Startups & The Retail Opportunity
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Transcript of Startups & The Retail Opportunity
Startups and the Retail Opportunity
Designing Experiences That Work
Rich Bowen | Terry Logan
Denver Startup Week | September 18, 2013
Retail is Dead: Long Live Retail
Retail is Dead: Long Live Retail
• Overall US retail sales in August 2013: $381B USD• e-Commerce sales in August 2103: $22B USD
$360B spent in retail stores
Source: US Dept of Commerce April Trade Report (http://www.census.gov/retail/)
Influence Beyond Retail
Online to Online
Traditional Channels to Store
$5.0T $6.2T CAGR
-3%
8%
Online to Store
12% (11-19%)
Transactions by Channel of Influence – Total Retail
Sources: Forrester, Morgan Stanley, US Census
It is too difficult to measure ROI in a traditional sense against digital and eCommerce investment vs. a specific line of transaction data.
Omni-channel is not complicated, its Commerce.
Retail is Dead: Long Live Retail
• The essential dynamic is the interplay between retailers, CPG brands, and the consumer
• Knowing how these three constituencies effect one another will give you a competitive advantage when bringing solutions to market
Actionable Insight (Lean in here)
• Retailers rely on CPG brands (and the agencies that support them) to bring consumer-driven solutions to market
Who’s In Play?
The Playing Field: The Basics
• Retail decisions are influenced before store trips, at the shelf, and then reinforced post-purchase
• We define this as Pre-Tail, Retail, and Post-Tail
So Where’s the Opportunity?
• It’s all in providing value• Does value = $$$ ?
Personalization used to be inversely dependent upon the size of retailer - now in an unprecedented time they actually work in correlation.
Personalization is the Future of Retailing
Increasing choice
Increasing efficiency
Size of retailers
Personalization
• Small grocers• Neighborhood drugstores
• Supermarkets• Super Centers• Chain drugstores
• Localization• Personalization• Customization
Transactions become de-coupled from the retail experience1.0
2.0
3.0 4.0
• Specialty shops• General store
1880’s 2014+
Retail is Evolving
Language Consumer Behavior Retailer Enablement
Multi-channel Consumer shop across different channels which function independently of one another
In-store, e-commerce, call-center channels function in technology and operational silos
Cross-channelSame consumers shop across channels and perceive these channels as part of the same
brand
In-store, e-commerce, call-center and mobile channels are connected through integration of
varying sophistication and reliability
Omni-channel Consumer does not perceive channels at all, simply a brand
All channels served by common set of technology services, single set of data, and
visibility beyond the individual retailer
Shoppers Depend on Different Tools to Meet Different Needs
Locate a Store72%
Look up/Compare pricing66%
Look up product information58%
Check out72%
Look up product information66%
Look for coupon/promotions65%
Look up product information66%
Look up/Compare pricing61%
Check user ratings/Reviews57%
How?
• Provide the right experience at the right time• It’s not enough to focus on features. Why not?
“If I had asked people what they wanted, they’d have said faster
horses.”
-Henry Ford
“It’s really hard to design by focus groups. A lot of times, people don’t know what they
want until you show it to them.”
Retail? Think Mobile First
• Do we need to talk about mobile device penetration rates?• (We hope not)
What Today’s Shoppers Rely On:SHOPPERS RELY ON MULTIPLE APPS TO MEET THEIR NEEDS
28NEXT-GEN RETAIL: MOBILE AND BEYONDº 28
Mass online retailers
Barcode scanners
Coupon or deal services
P2P marketplaces
Specific store brands
Price comparisons
Consumer reviews
Which types of shopping apps have you downloaded?
61%
48%
48%
42%
38%
37%
22%
Shoppers Expect Mobile to Improve Their In-Store Experience
SHOPPERS EXPECT MOBILETO IMPROVE THEIR IN-STORERETAIL EXPERIENCES
NEXT-GEN RETAIL: MOBILE AND BEYONDº 20
O!er Expertise, Not Just InformationShoppers are already using their mobile devices to look up product infor-mation, run price comparisons, and even make online purchases while shopping in a store. Retailers have an opportunity to leverage these behav-iors by providing the information themselves that people are already look-ing for—or don’t even know they want yet. With mobile, retailers can o!er people the expertise that traditional, face-to-face customer service pro-vides, but in a more personalized, real-time way. "is might include an app that recommends other items in a store that would pair well with a speci#c piece, or one that already knows your personal preferences and provides a list of products (available in-store) based on that. Seventy-nine percent of shoppers are interested in the possibility of having digital content—product recommendations, demo videos, virtual “try on” simulations, and so on—delivered to their mobile phones while shopping in a store. In fact, 77% of dual owners have already used or would be interested to use their tablets while shopping in a store.
33%Yes
44%No, but I might be interested to
23%No, and I probably
wouldn’t be interested to
HAVE YOU EVER USED YOUR TABLETWHILE SHOPPING IN A STORE?
*Data displayed for tablet owners only.
77% of shoppers are interested in the possibility of having digital content (e.g., product recommendations, videos, simulations and so on) delivered to their mobile phones while in-store.
People Feel:
How Do We Get From...This To This
Focus on Outcomes
designing around human-focused outcomes uncovers empathetic cues
Outcomes, Looking Backward, Tell Stories
the happy user gives substantial guidance to successful digital product design
The User-centered Design Process in Eight Easy Steps
-Build user personas from demographic and psychographic data-Write stories that begin with pre-conditions and move to post-conditions-Identify key points in the story (ask yourself this question: Were I to illustrate my story, which moments would make the most sense?-Sketch those interactions (screens, human interactions, etc)-Iterate on the screen interactions-Prototype the sketches-Iterate on the prototypes-Build, test, rebuild
Design ResourcesThese three books provide a quick read for designing, and building, great digital products:
Mobile First, Luke WroblewskiTapworthy, Josh ClarkDesigning for Emotion, Aaron Walter
What Comes Next?
• Lean in to trends, consumer insights, and technologies• Apply a user-centered design process• Iterate, and iterate some more
Mobile “Future Requests” For Physical Retail
*Data represents the percentage of people who would be interested in each o!ering (n=909).
94% Compare products
79% Watch demo videos
87%
79% Virtually “try on” clothes
72% See if items’ colors match
86% Be alerted when near a store with sought-after items
92% Tap “smart” posters for coupons
95% Self-scan items for check-out
Access store maps to locate products
82% View similar products bought by others
79% Receive a list of a store’s most popular items
The Big Win?
• Payment & e-Wallets: Earning a place inside the consumer’s wallet dominates the conversation among huge players in the space (Visa, AmEx, Walmart, Walgreen’s, Google, and the list goes on)