The Rise of the Connected Consumers “Innovate or...
Transcript of The Rise of the Connected Consumers “Innovate or...
The Rise of the Connected Consumers “Innovate or Die”
Anson BaileyPartner, Business DevelopmentKPMG China
Global Footwear Retail ConferenceMarch 31, 2016
Mega Trends
INNOVATION
IoT
ROBOTICSARTIFICIAL
INTELLIGENCE
2© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 2
Five trends consumers are drawn to:
Imperfection and
authenticity
2Creativity
Mindfulness
4Accessibility
Convenience
51 3
2
3© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 3
Retailing isn’t facing disruption…it’s already disrupted
There’s no longer any doubt about the role digital isplaying to reinvent retailing’s ecosystem.
Retailers are navigating an increasingly competitiveenvironment that demands innovation and technological
transformation at every turn.Retailing success today means much more than just a
positive transactional experience. Today’s consumers – many of them ‘digital natives’ – expect a lasting impact from their favored brands, one that they can relate to, engage more
deeply with and share on social media.In response, smart retailers are forging a distinct ‘brand
persona’ – an integrated platform that reaches consumers ona personalized level while providing a seamless experience
across diverse content channels.
3
4© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 4
Emerging Trends Mapping Timing & Impact
Impa
ct o
f Tre
nd
Hig
h (G
loba
l + M
acro
)
Mod
erat
e (V
aria
ble
by
Indu
stry
)Lim
ited
Monitor (5+ years) Prepare (2-5 years) Act (0-2 years)
CollabEconomyPlatforms
P2P
Smart Home
Consumer3D Printing
EnterpriseWearables
Big Data & Analytics
Personal Health APIs
MobileWallets
Mobile & Real Time
Care
Connected Consumer
Goods
Patient Mgmt Tools
Timing to Impact
Market TrendLegend
ConsumerWearables
MobileCommerce
MobilePOS
Internet of Things
Mobile Payments
Digital Health
Wearables
3DPrinting
CollaborativeEconomy
D&A Automation
Cognitive Technology
Cognitive Technology
Self-Driving
Cars
Smart City
D&A Automation
Enterprise IoT Enterprise
3D Printing
Preliminary
5© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 5
$8 T
$2.5 T
$6 T
$7 T$1.1 T
$0.4 T
$1.1 T
Household consumptionUS$ trillion
Shifting global landscape Global consumption in 2000
6© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 6
$18 T
$11 T
$16 T
$33 T$4.5 T
$2.1 T
$7 T
ASIA
Asia’s market is almost twice that of Europe and the U.S.
SUB-SAHARAN AFRICA
Remains relatively small in spite of young populationLATIN AMERICA
Not as big as Asia, but growing in relative importance.
Household consumptionUS$ trillion
Shifting global landscape Global consumption in 2030
7© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 7
$14.3 bn
$9.3 bn
8© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 8
“Price is becoming less of a driver, but value remains important as customers are well informed about global prices, since most of them travel physically or digitally.”
Thibault Villet, CEO of Mei.com
China’s Connected Consumers report….15x case studies
“Traditional business still think ecommerce is a
business model. It is not, it is a lifestyle!”
Jack Ma, Chairman & CEO of Alibaba
9© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 9
668million users
178million users
60%eComm
10© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 10
m-Commerce is the New Norm!
11© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 11
Distributed commerce
It’s being called a ‘buy here and now’ approach. And it’s here.Now.
Typical e-commerce is giving way to a more universal and agile ‘distributed commerce’ ecosystem that capitalizes on the capabilitiesof mobile devices, social media and the endless stream of content
being shared on popular social channels.
In essence, e-commerce now means instantaneously reaching out to consumers - via social sites, tweets, text, blogs, flyers or articles -
wherever they work, live or play in today’s mobile, content-richecosystem.
12© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 12
The Rising Chinese Consumers of Today
Tier 1 versus Tier 4
Older vs. younger
generationsMale vs.
female
Emerging needs states
beyond status
Page 12
70kSuper-rich
1.09millionaires
54%Upper
Middle-class
13© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 13
Cost of Access
Ease of Access
IndustryBlur
Needto
Innovate
14© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 14
SHOWROOMING
THIS PAIR IS SO PERFECT, I CAN’T WAIT TO BUY THEM CHEAPER ONLINE OR NEXT
MONTH IN HONG KONG. 62%
15© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 15
16© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 16
50
0
40
30
20
10
Billionsof
Devices
2010 2015 2020
15B
Rapid Adoption rate of digital
infrastructure:5X faster than electricity and
telephony
50B
Everything Will Be Connected to Everything
17© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 17
Predictive analytics
Connected consumers now enjoy endless instant access to digital content offering product reviews, comparison shopping, easy purchases and convenient delivery options.
Retailers are responding with predictive analytics designed to: Optimize pricing;
Accelerate the speed products are delivered to stores;
Personalize customer service; Improve the bottom line.
Analytics are providing ‘markdown optimization’ insights that suggest the best time to cut the price of a particular item in a particular store. Many retailers are thus discovering that sooner is better than later for pricing: Analytics can predict the advantages of selling a popular item at a discount today rather than waiting for the next seasonal promotion. Analytics can also deliver
customer data on buying habits, allowing sales staff to make smarter product recommendations.
Sometimes sooner really is better than
later
17
18© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 18
Retailer spotlight: Predictive analytics
Clothing and accessories retailer StitchFix has a unique sales model, asking users to take astyle survey, then using predictive analytics to match customers with clothing or accessoriesthat they might like.
What happens whenever customers don’t like a product they’ve received? Simple - they cansend back any item using free return shipping.
Source: https://www.stitchfix.com/
18
19© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 19
Today, most purchases begin with an online search.
In response, retailers are turning to ‘digital shopping assistants’ or‘virtual personal shoppers’ – intelligent computer programs designed to
interact with consumers by conversing, answering queries or posingquestions in order to make purchasing recommendations.
In a typical month, about a third of shoppers with smartphones arealready interacting with digital assistants and predictions are that $2
billion or more in sales in the next year will be conducted exclusively withdigital assistants.
19
Artificial intelligence
20© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 20
Retailer spotlight: Artificial intelligence
Specialty outdoor retailer The North Face launched online shopping tool XPS – Expert Personal Shopper – to help customers find
everything from ski jackets to winter hats.Built using IBM’s Watson cognitive computing technology and aimed at boosting e-commerce,
XPS quizzes shoppers to determine their specific needs and tastes before recommending a
product.The goal is to prompt a ‘conversation’ that customers typically have with in-store staff.The North Face reports positive results since the beta project launched on its e-commerce site and most customers say they would use XPS again.
Image source: https://www.thenorthface.com/XPS
21© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 21
More Innovation coming….The MILLS Project
22© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 22
Philip Kotler on Trend Prediction….“the most important thing is to forecast where customers
are moving and be in front of them.”
With new tools like Data Analytics and trend intelligence…we shall have much
deeper insights into the future consumer and trends before they
become obvious….we are going to see a new era of machine learning!
23© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 23
Everything is changing…KPMG Insights Centre
24© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 24
WE ARE GOING TO SEE A RAPIDLY CHANGING LANDSCAPE IN THE RETAIL AND IT’S RELATIONSHIP WITH TECHNOLOGY BEING THE
KEY DRIVER!
Welcome to the Future – Robotics & AI
25© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 25
Pace of Change disrupt or be disrupted…
26© 2016 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong. 26
Anson BaileyPartner, Business DevelopmentKPMG ChinaTel: +852 2978 [email protected]