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Megatrends and mobile payments

Richard HospodskýGfK Czech

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1. GfK Roper Study: What are the Latest Global Trends?

2. How About a Rich Life?

3. Extreme Shoppers

Agenda

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The Roper Study

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Western Europe§ France§ Germany§ Italy§ Spain§ Sweden§ UK

Central/Eastern Europe§ Czech Republic§ Poland § Russia§ Hungary*§ Ukraine*

Developed Asia§ Australia§ Japan§ South Korea§ Taiwan

Developing Asia§ China§ Indonesia§ India§ Thailand

About Roper Reports® Worldwide

North America§ USA§ Canada

Latin America§ Argentina§ Brazil§ Mexico§ Peru*

Middle East/Africa§ Turkey§ South Africa§ Egypt

L o ng e s t –running s yndic a te d g lo b a l c o ns um e r tre nd s tudy w ith a his to ry g o ing b a c k to 1 9 9 0 ’s

§ Macedonia*§ Serbia*

ü Conducted annually for 15 yearsü 37,500+ consumers each yearü 25+ countriesü Consumers aged 15+ü Approximately 1,500 consumers per market ü Covering ca. 83% of global GDP

* Additional markets in 2012

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Global Drivers

6 Global Drivers that are beyond consumers’ control, but are the root causes of consumer change, affecting not only patterns of behaviour but also, over time, underlying value systems.

1. Financial Change2. Technology3. Population & Demographics4. Environment5. Globalization6. Changing Business Model

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The Desire for a Richer Life

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ü Consumers are more pragmaticü Consumers are still uncertain and more reserved

A time for aspirationsA time for changeA desire for THE RICH LIFE

Consumers are concerned, yet they have a strong desire for a richer life

But consumers have already moved on..

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Roper Reports Worldwide 2012, (short trend, core 25 markets) QC1/C2

Rich Life = Thinking and doing ‘Your Way’

Freedom “Having freedom of action and thought”

Globally +3 ranks from 2008 to #6 today

Self-reliance “Being self-reliant, choosing your own goals”

+2 to #4

Individuality “Being different from others”

+8 to #36

+3

+2 +8

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When people around the world think of “the Good Life, the life you’d like to have,” more say it means…

The rich life | A yearning for experiences

Roper Reports Worldwide 2012 (short trend, core 25 countries), QI1

Free time/leisure time 50%, +4 points from 2008

Travel for leisure 45%, +4 points from 2008

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When people around the world think of “the Good Life, the life you’d like to have,” more say it means…

The rich life | Being in control and safe

Financial security 66% globally, +4 points from 2008

Control over one’s own life 52%, +4 points from 2008

Roper Reports Worldwide 2012 (short trend, core 25 countries), QI1

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Less people around the world think “the Good Life” means…

What’s out | Checking off the traditional boxes

A luxury car or second car20%, -5 points from 2008

Down in 15 of 25 RRW countries

A home you own 65%, -5 points from 2008

Down in 17 of 25 RRW countries

Children 50%, -6 points from 2008

Down in 18 of 25 RRW countries

A college education 21%, -8 points from 2008

Down in all 25 RRW countries

Roper Reports Worldwide 2012 (short trend, core 25 countries), QI1

12Roper Reports Worldwide 2012, (short trend, core 25 markets), QB1,B2

21% entertain weekly

55% entertain monthly

Entertaining guests at home, %

(Down 4 pts from 2008)

(Down 7 pts from 2008)

Relationship building is declining

Mean hours spent socializing with friends around town (including those who say 'none‘)

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0

10

20

30

40

50

60

70

80

% of Internet users who visited an online community or social networking site in the past 30 days

19% of global consumers visit social networking sites on their mobile phones (+6pts from 2011)

Yet, we feel that our networks continue to grow . . .

Roper Reports Worldwide 2012, (short trend, core 25 markets), QO8 and QO4

14Roper Reports Worldwide 2012, (short trend, core 25 countries) QN1

% who have recommended product/service to the following types of people in the past 12 months

Relatives outside the home Work or school

Others, just friends Through family’s or children’s activities

Social organization or club

Haven’t met personally, but know through online sites

Through place of worship Civic org. or community group

31 4

3

18 2

9

17 2

6

26

914

610

610

46

47

Neighbors

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. . . which results in greater influence

2010

2012

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The New Shopper

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The New Shopper

Is always connected

§ Has immediate access to all kinds of information

§ Is actively evaluating/comparing prices§ Uses multiple channels – online and

offline – to search, evaluate and purchase

§ Provides feedback using social media during and post purchase

§ Sets high expectations to meet his/her needs anywhere, anytime

Seeks Input Offline and Online at Increasing Rates

§ Go to company website AN D ask a salesperson

§ Seek out 3rd-party info AN D go online for reviews

§ Ask a friend AN D use a cell phone at retail

+62%

+64%

+94%

MORE IN CONTROL HY B R ID TAC T IC S

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The Emergence of a New Shopper Profile

Source: GfK Futurebuy, 2011

Competitive Optimistic

These behaviours are driven by a mindset and cut across category

and demographic segments

Connected

Xtreme Shopper

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““

“

“

Xtreme Shoppers are innovative, proactive and feel in control of the shopping process

Source: GfK Futurebuy, 2011. % Agreement shown

I a m u s in g n e w w a y s a n d in fo rm a tio n to fin d th in g s I n e e d

I fe e l I’m m o re in c o n tro l th a n e v e r in s h o p p in g

I a m le a rn in g h o w to s h o p m o re e ffic ie n tly a n d b e tte r th a n b e fo re

It’s a b e tte r tim e th a n e v e r to fin d rig h t p ro d u c ts a t rig h t p ric e s

82%

91%

75%

84%

82%

83%

86%

85%

““

“

“

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““

““

“

“

“

“

Xtreme Shoppers use the (mobile) web to search, evaluate and purchase

Source: GfK Futurebuy, 2011. Change in shopping habits vs. YAG

I a m u s in g th e in te rn e t to fin d p ro d u c ts I w a n t

I re s e a rc h p ro d u c ts o n th e in te rn e t

I a m s h o p p in g fo r p ro d u c ts o n th e in te rn e t

I a m u s in g th e in te rn e t to p u rc h a s e p ro d u c ts

69%

77%

68%

75%

65%

70%

62%

67%

% Shoppers Doing More

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U.K.

Total Europe

42%Total Europe

37%Total US

Source: GfK Futurebuy, 2011. 31% in 2009 in Total U.S.

Xtreme Shoppers are a global phenomenon. They are members of a new (flexible) urban middle class

Asia will follow

% Xtreme shopper incidence

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Source: GfK Futurebuy US, 2011

reports owning smartphones5 10

out of

Use it for more

than an hour a

day

8 0% Use it at

least 2 hours per

day

2 5%

The explosion of smartphones and tablets will accelerate the growth of this group

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Is Online Shopping Replacing Physical Stores?

“WE TEND to overestimate the effect of a technology in

the short run and underestimate the effect in

the long run” Roy Amara; American futurologist*

*Source: The Economist - Feb 2012

?

23*Source: GfK Retail and Technology (Europe–based Purchase Data)** Source: Forrester Research (based on trends in monthly retail sales figures releases by the U.S> Census Department

Growing online engagement is reflected in higher online purchases

7 % S ha re

62% growth vs.

2011

9 % S ha re

Online sales projections across all product categories in the U.S.**

2011 2016 (projected)

$202b

$327b

…still Bricks & Mortar keeps over 80% of the market

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Howdo we engage them to win?

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Xtreme Shopper Implications

Shoppers under tremendous pressure to obtain value

Digital technology redefining the paths to

purchase

Retail follows shoppers and

delivers unique experiences

Digital will continue to

changeat the speed of

light

C ha lle ng e s & O ppo rtunitie s :

Anticipate andact boldly

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To sum up

C ritic a l N e e d fo r S ho ppe r-C e ntric S o lutio ns

X tre m e S ho ppe r’s E m pow e rm e nt

§ K no w m e§ E ng a g e m e§ P rovide info rm a tio n § G ive m e g o o d v a lue fo r m y

m o ne y

§ Ma ke it e a s y fo r m e§ K e e p it fre s h§ N o b a d s urpris e s§ E nte rta in m e§ Ma ke m e lo o k g o o d/s m a rt§ B e s o c ia lly re s po ns ib le

S ho ppe r Ma nife s to

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Penetration of Mobile Payments in the Czech Republic

28PP10. Are you interested in usage of your mobile phone like a payment card

Interested in using mobile phones as credit card

Younger people, men, people with primary education and richer respondents are more than others interested in usage of their mobile phone as a payment card.

Bank

clie

nts

with

mob

ie

phon

e

(N=948)

(N=719)Res

pond

ents

In

tere

sted

in u

sing

Pa

y Pa

ss w

ith M

F

*) Low basis

29PP7. Do you know you can pay with your mobile phone?PP8. Have you ever used your mobile phone to pay?PP9. What did you pay?

Payment by a mobile phone

Awareness about mobile

phone’s possibility to pay

Ever used mobile phone to

pay

0 0,1 0,2 0,3 0,4 0,5

N=581

Bank clients with mobile phone (N=948)

N=163

What did you pay?

Although 61% of respondents are aware of the possibility to pay via a mobile phone, only one half (28%) of them has ever used their mobile phone for a payment. The most common payment by a mobile phone is buying a electronic ticket in a public transport (44%). The same portion (42%) of respondents are experienced with a classical banking money transfer via mobile.

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Thank you!

Richard Hospodský, GfK CzechMethodology & Innovation ExpertRichard.hospodsky@gfk.com