A report from the Economist Intelligence Unit The new retail: From mobile aspirations to business results Sponsored by The new retail: From mobile aspirations to business results Contents Preface Executive summary Introduction: A shopping mall in the palm of everyone’s hand Consumers lead, retailers sluggishly follow Easier said than done: Moving from theory to practice Commitment and execution Focus on customer value 10 Conclusion 13 Appendix: Survey results 14 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results About this report The new retail: From mobile aspirations to business results is an Economist Intelligence Unit research report, sponsored by AT&T Our thanks go to all survey respondents and interviewees for their time and insight The report was written by Peter Moustakerski and edited by Christine Emba The findings and views expressed in the report not necessarily reflect the views of the sponsor March 2014 Who took the survey? The survey, conducted in September and October 2013, reached 156 respondents in the retail sector: 30% from North America, 29% from AsiaPacific, 27% from Western Europe, 6% from the Middle East and Africa, 5% from Latin America and 3% from Eastern Europe Respondents filled a variety of functional roles—40% were in general © The Economist Intelligence Unit Limited 2014 management, while 15% were in finance, 12% in strategy and business development, and 11% in marketing and sales, among others Twenty-six percent of respondents were CEOs, presidents, or managing directors, 16% were SVPs, VPs or Directors in Merchandising, and 33% were SVP, VP or Director-level in other roles The new retail: From mobile aspirations to business results Executive summary A proliferation of powerful and functionality-laden mobile devices has transformed the way that people live and function The ubiquity of mobile devices has had a particularly strong impact on the retail sector, as customers and employees increasingly use and depend on their mobile devices throughout their shopping experience This mobile penetration is transforming shopping behaviours, as well as how retailers define success In order to determine how retailers are responding to the rise in mobile-empowered consumers, The Economist Intelligence Unit, on behalf of AT&T, conducted a survey of over 150 global executives from around the world l Integrating mobile is crucial to delivering a quality omni-channel experience Deploying mobile devices and fostering a culture of usage and innovation are seen by 84% of retailers as important to a strong omni-channel experience To so effectively, however, retailers must be able to integrate their theoretical ambitions with practical execution In our survey, respondents who perceive their companies as “practical” leaders or early adopters—those who not only aspire to use but actually adopt mobile technologies and integrate them throughout their company—are more likely to report above-average success across the board Key findings include: l The most effective mobile tools for retailers focus on consumer value Consumers respond more favourably to sophisticated, narrowly targeted and higher-value-add tools, such as mobile coupons (75% of retailers believe they have generated a positive response from customers), geo-targeted advertisements and promotions (74%) and product search apps (72%) Retailers’ next generation of mobile technologies will be designed to address specific customer needs and pain points, integrate the customer experience across sales channels and create previously unexplored sales opportunities l The mobile transformation is solidly under way in retail, and consumers are leading the charge As of January 2014, 91% of Americans owned a mobile phone, and 55% had a smartphone According to our survey, 39% of respondents say that customers use mobile devices “extensively” or ”often” while shopping Thirty percent of respondents have seen major behavioural shifts in customers attributable to mobile device usage, while 25% have observed similar shifts in their employees © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results Introduction: A shopping mall in the palm of everyone’s hand Shortly after taking over as head of marketing at Max Brenner—a chain of chocolate-themed cafés and candy boutiques—Stacey Paul took note of one particular metric: as many as half of all users were accessing the company’s website on their mobile devices However, the newly redesigned site did not have key mobile features such as pinch-andzoom or swiping between pages “We had to rethink our strategy,” says Ms Paul “The world is quicker and smaller, and your life is now on mobile Retailers need to answer that call.” Hence one of Q her first decisions as the company’s top marketing executive was to redraw the website and optimise it for smartphones and tablets using the latest in mobile Internet design and functionality The growing digital retail turnover is increasingly happening on the go The significant penetration of mobile devices into the lives of everyday consumers is transforming shopping behaviours As Ms Paul points out, consumers’ daily activities are increasingly reliant on mobile phones and tablets— how they shop is no exception According to the How will the use of mobile devices impact the following stages of your customer’s purchasing lifecycle? Please select responses on a scale from ‘Strong impact’ to ‘No impact’ (% respondents) Strong Moderate impact impact Pre-purchase: Discovery and awareness 47 Weak impact No impact Don’t know/ Not applicable 38 Pre-purchase: Decision to purchase 24 58 10 5 Pre-purchase: Comparison and selection 41 42 Purchase: Decision to upgrade/increase purchase 26 45 18 6 Purchase: Shopping experience 33 Post-purchase: Fulfilment and delivery experience 29 Post-purchase: After-sales service and support experience 30 Post-purchase: Decision to repeat purchases/customer loyalty and advocacy 31 43 15 38 19 36 17 40 15 10 13 Source: Economist Intelligence Unit survey, October 2013 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results ❛❛ The world is quicker and smaller, and your life is now on mobile Retailers need to answer that call ❜❜ Stacy Paul Head of marketing Max Brenner Pew Research Center, a US think-tank, as of January 2014 91% of the US population carries a mobile phone, 55% have a smartphone and 42% own a tablet computer Young people and wealthier, more-educated consumers are even more connected to their smart mobile devices—they about one-quarter of their shopping online and one-third of them use their phones for online research when deciding whether to visit a brick-and-mortar store or a restaurant This mobile shopping trend is expected to accelerate—according to the 2014 Mobile 500 report published by Internet Retailer, mobile commerce in the US will grow 63% to reach US$34bn by the end of 2014, up from US$21bn in 2012 These trends are holding across retail industries, even in retail banking and brokerage “Today, 12% of our daily average revenue trades come through mobile,” says Paul Zettl, managing director of retail marketing and digital media at TD Ameritrade, a US online broker Customers can use its mobile app from their smartphones or tablets to check balances, access investment research and place trade orders This rapid and on-going evolution has put large © The Economist Intelligence Unit Limited 2014 amounts of information and powerful mobiletechnology tools at the fingertips of ordinary people, resulting in the emergence of a culture that will forever transform how people plan and their shopping Results from an Economist Intelligence Unit (EIU) survey of more than 150 retail executives worldwide, conducted in October 2013, confirm that consumers are increasingly relying on their mobile devices during their shopping experiences—39% of respondents say that customers use them “extensively” or ”often” while shopping The growing prevalence of mobile devices is expected to affect every stage of retail shopping, though the awareness and comparison stages of a customer’s purchasing lifecycle should experience the greatest impact Overall, mobile technologies will have a positive effect on customer engagement and key business metrics that matter to retailers’ business performance Ultimately, mobile technologies are widely expected to benefit the two most important objectives for retail operators: profitability and customer experience The trick for retail operators will be to transform their strategies to reap these benefits The new retail: From mobile aspirations to business results Consumers lead, retailers sluggishly follow “Consumers are leading the way in mobile shopping, and retailers are struggling to catch up,” says Ms Paul of Max Brenner Our survey data support her assertion—respondents to our survey see significant cultural and behavioural shifts both among their retail customers and employees as a result of increased mobile device usage The new reality of mobile technology has influenced business drivers touching everyone in the Q organisation, from corporate office to shop floor Providing an integrated, seamless shopping experience across digital and physical channels has continued to be a challenge for many retailers The delivery of such an omni-channel experience is an important strategic goal across the retail industry “It is what customers have come to expect—the confluence of their online and in-store experience with our brand,” says Claire Impact of mobile device and application use on different business drivers for retail organisations Please select responses on a scale from ‘Very positive impact’ to ‘Very negative impact’ (% respondents) Very positive impact Somewhat positive impact No impact Somewhat negative impact Very negative impact Don’t know/ Not applicable Volume of footfall or traffic 23 41 Rate of traffic-to-sale conversion 14 24 50 Average sale/check amount 19 28 25 10 43 26 Customer loyalty metrics 23 Number of times inventory turns per month 15 43 28 44 Inventory loss due to theft or waste 14 14 56 Seasonal/peak period demand management 17 33 Operating profit margins at the store level 24 Corporate overhead costs 18 12 37 28 26 30 38 15 31 10 10 71 11 Source: Economist Intelligence Unit survey, October 2013 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results Chambers, founder and CEO of Journelle, an upscale lingerie retailer in the US Yet many retailers still struggle with the challenge of co-ordinating customer experiences across channels, and many haven’t been completely successful Twenty-four percent of EIU survey respondents rate their company’s success in creating an omni-channel experience as “somewhat” or “well below average” compared with that of their peers Why are many retailers failing to realise their omni-channel goals or even catch up with the rest of the field? What separates the organisations that succeed from the rest of the pack? Easier said than done: Moving from theory to practice In our survey, we analysed two levels at which companies embrace mobile technology: “theoretical”, which reflects the leadership’s stance and the company’s stated position with regard to using mobile technology to achieve its strategic goals, and “practical”, which reflects the organisation’s actual use of mobile devices and apps to serve customers Our data show a strong connection between a retailer being either a theoretical or a practical leader in embracing mobile technologies and successfully implementing an omni-channel strategy—respondents who see their companies as frontrunners in the mobile space (either in theory or practice) are much more likely to report that they are enjoying above-average success creating a high-quality omni-channel experience More than one-third of our survey respondents believe that their company is a theoretical leader— that is, their company and its leadership team have a positive, encouraging attitude towards the use of mobile devices to engage customers and drive business results At the same time, however, actual use of these technologies tends to lag behind the operators’ theoretical aspirations This gap between theory and practice highlights both the challenge and the opportunity for retailers as they transform themselves into omnichannel players, and underlines the need for the strategies that we describe below Success by “practical” and “theoretical” mobile technology leaders in creating an omni-channel experience, compared with that of industry peers (% respondents) “Theoretical” leaders and early adopters “Practical” leaders and early adopters Well above average 34 36 Somewhat above average 39 27 27 Average/On par with peers Somewhat below average 0 Well below average 0 We not focus on the development of an omni-channel experience 36 Source: Economist Intelligence Unit survey, October 2013 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results Market leaders excel at motivating and mobilising their workforce to create an inhouse app culture of their own Commitment and execution For many retailers, in-store sales still dominate their revenues; thus, investing in the development of new digital channels may seem less urgent Such thinking leads to a lack of top-down leadership commitment to new mobile channels, which in turn affects the buy-in of the rest of the organisation In addition, mobile channels still account for a relatively small portion of revenues, and the cost of developing and maintaining a high-quality omni-channel experience can be significant “Merging the information from different databases is a real challenge,” says Ms Chambers of Journelle “Customers expect to walk into your store and pick up merchandise that they placed in their online cart the day before But we can’t see what’s in their online cart, and sometimes don’t even stock the same merchandise in our stores.” If retailers are to succeed as omni-channel players, they must meet two challenges First, they Q have to develop the leadership commitment—the theoretical aspiration—to use mobile technologies across sales channels to achieve their strategic goals Second, they need to find the focus and stamina—the practical execution capabilities—to follow through on their commitment and complete the complex tasks required to transform themselves into omni-channel operators These tasks include integrating information from multiple systems and databases, co-ordinating marketing content across customer touch-points and revamping operations to support product merchandising and fulfilment across different channels In our survey, respondents who perceive their companies as “practical” leaders or early adopters—those who not only aspire to adopt but also actually go forward to adopt mobile technologies and apps—are more likely to report above-average success across the board To what extent has the use of mobile devices and applications led to a cultural and behavioural shift at your organisation in the past years? (% respondents) “Practical” leaders and early adopters Followers Major change 52 16 Moderate change 41 Minor change No change 47 29 © The Economist Intelligence Unit Limited 2014 Source: Economist Intelligence Unit survey, October 2013 The new retail: From mobile aspirations to business results Q Has mobile device use had a positive impact on the following business drivers for your organisation? (% respondents) “Practical” leaders and early adopters Followers Customer loyalty metrics 86 57 Rate of traffic-to-sale conversion Operating profit margins at the store level 80 45 Volume of footfall or traffic 70 33 Average sale/check amount 64 37 20 Market leaders are much more likely to report that their employees “extensively” or “often” use mobile devices to serve customers or that mobile technologies have led to a major or moderate behavioural shift among their employees These retailers excel at motivating and mobilising their workforce to create an in-house app culture of their own and thus are able to respond to customers’ expectations when it comes to using mobile devices throughout the shopping lifecycle “Our mobile development team is embedded in the product team,” says Mr Zettl of TD Ameritrade He points out that having marketers who keep up with the latest mobile capabilities, along with app © The Economist Intelligence Unit Limited 2014 66 43 Number of times inventory turns per month Paul Zettl Managing director, retail marketing and digital media TD Ameritrade 73 44 Corporate overhead costs ❛❛ Building a ‘mobile first’ platform is the industry holy grail we are striving to reach ❜❜ 73 65 Season/peak period demand magangement Inventory loss due to theft or waste 84 63 48 Source: Economist Intelligence Unit survey, October 2013 developers who understand the marketing strategy and customer needs, is critical to the success of mobile strategies “Our strategy is to help our clients trade more intelligently,” says Mr Zettl, “and building a ‘mobile-first’ platform is the industry holy grail we are striving to reach.” Practical mobile app and device leaders also see greater impact of mobile technologies on a customer’s shopping journey, and they deploy more advanced and value-added services to their customers to maintain loyalty Most important, they report significantly higher benefits from mobile technology on all their key business metrics and, ultimately, on their company’s bottom line The new retail: From mobile aspirations to business results Focus on customer value The second dimension that underpins the omnichannel success of leaders goes beyond whether they have the commitment and capabilities to adopt and use the latest mobile technology tools Rather it matters what they with these technologies and how well they deploy them to solve pressing customer problems The widespread penetration of mobile devices and the proliferation of free or low-cost mobile applications have presented consumers with a plethora of tools designed to address their slightest need The realm of consumer retail Q shopping in particular has been flooded with tools and applications that target every step of the purchasing process Most, if not all, are aimed at making parting with cash anytime and anywhere as easy—and even fun— as possible for consumers The mobile tools most widely deployed by retailers today tend to focus on one primary sales channel rather than functioning across channels The most common tools include a company-branded mobile website or app (used by 65% of total survey respondents.) and social media software (53%) The next generation of mobile tools will be Which of the following mobile device technologies and applications are currently used by your company to serve your customers? (% respondents) “Practical” leaders and early adopters Company-branded mobile app/website 82 66 Customer WiFi 52 Big data analytics (eg, WiFi/Cellular) 61 73 27 Digital signage and in-store communications 55 29 Customer collaboration solutions (eg, customer profile, live chat/support) © The Economist Intelligence Unit Limited 2014 68 40 Click & reserve functionality 10 56 51 Mobile point-of-sale/payment Self-serve kiosks 80 54 Social media software (eg, monitoring, engagement and analytics) 28 24 Followers 50 50 Source: Economist Intelligence Unit survey, October 2013 The new retail: From mobile aspirations to business results ❛❛ Following the customers to where they want to go is key ❜❜ Claire Chambers Founder and CEO Journelle designed to address specific customer needs and pain points, integrate the customer experience across sales channels and create previously unexplored sales opportunities The Nieman Marcus mobile app, for example, combines customer service and collaboration with store staff The luxury retailer’s app allows customers to bookmark certain items and then connect by e-mail, text or phone with sales staff in a nearby store “Mobile customers behave differently from shoppers who are online or in a physical store,” says Ms Paul “They have less time and are acting with a specific purpose in mind.” Thus customers expect mobile apps to be simple, easy to navigate and geared towards achieving a specific, relevant objective Industry leaders and early adopters listen to pressing customer needs and respond with simple, user-friendly and useful apps and services US retailer Wal-Mart, for example, realised that some of its recession-hit customers had smartphones and wanted to shop online, but did not have credit cards with which to place orders To allow these customers to use their preferred channel, Wal-Mart began to let customers place orders online and Q then come into a bricks-and-mortar outlet to make payment in cash “Following the customers to where they want to go is key,” says Ms Chambers of Journelle, “and giving them a valuable service, such as pulling up their past purchasing history or the ability to pick up or return in the store goods they purchased online.” This distinction between mobile leaders and followers is evident in our survey results—leaders are much more likely to offer their customers click-and-reserve capabilities or use mobile point-of-sale payment systems For instance, US supermarket chain ShopRite is testing a mobile app that allows customers to scan items on their smartphones as they place them in their shopping carts and then use their phone to check out, thereby bypassing crowded checkout lanes Among mobile marketing tools, the most common are e-mail communication, social media integration and text messaging Yet these traditional digital methods are not necessarily the most effective way to reach new customers or cement existing relationships When asked about consumers’ response to different mobile marketing Which of the following mobile marketing tools and strategies you currently utilise to engage your customers? (% respondents) “Practical” leaders and early adopters Followers Email communication 82 81 Social media integration Text messaging/SMS 77 49 Product search apps 75 45 Geo-targeted advertisement and promotions 66 41 QR codes 70 38 Mobile coupons Mobile video advertisements 80 57 Store locator apps Mobile shopping card/payment apps 70 64 68 32 48 16 15 41 Source: Economist Intelligence Unit survey, October 2013 11 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results ❛❛ Targeting is key Your message can’t be broad anymore ❜❜ Stacey Paul Head of Marketing Max Brenner 12 tools, EIU survey participants rate e-mail and text messaging as least appealing More sophisticated mobile marketing tools such as geo-targeted promotions (used by 45% of survey respondents) and mobile coupons (39%) are also gaining ground and tend to generate greater customer engagement The Hijack app by Guatemalan footwear retailer Meatpack uses GPS technology to detect when users are in competitors’ stores Customers receive a message with a discount that starts at 99% and drops by 1% every second, meaning that the faster customers arrive at a Meatpack retail store, the higher a discount they will receive In addition to generating significant marketing buzz, the app reportedly “hijacked” 600 customers in a single week Consumers respond more favourably to such © The Economist Intelligence Unit Limited 2014 sophisticated, narrowly targeted and higher-valueadd tools According to participants in our survey, mobile coupons are most welcome, followed by geo-targeted advertisements and promotions, and product search-and-compare apps And when it comes to marketing tools, industry leaders in mobile deployment are much more adept at using high-value-add tools such as store locator apps, QR codes and geo-targeted ads and promotions “Targeting is key,” says Ms Paul “Your marketing message can’t be broad anymore, which is why geo-targeting is a must—it’s expected.” Best-in-class mobile tools provide both the speed and convenience mobile consumers crave, as well as content and interactions that are specifically targeted to their preferences and thus relevant to their needs The new retail: From mobile aspirations to business results Conclusion Mobile technology will continue to play an increasing role in improving the consumer retail experience and unlocking new revenue opportunities for retailers For the foreseeable future, consumers will likely set the speed, direction and expectations of the app culture revolution and retailers will their best to keep pace and realise the business benefits Accordingly, retailers will need to rethink their strategies to incorporate and prioritise the new mobile channels They will need to communicate these new attitudes both internally and externally, and mobilise their leadership and rank-and-file employees to execute the transformational initiatives that will lay the groundwork for their 13 © The Economist Intelligence Unit Limited 2014 omni-channel success In-store employees will be especially critical to this transformation Companies should enable those on the front lines with the necessary tools and training to develop a supply-side culture that meets the new needs of an increasingly mobile-savvy consumer Finally, retailers will need to become far better listeners to their customers Rather than taking a one-size-fits-all approach, they must navigate the clutter of apps and tools now available and prioritise those that address specific needs and problems— such as convenience, speed of transaction, individually tailored offerings and promotions—if they are to remain fresh, relevant and indispensable in the minds and hearts of consumers The new retail: From mobile aspirations to business results Appendix: Survey results Percentages may not add to 100% owing to rounding or the ability of respondents to choose multiple responses Overall, how would you characterise your company’s position with regard to utilising mobile devices and apps in achieving its strategic goals? (% respondents) Industry leader and innovator of mobile technologies 12 Early adopter of cutting-edge mobile technologies 24 Early follower of proven mobile technologies 28 Late follower of established mobile technologies 26 Not a follower of proven or established mobile technologies 10 Don’t know How would you characterise your organisation’s use of mobile devices and apps in serving your customers? (% respondents) Industry leader and innovator of mobile technologies 10 Early adopter of cutting-edge mobile technologies 18 Early follower of proven mobile technologies 30 Late follower of established mobile technologies 31 Not a follower of proven or established mobile technologies 10 Don’t know 14 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results To what extent are your employees using mobile devices and apps to serve their customers throughout their shopping journey? (% respondents) Extensively/always 16 Often 25 Sometimes 34 Rarely 18 Not at all Don’t know/Not applicable To what extent are your customers using mobile devices and apps to fulfil their shopping missions at your retail stores? (% respondents) Extensively/always 10 Often 28 Sometimes 36 Rarely 18 Not at all Don’t know/Not applicable In your opinion, to what extent has the use of mobile devices and applications led to a cultural and behavioural shift at your organisation in the past years? Please select responses on a scale from ‘Major change’ to ‘No change’ (% respondents) Major change Cultural shift among your employees 28 Moderate change Minor change 42 No change Don’t know 21 81 Cultural shift among your customers 27 42 Behavioural shift among your employees 25 42 21 22 Behavioural shift among your customers 30 15 © The Economist Intelligence Unit Limited 2014 35 27 The new retail: From mobile aspirations to business results To what extent will the use of mobile devices and applications lead to a cultural and behavioural shift at your company in the next years? Please select responses on a scale from ‘Major change’ to ‘No change’ (% respondents) Major change Cultural shift among your employees 40 Moderate change Minor change No change Don’t know 43 12 41 Cultural shift among your customers 35 42 17 51 Behavioural shift among your employees 43 38 15 Behavioural shift among your customers 39 38 17 51 Which of the following mobile device technologies and applications are currently used by your company to serve your customers? Please select all that apply (% respondents) Company-branded mobile app/website 65 Customer WiFi 60 Social media software (eg, monitoring, engagement and analytics) 53 Big data analytics (eg, WiFi/Cellular) 51 Mobile point-of-sale/payment 44 Click & reserve functionality 37 Digital signage and in-store communications 34 Customer collaboration solutions (eg, customer profile, live chat/support) 33 Self-serve kiosks 29 Other 16 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results Which of the following mobile device technologies and applications not currently used by your organisation will be implemented in the next eighteen months? Please select all that apply (% respondents) Customer collaboration solutions (eg, customer profile, live chat/support) 26 Mobile point-of-sale/payment 22 Self-serve kiosks 21 Digital signage and in-store communications 20 Social media software (eg, monitoring, engagement and analytics) 20 Click & reserve functionality 19 Company-branded mobile app/website 13 Big data analytics (eg,WiFi/Cellular) 13 Customer WiFi Other None of the above 19 Which of the following mobile marketing tools and strategies you currently utilise to engage your customers? Please select all that apply (% respondents) Email communication 82 Social media integration 63 Text messaging/SMS 62 Store locator apps 54 Product search apps 51 Geo-targeted advertisement and promotions 45 QR codes 44 Mobile coupons 39 Mobile shopping card/payment apps 23 Mobile video advertisements 21 Other 17 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results How have customers responded to the mobile marketing tools and strategies used by your organisation? Please select responses on a scale from ‘Positively’ to ‘Negatively’ (% respondents) Positively Neutral Negatively Don’t know/ Not applicable Geo-targeted advertisement and promotions 74 20 Store locator apps 57 41 Product search apps 72 24 42 QR codes 52 Text messaging/SMS 56 35 Email communication 57 35 Social media integration 66 29 20 Mobile coupons 75 Mobile shopping card/payment apps 69 22 Mobile video advertisements 59 41 How will the use of mobile devices impact the following stages of your customer’s purchasing lifecycle? Please select responses on a scale from ‘Strong impact’ to ‘No impact’ (% respondents) Strong impact Pre-purchase: Discovery and awareness 47 Moderate impact Weak impact No impact Don’t know/ Not applicable 38 Pre-purchase: Decision to purchase 24 58 10 Pre-purchase: Comparison and selection 41 42 Purchase: Decision to upgrade/increase purchase 26 45 18 6 Purchase: Shopping experience 33 Post-purchase: Fulfilment and delivery experience 29 Post-purchase: After-sales service and support experience 30 Post-purchase: Decision to repeat purchases/customer loyalty and advocacy 31 18 © The Economist Intelligence Unit Limited 2014 43 15 38 19 36 17 40 15 10 13 The new retail: From mobile aspirations to business results How would you rate your company’s success in creating an omni-channel experience compared with that of your industry peers? (% respondents) Well above average 14 Somewhat above average 29 Average/On par with peers 28 Somewhat below average 19 Well below average We not focus on the development of an omni-channel experience In your opinion, how important is the deployment of mobile devices and apps to the creation of an omni-channel experience? (% respondents) Highly important 47 Moderately important 37 Minimally important 10 Not important at all Don’t know What impact has the use of mobile devices and apps had on the following business drivers for your organisation? Please select responses on a scale from ‘Very positive impact’ to ‘Very negative impact’ (% respondents) Very positive Somewhat No impact impact positive impact Somewhat negative impact Very negative impact Don’t know/ Not applicable Volume of footfall or traffic 23 41 Rate of traffic-to-sale conversion 14 24 50 Average sale/check amount 19 25 28 43 10 26 Customer loyalty metrics 23 43 Number of times inventory turns per month 15 Inventory loss due to theft or waste 14 28 14 33 Operating profit margins at the store level 24 Corporate overhead costs 18 © The Economist Intelligence Unit Limited 2014 12 56 Seasonal/peak period demand management 17 19 44 37 28 26 30 38 15 31 10 10 71 11 The new retail: From mobile aspirations to business results In your opinion, over the next years, will the use of mobile devices and apps have a positive or negative effect on your company’s bottom line and your customer’s experience? Please select responses on a scale from ‘Positive effect’ to ‘Negative effect’ (% respondents) Positive effect No effect Negative effect Don’t know/ Not applicable Your company’s bottom line 75 18 14 Your customers’ shopping experience 82 Please select the retail sub-sector your company belongs to In which country are you personally located? (% respondents) Select the one response that best reflects the classification of your company (% respondents) United States of America 28 United Kingdom General merchandiser 8 Singapore Department store Supermarket Superstore/discounter Convenience store Specialty retailer: footwear and apparel 17 Specialty retailer: personal care or health and beauty merchandise Specialty retailer: household goods Specialty retailer: home improvement merchandise Specialty retailer: consumer electronics Other specialty retailer 13 Catalogue or online retailer Other retailer Australia, China, India, Japan, South Korea Brazil, Germany, Italy, Romania, Spain Canada, France, Saudi Arabia, United Arab Emirates Argentina, Denmark, Hong Kong, Switzerland, Austria, Belgium, Finland, Ghana, Ireland, Israel, Kenya, Latvia, Lithuania, Malaysia, Mexico, Poland, Portugal, South Africa, Sweden, Taiwan, Turkey What are your organisation’s global annual revenues in US dollars? (% respondents) $500m or less 52 $500m to $1bn 15 $1bn to $5bn 17 $5bn to $10bn $10bn or more 10 In which region are you personally located? (% respondents) North America 30 Asia-Pacific 29 Western Europe 27 Middle East and Africa Latin America Eastern Europe 20 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results What is your main functional role? (% respondents) General management 40 Finance 15 Strategy and business development 12 Marketing and sales 11 IT Human resources Supply-chain management Procurement Information and research Operations and production Risk/Security Customer service Other Which of the following best describes your title? (% respondents) CEO/president/managing director 26 CFO/Treasurer/comptroller 10 CIO/CTO/Technology director CMO/Advertising officer/ Experience officer Other C-level executive SVP/VP/Director, Merchandising 16 SVP/VP/Director, Distribution SVP/VP/Director, Finance/accounting SVP/VP/Director, Other 18 21 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd nor the sponsor of this report can accept any responsibility or liability for reliance by any person on this white paper or any of the Cover: Shutterstock information, opinions or conclusions set out in the white paper 22 © The Economist Intelligence Unit Limited 2014 London 20 Cabot Square London E14 4QW United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8476 E-mail: london@eiu.com New York 750 Third Avenue 5th Floor New York, NY 10017 United States Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 E-mail: newyork@eiu.com Hong Kong 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com Geneva Boulevard des Tranchées 16 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: geneva@eiu.com [...].. .The new retail: From mobile aspirations to business results 4 Focus on customer value The second dimension that underpins the omnichannel success of leaders goes beyond whether they have the commitment and capabilities to adopt and use the latest mobile technology tools Rather it matters what they do with these technologies and how well they deploy them to solve pressing customer problems The widespread... specifically targeted to their preferences and thus relevant to their needs The new retail: From mobile aspirations to business results 5 Conclusion Mobile technology will continue to play an increasing role in improving the consumer retail experience and unlocking new revenue opportunities for retailers For the foreseeable future, consumers will likely set the speed, direction and expectations of the app culture... officer 3 Other C-level executive 7 SVP/VP/Director, Merchandising 16 SVP/VP/Director, Distribution 6 SVP/VP/Director, Finance/accounting 9 SVP/VP/Director, Other 18 21 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd nor the sponsor... revolution and retailers will do their best to keep pace and realise the business benefits Accordingly, retailers will need to rethink their strategies to incorporate and prioritise the new mobile channels They will need to communicate these new attitudes both internally and externally, and mobilise their leadership and rank-and-file employees to execute the transformational initiatives that will lay the groundwork... recession-hit customers had smartphones and wanted to shop online, but did not have credit cards with which to place orders To allow these customers to use their preferred channel, Wal-Mart began to let customers place orders online and Q then come into a bricks-and-mortar outlet to make payment in cash “Following the customers to where they want to go is key,” says Ms Chambers of Journelle, “and giving them a... Early follower of proven mobile technologies 30 Late follower of established mobile technologies 31 Not a follower of proven or established mobile technologies 10 Don’t know 1 14 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results To what extent are your employees using mobile devices and apps to serve their customers throughout their shopping journey?... 51 Mobile point-of-sale/payment Self-serve kiosks 80 54 Social media software (eg, monitoring, engagement and analytics) 28 24 Followers 50 50 Source: Economist Intelligence Unit survey, October 2013 The new retail: From mobile aspirations to business results ❛❛ Following the customers to where they want to go is key ❜❜ Claire Chambers Founder and CEO Journelle designed to address specific customer... Mobile shopping card/payment apps 23 Mobile video advertisements 21 Other 1 17 © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results How have customers responded to the mobile marketing tools and strategies used by your organisation? Please select responses on a scale from ‘Positively’ to ‘Negatively’ (% respondents) Positively Neutral Negatively Don’t... month 15 Inventory loss due to theft or waste 14 28 14 33 Operating profit margins at the store level 24 Corporate overhead costs 18 © The Economist Intelligence Unit Limited 2014 12 56 1 Seasonal/peak period demand management 17 19 44 2 37 28 26 30 38 15 31 10 7 10 71 11 The new retail: From mobile aspirations to business results In your opinion, over the next 3 years, will the use of mobile devices... that allows customers to scan items on their smartphones as they place them in their shopping carts and then use their phone to check out, thereby bypassing crowded checkout lanes Among mobile marketing tools, the most common are e-mail communication, social media integration and text messaging Yet these traditional digital methods are not necessarily the most effective way to reach new customers or cement ... experience The trick for retail operators will be to transform their strategies to reap these benefits The new retail: From mobile aspirations to business results Consumers lead, retailers sluggishly... October 2013 The new retail: From mobile aspirations to business results ❛❛ Following the customers to where they want to go is key ❜❜ Claire Chambers Founder and CEO Journelle designed to address... © The Economist Intelligence Unit Limited 2014 The new retail: From mobile aspirations to business results To what extent are your employees using mobile devices and apps to serve their customers