In-Store Digital Retail: Exploring the Reality of the Digital-Enabled Store

David Bradfield Hilding AndersonStrategy Research & Insights@dbradfield @hildinganderson

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DISCUSSION HIGHLIGHTS

1. How to plan for and engage in an omnichannel world

2. The current state of digital retail

3. Three insights driving change

4. Six research highlights

5. Five truths shaping the next wave of retail

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© 2013 SAPIENT CORPORATION | CONFIDENTIAL

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IT WAS SIMPLE

It was all about 360°marketing, having a great ad campaign and a robust media plan. Consumers watched the commercial and did what they were told.

PUSH DRIVEN BRAND ECONOMY

BRAND EXPERIENCE TECHNOLOGY/ PHYSICAL

Each connection inspires engagement with another, ultimately infusing the brand into the consumer’s own story… and the consumer into the brand story. BRAND EXPERIENCE TECHNOLOGY/ PHYSICAL

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StoriesPeople seek affinity. By connecting to consumer desires, digital channels deliver compelling stories in the moment, the ones fans will want be a part of.

Experiences We activate channels as an integral part of physical, digital, commerce and service experiences to turn engagement into action. We tap into your community to drive behaviour and growth. 

RelationshipsYou’ve worked hard for your fans to take action. Make them work for you. Tap social, CRM, loyalty or community programs to turn your best fans into an always‐on advocate network, moving from B2C to C2C.

The Future of Digital Retail: Based on SapientNitro Proprietary Research

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About your Speaker: Hilding Anderson

Director of SapientNitro’s Research Institute

15 years of experience

Editor of Insights

Published in Forbes, speaker at SXSWi

Entrepreneur

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"That truth is that traditional brick and mortar retailing is an inflection point. No longer are many retailers only required to compete with stores on the other side of the street. They are now required to compete with stores on the other side of the country."

Starbucks CEO Schultz, January 23, 2014

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3 INSIGHTSDRIVING THE CHANGE

6 HIGHLIGHTSFROM THE RESEARCH

5 TRUTHSFOR TOMORROW’S RETAIL

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Our insights on

retail consumerTHE EVER-CHANGING

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01: NEW SHOPPING BEHAVIOR: ‘SHOPPING-IN-INCREMENTS’

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CONNECTED DEVICES DEMAND UNIQUE EXPERIENCES

4339

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05

101520253035404550

TV PC/Laptop Tablet Smartphone

Minutes

Source: Google, August 2012

Average Minutes Spent Per Interaction By Device

UK consumers switch between devices

per hour

21x

Source: OMD 2013 Study

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DRIVEN BY TIME SPENT

45%

25%

17%

4%

9%7%

44%

26%

16%

6%8% 8%

43%

26%

15%

9%7% 7%

42%

26%

14%12%

6%5%

38%

20%

12%

20%

4% 5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

TV Online Radio Mobile Print Other

Source: eMarketer, August 2013

U.S. Consumer Media Consumption Share

2009 2010 2011 2012 2013

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02: A DIMINISHED AND CHANGING ROLE FOR THE STORE

U.S. 2013 holiday foot traffic is just 50% of 3 years ago

Source: SapientNitro 2013 Study

52%of Canadians report

shopping online more than 3 years ago,

amid more options than ever

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03: EXPERIENCE IN DIGITAL + PHYSICAL HAS IRREVERSIBLY COLLAPSED INTO ONE

Source: SapientNitro 2013 Study

62%of Canadians want to use all their devices

(mobile, tablet, laptops) to help them

shop

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Highlights from the 2013

Retail StudyIN-STORE DIGITAL

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Methodology: Approach: On-site, unannounced visits to 72 major

retailers At least one location, primarily Flagship

stores in NYC and Toronto, selected Chicago stores

Ipsos Consumer Survey sent to 1,500 customers

Comparison to 2012 survey July 2013 – September 2013

What we found:• 500 points of data collected• Based list on 2012 with addition of 12

Canadian-based firms, and added several known, leading retailers

KEY FINDINGS OF IN-STORE DIGITAL RETAIL STUDY

• For first time, three retailers crowned “excellent”

• Just 18 (of 72) retailers emerged with scores higher than 45 (out of 75 total points).

• Several of last year’s leaders were outpaced by newcomers

• Interactive tools and the store experience separated leaders from followers

KEY FINDINGS OF IN-STORE DIGITAL RETAIL STUDY

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FIVE AREAS OF EVOLUTION (BUT NO REVOLUTION)

• Mobile tools are the area of greatest change• Omni-channel shopping technology is widespread• Retailers have significantly improved the integration of digital

content and store design• Not enough focused on interactive tools• Few retailers use their store to create digital + physical experience

01: MOBILE: WAYFINDING AND BARCODE SCANNING

02: OMNICHANNEL SHOPPING

03: IN-STORE DISPLAYS AND LAYOUT

03: IN-STORE DISPLAYS AND LAYOUT CONT’D

03: IN-STORE DISPLAYS AND LAYOUT CONT’D

04: INTERACTIVE AND PERSONALIZED TOOLS

04: INTERACTIVE AND PERSONALIZED TOOLS CONT’D

05: EARLY STEPS IN CROSS CHANNEL STORYTELLING

06: DIGITAL ENGAGEMENT CREATES MEASURABLE VALUE

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Rules for Tomorrow’s

RETAIL EXPERIENCES

RULES FOR THE NEXT 5 YEARS OF RETAIL1. A single, connected experience: physical and digital spaces have

irreversibly collapsed into one. Physical stores must enhance our digital spaces.

2. Stores still matter: Consumers still want specialty stores, value the services that they get from them, and the human interaction.

3. CMTOs must embrace new tech: BLE, touch screens, mobile payments, in-store real-time analytics, and even native advertising are enablers for creating new blended experiences.

4. Be participatory: Beyond push advertising, generic merchandising and passive shopping patterns. Shoppers now want to own the experience.

5. Build around themes: To build powerful experiences, shape stories around an organizing idea.

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More in the IN-STORE DIGITAL RETAIL STUDY

© 2013 SAPIENT CORPORATION | CONFIDENTIAL

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