The Disruptive Future of Retail

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


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


Global Retail Market - $13.6T

Fastest Growing Market

5.7%Middle East & Africa

Fastest Growing Channel

12%Online Retailing

Source: Euromonitor


Level of globalization by product sector, FY2014Product sector profiles, FY2014

The Global Top 250 Retailers

Source: 2016 Deloitte Global Powers of Retailing


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


Phone: +1 561 866-9462


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


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


Phone: +1 561 866-9462

13© 2016 Tyco. All Rights Reserved. 13

Technology Driving Shifts in Retail Power


Evol

ving

Tec

hnol

ogy

Syst

ems

Impa

ctin

g R

etai

l


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%


The Evolution of Loss Prevention

Item Intelligence

Store Intelligence

Item Security

Data & Video Analytics

EAS Video RFID

Traffic & ShopperAnalytics


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


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


Planning the Perfect CelebrationSource: YouTube.com


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


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*


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


The Consumer Power

What Consumers

Want

How are Retailers Addressing it?


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


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


It’s all about the customerSource: YouTube.com


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


Technology Will Continue to Disrupt the Store


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


MuitoObrigado


Phone: +1 561 866-9462

The Disruptive Future of Retail

Retail

Transcript of The Disruptive Future of Retail