Presented by: DRIVING ENGAGEMENT THRU SOCIAL MEDIA & LOYALTY PROGRAMS Mary Brett Whitfield Senior...

Presented by:

DRIVING ENGAGEMENT THRU SOCIAL MEDIA & LOYALTY PROGRAMS

Mary Brett WhitfieldSenior Vice President

Jahnia SandfordAnalyst

May 2, 2013

Apparel Retailing Webinar Series

© Copyright 2013 Kantar Retail

Copyright Notice and Disclaimer

Copyright ©2013 Kantar Retail LLC All Rights Reserved.

501 Boylston Street, Boston, MA 02116 USA Tel. +1 617 912-2828Contact: [email protected]

No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photography, recording, or any information storage and retrieval system now known or to be invented, without the express written permission of Kantar Retail LLC.

The printing of any copies for back up is also strictly prohibited.

DisclaimersThe analyses and conclusions presented here represent the opinions of Kantar Retail LLC. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.

This content is not endorsed, or otherwise supported, by the management of any of the companies covered during the course of the presentation or within the following slides.

2


Agenda

• Loyalty Program Participation Drivers

• Getting Social

• Emerging Growth Trends Around the Landscape

Presenters

Mary Brett Whitfield

Senior Vice President

Jahnia Sandford

Analyst

Today’s Presenters and Agenda

3


Who?Who?

How?How?

What?What?

CoverageCoverage

• 4,000 primary household shoppers per month• CORE SAMPLE: Representative sample of ~50,000

unique primary household U.S. shoppers annually• ALSO: Oversample of men for representative sample of males HOH 18+

(n = 800/month)

• Fielded online the third week of every month

• Survey fielded through LSR access panel of more than 3 million individuals

• Monthly and quarterly tracking questions on retailers and venues shopped, products purchased, where spent, near-term spending outlook, and household financial health

• Questions on timely and topical issues (including key holiday periods) affecting shopping behavior

• 200+ retailers across all sectors of retail

• 75+ product categories (e.g., over-the-counter medications)

• 7 major merchandise groups (e.g., health and beauty care products)

4

Kantar Retail ShopperScape®

4


Spring Spending HeadwindsMore plan to spend more…but more also plan to spend less

5

Updating Wardrobe for Myself

Updating Wardrobe for Kids*

Home Improvement Projects

Gardening/Landscaping

Plans for Spending this Spring Compared with Last Year

Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

*Among shoppers with children 18 or younger in the household


Agenda

• Loyalty Program Participation Drivers–Which Shoppers Participate and Where

–Shoppers’ Ideal Reward Program Benefits

–Benefits Frequent Shoppers Currently Receive

–Gap Analysis: How Retailer Programs Align with Shopper Wants

• Getting Social• Emerging Growth Trends Around the Landscape

6


Loyalty Programs: Who Participates?Majority do not

Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis 7

Female Primary Household Shoppers

Male Heads of Households

Membership in Any Frequent Shopper/Rewards Programs Offered by Clothing Specialty Retailers, Department Stores or Shoe Retailers


Shoppers Most Likely to Cite Department Stores as Most Frequently Used

8Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis

Shoe Stores

Apparel Specialty Stores

Department Stores

*Read as 26% of all female primary household shoppers cite Kohl’s as the apparel-related loyalty program they use most often

Among female primary household shoppers

Most Frequently Used Apparel-Related Loyalty Program(among female primary household shoppers)

Channel’s Share of Most Frequently Used Apparel-Related Loyalty Program

(among female primary household shoppers)


Boomers Even More Likely to Most Use Department Store Programs


Note: Arrows indicate significant difference vs. all shoppers (90% confidence level)


Seniors and Boomers Drive Department Store Program Participation


Gen Y (born 1982 to 2002)Gen X (born 1965 to 1981)Boomers (born 1946 to 1964)Seniors (born before 1946)

Read as: 76% Senior female primary household shoppers cite a department store loyalty/rewards programs as the apparel-related rewards program they use most oftenShading indicates significantly greater percentage vs.all shoppers; border indicates significantly lower percentage (90% confidence level)

Gen XGen X

Most Frequently Used Apparel-Related Loyalty Program(among female primary household shoppers)

Generation

All

ShoppersGen Y Gen X Boomers Seniors

Sample 1264 247 457 440 121Department stores (net) 61% 52% 58% 66% 76%*Kohl's 26% 22% 27% 25% 31%Macy's 10% 10% 10% 10% 12%Other Department Stores 8% 9% 7% 9% 11%JCPenney 7% 2% 7% 11% 5%Sears 7% 7% 5% 8% 8%Nordstrom 1% 2% 2% 1% 2%Belk 1% 0% 1% 1% 8%Dillard's 1% 0% 0% 1% 0%Apparel specialty retailers (net) 30% 39% 32% 24% 18%Victoria's Secret 5% 8% 6% 3% 2%Old Navy 3% 4% 5% 2% 0%TJMaxx/Marshalls 2% 2% 3% 2% 2%Gap 2% 3% 3% 1% 0%

Other Apparel Specialty Stores 17% 21% 16% 17% 14%

Shoe retailers (net) 9% 9% 10% 10% 5%DSW 5% 5% 6% 5% 2%Other Shoe Stores 4% 4% 4% 5% 3%

BoomersBoomers

Gen YGen Y

SeniorsSeniors


Give More Discounts, Free Shipping, and Rewards Coupons in Exchange for Loyalty


Potential Loyalty Program Benefits Shoppers Indicated as Ideal(among female primary household shoppers)

*Read as 62% of all female primary household shoppers indicate getting discounts on all purchases as an ideal benefit of an apparel-related frequent shopper/rewards program


Increase Appeal among Men by Marketing Fewer Fees and Exclusive Events

Top 10 Most Appealing Loyalty Program Attributes: Men vs. Women

Men Women

1. No annual fee Discount on all purchases

2. Discount on all purchasesFree shipping for online

purchases

3.Reward certificates at specific

spending/points levels

Reward certificates at specific spending/points

levels

4. Members-only coupon offers No annual fee

5. Exclusive sales events Members-only coupon offers

42%+ 55%+

6. Free shipping for online purchasesBonuses/discounts during your

birthday month

7. Free shipping on returns Free shipping on returns

8. 0% financing Double/triple points days

9.Bonuses/discounts during your

birthday monthExclusive sales events

10. Double/triple points days Early access to sales events

30%+ 40%+



365 Discounting Less Important to Macy’s Participants, More to Belk and Other Specialty


*Read as 50% of shoppers who use Macy’s rewards program most often indicate getting discounts on all purchases as an ideal benefit of a rewards programNote: Arrows indicate significant difference vs. all shoppers, 90% confidence level


Free Shipping Has Strongest Appeal amongOld Navy and DSW Loyalty Program Shoppers


*Read as 69% of shoppers who use DSW’s rewards program most often indicate having free shipping on online purchases as an ideal benefit of a rewards program

Note: Arrows indicate significant difference vs. all shoppers, 90% confidence level


No Annual Fee Likely to Resonate More with Boomers and Seniors than Younger Shoppers


Where the largest and lowest percentage of shoppers noted a potential apparel retailing loyalty program benefits as ideal


Top Ideal Least Important

SeniorsSeniors1. No annual fee2. Discount on all purchases3. Free shipping for online purchases

1. Allow family members credit line access 2. Personal stylist orconcierge service3. Phone alerts about store events

BoomersBoomers

1. Discount on all purchases2. No annual fee3. Reward certs when reached specific

spending/points levels

1. Personal stylist or concierge service2. Allow family members credit line access3. Phone alerts about store events

Gen XGen X1. Discount on all purchases2. Members-only coupon offers3. Free shipping for online purchases

1. Personal stylist or concierge service2. Allow family members credit line access3. Phone alerts about store events

Gen YGen Y1. Discount on all purchases2. Members-only coupon offers3. Bonuses/discounts during birthday month

1. Allow family members credit line access 2. Personal stylist or concierge service3. Previews of new collections via e-mail


Largest Differences Between Gen Y and Senior Interests, Including In-store Events

0% Financing

Birthday Bonuses & Discounts

No Annual

Fee

Free Alterations

Free Shipping

on Returns

Special In store

Parties & Events

Highest Among

Gen X (29%*)

Gen Y (59%)

Seniors(69%)

Seniors(31%)

Boomers(55%)

Gen Y(20%)

Lowest Among

Seniors(20%)

Seniors (46%)

Gen Y(48%)

Gen X(18%)

Gen X &Y (49%)

Seniors(10%)


Where the largest and lowest percentage of shoppers noted a potential apparel retailing loyalty program benefits as ideal


*Read as 29% of Gen X shoppers indicated 0% financing as an ideal potential benefit from an apparel-related frequent shopper/rewards program


Members-only Coupons and Reward Certificates Popular Retailer Benefits


Actual Loyalty Program Benefits Received from Apparel-Related Program Used Most Often(among female primary household shoppers)


Kohl’s Loyalty Program Members Most Likely to Receive Members-only Coupons



*Read as 49% of shoppers who use Kohl’s rewards program most often indicate having members-only coupons issued as an actual benefit they receive.


Gap, Belk & DSW Program Shoppers Likely to Get Rewards Certs for Spending


Note: Arrows indicate significant difference vs. to all shoppers, 90% confidence level

*Read as 71% of shoppers who use DSWs rewards program most often indicate having certificates issued when reached spending or points levels as an actual benefit they receive.


Gap Analysis: Retailers Most Aligned with Shoppers on Members-only Coupons


Which of these potential benefits of an apparel-related rewards program would you consider to be part of an 'ideal' rewards program?

vs. For the apparel-related rewards program you use most often, which of

these benefits do you receive as a member of that program?Female primary

household shoppers

Ideal Received

1 Discount on all purchases 62% 21%

2 Free shipping for online purchases 59% 16%

3Reward certificates at specific spending/points levels 59% 39%

4 No annual fee 57% 34%

5 Members-only coupon offers 57% 40%

6Bonuses/discounts during your birthday month 53% 21%

7 Free shipping on returns 51% 11%

8 Double/triple points days 42% 13%

9 Exclusive sales events 41% 23%

10 Early access to sales events 40% 19%


Points Programs and Exclusive Sales where Specialty Wins with Loyalty Program Shoppers


vs.For the apparel-related rewards program you use most often, which

of these benefits do you receive as a member of that program?Ideal Received

among shoppers who use Specialty

Apparel Rewards program most often

Sample 373




4Reward certificates when you reach specific spending/points levels 61% 46%




8 Double/triple points days 46% 16%9 Exclusive sales events 40% 24%




Shoe Stores Best Aligned with Shopper Interests on Reward Points and Double/Triple Point Days

22Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis


vs.For the apparel-related rewards program you use most often, which of

these benefits do you receive as a member of that program?

Ideal Received

among shoppers who use Shoe Store Rewards program

most often

Sample 115

1Reward certificates when you reach specific spending/points levels

69% 50%


3Free shipping for online purchases 68% 16%



6 Free shipping on returns 58% 15%7 No annual fee 53% 29%8 Early access to sales events 50% 16%9 Double/triple points days 43% 22%



Department Stores Matching Up on Double/ Triple Points Days and Free Shipping

23




Ideal Received

among shoppers who use

Department Rewards program

most often

Sample 776


2 Previews of new collections via e-mail 56% 34%

3 Pick your own sales day 56% 34%

4Reward certificates when you reach specific spending/points levels 55% 15%

5 Double/triple points days 54% 42%


7 Special in-store parties and private events 50% 9%


9 Receipt not required for returns 41% 10%


Source: Kantar Retail ShopperScape® March 2013 and Kantar Retail analysis


JCP Most Aligned with Shoppers on Points/Spending Plan to Earn Rewards Certs





Ideal Received

among shoppers who use JCP's Rewards program

most often

Sample 90



3Reward certificates when you reach specific spending/points levels

55% 51%


5Bonuses/discounts during your birthday month

51% 14%





10 Receipt not required for returns 37% 8%


Loyalty Programs: Issues and Implications

25


Agenda

• Loyalty Program Participation Drivers• Getting Social

–Who’s Connected and on Which Platforms

–What’s Driving Shoppers to Connect

–What’s Keeping Shoppers Connected


26


Majority of Shoppers Have Not Connected Socially with Apparel Retailers/Brands


**Read as 11% of shoppers who connected with an apparel related Facebook, Pinterest, Instagram or Twitter in the past year, connected with Twitter

*Read as 27% of all shoppers indicated they have connected to an apparel retailer or brand thru Facebook in the past year

The Socially Engaged(among shoppers who connected

with a retailer or brand in past year)


Deals and Promotions Biggest Drivers for Social Engagement



Boomers and Lower-Income Shoppers not as Concerned with Getting Deals


Generational Cohort Income Market


*Read as 28% of Boomers engage socially to stay aware of future deals and promotions


Curiosity Drives Lower-Income Shoppers

What Prompted Shoppers to Connect with a Retailer or Brand via Social Media(among all shoppers)

Generation Income Market

All Shopper

s Gen Y Gen X Boomers Seniors Down Middle Up

Sample 1188 319 488 315 66 324 542 321

To stay aware of future deals and promotions 35% 39% 40% 28% 18% 24% 39% 40%

To get a specific deal that was being offered 30% 32% 31% 29% 22% 21% 32% 35%

Curiosity 23% 22% 22% 25% 24% 27% 22% 20%

Ability to participate in contests 22% 21% 25% 21% 14% 16% 25% 22%

Stay up to date on brand/retailer news and events 22% 31% 23% 14% 11% 19% 21% 26%

No real reason 14% 11% 13% 18% 30% 23% 13% 9%

Get fashion advice/stay current on trends 13% 20% 11% 11% 12% 13% 16% 9%

Express my taste/show others I like a retailer 13% 15% 13% 11% 17% 17% 12% 12%

Entertainment 13% 16% 15% 7% 5% 17% 12% 10%

Connect with others who share my interests/fashion 11% 13% 10% 8% 15% 14% 8% 11%

Access to customer service 8% 8% 7% 8% 5% 7% 8% 8%

Able to share/show recent purchases/styles/outfits 7% 8% 8% 6% 0% 5% 7% 7%

Other 1% 1% 1% 2% 3% 1% 1% 1%

While contests attract Gen X and Middle-Income Shoppers


Shading/bolding indicates significantly greater percentage compared with all shoppers; outline/bolding indicates significantly lower percentage (90% confidence level)


Use Facebook to Market New Deals and Promotions and Twitter for Reminders


Note: Arrows indicate significant difference when compared to all shoppers, 90% confidence level


Instagram Garnering Most Interest out of Curiosity and for Trends and Style Advice

In the Past Year what Prompted Shoppers to Connectwith any Apparel Retailers or Brands, by Site

(among all shoppers)

All Shoppers

Twitter Facebook Pinterest Instagram

Sample 1188 183 1102 277 96To stay aware of future deals and promotions

35% 40% 36% 39% 29%

To get a specific deal that was being offered

30% 37% 31% 34% 31%

Curiosity 23% 30% 23% 31% 34%

Ability to participate in contests 22% 32% 23% 27% 23%Stay up to date on brand/retailer news and current events

22% 29% 22% 29% 27%

No real reason 14% 13% 15% 7% 12%Get fashion advice/stay current on trends

13% 24% 12% 25% 38%

To express my taste/show others I like a particular retailer

13% 20% 13% 19% 20%

Entertainment 13% 19% 12% 16% 27%

Connect with others who share my interests/fashion

11% 14% 11% 15% 23%

Access to customer service 8% 16% 8% 10% 15%Ability to share/show off recent purchases/styles/outfits

7% 16% 7% 9% 16%

Other 1% 1% 1% 1% 1%


Shading/bolding indicate significantly greater percentage compared with all shoppers; outline/bolding indicate significantly lower percentage (90% confidence level)


Deals and Promotions Keep Shoppers Following, Pinning, and Posting … Especially Moms


*Read as 50% of shoppers stay connected with apparel retailers or brands because of access to deals and promotions

Moms: 55%

Moms: 55%

Seniors 27%

Seniors 27%


Social Media Key Take Aways

34Source: Kantar Retail analysis


Agenda

• Loyalty Program Participation Drivers

• Getting Social


35


Are You Accepting PayPal?

JCPenney joins Walmart, eBay, and Nordstrom (in-store only) as one of the few large-scale apparel-related retailers that accept PayPal, in early April

Amazon isn’t so why aren’t you?

Source: Kantar Retail Analysis and company reports 36

Why is this important?Macy’s, Gap, Kohl’s, Target and many other top apparel retailers do not accept at this time, key because:

1.Limits accessibility, in increasingly accessible world2.Stifles ability to differentiate from Amazon in a very relevant way3.Many smaller online-only retailers are accepting PayPal, broader competitive set4.PayPal accepted in more than 20,000 retail outlets across U.S. with user base of 128 million5.Sephora slated to accept in stores at EOY


luluemon Boots Trusted Advisory StatusLaunches “om finder” Yogi-centric mobile app

37Source: Kantar Retail Analysis and company media


See & Share Your Brand in MotionUsing Vine to strengthen brand connection


Glamour: advertising

trendy footwear & wearability from Clover

Canyon Boutique

Uniqlo: promoting pop-up truck

features, locations and experience

6 sec looping video to engage social

followers

6 sec looping video to engage social

followers

Urban Outfitters: leveraging as contest in support of

partnership with Converse, tie to key lifestyle interests

Walgreens: promoting

availability of healthy eating

assortment


New Approaches to Gen YSephora and Nordstrom’s latest efforts


No slowing down in targeting younger shoppers, increasing threat to

department stores: •Merchandising in ‘discovery format’ not by brands•Testing more interactive in-store features, e.g., Fragrance Sensorium•Leveraging online: online-only deals, exclusive products and Beauty Talk blog and community forum with mobile app•New “department store” brands arriving, e.g., Clinique and Bobbie Brown

No slowing down in targeting younger shoppers, increasing threat to

department stores: •Merchandising in ‘discovery format’ not by brands•Testing more interactive in-store features, e.g., Fragrance Sensorium•Leveraging online: online-only deals, exclusive products and Beauty Talk blog and community forum with mobile app•New “department store” brands arriving, e.g., Clinique and Bobbie Brown


Adding High-end Cosmetics to Value Offer

• Off-pricers usually, sell discontinued, slow selling, RTV beauty products at moderate to deep discount, inconsistent mix and availability

• Nordstrom Rack model – High penetration in single brands, i.e., Neutrogena and Origins

On mall and traditional department store implications as Century 21 debuts MAC

40Source: Kantar Retail Analysis, Store Visits and company reports


What to Watch ForNew initiatives and strategies on the horizon

41Source: Kantar Retail Analysis, and company reports


Growth Trends: Key Implications

42Source: Kantar Retail analysis

Mid-Year Forum / Chicago & New York City

43

Build an integrated, strategic and “thought-tested” plan for 2014Build an integrated, strategic and “thought-tested” plan for 2014

Day 1 - “Where to Play,” addresses 3 business questions:1.Which changes in the marketplace matter to retail growth & how do I find meaning? 2.How, should I be changing my 2014 plans/objectives based on the change drivers?3.What are winning retailers doing to outpace the market?

Day 2 “How To Win” - breakout sessions that take a look at specific retailers, channels, and topics. •Organized around “customer/channel,” “digital/shopper,” and “planning,” and designed to explain the change dynamics outlined on Day 1 are shaping marketplace strategies and plans. •Attend 4 focused 100-minute “power sessions”

Two Locations: Chicago / June 12-13•Hyatt Regency ChicagoNew York City / June 19-20•Intercontinental Times Square

Pricing for either location:

$2,795 for 2 full days

Featured speakers:•Bryan Gildenberg / Chief Knowledge Officer•Leon Nicholas / Senior Vice President•John Rand / Senior Vice President•David Marcotte / Senior Vice President•Mary Brett Whitfield / Senior Vice President•Frank Badillo / Chief Economist•Anne Zybowski / Vice President

Featured speakers:•Bryan Gildenberg / Chief Knowledge Officer•Leon Nicholas / Senior Vice President•John Rand / Senior Vice President•David Marcotte / Senior Vice President•Mary Brett Whitfield / Senior Vice President•Frank Badillo / Chief Economist•Anne Zybowski / Vice President

Track 1 / Customer/Channel•Walmart’s Momentum: Supercenter Fights for its Spark / Staying on Target: Planning in the Midst of a Shifting Landscape / Chain Drug: Keeping Up with the Channel EvolutionTrack 2 / Customer/Channel•Chain Grocery: The Big Picture / Supermarket Transformation / Value Discounters: The Who , Where, What To Do About It / Winning with the Warehouses: Keeping Club Relevant Track 3 / Digital/Shopper•Winning with Amazon / The New Shopping Cohort: New Requirements, Different Expectations / Navigating Life in the Amazon / The Real Story of Mobile Shopping Track 4 / Topical•Canada the Emerging Market / Omni-retailing: Integrating eCommerce into Retail Strategy / Walmart’s Next Directions: New Avenues for Growth / Small Box Retailing

Breakout Schedule

–Loyalty Program Participation Drivers

– Getting Social

–Emerging Growth Trends Around the Landscape

44

QUESTIONS?Submit questions on Q&A panel on right side of screen

245 First StreetFloor 10Cambridge, MA02142

F +1 617 499 2723

www.KantarRetailiq.com

245 First StreetFloor 10Cambridge, MA02142

F +1 617 499 2723

www.KantarRetailiq.com

Jahnia Sandford

Analyst

[email protected]

P + 614 355 4045

Mary Brett Whitfield

Senior Vice President

[email protected]

P + 614 355 4010

Presented by: DRIVING ENGAGEMENT THRU SOCIAL MEDIA & LOYALTY PROGRAMS Mary Brett Whitfield Senior...

Documents

Transcript of Presented by: DRIVING ENGAGEMENT THRU SOCIAL MEDIA & LOYALTY PROGRAMS Mary Brett Whitfield Senior...