GROWING ABROAD

THROUGH CUSTOMER

EXPERIENCEPunto di vista EY sull’omnichannel

in logica retail internationalization

Milano, 8 aprile 2016

Spain focus

Andrea BassaninoAdvisory Partner – EY

Strategy Mediterranean Leader

Joaquim Martinez BoschSenior Manager – EY

Advisory Services

Evolvono i consumatori: iperconnessi, in mobilità e sempre più consapevoli

TV Internet(PC)

Mobile

-1.2%

+1.3%

-0.5%

-3.7%

-5.4%

+7.6%

+21%

+7%

+29%

Audience

Tempo

speso

ADV Inv.

Evoluzione in numeri

In movimentoPiù interattivi

► Sono consumatori

multi device

► Sempre connessi

ad Internet

► Relazioni e

condivisioni on-line

in aumento

► Si informano con

fonti inedite (Wiki,

blog, podcast)

► Creano contenuti

per uso privato e

condivisione

Più consapevoli Più attenti

► Acquistano online e

si relazionano

tramite social

network

► Hanno aspettative

sempre più alte

verso le aziende

► Danno priorità alla

convenienza e al

risparmio di tempo

► Si rassicurano con

social media e

advocacy

► Prediligono il self-

service e soluzioni

multicanale

La multicanalità è la «nuova» normalità

44%Ricerca e acquisto

online 17% Visita uno store e poi

compra online

32% Ricerca online, visita uno store

per vedere il prodotto, torna

online per l’acquisto51% Ricerca online e acquista

offline

Image credits & Source: Google shopping Intentions Study

Customer omnichannel engagement: innovazione punto vendita e integrazione physical-digital

Omnichannel Customer Experience: conoscere il cliente per competere

Overseeing the

whole customer

journey

Know and segment your customer

Orchestrate and optimize channel mix

Define offers and services aligned to target need

Awareness Knowledge Consideration Selection Loyalty AdvocacySatisfaction

TraditionalMulti-channel

Geek

CoupleSingleFamily

ForeignAffluence

FamilyBehavior Needs

Socio

Demo

Processes Organization Systems

Align company

capabilities to the

customer centric

model

1

3

2

4

5

$

International

expansion

challenges

2 Different customer

needs

Erratic suppliers or

sourcing and poor

infrastructure

3

Uncertain local politics and

complex regulatory

environment

1

Currency

fluctuations,

rising costs and

wages

4

Tax compliance,

transparency

and changing

environment

6

Customs, import and

export restrictions5

Language

barriers and

cultural

considerations

7

Inadequate

project

management

8

Inability to

secure required

local talent

9

Stakeholder

management

considerations

10

Internazionalizzazione: sfide e complessità da affrontare su diversi ambiti

Internazionalizzazione: definizione dei mercati su cui operare e qualificazione delle modalità di approccio come tipici snodi chiave

Basic strategic questions for going international

Where to play ? How to play ?1 2

A

B

C

D

E

F

G

…

n

1 2 1 2 3 4 1 2 3 1 2

Product

line 1

Product

line 2

VAS Other

?

?

?

?

?

?

?

Seg

ment

Current

presence

Priority 1

enlargement

Priority 2

enlargement

Il digitale e l’omnicanalità rappresentano elementi che possono alimentare e influenzare

sia la scelta delle geografie più attrattive, sia le modalità operative di ingresso

Internazionalizzazione: il nostro point of view

Internationalization Strategy

Within the support to internationalization, EY supports clients in addressing all key

questions, from the selection of countries to enter to the definition of the entry strategy

and of the business case

► Macroeconomic

scenario and

general

attractiveness

evaluation

► Evaluation of

regulatory and tariff

barriers

► …

► Mapping of actors

along the value

chain

► Assessment of

critical channels

► Identification of

buyers / influencers

► …

► Understanding of

clients purchasing

criteria

► Order winner and

order qualifier

assessment

► …

► Analysis of

addressable market

size

► Future trends

► Assessment of

incumbent’s

positioning

► Assessment of

expected

profitability

► …

► Comparison and

scoring of markets

► Prioritization

► Short listing

► …

► Detailed market

and competition

analysis

► Go To Market

Strategy definition

(channels,

products, roadmap,

etc.)

► Detailed Business

case definition

Macroeconomic and

Regulatory Analysis

Value Chain

Analysis

Clients’ Market

Analysis

Markets

potential and

competition

analysis

Markets

prioritization

and selection

Market Entry

Strategy and

Business Case

Main

Ob

jecti

ves

Deliv

era

ble

Exam

ple

Thought Leadership / Partners

Key DIfferentiators

► Scale

► Global Reach

► Multi skill

► Innovation attitude

► Holistic approach

► End to end support

Focus on Spain

Last mega trends have eliminated some gaps between traditional customer segments…

Traditional Segmentation

SOCIAL CLASS

AG

E S

EG

ME

NT

Last mega trends have eliminated some gaps between traditional customer segments…

Traditional Segmentation

Digital Transformation

Globalization

Economic

environment

Current Segmentation

Etc.

SOCIAL CLASS

AG

E S

EG

ME

NT

SOCIAL CLASS

AG

E S

EG

ME

NT

We have identified some common behaviors in Spanish market:

SOCIAL CLASS

AG

E S

EG

ME

NT

We are becoming digital1We are becoming omnichannel2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands6

Simplicity is a challenge7

We are digital:

We are video-addicts

Would like to see the agent for

complex queries54 %

Want to use video chat to

communicate with organizations57 %

Use YouTube first to research a

new product or service36 %

Using videos and

video-chat is

becoming a key

element in customer

experience SPAIN

56% would like video-chat to

have a product demonstrated by an agent

Spain is the most video-addict country in Europe

We are social1

Consumers want more customer service

by social media and less marketing

Expect response to social media

comment in 15 mins55 %

Would post a complaint on social

media45 %

Have had customer service by

social media (8% made complaint)15 %

Of the customer have used smartphone to comment on social media about customer service

just received

37% 30%33%

123

2

“Source: The Autonomous Customer 2015: 8 Global Trends.”, BT

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

Customer experience is very different depending on the market:

“Source: DEC by BCG

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

.

Fashion Retailer and Customer Experience

Customer Experience by sector

HotelsAutomobileSmart

phonesCar

InsuranceFood

distribution FashionHealth

insurance Transport Restaurant Telephony BroadbandLive

insuranceFood&Drink Bank Utilities

- 151120212324272732343536444563

Why improve customer experience

33%

3%

16%

Of customers buy 50% of their clothes in the same company and they recommend it 3 times each 3 months

Of customers buy 50% of their clothes in the same company

Of customers buy 50% of their clothes in the same company and they criticize it 3 times each 3 months

Customer experience level:

BAI Customers

Enterprise Primark Zalando Massimo Dutti C&A Lefties H&M

Recommendation 30 30 34 20 32 23 30 22 27 24 28 22

Criticizes 3 1 1 0 2 1 1 0 2 1 2 1

BAI Customers 40 37 36 35 34 34

Enterprise Mango Zara Bimba y Lola Cortefiel Desigual Bershka

Recommendation 25 25 27 24 30 18 29 23 28 17 23 19

Criticizes 2 1 2 1 1 0 4 1 2 1 3 1

BAI Customers 34 33 32 32 27 25

% of customer who recommend or criticize the different brands:

To measure the customer experience of a brand we will use the Brand Advocacy Index (BAI):

- A client recommend the brand spontaneously (x1)

- A client recommend the brand (x0,5)

- A client criticize the brand (x1)

- A client criticize the brand spontaneously (x2)

+

-

-

BAI

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

Customer experience is very different depending on the market:

Customer Experience by sector

.

HotelsAutomobileSmart

phonesCar

InsuranceFood

distribution FashionHealth

insurance Transport Restaurant Telephony BroadbandLive

insuranceFood&Drink Bank Utilities

- 151120212324272732343536444563

Enterprise Foster’s Domino’s 100 Montaditos Ginos La Sureña Lizarrán Pan’s & Company Telepizza

Recommendation 30 30 35 20 30 25 30 24 31 23 33 20 25 17 28 16

Criticizes 4 1 1 0 5 1 5 1 4 2 5 0 2 2 5 1

BAI Customers 38 36 33 32 31 30 24 23

Enterprise KFC BurgerKing Subway McDonalds Starbucks Vips Tommy Mel’s

Recommendation 35 20 27 16 30 21 25 12 30 20 23 19 25 30

Criticizes 3 2 3 1 3 2 6 1 6 2 3 1 7 4

BAI Customers 30 25 28 17 25 24

% of customer who recommend or criticize the different brands:

To measure the customer experience of a brand we will use the Brand Advocacy Index (BAI):

- A client recommend the brand spontaneously (x1)

- A client recommend the brand (x0,5)

- A client criticize the brand (x1)

- A client criticize the brand spontaneously (x2)

+

-

-

BAI

“Source: DEC by BCG

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

EY Spain Omnichannel study

Omnichannel

Cu

sto

me

r E

xp

eri

en

ce

Retail

Experiencia

Generation 11

Generation 22

Generation 33

Generation 44

EXPERIENCE: Memories generated in the customer mind or potential customer as a result of the relationship with the brand

MULTICHANNEL GENERATION 2: Presence of more than one channel but not integrated with different experiences

MULTICHANNEL GENERATION 3: Several integrated channels at operations level but not at the customer experience level

MULTICHANNEL GENERATION 4. OMNICHANNEL: More than a channel that integrates both the customer experience and customer operations allowing complete lifecycle of experience, regardless of location, time and channel, even through different channels without this affecting their experience

EY Spain has performed a study about the main companies in Spain based on several KPIs to evaluate how “omnichannel” they are

► The study clasisifies the companies in four generations.

►Companies generation depends on their level of onmichanel, being the fourth generation the best.

► Each sector has its own analysis.

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

We are becoming omnichannel… but it doesn’t necessary mean providing an excellent customer experience:

“Source: EY Spain

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

Fashion sector

valuation average is

above the average of

Spain

Only the 15,5% of

the companies

have a

differentiated and

personalized

behavior with their

actual clients

Fashion sector

stands out for having

several of the most

omnichannel

companies

Fashion sector is

strong in flexible

delivery but weak in

data analytics

More than the 50% of the companies

are in the second generation

In Spain few

companies are truly

digitals

35,7% of the

companies have a

loyalty program

Web100%

App50%

Web with e-shop72,6%

App with e-shop20,2%

EY Omnichannel

study

“Study of

Omnichannel”

Only a 5% of the

companies are in the

fourth generation.

Conclusions of the Spanish omnichannel study: Consumer digitalization is going faster that companies digitalization

We have prioritized other values vs. brand loyalty…

“Source: EY Spain

Telcos changed market rules

Traditional organizations have diversified

their businesses

Globalization brings new competitors

Spaniards has lost brand

loyalty to:

• Telco brands

• Banks

• Power companies

• Insurances

• Sport clubs

• Food & drink brands (white

labels)

• Etc.

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

Product quality is one of the main decision tools:

“Source: DEC by BCG

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

Product quality is one of the main decision tools:

““Source: DEC by BCG

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

We are becoming green…

“Source: ministerio de Agricultura, Alimentación y Medio Ambiente

► Eco-consumers are increasing

exponentially

► They are also expanding

geographically

► Consumption frequency is

incrementing

► New trends have been matured

(KM 0, Biological, Gluten free, CO2

emission, etc.)

► This is impacting new sectors

(drugstores, transportation,

schools, etc).

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

We are not as much in love with Spanish brands:

► Political situation is affecting regional brands

► There are other country brands which are stronger (recognized by

Spanish market)

► We keep good brand perception for some specific products

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

We are not as much in love with Spanish brands:

We are becoming digital

1

We are becoming omnichannel

2

We have lost brand loyalty3

We still expect quality4

We are becoming green5We are not as much in love with Spanish brands

6

Simplicity is a challenge7

Customers buy more from organizations that make it easier

Easy is an opportunity

It should be easier to contact orgs. by phone, web chat

and email82 %

Like it when orgs. notice I have a problem with

customer service & try to help71 %

Consumers would be more loyal to orgs. if they are

easy to deal with87 %

In Spain few customers do it but they think that:

Facing this customer trend will be a strategic advantage

82% 50%73%

128

1

Which is your SWOT analysis???

We are becoming digital1

We are becoming omnichannel2

We have lost brand loyalty3

We still expect quality4

We are becoming green5

We are not as much in love with Spanish brands6

Simplicity is a challenge7

ThreatsOpportunities

Strengths Weaknesses

1 12 2

3

6

5

4

7

??

??

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