A report by Verdict Consulting for Webloyalty

March 2011

‘Getting ahead in a multichannel world’

Guy Chiswick

16th May 2012

The retail world is changing

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Customers can shop when, where and how they want

The evolution of the consumer and the drivers

Traditional shopper

Online shopper

Multichannel

Social

Future

The Internet

Convenience

m-commerce

Information

Drivers Pre 1990’s

2020 and beyond

1990

1999

2008

2010

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Use of multiple channels is now commonplace

53.9%

85.1%

92.9%

95.2%

52.0%

7.8%

Online shops

Physical shops

Internet sites

Telephone/ call centres

Catalogues

Mobile commerce

32.2%

Newspapers & magazines

23.8%

Retailer magazines

Traditional retail

The Future

The percentage of consumers using various channels at any stage of the purchasing process

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

And shopping trips are only going to become more personalised

A future shopping trip

Online In-store

Research products, availability and prices online

Product selection and details sent to mobile phone

Go to shop to view the product

Find product in a shop

Mobile used to scan products for price comparison and

product information

Customer locates nearest shop with

best price and availability using GPS

map

Customer finds online is cheaper, uses

mobile to go online and buy the product

Mobile used to reserve item at chosen store

Mobile used to download or redeem mobile coupon

Once payment is made, customer receives mobile coupon via text to redeem

against next online purchase

Message from retailer with recommendations

Customer logs into store, receives

update of deals and personalised

product suggestions

Customer reviews product and asks for

opinion Order product in store and

track delivery

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Mobile has grown rapidly

52.0

62.9

71.877.3 79.3

28.2

2009 2010 2011 2012 2013 2014

% of UK population that uses m-commerce (at any stage of purchasing process)

3.8%

9.8%

% of UK shopping population that shop online via mobile phone

2009 2014

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Mobile integrates well with other channels

Stores Catalogues Online

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Mobile increases the probability of multichannel shopping

Compare

Research

Click & collect

Social/Opinion Purchase

Price check

Availability

Locate

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Retail spend is declining in stores

All retail spend Non food retail spend

4.9 (£8.0bn)

95.1 (£154.1bn)

1994

87.7 (£280.3bn)

12.3 (£39.3bn)

2014

Store Non store 8.5 (£7.9bn)

91.5 (£85.1bn) 82.1 (£145.3bn)

17.9 (£31.7bn)

1994 2014

Store Non store

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Fewer stores are being opened

-0.8

-1.3

-1.0-0.8

-1.7

-2.7

-3.3

-2.0

-0.3 -0.2

0.1

210,000

220,000

230,000

240,000

250,000

260,000

270,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-3.5

-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

Stores Y-on-y grow th %

0.9

0.4

0.7

1.2

-1.5

-2.1

-1.8

-0.9

0.10.3 0.2

520

530

540

550

560

570

580

590

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

Space (millions sq ft) Y-on-y grow th %

Stores Space

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Stores will look very different in the future

The store Fewer and larger

The staff Specialist, service

The layout Immersive & interactive

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

High street is losing its retail crown

1994 2014

High street

Neighbourhood

Out-of-town

Non store

4.9%

23.9%

21.0%

50.2%

12.3%

31.7%

17.9%

40.2%

Percentage share of total retail spend by location

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

0

200

400

600

800

1,000

1,200

1,400

1,600

2010 2011 2012 2013 20140

10

20

30

40

50

60

70

80

90

Online share Store numbers

6,000

6,100

6,200

6,300

6,400

6,500

6,600

6,700

2010 2011 2012 2013 20140

5

10

15

20

25

30

35

40

45

Online share Store numbers

Music & Video Electricals

38,500

39,000

39,500

40,000

40,500

41,000

2010 2011 2012 2013 2014

0

2

4

6

8

10

12

14

Online share Store numbers

14,400

14,420

14,440

14,460

14,480

14,500

14,520

14,540

14,560

2010 2011 2012 2013 20140

1

2

3

4

5

6

Online share Store numbers

Clothing Health & Beauty

Stores on the verge of a tipping point

Private & Confidential. Webloyalty International Limited is a company registered in England, company registration number 05922626, and its registered office is at Charter Court, 50 Windsor Road Slough, SL1 2EJ. ©2012, Webloyalty International Limited

Key action points

Multichannel retailing is developing rapidly .

Consumers want to shop how, when and where they want Information overload leaves us confused M-commerce will help drive multichannel integration

Loyalty harder to achieve

Establish a presence Offer flexible fulfilment

Consistent message M-commerce is the missing link that connects all channels

Consumer interaction should be personal and bespoke

1

2

3

4

5

Consumer and retail trends Actions retailers should take

1

1

1

1

1

What are retailers doing about it?

What are retailers doing about it?

What are retailers doing about it?

What are retailers doing about it?

‘Thriving in a multichannel world’

Coming soon…

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