The Future of Shopping How to do consumers shop in 2020 and beyond?
Quick introduction…
Why ShoppingTomorrow?
Changing consumer behavior Disintermediation
Virtual reality 3D Printing Amazonization
Our central research question
How will the consumer shop in 2020 and what actions should be taken on a national, branch and company level upon that B2C-operating companies can successfully respond to this, both nationally and internationally?
Supported by 24 industry associations
Common vision (2013)
2019
Creating social awareness
The Last Mile
Shared Roadmap (2014) 2018
Conversion attribution
2017
You can download all reports from EcommerceWiki.org for free
Key Findings
Disclaimer: Many of the research has been done in the Netherlands Some of it may apply to other countries but local differences will always exist
Prediction is very difficult especially if it is about the future. Niels Bohr Nuclear and Quantum Theory Physicist
The Market “If I had asked people what they wanted, they would have said faster horses.” Henry Ford
After a period of declining consumer confidence is increasing
But Dutch consumers are still careful and few expect to increase their product spending The majority expects their product spending to be on the same level in 2020
The same accounts for the expected future spending on services
There is a relatively large group who expects a decrease in their spending on insurances
Consumers expect to spend 38% of their total expenditures in 2020 via online channels.
Largest increases in online shares (in value) expected in food/nearfood & clothing industry Off all product categories, telecom is expected to have the largest online share in 2020
Offline overall still scores better than online shopping
Extensive product offering key differentiator for the online shopping channel
The offline channel performs less on price and extensive product offering
User experience and a safe shopping environment are attention points for the online channel
Expectations differ across age groups
The Consumer “There is only one boss. The customer. And she can fire everybody in the company from the chairman on down, simply by spending her money somewhere else...”
The consumer of 2020 will be more powerful than ever… I make • or break • your product/service I know • more about the product…. • the lowest prices… • where it’s available...
I determine • what I read, see, hear and do • where, when and how I make my purchases
The consumer starts (en ends) its search increasingly often at one place
SOURCE: McKinsey iConsumer U.S. 2012
The sharing economy is on the rise…
Why buy something if you can share almost everything?
Current and future usage of peer-to-peer services (1/3)
To what extent do you rent/borrow/share these product from other consumers?
Current and future usage of peer-to-peer services (2/3)
To what extent do you rent/borrow/share these product from other consumers?
Current and future usage of peer-to-peer services (3/3)
To what extent do you rent/borrow/share these product from other consumers?
59% of all people see advantages to peer-to-peer services
Price and convenience biggest advantages, trust issues biggest disadvantages
Airbnb now covers 191 countries & 34,000 cities, facilitating 17 million guests in summer 2015
• The average family offering an Airbnb room earns $ 7,350 extra per year
http://blog.airbnb.com/wp-content/uploads/2015/09/Airbnb-Summer-Travel-Report-1.pdf
One million Germans have shared a car last year The market grew with 37,4% in 2014 (51% in 2013)
http://www.carsharing.de/presse/pressemitteilungen/pressemitteilung-vom-16032015
Borrow my doggy, matching dog owners & borrowers Dog owners pay € 44,99 p/y, borrowers € 9,95 p/y
Technology We're not a retailer competing in Silicon Valley. We're building an Internet technology company inside the world's largest retailer.” - Wallmart
Towards 2020, hundreds of new technologies will come our way…
Source: Gartner Hype Cycle 2014
The pace of innovation and adoption of technology is increasing exponentially
~360+
Number of days until sale of one million items ~300+
~180 ~74 74 ~28 28 iPod
SOURCE: McKinsey
BlackBerry
Netflix
iPhone
iPad
~13 Nintendo Wii
Online and offline technology will increasingly merge
Mycom uses tablets to sell the ‘long tail’ and offer better service It allowed the retail chain of 23 stores to acquire Dixons with 128 store
Online & offline will increasingly merge to provide information
Source: Estimote iBeacon (http://youtu.be/sUIqfjpInxY)
Budweiser offers the ‘one click beer bottle delivery app’
http://newsroom.anheuser-busch.com/anheuser-busch-introduces-bud-light-delivery-at-the-tap-of-a-button-with-new-branded-app-in-washington-d-c/
Bloomingdale offered a 3D body scanner in 70 stores for the perfect fit The scanner failed. Women found it to confronting and jeans were offered only in 15 sizes
http://www.me-ality.com/fit-solutions
Online & offline will increasingly merge…
Source: http://www.youtube.com/watch?v=oUD57MpHAE8
Holograms will increasingly be part of the in store experience
Holograms even get their own fan base like Hatsune Miku
Everywhere where products are available, the consumer will make purchases from the TV, on the street…
We may work with fingernail sized devices…
Or just use our fingers to control our environment
http://www.indiegogo.com/projects/fin-wearable-ring-make-your-palm-as-numeric-keypad-and-gesture-interface
Media are coming closer to our bodies; we will be online continuously
Source: https://vimeo.com/46304267
The Pyramid of Technology
http://www.nextnature.net/2014/08/pyramid-of-technology/
The product is becoming more and more digital
Source: Hapilabs.com
Shoes coach you how to sport better
Source: Steven van Belleghem
The diaper tells you when it needs to be changed
http://www.nst.com.my/latest/japan-sensor-will-let-diaper-say-baby-needs-changing-1.480875
3D Printing is developing very rapidly
Source: http://www.3ders.org/articles/20120620-tool-less-production-of-moulds-using-3d-printing-technology.html http://www.youtube.com/watch?v=RPvxShlrm58&list=PLUWBnRobGU6gMcaXFRKwYa_F_OKILjA4L
And the killer app may come from a very different direction than we think…
Even traditional retail chains like Hema have started offering 3D printing
While sales is still minimal, this was also the case for photo printing. Now Hema market leader.
Appie, from shopping list to primary online ordering tool
Albert Heijn prefills 80 to 90% of its mobile app shopping list for its customers
Bron: www.emerce.nl/nieuws/ahnl-maakt-zich-reeks-online-vernieuwingen
Privacy seems to be an offline issue …
Online customers are willing to provide their data as long as there is a clear benefit
Pragmatists
Willing to provide their personal data to companies in return fro free services or other benefits
53%
Fundamentalists
Do not share data with organizations unless there are mandatory reasons to do so
16%
The Careless
Do not care who uses their data and how their data is used
31%
Bron: Expertgroep Analytics & Big Data, Shopping2020
Disney’s Magic Band offers people faster access to…everything
http://mousehints.com/my-magic-plus
RadioShack is selling its customer data of 67 million customers
RadioShack filled for bankruptcy and is trying to sell its (intellectual) assets of 1740 stores
http://www.sltrib.com/home/2453366-155/radioshack-is-looking-to-sell-customer
Ashley Madison: 100 gigabyte of data stolen of 32 million users
15.000 email addresses have a .mil or .org extension and the name Tony Blair was also found
http://www.wired.com/2015/08/happened-hackers-posted-stolen-ashley-madison-data/
SUSTAINABILITY
American shopping mall traffic declines with 50% from 2010 to 2013 Due to over offering, a return to down town and rise of online shopping (6%)
By 2020, 36% of all people expect to pay (significantly) less visits to city centers 56% expects to stabilize his current number of visits to city centers
Parking costs are the main dissatisfier that prevents people from visiting the city centers Next to hospitality and shop presence, parking facilities are a must for city centers
The role of the physical store will change
Pick-up points and advice & service will become more important in the proposition of the offline channel
Cross border ecommerce
European consumers are increasingly shopping cross border
Consumers that bought products online outside of their own country in the last 12 months Romania Poland Czech Republic Hungary Italy Greece Portugal Germany Spain EU28 United Kingdom Netherlands France Sweden
Estonia Ireland Iceland Belgium Finland Denmark Malta
Austria Luxembourg 0%
10%
20%
2012 2013 30%
2014
40%
50%
60%
70%
20% of the Dutch population (15+) bought cross border in 2014, accounting for € 390 mln More than one fifth of these spending go to Chinese webshops
The Rise of the Global Market Places How to compete and prosper in the world of Amazon, Alibaba and other platforms
“In the Netherlands, 11% of all SME business is carried out via eBay’s local market place, Marktplaats.nl.
Olivier van Duijn General Manager Benelux
In its home market, Amazon is bigger than the number 2 to 12 online retailers combined 0
10
20
30
40
50
Amazon.com Inc.
60
70 67,86
Apple Inc.
18,3
Staples Inc.
10,4
Walmart.com
10,03
Sears Holdings Corp.
4,9
Liberty Interactive Corp.
4,8
Netflix Inc.
4,38
Macy's Inc.
4,15
Office Depot Inc.
4,1
Dell Inc.
3,55
CDW Corp.
3,39
OfficeMax Inc.
3,2
W.W. Grainger Inc.
3,1
Costco Wholesale Corp.
3,09
Best Buy Co.
3,04
Source, Statista, Leading e-retailers in the United States in 2013, ranked by e-commerce sales (in billions of U.S. dollars), 2015
80
Amazon, Apple, Facebook, Google are all investing massively in VR, Voice & AI
Alibaba sold for $ 9.3 billion on Singles Day (11th of November) A rise of 60% compared to 2013
Aliexpress has gained an online market share of 30% in Russia in just 3 years Russian audience of large international e-commerce sites (in million monthly users)
http://www.ewdn.com/2014/11/24/new-ewdn-study-cross-border-sales-still-growing-fast-chinese-players-invading-the-market/
Retailers estimate global market places will own 40% of the global online retail market in 2020 What do you expect the market share of market places to be in global online consumer sales in 2020? 100% 90% 80% 70%
60% 50% 40% 30% 20% 10% 0%
at least 10% Source: commons.wikimedia.org/wiki/File:Wokkersmundo.jpg
at least 25%
at least 40%
at least 50%
at least 60%
What’s Next? “It’s not the crisis, it’s not the web, it’s the consumer stupid.” Ed Peerenbolte
The global market places are not the only concern of retailers Retailers are faced with increasing market transparency, more powerful consumers, direct sellers & new tech
Market places
Market places
Brands
Market Transparency
Sharing initiatives
Social empowerment 3D Printing
Retail may look very different in 5 to 10 years A scenario where market places rule is not unlikely
Market Places 50%
Vertical Kingdoms
Platform Empire
Digital Share 20%
Digital Share 50% Omnichannel World
Pure & Omnichannel Player Ecosystem
Market Places 20%
The question is not how do I become an omnichannel retailer? How can I digitize my store? Start with a blank sheet. How would I set-up my company from scratch today? Terry Freiherr von Bibra Chief Retail Officer Omnichannel
The new retail landscape requires new retail business models Yes Generic Retailers sells a broad & deep of rd 3 party brand assortment on a 1 to 1 basis
Inventory
Vertical Retailers (Brands) designs, manufactures, sells & distributes own products to a specific community
Specialist Retailers sells a curate assortment of 3rd party products adds value in service & advice
Market Makers brings supply/demand together no own inventory/customer ownership
No Tailored
Customer Need
Mass
Tip 1: Use the power of market places to learn, gain scale, go cross-border There is no point in not being where the customer is
Source: en.wikipedia.org/wiki/Mahane_Yehuda_Market
Tip 2: Migrate towards the vertical and/or specialist retailer model
Unless you have the resources and skills to become a generic retailer or market maker • 6 new stores p/y in the USA • Complete digital revamp (web, mobile, app, in-store)
“To inspire, educate and outfit for a lifetime outdoor.”
• Store staff is selected and groomed to be outdoor experts. • Expansion private label > 20%
Context
Curation
Community
• REI440project.com: 4,000 photo’s/week • Training: 300,000 people p/y (biking, hiking, climbing, etc.)
Tip 3: Build a Brand with a Heart
Source: pixabay.com/nl/hersenen-harten-liefde-emoji-619060/
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Jorij Abraham Director Research & Advice E:
[email protected] M: +31 6 52 84 00 39
Interested? Please feel free to contact me...
Jorij Abraham Director Research & Advice E:
[email protected] M: +31 6 52 84 00 39