Global Shopping Trends
Trends Multi channel Global Shopping trends submitted sy: Bharat Bhushan Narang (Roll NO 18) EPGDIB – 2012 – 14 subject: IMM Indian Institute of Foreign Trade, New Delhi Faculty: Dr. R. M. Joshi 1. Introduction Multi channel Global Shopping trends 1. Background “91% of global consumers believe that companies must go beyond the minimum standards required by law to operate responsibly. ” Cone Communications/ Echo, May 2013 “87% of global consumers believe business should place at least equal emphasis on social in terests as business interests, and ‘purpose’ has increased as a purchase trigger by 26% since 2008. of 14 Edelman, April 2012 Globalization is not a new trend for retailers: in fact, it was the theme of last year’s Global Powers of Retailing. In 2012, retailers will continue to look to enter new markets like Asia Pacific, Africa and South America as higher growth in these regions continues, and they will look to improve their existing operational performance in these markets to achieve sustained growth. Along the way, retailers have learned that to succeed in emerging markets they must significantly customize both their market models and product offerings to meet local needs and preferences.
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In addition, expect retailers to more fully empower store and regional managers when developing marketing and sales plans, given the managers’ better understanding of local consumer and community needs. Finally, real estate will continue to be of great importance when entering new markets, given the difficulties of gaining a foothold when local operators already own the best locations. Retailers will not only be looking for growth in emerging markets; they will also look to innovate in multichannel strategies, mobile and data analytics to maintain or grow their market shares in developed markets.
We an see global consumers to be expecting more and emphasizing on preferences an d the social interest. Consumers with Internet access in growth markets & in emerging market have become voracious shoppers, often exceeding the global average in early adoption of products, affinity for aspirational brands, researching, and deal sensitivity. 2. Problem Situation Retailers are entering new markets, both developed and developing, through varlous cnannels. For example, one may open an online store overseas to test the market before committing toa physical presence.
Most retailers have a presence across multiple channels (e. . , stores, catalogs, online, call centers, social networking, ddigital displays, mobile). Few, however, truly understand how consumers are using and shopping across each of their channels (e. g. , using social media sites to get discounts, going to the store to test the product and then purchasing the product online), and even fewer have a seamless, consistent and comprehensive multichannel strategy. However, having a comprehensive multi channel strategy will become more important than ever.
As consumers become sawier, they are increasingly taking charge of their shopping experience, dentifying and leveraging many different sources of information and channels to optimize the different elements of their shopping Journey. As of this writing, 71 ppercent of respondents to the Deloitte U. S. 2011 Annual Holiday Survey were planning on shopping multiple channels in some manner – viewing or researching products in one channel and purchasing in another, for exam ple.
Since customers do not distinguish between channels, retailers will have to support seamless integration among and between each of them, including access to assortment, customer informa tion and order information. Within the next few years, it is likely that onsumers will expect to use a mobile device to get realtime inventory information about the closest stores or to order a product while in a store and have it delivered to their home.
Therefore, in 2012 it is likely that retailers will continue to develop and launch innovative multichannel solutions. Retailers will need to have a clear understanding of the shopping Journey and how consumers move across channels, from mobile to social networking, the web and in store. Understanding how they go through the prepurchase, purchase, and post purchase process will be key to retailers identifying opportunities that both nhance their bottom line and actually make sense to consumers.
For example, most large retailers in developed multichannel markets like the United States and the U. K. 2 of 14 no longer operate in silos but have become “brand and product showrooms” that drive revenues across all channels and are “destinations” for consumers to do more than Just simply browse and transact To support ssimilar iintegrated, seamless and consistent multichannel experiences, many retailers will need to reevaluate their business and make fundamental changes across their organizations in all functions.
With the incredible speed t which the iPhone 4S sold – one million units in 24 hours, four million the weekend it was launched – and ssmartphones emerging as the most dominant consumer technology platform, one cannot mention multichannel without also discussing mobile. Moreover, since a significant population of mobile users has not even reached shopping age, one can anticipate that moDlle, ana all tne capaDllltles ana opportunltles It OTTers, will De top 0T mina among retailers in 2012. Mobile consumers are no longer Just early adopters: They represent a broad range of consumer segments and have become part of the ainstream population.
For retailers looking to remain relevant in this connected consumer environment, the ability to leverage mobile to deliver an improved customer experience will be a critical success factor. To be sure, there is a great deal of aactivity in launching mobile solutions focused on the preshopping experience. However, many retailers are diving in without a clear strategy and few have launched an iintegrated multichannel experience. Retailers that can deliver an iintegrated customer experience demonstrating a clear understanding of consumer preferences and behaviors across the urchase process will have an advantage over the competition.
In the race to put out a “cool” app, retailers must not neglect three important factors: Usability and the user experience, including integration points between mobile and other channels. A poor customer experience is worse than no app at all. Security and privacy. A mobilerelated security or privacy breach could severely damage a retailer’s reputation and hamper adoption of mobile capabilities. Access for employees and business partners. Sales associates need access to the same information as the connected “super user” consumers who walk hrough the door.
Providing suppliers realtime visibility into the location and estimated arrival time of shipments can ultimately benefit consumers as well. From data to personalization Data analytics and personalization will continue to be critical success factors in 2012 and beyond. Indeed, personalization has become the norm for growing numbers of consumers. Given all the new channels through which retailers are interacting with consumers, from pointofsale to mobile to social media sites, the sheer volume of data that can be collected about consumers and their shopping behaviors continues to row.
The industry is evolving quickly in its data analytics capabilities and in its ability to develop personalized marketing campaigns and customer experiences. Still, the ongoing challenge for retailers will be how to best analyze all this rich data and derive from it valuable insights about what consumers want and need. While technology is bringing radical changes to how people shop, the bricks andmortar store remains the core of retail. The physical store, however, is no longer the final shopping destination; increasingly, it is becoming a piece in a larger, more connected customer experience.
This transition will require retailers to innovate and rethink their operating models in ways many couldn’t even conceive of five years ago. In this, we shall be understanding the behavior, pattern, shopping trend in global m arket. 3. Major findings/lssues PreTerences over aeslgner products : SIX out respondents in the AsiaPacific 3 of 14 10 online survey region said they are willing to pay extra for designer products, exceeding the global average by 17 ppercentage points. Affinity for buying famous brands is highest among respondents in the AsiaPacific (55%) and Middle East/
Africa (56%) markets, exceeding the global average of 47%. Source http:// www. marketingprofs. com Chinese consumers are the most willing to pay more for designer products (74% of respondents), and fondness for famous brands is highest in India (74%).. Preferences over designer products: Six out of 10 online survey respondents in the Promotions: 78% of global respondents say quality is their most important product concern, with respondents in Latin America (83%) and Asia Pacific (82%) exceeding the global average. Price is key as well, with 65% of global respondents ranking it as important. % of global shoppers are aware of promotions and discounts and say products wit h free gifts are good incentives (58%). In particular, a large ppercentage of shoppers in the Philippines (77%), Vietnam (75%), Greece (74%), and Turkey (72%) find free gifts apealing. 4 of 14 Source http://www. marketingprofs. com . Shopping Around: Latin Americans are the most likely to shop around, to have preferred brands in mind before shopping, and to sample first before making a purchase. North American respondents put the least trust in products recommended by profes sionals (35%).
Respondents in the Latin America and Middle East/ Africa rely the most on the advice of 5 of 14 professionals. Source http://www. marketingprofs. com Multichannel Shopping: With the ability to shop anywhere at anytime with any device, consumers are demanding excellence and consistency at every turn and are challenging retailers and brands to keep up. The key The increasingly sophisticated online shopper One of the findings that stands out – and one heavy with implications for retailers – was the selfdescribed sophistication of the online shoppers we surveyed.
Many of considered themselves to be highly capable in terms of researching and purchasing nline. In fact, 72% of US respondents consider themselves to be either confident or experts in this regard, slightly besting the 69% of global respondents that consider themselves to De at tnls same level. 0T tne overall gr owtn In onllne sales In 2012 came from existing shoppers simply buying more online The popularity of online shopping is rooted in many factors What is it that is so attractive about online shopping, regardless of nationality or geography?
There’s a great deal of global consistency in the top five factors cited. The conventional wisdom is that the issue of price is the driving force or the growth of online shopping, and indeed, it does feature among the top three reasons cited by our survey respondents Insights for the US Retail Industry, retailers can gain an additional margin oopportunity of 8% to 12% by offering free shipping, yet of retailers charge for shipping products.
Perhaps even more impactful is the fact that 2 out of 3 US consumers say they are likely to cancel a purchase without free shipping The desired multichannel purchase Journey Online shopping has opened up huge new choices for consumers, not Just in terms of what they buy, but how they buy it. The Internet 6 of 14 has empowered the consumer in three ways: during the decision making process leading to the purchase; at the actual moment of purchase; and tthroughout the product owinership period, including product delivery, maintenance, and return.
The challenge – at least for some retailers – is that consumers are starting to behave in far more sophisticated ways, whether they’re buying expensive items or weekly groceries. Because most retailers haven’t yet created efficient multichannel models, consumers are working it out for themselves, using different channels in ways hat best suit them. Consumers may choose to research a product in the store ” a shoe perhaps ” then use their mobile phone to find a better price online, and then call into the retailer’s customer service line to order and have the shoe shipped to their home.
In essence, consumers are creating their own multichannel experiences by leveraging multiple retailers across a single category or product Keeping up with multichannel shoppers is getting more complex Take the clothing category. Almost onethird of our respondents said they prefer to research and purchase clothing nline, and this puts an onus on the retailer to manage the return process The role of the physical store is changing A key issue for all retailers with large numbers of physical stores is the role those stores should be playing in a multichannel world and how that differs by country.
Chinese online shoppers, for example, are embracing the online medium more quickly than shoppers from other countries, replacing the need for physical retail outlets. But no matter the country, retailers should consider the roles of their stores now and in the future. Are they flagships for the brand? Are they a combination of flagship and technology emporiums, such as the Apple stores? Are they showrooms for product display, as is increasingly the case with white goods?
What is the role of the retail store in the Tuture Ine world Is getting smaller: Local players Deware our survey results show that within individual territories there exists a sthrong bias towards the most wellknown, incountry, or homebased retailers. For example, the survey shows that the top ten retailers shopped across channels in the last 12 months include Walmart in the US (41% of local online hoppers) Argos (39%) and Tesco (30%) in the I-JK, and Taobao in China (34%). Source:http://www. wc. com/en_us/us/retailconsumer/publications/assets/pwcus multichannelsh oppingsurvey. pdf 7 of 14 2. Strategy Adopted Trend watching analysis and study Global Multi Channel consumer surveys and reports by PWC etc. Global shopping trends and behavior pattern Understanding & evaluating multi channel shopping trends Data analyzed and studied by various sources providers including PWC and Nielson Critically evaluating the challenges and oopportunity for global shopping trends in fut ure of 14 3.
Critical Evaluation of the Strategy Adopted Multichannel shopping is here to stay with the ability to shop anywhere at any time with any device, consumers are demanding excellence and consistency at every turn and are challenging retailers and brands to keep up. The key question retailers must now answer is How will multichannel shopping behavior continue to evolve? and What investments must be made to meet consumer expectations? Reason why consumers buy directly from a brand / manufacturer Source: http://www. pwc. com/gx/en/retailconsumer/retailconsumerpublications/ lobalmultichannelconsu mersurvey/countrysnapshots. html 90f14 Source: http://about. datamonitor. com/sectors/retail/om/luxuryretailmarketsize strategiescompetitor/ 100f14 Source: http://www. giovannicappellotto. it/4248globaltrendsonlineshopping/ To help understand this evolving retail marketplace, I undertook PW’C global study of consumers which was focused on addressing the habits and preferences 0T onllne snoppers. snoppers Trom elgn t OITTerent terrltorles (us, cnlna, Hong Kong, Germany, France, I-JK, Switzerland, and The Netherlands) were iincluded Key findings from their study revealed:
Twenty ppercent of survey consumers made their first online purchase within the last year, suggesting great upside oopportunity for retailers with an online presence Many more global online shoppers are following brands using social media, but only 3% have used the network to shop Researching products online is a critical element of multichannel shopping Consumers are leading the way in multichannel shopping, with many retailers lagging behind when it comes to meeting consumer need i have leveraged the insights from data and research to make several observations about how etailers can better support their online customers – and attract new ones with three themes as . “Multichannel shopping as a major force”, “Multichannel shopping consolidation” and “Global retailing in 2020”.
I have also highlighted several actionable items that 11 of 14 can help retailers keep up with and adapt to the changing multichannel retail landsc ape: Become far more innovative with their online websites and other ddigital offerings Improve bricks and mortar formats to emphasize quality and customer satisfaction as opposed to price and selection Align themselves with he growing middle class in emerging markets who are shopping more online and using multi channels to a greater degree than shoppers in developed mar kets Focus on satisfying customers across all channels, instead of viewing ddigital channels as a competing channel Today, global retailers have a huge oopportunity to enhance the experiences necessary to stay ahead of shoppers who are demanding more customization in terms of product choice, delivery, return policies and the number of retail channels for shopping 4.
Lessons Learnt Global retailing in 2020 The complete embrace of ddigital technology As lobal world, and in turn, increasingly multi channel shopping world evolves, there are several trends that will permeate global shopping behaviors in the future: Complete embrace of ddigital technology: By 2020 retailers will have fully embraced the use of ddigital technology, including mining consumer data to better understand purchase behavior, fully employing social media, and leveraging twoway communication channels with the workforce, whether infield, instore, or during travel. Heightened influence of social media: Social media will influence a larger proportion of sales,