Post on 22-Oct-2014
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14/01/2013
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TEARING DOWN THE WALLS:Winning in a “wall-less” retail world
Bryan Gildenberg
Chief Knowledge Officer, Kantar Retail
Miguel Almeida
Vice President eCommerce, Walgreens
Anne Zybowski
Vice President, Kantar Retail
PRESENTED BY:
AGENDA
• Tearing Down the Walls
• Winning in a “Wall‐less” Retail World
• In‐Depth: Walgreens Omni‐channel Strategy
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Macro, Shopper, & Information ForcesExecution: I ran out of room or I couldn’t do it
ROI: I want to carry more, but I’ve run out of cash
Information
ShopperMacro Forces
Source: Kantar Retail analysis3
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Brand Positioning Falls into 4 Families: 4EsMust become broader than SKUs & categories sold
These quadrantsreflect strategies more so than channels, though store size obviously correlates quite strongly with strategy here
Source: Kantar Retail analysis4
Fast Forward 50 Years… New EfficiencyAmazon tears down walls of the store
ROI: Jeff Bezosunpacks the power of unlimited non‐physical assortment
Execution: Technology and transportation change the art of the possible
Source: Kantar Retail analysis
Information
ShopperMacro Forces
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With Digital Retail Driving Change…. Boundaries again get dramatically altered
Dynamic pricing, limited inventory,
alternative revenue streams
Source: Kantar Retail analysis6
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None of the 4Es Positionings Can Fend OffNew economics & efficiencies of post‐modern landscape
Source: Kantar Retail analysis
Must remove
the walls!
RETAIL’S FUNDAMENTAL PROBLEM TO SOLVE IS NO LONGER ABOUT WHAT SKUS AND CATEGORIES I SELL
It’s about understanding the need states retail
was using SKUs and categories to
optimize… and finding new positioning
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Rebuilding Value Proposition Without Walls
Source: Kantar Retail analysis
Need to rebrand these ideas around concepts that stretch beyond the store (or retail)
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AGENDA
• Tearing Down the Walls
• Winning in a “Wall‐less” Retail World
• In‐Depth: Walgreens Omni‐channel Strategy
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Creating New Shopper Moments:
Source: Kantar Retail analysis
4 Capability Clusters
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Small is Not Necessarily Convenient
Source: Kantar Retail analysis
Confectionery supplier after visiting Tesco Express & Sainsbury’s Local,
March 2012
“These are big box experts trying to drive a small box solution through
efficiency. These stores are actually the polar opposite of convenience”
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Convenience: Improving the NOW
Source: Kantar Retail analysis
Balancing 4 factors
Quick In /Out One‐Stop Shop
Easy Access Familiar
Impulse Stock Up
Immediate Planned
All four factors are present at all times – different retailers balance them differently;the mix defines the store model
Ease and Speed
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NOW Format Innovation: Click & CollectFrance is leading the way
Source: Kantar Retail analysis, quote from Lineares 2009
“We have the ambition to make Chronodrive.com the largest e‐commerce business in France”
Ludovic Duprez, co‐founder
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NOW: Everyone is a Convenience StoreKey skills to look for
Source: Kantar Retail analysis
Differentiated and Focused Stores:
• smaller, more convenient, more local, more memorable
Multi‐channel:
• your best retailer will be engaging your shoppers digitally as well as physically
Manage Shoppers Time:
• either by making the store experience more efficient, or so absorbing that the shopper feels the time is well spent
• It better be faster, easier – or a LOT more fun
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Experience is Not Just About Pretty Stores
Source: Kantar Retail analysis and store photos15
Experience must have a purpose: closing the sale
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Experience – Part of the WOWKey skills to look for
Source: Kantar Retail analysis
Retailers That Deliver on Experience:
• will make the visit more compelling than a website is easy
Ability to Execute:
• reliably, efficiently, from shelf condition to checkout – in stock and visible on shelf
On Trend:
• literally, having the Right Stuff is still vital
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Right: Local Market Sensitivity & Loyalty
Source: Kantar Retail analysis; store visits
Know thy Shopper
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Tesco studies shopping patterns and preferences of individual neighbourhoods to have the ability to appeal to local consumers. Tesco offers product mixes and price ranges that are aligned with local neighbourhoods.
Block‐by‐Block Analysis Block‐by‐Block Analysis
Right: Engaging Shoppers Via Store ExperienceNot your typical store loyalty
Source: Kantar Retail analysis and store visits; BrandZ18
BrandZ: Diagnosis of BondingRanked by importance of attribute in category
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Loyalty: Getting it RIGHT for the Right ShopperKey skills to look for
Source: Kantar Retail analysis
Know and Engage Their shoppers:
• whether analytical or intuitive, this is key to all else
Collaborative:
• Getting the supplier community engaged and aligned is a skill that attracts investment, and leverages the best of both sides of the desk
Masters of Their Own Brand:
• the clarity of the brand determines the ability to make decisions
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Shoppers Actively Creating Own Value
Source: Kantar Retail ShopperScape®, February 2010 and October 2011
Deal‐Seeking and Limiting Will Continue
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Behavior Changes In RecessionPlan for 2012 Type of Behavior
Taking advantage of good sales/deals 41% 54% Deal‐Seeking
Buying only things I truly need 40% 52% Limiting
Using more coupons 34% 48% Deal‐Seeking
Buying fewer things 33% 42% Limiting
Doing more price comparisons before purchasing 33% 38% Deal‐Seeking
Shopping less often 31% 34% Limiting
Using/keeping items longer before replacing 20% 30% Limiting
Buying only items needed in the near term 23% 28% Limiting
Shopping more at discount/value retailers 22% 28% Trading‐Down
Postponing more purchases 28% 25% Limiting
Buying less expensive versions of products 27% 24% Trading‐Down
Buying fewer luxury items 35% 24% Limiting
Buying more store brands vs. national brands 26% 22% Trading‐Down
Trading down to less-expensive brands na 16% Trading‐Down
Shopping online for more things na 13% Moving Online
Shopping online more often na 12% Moving Online
Using smart phone to compare prices while in stores na 6% Deal‐Seeking
Switching some purchasing to "auto-replenishment" programs na 1% Moving Online
Participation in Shopping Behavior Changes(among primary household shoppers)
V
Smart: Harder with a Well‐Informed Shopper
Source: Kantar Retail analysis & store visits21
Role of in‐store education & experts
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Smart: Everyone is a Value RetailerKey skills to look for
Source: Kantar Retail analysis
A Clear Value Perception:
• whether price based or based on something beyond price, a retailer must be worth something
Masters of Promotion:
• effective marketing that distinguishes the retailer, supports their brand, and is worth your investment
Financially Competent:
• It is hard to imagine a retailer who can deliver value without a keen management of their own finances – either through efficiency (ASDA), cost and margin control (Tesco), or a better business model (Costco)
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Must Master All 4 Capability ClustersOne is insufficient
Source: Kantar Retail analysis23
AGENDA
• Tearing Down the Walls
• Winning in a “Wall‐less” Retail World
• In‐Depth: Walgreens Omni‐channel Strategy
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Omni-channel strategy
January 13th, 2013
Miguel AlmeidaVice-President, eCommerce
A company founded in 1901
32With $72B of revenue in 2012
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Featured in Jim Collins books
With a long history of innovation
Stand-alonestores withdrive-thru
pharmacies1992
MultiplelanguageRx labels
2002
1950Self-service
stores
1968First with
child-resistantcontainers
Pharmacieslinked bysatellite
1981
1999Prescription
history online
2005Online
digital photo
1960 1980 1990 20101950 1970 2000
1991Point-of-sale
scanning
OpenedFirst
Take Care2006
2010Refill by
scan
US Online and Web-Influenced Retail Sales($ Billions)
Source: Forrester Research (June 2012)
US online and web influenced as a % of
total retail sales 44% 45% 47% 49% 51% 52%
2011 2012 2013
Non-WebInfluenced
Retail Sales
Web Influenced Retail Sales
Online Retail Sales
1,672
202
2,977
1,723
226
3,155
1,741
252
3,313
2014 2016
1,780
3,6363,478
278
3,799
327304
2015
1,7711,812
In the next 3 years, over half of all retail sales will happen online or be influenced by online channel
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Customers are connecting with brands and retailers differently
Tablet ownership reached 19% of adult population
56% of social networkers have liked, followed or became fan of a brand, product or company
68% of online adults have a facebook account ; including over
50% of adults over age 68
More than 50% of mobile phones are now smartphones
We engage with millions of customers via our online properties and channels
Web Mobile
6,600,000 3,200,000 42,000,000visits per week visits per week reached per week
Social
Average annual spend,
2011
($) 3.5X 4X6X
Average Annual Spend per CustomerSource: EDW, eComm Analysis in $USD
Our multi-channel customers are more valuable
Store ONLY Store +
ONLINE
Store +
MOBILE
Store +
ONLINE+
MOBILE
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What omni-channel means for us
Our Strategy
Give our customer
…Whatever she wants …Wherever she wants …Whenever she wants
The Yesterday, Today, and Tomorrow ofWhat, When, and Where
yesterday “where we were”
24 hour pharmacy
WhatDaily Living
PhotoPharmacy
When5-7 day shipping
One hour photo
Product reviews
Where8,000 stores
Worksite pharmacies
Drive-Thru Take Care ClinicsWalgreens.com
Kiosk
today “where we are”
The Yesterday, Today, and Tomorrow ofWhat, When, and Where
1-2 Day Shipping
1 hour web pickup
WhatDaily Living
PhotoPharmacy
WhenWhere24 hour pharmacy
One hour photo8,000 stores
Worksite pharmacies
Drive-Thru Take Care ClinicsWalgreens.com
Prestige Beauty80,000 new products
ImmunizationsContact Lenses
Creative Photo Products
MobileTablet
Drugstore.comBeauty.com
VisionDirect.comSkinstore.com
Kiosk
In store mapping
Pharmacy Chat
Product reviews
Auto-ReOrder
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tomorrow “where we’ll be”
The Yesterday, Today, and Tomorrow ofWhat, When, and Where
1-2 Day Shipping
1 hour web pickup
WhatDaily Living
PhotoPharmacy
WhenWhere24 hour pharmacy
One hour photo8,000 stores
Worksite pharmacies
Drive-Thru Take Care ClinicsWalgreens.com
Prestige Beauty80,000 new products
ImmuniationsContact Lenses
Creative Photo Products
MobileTablet
Drugstore.comBeauty.com
VisionDirect.comSkinstore.com
Personalized Content
Consumer Health Tools
Boots Private LabelSame Day Home Delivery
International
Site to Store
Kiosk
Product reviews
In store mapping
Pharmacy Chat
Auto-ReOrder
Our Team
Success in Omni-Channel requires achieving best in class experiences both online and offline
Offline
Convenience of great locationsStrong and relevant product selection
Customer “Well” experience
Online
Extensive product assortmentPersonalized offers
Fast shippingUser experience
Omni-Channel
Seamless integration across all channelsSeveral fulfillment options to meet all customer needs
Omni-channel marketing messages
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We have been remodeling our stores
…building best in class ecommerce capabilities…
Social Local Mobile
>2MMFacebook Fans
in-store mapping
Exclusive Foursquare partnership
Top 10 mobile shopping app
Refill by scan
QuickPrintsNative Facebook Apps for Photos
>100KTwitter Followers
PassbookGeofencing
…and innovating in social, local and mobile
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While seamlessly connecting our physical and digital channels
Web PickupIn Store
Shopping
Same Day Home Delivery
Site to Store
eCommerce Commercial
The challenges
Channel conflict
Pricing models
Technology & Operations
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The key learnings
Innovate across the value chain
Be user centric
Test & learn
“If you always do what you always did, you will always get what you always got”.
- Albert Einstein -
Thank You.
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Bryan Gildenberg
Chief Knowledge Officer, Kantar Retail
Bryan.Gildenberg@KantarRetail.com
PRESENTED BY:
Anne Zybowski
Vice President, Kantar Retail
Anne.Zybowski@KantarRetail.com
Miguel Almeida
Vice President eCommerce, Walgreens
Miguel.Almeida@walgreens.com