Robert Kinkade - EY - An Overview of Online Consumerism
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An Overview of Online Consumerism Online Retail Logistics Conference Presented by Robert Kinkade April 28 2016
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Transcript of Robert Kinkade - EY - An Overview of Online Consumerism
An Overview of Online Consumerism
Online Retail Logistics Conference
Presented by Robert Kinkade
April 28 2016
Agenda
Digital is the mega-trend of our generation —
transforming how everything is done
Online consumer activity in the past 12 months
How Australia compares on a global scale
Future trends
The way consumers discover and purchase products has forever changed; businesses must adapt or become irrelevant
Online Consumer Activity
globally have shoppedonline with overseas retailers
40%
consumers usesocial media
in-store
67%
72%
shop options online before going in-store
SocialIntelligence
Omni-ChannelMillennials
45%increase in interactions
withproducts
Location-BasedServices
Always-On Consumers
86%expect flexible
timing for customer service
interactions
Global trends in online consumer activity…
online purchases are made cross-channel
67%
Cross-Geo
Page 5 | Online Retail Logistics Conference 2016
Now, we have demand signals from…
THE
OMNI-CHANNEL
SHOPPER
She´s a 40-SOMETHING WOMAN
Despite what many may assume the average
connected consumer is not a millennial
52% of connected consumers
are women with a mean age
of 40$ 63,000Mean household income
She carries MULTIPLE internet-connected devices. In
addition to owning a PC or laptop
73% owned
smartphone
26% own
tablet
She´s SUPER SOCIAL connected consumer are a social crowd
and enthusiastic about shopping
Are active
users
Shop via
digital or
print catalogs
Say shopping
makes them
feel happy
81% 60% 43%
“EXCITED “, “THRIFTY “AND “PRODUCTIVE”
Also top the list of the connected consumer´s shopping
emotions.
The way consumers discover and purchase products has forever changed; businesses must adapt or become irrelevant
How Does Australia Compare?
An Australian outlook and comparison…
65% 14.6%growth in online
shopping p.a.
lag in digital FMCG shopping compared to
global average
13%
5.8%
lag in speed of online retail sites compared to
global
𝟑 𝟏𝟎shop online every week,
amongst top internet shoppers globally
24%time spent on
social media – one of highest worldwide
76%
30-39 year olds havehighest incidence of
shopping online
How does Australia compare to the
rest of the world?
67%
place emphasis on convenience when it
comes to online shopping
smartphone penetration;one of the highest
in the world
Page 8 | Online Retail Logistics Conference 2016
Research Consider Buy Fulfil Use
Catalogue
In Store
Contact
Centre
Web
Mobile
Social
TV, Radio, Magazines, Newspapers
Buzz Marketing, Online Search, Mailing
Online Media, Blogs, Chat Social Media PR & Events & Loyalty Program
Google search
Visit RetailStore
Read Reviews
Share purchase on Social Media
Product Support
Review on Social Media
Share experience on Social Media
Browse Catalogue
Ship fromstore
Buy Online
Endless aisle Click &Collect
The Linear Path to Purchase is History
The way consumers discover and purchase products has forever changed; businesses must adapt or become irrelevant
Future Trends
Page 10 | Online Retail Logistics Conference 2016
Source: EY 2015 CGF omni-channel supply chain survey
Omni-channel
consumers spend twice
as much as in-store only
consumers
2x Combined global online
and web-influenced
retail sales expected to
reach $1.8 trillion dollars
by 2017
$1.8T
Online sales currently
account for only 6.5% of
total sales in Australian
stores
6.5%
Non bricks-and-mortar
sales are expected to
increase from 7% to
19% over the next 5
years
19%
81% of companies
surveyed believe their
current supply chain is
not fit for purpose for
omni-channel
81%
Gearing up to Leverage Changed Consumer Behavior
Page 11 | Online Retail Logistics Conference 2016
Avoiding the Trap of increased Cost & Complexity without offsetting Revenue
Bricks-and-mortar still dominates, but omni-channel is critical for growth
retailers must utilise analytics to drive personalised and curated journeys for consumers
Omni-channel growth risks dragging down corporate profits
The traditional retailer supply chain is not fit for purpose and must be re-engineered to align
with a consumer-centric, end-to-end approach
In their rush to develop e-commerce capabilities, companies have often bolted-on systems
and processes without fully considering integration with traditional store fulfilment
Key Issues:
Shoes of Prey
► Customers select their own
style, materials and heel
height
► Design, build and order
shoes from the website,
with products delivered to
your door
► In-store fitting and ordering
service available at
selected department stores
What good looks like…
…driving web traffic via physical space
► Targeted shopping
experience for a male
demographic
► Focus on fit with minimal
time and hassle
► Hybrid guideshops facilitate
fitting sessions with
customers emailed sizing
information
► Product is fulfilled direct to
consumer
Bonobos
…inventory-free ‘guideshops’ lift web
conversion & minimise online returns
What good looks like…
► Consumers in South Korea can order their groceries while standing on a subway platform by interacting with “shop-like” display walls
► Consumers scan the QR code of the product they’d like, the item is automatically added to an online shopping cart
► After paying, shoppers bag of groceries seamlessly arrives on their doorstep
TESCO’s Virtual Store
…unconstrained convenience
What good looks like…
► Full harmonisation
between in-store and on-
line offering
► Cross-channel
‘Marketplace’ extending
choice with minimal
inventory exposure
► Pioneer of the ‘drive
concept’ where customers
can collect their groceries
without the need to get out
of the car
Auchan
…using the drive concept to align with
customer shopping missions
What good looks like…
► Leading UK omni-channel
retailer with offerings
spanning web, mobile,
tablet and stores
► Browse digital catalogue in-
store wit endless aisle
► Expanded mobile apps
from ‘Check and Reserve’
to fully functioning e-
commerce services
► Strategy incorporates E2E
supply chain with hub and
spoke model
Argos
What good looks like…
…maximising use of store inventory for omni-
channel flexibility / efficiency
► American upscale fashion
retailer at the forefront of
omni-channel retail
► Tech stack integrates
supply-chain management
to align front & back end
execution – early pioneer of
click & collect
► Innovative omni-channel
model includes websites
and apps for Nordstrom,
NordstromRack and
HauteLook
Nordstrom
What good looks like…
…pushing the omni-channel boundaries with
digital innovation and acquisitions
Page 18 | Online Retail Logistics Conference 2016
Agile Innovation
Adaptive
Transformation
(2 speed)
Ecosystems and
platforms
Senior Executive Alignment
Culture
Operating
Model
Performance
Management
Re-inventing the box
Omni-channel
stores
Network
Rationalisation
Omni-channelOrchestration
Customer
Contact
Hub
Next Gen
Fulfillment
Distributed
Order
Management
Strategy &
Business
Model
Achieving Successful Omni-Channel Outcomes
Guiding Principles to Consider...
‘‘Organisationally
Inclusive Not Exclusive’
…drive the C and D suite
‘tip of the spear’ dialogue
to open the door across
the organisational silos –
the magic happens in the
gaps
“Balanced & Measured
Innovation Portfolio”
…use a portfolio
management approach to
balance the bleeding-edge
hype with pragmatic
solutions to NOW business
problems leveraging digital
“Digital Innovation for
Enterprise”
…the next 5-10 years will
bring unpreceded change
as we enter the second
half of the chessboard with
tech miniaturisation &
accessibility
Page 21 | Online Retail Logistics Conference 2016
Appendix
Sources from Slide 4:
1) “Millennials: Double Trouble for Retail”, (2014), Forbes
2) “Social Media has changed how consumers shop online”, (2014), AdWeek
3) “Study: Consumers Demand More Flexibility When Shopping Online”, (2014), comScore
4) “Global Consumer Online Shopping Expectations”, (2015), Dyn
5) “Brand Loyalty trumped by customised customer service”, (2013), BizReport
6) “Tech-Led Innovation: Retail Marketing Strategies For 2016”, (2015), CMO
Sources from Slide 6:
1) “Online shopping in Australia: Market Research”, (2016), IBIS World
2) “Australia lags in digital grocery”, (2015), insideFMCG
3) “Australian online retailers lagging behind global competitors when it comes to site speeds”, (2015), smartCompany
4) “New Study Finds Australians Spending Even More Money On Online Shopping This Year”, (2013), Business Insider
5) “The state of Social Media usage in Australia”, (2013), Marketing Mag
6) “Digital Australia: State of the Nation Report 2015-16, (2016), EY Sweeney Research
7) “E-commerce marketplace in Australia: Online shopping”, (2011), ACMA
