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The Future of RetailHow to put it back together when it all falls apart
Outline
• Macro view
• Implications
• Causes
• Recommendations
30,000” view
WHAT IS RETAIL?
Ecommerce Value Chain
Customer perspective
Sellerperspective
Selection
Finding the right product quickly
Customer acquisition & merchandising CMS
Buy
Fast, simple & affordable transaction
1-click ordering
Process order
Easy to pay the way want to pay
Cart
Get it shipped
Convenient delivery & cost
Warehouse & logistics
Get support
Easy to try, return, or work through issues
Omni-channel support
Ecommerce Value Chain
Selection
SINGLE RETAILER
Benefits of scale- Purchase power- Selection- Logistics efficiencies
Buy Process order Get it shipped
Get support
Yet… Retail is breaking
Becoming disaggregated
Discovery
Buy
Selection
Transact
DeliverySupport
Share
PLACE
Changes in DistributionDrive Innovation
Instacart
Where can it head?
• Robotic sorting• Robotic delivery• Autonomous cars
Moving to Omni-Channel
INSIGHT | WHAT HAPPENS WHEN RETAIL
IS NO LONGER A PLACE?
DISCOVERY & SEARCH
© 2013 SYNQY
CONTENT CONSUMPTION WAS CENTRALIZED
80% of adults could be reached with 3 TV ads in 1965.
Today, it would take 117 commercials in prime time.
- Former CMO, P&G
Path to purchase used to be linear
Most time was in store
Actively shopping After the exchange
Preparing to shop
Retailers are too-transaction centric
• Didn’t focus on path to purchase (P2P)
• Missed most of the shopping process
• Less opportunities to create ROI and monetization
Only focused
here
Missed opportunityMissed
opportunity
15 different sites over 5-6 weeks Lots of content
Actively shopping
After the exchangePreparing to shop
Discovery time in-store is declining
34% drop
Shoppers are going elsewhere to learn about what to purchase.
This raises acquisition costs, too.
Money is made along the path to purchase not, just at transaction
Discover Purchase Use
Marketing $$ Margin $$ Repeat/Upsell $$
Ad revenue has dropped 50% in 6 yrs
50% drop
Advertisers know retailer circulars don’t work like they used to.
The Purchase Path is now convoluted
The number of touch points is growing exponentially.
© 2013 SYNQY
CONTENT IS EXPLODINGBreaking through is harder than ever
“We generated more content in the last 2 days than we did from beginning of time until 2003”
– Eric Schmidt, Google
2003TodayBeginning of time
2 Days today > 6,000 years
© 2013 SYNQY
CUSTOMERS MORE DISTRACTED THAN EVER
Source: Google
© 2013 SYNQY
CONSUMERS DON’T READ, THEY SCANRead only 8% of the article (32 words)
40% view
½ story
http://www.slate.com/articles/technology/technology/2013/06/how_people_read_online_why_you_won_t_finish_this_article.html
Only 40% see more than ½ the article
And they only read 20% of what they see.
Source: Jacob Nielsen
© 2013 SYNQY
USERS DON’T CLICK ON WHAT THEY DON’T SEE(only 10-20% of links get seen)
50% never read past here.Above the
fold The good stuff – the interactive content and links are here.
© 2013 SYNQY
AND THEY RARELY GET TO THEIR CTA DESTINATION
Most customers are lost quickly when asked to click away from what they are doing
1 2 3 4 5 6 7 80%
20%
40%
60%
80%
100%
120%
Number of clicks
33%
11%
3.7%1.2% 0.41% 0.14% 0.05%
% of customers still with you
Marketing $ are moving from retailers to online properties like Google
Discover Purchase Use
Marketing $$ Margin $$ Repeat/Upsell $$
Product Listing Ads – big trend
Internet Scavenger Hunt
BUY
MARKETING TRANSPORTATION$100B
Marketing dollars are substantial…
$83
Google Ad dollars per
order*
$10 margin per order
Source: Google average ad cost @ 3% convert rate, Margin assumption of 50%
8x bigger
Retailers are getting commoditized
Price becomes differentiator
Who is this retailer?
Who is this retailer?
INSIGHT | WHO CONTROLS SHOPPER?
DIGITAL SHELF
How will we disrupt merchandising?
Discovery
Buy
Selection
Transact
DeliverySupport
Share
HOW WILL YOU CUT CUSTOMER ACQUISITION COSTS?
Add value through proximity
$$
Path to purchase
POS
The closer to the time and place of purchase, the more valuable the marketing investment
Persuasion is weakest at the shelf
Brand Storytelling and product marketing are separated
Limited retail usability innovations
2002 2014
Object of Desire
Object of Desire
The desire comes from the marketing and brand work
Ecommerce Today
No persuasive brand content
How Brands Market
Object of Desire
Great content is stripped when it goes to resellers
Object
INSIGHT | RETAILERS ARE
COMMODITIZING BRANDS
Commoditized shopping experience
Commoditized shopping experience
There’s very little other differentiationSection Attribute TRU Amazon Walmart Target
Details &Description
Product details ✔ ✔ ✔ ✔
Product description <50 word ✔ ✔ ✔ ✔
Quick bullet facts about product ✖ ✔ ✔ ✖
Rich-media content
Roll over image/zoom ✔ ✔ ✔ ✔
30 Second video commercial ✔ ✖ ✖ ✖
Customer and shipping information
Customer Question & Answer ✔ ✔ ✔ ✖
Customer reviews ✔ ✔ ✔ ✔
Featured/related items ✔ ✔ ✔ ✔
Fast shipping options ✔ ✔ ✔ ✔
Local store search ✔ N/A ✔ ✔
Price comparison/financing options ✖ ✔ ✔ ✖
INSIGHT | RETAILERS ARE
COMMODITIZING THEMSELVES
Enthusiasm gets lost, not amplified
What Happens Without Impulse Buying?
Merchandising
Matters.
Didn’t deliver right content
• Most shoppers still go to vendor websites for information
• Over 50% of shoppers who abandon shopping carts go to visit vendor websites
Sources: LivePerson, IBM/CoreMetrics
100% of shopping
carts
32%Buy
The cost of stripping away the content
Sources: LivePerson, IBM/CoreMetrics
100% of shopping
carts
68%Abandon
32%Buy
The cost of stripping away the content
Sources: LivePerson, IBM/CoreMetrics
100% of shopping
carts
32%Buy
41%Other reasons
27% Seek rich
vendor content
The cost of stripping away the content
Transactional info, not lifecycle info
• Focused only on one small sliver of time and narrow content
• Didn’t think end-to-end or whole consumer lifecycle
Win the discovery phase with more relevant content
Discover Purchase Use
Give them a reason to shop you in this phase
Content Enhances Discovery
VENDOR PRODUCT REGISTRATION
VENDOR-BASEDPRODUCT SUPPORT &
CONTENT INFORMATION
PROMOTIONAL INFOBUYER’S GUIDES &
EXPERT ADVICE
LIVE VENDOR CHAT
AUTHENTIC UNBOX VIDEOS AND USER PHOTOS
INTERACTIVE MARKETING MATERIALS
CAUSE MARKETING MATERIALS
RICH-MEDIA SHARING
HOW-TO TUTORIALS
AWARDS
INSIGHT | RELEVANCE WINS DISCOVERY
COMPARISON SHOPPING
HOW WILL YOU FIGHT SHOWROOMING?
THE PATH ISN’T CLEAR
Google Value Chain
Selection Buy Process order Get it shipped
Get support
PLAAdwordsExpress
Wallet WalletExpress
Express ?
44% of transactions today in ecommerce
Where are you?
Advice: Be careful with your partnerships
INSIGHT | SCALE MATTERS AGAIN.
© 2013 SYNQY
ENCOURAGED YET?
THE VENDOR PERSPECTIVE
WHAT HAPPENS WHEN 3-4 BIG RETAILERS CONTROL EVERYTHING?
Vendors need a toxin. Retailers too.
Need a way out.
Vendors need to protect their channel.
As Google search goes local,National brands lose control
Vendors must transform discovery
Discovery
Buy
Selection
Transact
DeliverySupport
Share
• Lowers the Google tax• Increase flatter retail• Shortens path to purchase• Can move location of retail
INSIGHT | IT’S THE NETWORK. STUPID.
HIDDEN PROBLEM.
Product marketing content doesn’t flow to resellers.
PRODUCTS FLOW
PRODUCTS FLOW
Content Doesn’t Flow
Work gets replicated
Problem
• Gathering the rich media content
• Organizing and managing it
• Keeping it current
• Displaying the content across sites, platforms and apps
Too hard and expensive for companies to do themselves
INSIGHT | IT’S THE NETWORK. STUPID.
NOW WHAT?
EMBRACE THE COMPLEXITY
Turn Pointers to Engagement into Places of Engagement
Built engagement everywhere
LEVERAGE THE POWER OF THE NETWORK
Introducing SYNQY
Introducing SYNQY
Introducing SYNQY
Introducing SYNQY
Introducing SYNQY
Introducing SYNQY
Introducing SYNQY
Rich, interactive brand content
Improves your results and product pages
Curates together
Live Feed
How it works
1 line of codeProduct pages
SEE IT IN ACTION
Sources: LivePerson, IBM/CoreMetrics
100% of shopping
carts
32%Buy Upside of fixing
91% growth
41%Other reasons
27% Seek rich
vendor content
SYNQY can deliver real financial results
Everybody Wins
Shoppers Get better experience
Resellers Increase revenue per visitor
BrandsImprove persuasion at the pivotal moment of truth
UPDATE ONCE – CORRECT EVERYWHERE
See more clearly
Hassles eliminated
• Simplify shopping• No more wasted time• Discovery is comprehensive
DYNAMIC & RESPONSIVE
Costs Eliminated
Gets rid of manual efforts to keep content current and relevant
INSIGHT | PARTNER OR PERISH
WHAT IS RETAIL?
Summary
• Retail is disaggregating
• Product discovery sits as pivotal way to survive
• Key is to partner with vendors
• Think network, not static
• Ride the change to survive
Q&A | LET’S DISCUSS
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