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Tony D‘OnofrioOctober 2016
The DisruptiveFuture of Retail
© 2016 Tyco. All Rights Reserved.
Agenda
2
• Who is Tony D’Onofrio?
• Retail Globalization
• Make Wise Technology Choices
• The Disruptive Future of Retail
• Retail Trend Setters
You are the Leaders to Shape It.
3© 2016 Tyco. All Rights Reserved.
Who is Tony D’Onofrio
Top 15 Retail Influencer1
Top 25 Retail Website2
Top 40 Retail Blogs3
Retail Leadership Awards4
Global Visionary ConnectorOf Ideas and People
For Profitable Business Growth.1 Vend’s Top 50 Retail Influencers 2 Vend's Top Retail Websites3 Market Inspector 4 Asia Retail Congress
4© 2016 Tyco. All Rights Reserved.
An Immersive Positive Customer ExperienceSource: YouTube.com
© 2016 Tyco. All Rights Reserved. 5
Retail Globalization
Retail Globalization
Tony D’OnofrioEmail: [email protected]
Phone: +1 561 866-9462
6© 2016 Tyco. All Rights Reserved.
Global Retail Market - $13.6T
Fastest Growing Market
5.7%Middle East & Africa
Fastest Growing Channel
12%Online Retailing
Source: Euromonitor
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Level of globalization by product sector, FY2014Product sector profiles, FY2014
The Global Top 250 Retailers
Source: 2016 Deloitte Global Powers of Retailing
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Q Ratio LeadersFastest Growing
Source: 2016 Deloitte Global Powers of Retailing
Top 10 Fastest Growing / Q Ratio Retailers
Retailer Country FY2009 - 2014 retailRevenue CAGR¹ RANK Retailer Country Q Ratio
Vipshop Holdings Limited China 320.8% 1 Hermès International SCA France 6.422
JD.com Inc. China 106.3% 2 Tractor Supply Company US 6.113
Axel Johnson AB/ Axfood,Axstores Sweden 49.3% 3
H & M Hennes & Mauritz AB Sweden 5.811
AB Acquisition LLC (nowAlbertsons Companies Inc.) US 45.3% 4 Inditex S.A. Spain 5.792
Steinhoff InternationalHoldings Ltd. S. Africa 41.6% 5 Amazon.com Inc. US 5.307
Southeastern Grocers LLC(formerly BI-LO Holding LLC)
US 36.0% 6Nike Inc./Direct to Consumer US 5.180
Yonghui Superstores Co.Ltd.
China 33.7% 7 Next plc UK 4.952
OJSC Dixy Group Russia 33.3% 8 The TJX Companies Inc. US 4.438
Chongqing Department StoreCo. Ltd.
China 32.5% 9 Vipshop Holdings Limited China 4.400
Jumbo Groep Holding B.V. Netherlands 30.1% 10 Ross Stores Inc. US 4.369
© 2016 Tyco. All Rights Reserved. 9
Make WiseTechnology
Choices
Make WiseTechnology
Choices
Tony D’OnofrioEmail: [email protected]
Phone: +1 561 866-9462
10© 2016 Tyco. All Rights Reserved.
Store Systems Priorities
Top Store System Priorities for 2016
15%
16%
16%
19%
21%
29%
32%
35%
42%
52%
Assisted Selling
Ship-from-Store
Workforce Management
Improved Training Tools
Single Transaction Engine
WAN/WiFi Upgrade
Inventory Visibility
BI/Analytics
Mobile for Associates
Advanced CRM/Loyality
3.9% Average increase
in-store technology spending in 2016
Source: 2016 IHL / RIS Store Systems Study
6.5%5.0% 4.7%
2.8% 2.4%
PredictiveAnalytics
ProximityMarketing
DataVisualization
RFID Internet ofThings
Emerging Tech
11© 2016 Tyco. All Rights Reserved.
Age of Amazon:Challenges & Opportunities
Source: RIS / Gartner Retail Technology Study 2016
1. Developing personalized marketing capabilities 51%
2. Network and IT systems security 47%
3.Leveraging social media (for sales, CRM, hiring, customer service, etc.)
46%
4.New payment technologies(EMV, contactless, mobile, etc.)
45%
5.Expanding unified commerce (omnichannel) initiatives
44%
Top 5 major strategies over the next 18 months
Top 5 challengesover the next 3 years
1. Customer data security 49%
2. Retiring legacy systems 46%
3.Optimizing digital commerce as growth channels
39%
4. Application integration 35%
5. Optimizing stores as a growing channel 29%
Investments in technologies that improve the retailer’s ability to meet customer
expectations, exploit innate strengths, overcome weakness and disintermediate
others, will move the needle. Make wise choices.
12© 2016 Tyco. All Rights Reserved.© 2016 Tyco. All Rights Reserved. 12
TheDisruptiveFuture of Retail
TheDisruptiveFuture of Retail
Tony D’OnofrioEmail: [email protected]
Phone: +1 561 866-9462
13© 2016 Tyco. All Rights Reserved. 13
Technology Driving Shifts in Retail Power
14© 2016 Tyco. All Rights Reserved. 14
Evol
ving
Tec
hnol
ogy
Syst
ems
Impa
ctin
g R
etai
l
15© 2016 Tyco. All Rights Reserved. 15
Top Retail TrendsMultichannel consumers
more profitable than single channel*
shoppers to refrain purchasing from store if desired brand not available*
*Sources: RIS 2015 Shopper Experience Study; RSR 2015 Omnichannel Report; RSR 2015 Mobile Study
retailers believe consumers are using mobile as part their shopping experience*
50%
69% 90%
16© 2016 Tyco. All Rights Reserved. 16
The Evolution of Loss Prevention
Item Intelligence
Store Intelligence
Item Security
Data & Video Analytics
EAS Video RFID
Traffic & ShopperAnalytics
17© 2016 Tyco. All Rights Reserved.
The Smart Store
Loss Prevention
Employee Theft
Protection
Storefront Visibility
Shoplifting Protection
Staff Allocation
Zone Performance
Draw Rate
Foot Traffic
Conversion
Shelf Sweeps
Fitting Room
Analytics
Omni-Channel
Fulfillment
On Floor Visibility
Track & Trace Authentication
Inventory Intelligence
TrafficInsights
18© 2016 Tyco. All Rights Reserved. 18
An Omni-Channel Multi-Sensored Retail Future
SCREEN TIME(Per Day)
30 Country Millward Brown study of 16-45 year olds
Source: Transparency Research
Deloitte Digital
Frost & Sullivan
Frost & Sullivan
Global Theft Barometer
IHL GroupGlobal Theft Barometer
$1.5 TrillionMobile & Digital
Influence on in‐storesales in 2014, up
from $334B in 2012
$5,409MillionRetail RFID MarketBy 2020, up from$542M in 2013
$5.8 BillionGlobal Wearables
Tech market by 2018,Up from $750M in 2012
$123 BillionGlobal Retail Shrink
$4.3 TrillionGlobal Online Retail Sales
By 2025, up from$0.55T in 2011
$1.1 TrillionGlobal Inventory Distortion
$634 Billion From Out‐Of‐Stocks
63%Global Retailers
Maintaining / ExpandingGlobal Source Tagging
Phones147
minutes
TVs113
minutes
PCs108
minutes
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Planning the Perfect CelebrationSource: YouTube.com
20© 2016 Tyco. All Rights Reserved.
Macy’s RFID Journey
• Inventory count 1x / year
• Inventory accuracy deteriorates 2-3% per month
• Inventory accuracy 60-70%
BEFORE RFID
• 1x / year & can cycle count up to 24x / year
• Achieve nearly 99% accuracy w/annual inventory
• Annual inventory accuracy 95%
• RFID categories out performed non-RFID categories with avg. 10% sales lift
WITH RFID
• B2F – Back to Front, Sales Floor Replenishment
• Increased sales and margins, reducing MDs
• 1/3 reduction in basic stock required on-hand
• Improved display compliance from avg. 65-70% to nearly 100%
• P2LU – Pick to the Last Unit
• Leverage 15-20% of store inventory that exits in single units
• Omni-channel readiness enabling $1B reduction in store inventory
• Sales lift on regular & 1st MD merchandise
BEYOND REPLENISHMENT
Peter LongoFormer Macy’s, President, Operations and Logistics -January 2015
RFID is your foundational ‘air supply’
to deliver an omni‐channel promise.
Source: GS1 panel discussion ‐‐ January 13, 2015 at NRF Big Show
21© 2016 Tyco. All Rights Reserved. 21
Relevancy of the Store
Educate & empower in-store employees using technology
#1
Brick & mortar stores account retailer revenues*85%
Sources: PSFK and RSR Research; RSR 2015 Store Report
Opportunity for improving in-store experience*
22© 2016 Tyco. All Rights Reserved. 22
Store Reinvented - The Future of the Store
“Retailers reported 16.5%YOY improvement in KPI’s related to sales, customer engagement and satisfaction as a result of empowered sales associates”
Source: EKN Modern Labor for Omnichannel Success Report
23© 2016 Tyco. All Rights Reserved. 23
The Consumer Power
What Consumers
Want
How are Retailers Addressing it?
24© 2016 Tyco. All Rights Reserved.
The Consumer / Retailer Information Dichotomy
…disclosing information about themselves? …having store employees welcome the customer by name when he/she enters the store?
Source: HUI Research (2015)
ConsumerRetailer
60%40%
55% 50%
How do consumers in general feel about…
10%
22%10%
Consumer
22%
Retailer
25© 2016 Tyco. All Rights Reserved.© 2016 Tyco. All Rights Reserved. 25
Trend Setters
Tony D’OnofrioEmail: [email protected]
Phone: +1 561 866-9462
26© 2016 Tyco. All Rights Reserved.
Global Retail Apparel Trend Setters
FY’15 Revenues - $28B• 900 corporate stores in
41 countries
• 12,000 franchise stores
• FY’15 Revenues - US$23B; 62% of revenues from EMEA
• 7,013 stores with 8 different store concepts
• Global presence in 88 countries
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It’s all about the customerSource: YouTube.com
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Global Retail Apparel Trend Setters
• FY’15 Revenues - USD$24B; ~40% of revenues coming from Germany, US and UK
• 3,924 stores globally in 61 markets
• 6 distinct store concepts
• USD$16B in annual sales, 46% comes from Uniqlo Japan
• 2,978 global stores
• Manage multiple brand portfolio including Uniqlo, GU, Theory etc
29© 2016 Tyco. All Rights Reserved. 29
Technology Will Continue to Disrupt the Store
30© 2016 Tyco. All Rights Reserved. 30
Global Source Tagging & The Future of RetailFuture Plans of Using Source Tagging Across Regions Future Plans of Using Source Tagging Across Product Categories
The Future of Retail• Less Store Labor / Improved Customer Experience• Interactive Retail Stores with Employees as Brand Ambassadors• Item Level Intelligence Driven by Source Tagging / Out of Stocks FOCUS• A Focus on “Value” Integration• A Sustainable Retail Future
31© 2016 Tyco. All Rights Reserved.
MuitoObrigado
Tony D’OnofrioEmail: [email protected]
Phone: +1 561 866-9462