Playing to Win the Retail Holiday Season

Playing to Win the Retail Holiday Season:

Strategies to Increase In-Store Traffic and Sales

©

© RevTrax 2014. All trademarks and service marks herein are the property of RevTrax, Forrester, Inc., or their respective clients and may not be used without their prior written consent. All rights reserved.

Stephanie MartoneManager of Strategic Initiatives

RevTrax

@stephmartone, @RevTrax

Adam SilvermanPrincipal Analyst

Forrester Research, Inc.

@AdamKSilverman

©


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Playing to Win the Retail Holiday

Season: Strategies to Increase

In-store Traffic and Sales

Adam Silverman, Principal Analyst

October 8th, 2014

© 2014 Forrester Research, Inc. Reproduction Prohibited 5

“The pace of change is accelerating

faster than anticipated a year ago.”

— Blake Nordstrom, president of Nordstrom

April 2014


Mobile connects us wherever we go


Firms are NOT set up for success

74%…of businesses think they have a digital

strategy.

34%…of executives think their firm has the right

strategy.

16%…of executives believe their firm has the skills

and resources necessary to deliver.

Source: Forrester / Russell Reynolds 2014 Digital Business Online Survey

Footfall to European retail outlets in decline:

Germany: -6.4%

Italy: -6.2%

UK: -2.9%

Spain: -3.1%

Source: Forrester; “While Retail Footfall decreases, digital influence on Consumer shopping Behavior increases” 2/26/14



Agenda

› How customer behavior continues to evolve…quickly

› The retail response – today and in the future

› Recommendations for Holiday 2014


This year, 52% of all US retail sales will either be influenced by or occur online


Holiday online sales continue to grow

73% - expect to click and collect

86% - expect to return online orders in the store

89% - expect to view the in-store inventory of

products online

A commissioned Forrester study with Purolator, May 2014

Customers have high expectations

when it comes to channel integration

14

19%

70%

An Engaging Brand Is

Important To Me

The Store Associate

Is The Best Resource

For Information

Source: NA Technographics Customer Lifecycle Buy Phase Q1 2012 and NA Technographics Customer Lifecycle Discover Phase Q3 2102


Younger shoppers check price in-aisle

Source: Forrester’s North American Consumer Technographics Retail Survey, 2014. Base: 5007 US online Adults (18+). Image source: https://www.flickr.com/photos/kdinuraj/

Percent of US online consumers who have price checked on their

mobile phone while in store in the past 3 months

Golden Generation (70+)………….….9%

Older Boomers (59-69)…………….….9%

Younger Boomers (49-58)………..….16%

Gen X (35-48)…………………………28%

Gen Y/Millennials (26-34)……..……..33%

Gen Z/Young Millennials (18-25)…....30%

Total U.S……………………………….23%


Agenda

›How customer behavior continues to evolve…quickly

› The retail response – today and in the future

›Recommendations for Holiday 2014


Today

Enterprise inventory visibility and

store fulfillment lead the pack


75% of customers are likely to visit a

store if in-store inventory is marked

available online . . .

. . . however, more than one-third of

customers are unlikely to visit a store if

they can’t check inventory online.


Ikea exposes the supply chain

Learn Assist

Buy Operate

The associate facilitates engagement

66% of luxury shoppers more likely to

shop or interact with sales

associates who are equipped with

mobile devices

Source: North American Technographics Retail Survey 2013


The Future


The Store As A Platform

Analytics

OMS

POS

CRM

Ops Source - https://www.flickr.com/photos/statefarm/


Location Context Grows In

Importance

Source: https://www.flickr.com/photos/pr9000/

The store becomes theater

Source: Mirande Prynne, “Variable price tags being tested on high street,” The Telegraph, October 22, 2013

(http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10395403/Variable-price-tags-being-tested-on-high-street.html)

Image source: B&Q Googe+ (https://plus.google.com/112415411810890959234/about)

The store becomes personal

The store becomes social

Promises delivery two full

days quicker than before

The store drives service

Data will need to transform into insights.

Image source: Bizj (http://media.bizj.us/view/img/849021/retailnext-kinetic-heat-map*304.png)


Agenda

›How customer behavior continues to evolve…quickly

›The retail response – today and in the future

› Recommendations for Holiday 2014

2014 Holiday Best Practices

1. Pay attention to price

2. Channel integration is expected

3. The store experience matters

4. Think mobile first now

5. Win on key days

6. Use data to capture behavior and measure

performance


1. Pay Attention to PriceDynamic Pricing Exists – Have A Strategy

› This doesn’t mean you should promote yourself

to zero margin.

› Customers not likely to pay significantly more for

an item in store

› Get help here – find a pricing vendor who can

help you monitor your offering

Source: USA today, 9/28/13


The store “premium” isn’t large

How much more would you consider paying to purchase a product in a physical store rather than buying

it online so that you could have the product immediately rather than wait for it to be shipped to you?

52%

18%

6%

4%

4%

3%

1-5% higher in store





More than 25% higher in store

Source: Forrester Life Cycle Survey, Q1 2013


2. Channel Integration Is ExpectedThe experience must tie together many different touchpoints

› Enable your associates and customers to see

inventory in your stores. (Easier said than done)

› Establish processes to handle online orders that

need to be returned in-stores



3. The Store Experience MattersFocus on service and engagement

› Use mPOS technology to ‘line bust’

› Focus on convenience over experimental

technology

› Train associates to engage with customers who

are using digital devices



Associates = tour guides


4. Think Mobile NowThe future is here NOW

› Expect more customers to use mobile phones in

all locations to find the best prices and deals

› Use opt-methods of tracking customer behavior

across channels

› Focus on your mobile experience; both from an

influence and transactional perspective



Mobile is a bigger part of holiday shopping

% of online buyers who shopped on a mobile device

Thanksgiving CyberMonday

18% 21%

34%

2011 2012 2013

23%

38%

2012 2013

Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013


Mobile buying is growing during key time periods

In a retail store, 3%

Home, 76%

Elsewhere, 22%

Where the mobile device was used

(CyberMonday)

Source: Bizrate Insights/Forrester Holiday Flash Survey, 2013

16%

17%

26%

45%

53%

75%

Locat retail stores

General storeinformation

Read product/storereviews

Price checks

Browse or researchproducts

Make purchases

For which of the following did you use your

mobile device today (CyberMonday)?


5. Win On Key DaysThis DOES NOT mean you must offer margin busting deals

› This season is SHORT – just 28 days between

Thanksgiving and Christmas

› Buy into holiday “door busters”

› Test offers to determine the best margin

producing AND new customer acquisition

campaign


© 2013 Forrester Research, Inc. Reproduction Prohibited

Growth On Key Holiday Sales Dates Continues To Outpace Overall Holiday Growth


6. Leverage DataLeverage new in-store tools to drive conversion

› In-store analytics growing in popularity, although

riddled with privacy concerns

› Leverage programs that can track customer

behavior in all touch points and help with

marketing attribution

› Ensure you understand different segment

behavior during holidays vs non holiday periodsSource: USA today, 9/28/13

+30% — same store sales growth

-16% — shrink

Thank youAdam Silverman

+1 415.294.8177

[email protected]

@AdamKSilverman

©


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