and mobile shopping apps are and will be on top on the investment plan

Building profitable

client relationships


47

71

15

25

35

21

73

63

18

8

12

12

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

Retailer 4

Retailer 3

Retailer 2

Retailer 1

Weak relationship Strong relationship At risk relationship

Understand and drive the level of strong and positive brand relationships

Source: GfK Retailer Brand Equity Study 2017; Germany

Client relationships are very diverse and differentiated by retailer.


Big opportunities for TCG retail

Innovation is a strong driver

for TCG, make sure you exploit the top

segments

Know your target groups

and be responsive to their needs

Invest in technology,

having in mind the solutions of

the future to differentiate

Build strong and

meaningful relationships

with your customers

1 2 3 4

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