Beyond transactions Building a compelling retail experience. An Economist Intelligence Unit white paper Sponsored by SAP

Transcription

1 An Economist Intelligence Unit white paper Sponsored by SAP

2 Preface : is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Dan Armstrong was the editor of the report and Sylvia Helm as the author. Mike Kenny was responsible for layout and design. Our thanks are due to all of the executives who responded to the survey. October 1 Economist Intelligence Unit Limited

3 Contents Introduction Key findings Conclusion Appendix 1: Overall survey results 8 Appendix 2: Americas survey results 1 Appendix : Asia-Pacific survey results 18 Appendix : Europe Middle East and Africa survey results 2 2 Economist Intelligence Unit Limited

4 Introduction Global recession, the accompanying fall in demand and the proliferation of shopping choices have combined in the last year to make retailing a tough business in which to succeed. Shoppers can buy the same goods from any number of interchangeable sources, including competing chains and multiple web commerce sites. They can use their mobile phones to scan bar codes and instantly obtain a list of stores and website where the product is available and how much it costs at each. They can reject a retailer for any number of reasons: a price that may be only pennies higher than competitors, the level of convenience, the friendliness of the sales staff, even the store s décor. When products are delivered to the door at a low price with a click of the mouse, there is no reason to even leave the house. To differentiate in this environment, retailers need to provide something special something informed by the qualities that the customer values. If it is not price, the key is customer experience. Regardless of channel, the retailer needs to provide a consistently enjoyable and convenient shopping experience, ensuring that everything from the feel of the store or website to the return and exchange policy and the promotions extended to the customer is carefully matched with the traits that the customer values. In this difficult economy, retailers would be well-advised to focus on the elements within their control, especially building customer loyalty among the most valuable customers who account for the bulk of the revenues and profits. Getting these customers to keep coming back requires gathering information from customer transactions, sharing that information across customer-facing units, and ultimately measuring and taking actions based on the value of each customer. About the survey In September, the Economist Intelligence Unit surveyed 89 executives of retail organisations on the challenges of getting customer-facing departments to work together more consistently and effectively. Survey respondents spanned the globe, with % from the Asia-Pacific region, 2% from the Americas and % from EMEA. Respondents annual revenue ranged from less than US$5m to more than US$1bn. The level of seniority of respondents was high: 1% were C-level or board members and another 1% were VPs or heads of business units. Economist Intelligence Unit Limited

5 Key findings Estimating customer lifetime value Most retail organisations in the survey consider customer loyalty their strong suit. Despite the recession, 5% say they have greatly strengthened customer relationships over the past 12 months. What they have not done is figure out a way to measure the lifetime value of their customers and use that information to prioritise their sales and marketing efforts. Regardless of industry or region, very few executives can honestly say that their companies can quantify the value of their best customers or any customers, for that matter. Measuring the value of customers (% of respondents who agree minus % who disagree) Disagree Agree Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months My organisation has an accurate way to estimate the lifetime value of customers My organisation has an accurate way to estimate the lifetime value of customers Source: Economist Intelligence Unit survey, September. Targeting the customers As to which customer-related areas need to be improved the most, the number-one response is targeting the right customer to meet sales goals. Retailers point to segmenting and profiling shoppers, reducing the cost of sales and cross-selling or upselling shoppers as areas in need of improvement. They also mention enhancing their ability to drill down to the individual sales level to understand what each customer is likely to buy, estimate how much revenue will be produced, and what to promote or cross sell each Economist Intelligence Unit Limited

6 customer. To do this, retailers have moved beyond traditional demographic criteria to frequency and size of purchases, lifestyle information and the last product bought. For instance, the US women s clothing retailer Coldwater Creek which sells through retail stores, a web site and direct-mail catalogs recently announced the launch of the Onecreek loyalty program aimed at the top 5% of the company s active customers. It offers early peeks at new merchandise, a personal shopper, free shipping on returns and a gift on the customer s birthday. Eligible customers are those who purchase three times as frequently and spend four times as much as an average customer. The program is designed to improve retention and overall spend within this very important and profitable segment of our customer base, said Dennis Pence, the company s CEO, in a press release. Targeting resources Survey respondents say big benefits can be gained from integrating marketing, sales and service activities. If all customer-facing service units share the results of every customer interaction, they should receive a detailed picture of shopper behavior from all angles. Then resources could be prioritised based on total value of each customer over the life of the relationship. Many companies, including Sony Ericsson, Bell Canada, Samsung, Apple and Amazon have distinct customer service numbers for so-called executive customers those whose spending surpasses a certain level, whether for their companies or on their own behalf. These customer service agents have information on each customer at the touch of a button, and are empowered to offer discounts and provide extras on depending on the value of the relationship. Top three benefits from integrating marketing, sales and service activities? Developing and sharing a detailed picture of shopper behavior and preferences Making each unit aware of how the others have interacted with a given shopper Prioritising resources directed towards shoppers by total value over the life of the relationship Source: Economist Intelligence Unit survey, September. 5 Economist Intelligence Unit Limited

7 How the three regions differ The three regions surveyed the Americas, Asia-Pacific and EMEA all give themselves top marks for excellent customer service. All pride themselves on the loyalty of their customers. And all admit that their organisations cannot accurately measure the value of or even identify, in many cases their most profitable customers. The challenges faced in each region include the following. Americas Reducing the cost of sales necessary to keep margins low and prices competitive is a top priority for Americas retail organisations. In the Americas, customer feedback tends to be filtered through the less expensive e-commerce channels, rather than from direct response feedback (as is the case in the two other regions). Asia-Pacific Asia-Pacific retail organisations get most of their customer feedback in stores, through retail sales staff, and at the point of sale. They are the lowest users of e-commerce, and call centers are used by only 1% of respondents. EMEA Of all regions surveyed, EMEA retail organisations are the least able to gauge the lifetime value of customers. Most in need of improvement: profiling, targeting, and cross selling or up selling existing customers. EMEA retailers use call centers the least and direct response (direct mail, ) the most. Economist Intelligence Unit Limited

8 Conclusion Few survey respondents say they can accurately measure the value of customers. Faced with challenges they cannot control global economic trends, rapid shifts in product demand, commoditization of the retail channel they have to focus on what they can control, working to understand the customer and provide a pleasant and convenient retail experience. Retailer organisations should consider how to: Do a better job of analysing the customer base and measuring the value of individual customers. Share and act on customer information in all customer-facing units, making sure to improve the weak links. Differentiate customers by products purchased, services used and revenues generated. Provide distinct service to high-value customers, building their trust, increasing their loyalty, and generating more revenues. Economist Intelligence Unit Limited

9 Appendix 1 Overall survey results Appendix: Overall survey results In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to customers Operational excellence: Creating highly efficient processes Product innovation: First to market with groundbreaking new products or services Each of the organisation s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to No coordination; 2. Ad hoc coordination;. Some procedures. Procedures 5. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns 8 2 Executing promotions/campaigns Measuring effectiveness of promotions/campaigns Developing and launching new products Analysing and segmenting shoppers Gauging shopper satisfaction Responding to shopper demands or complaints Incorporating shopper feedback into products/services Economist Intelligence Unit

10 Appendix 1 Overall survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most shoppers consider 2 Compared to our competitors, my organisation s shoppers are more loyal 2 1 My organisation has an accurate way to estimate the lifetime value of customers 9 1 My organisation prioritises sales and marketing resources based on each customer s lifetime value 52 1 We are currently developing a social media strategy 1 2 My organisation has more flexibility than its competitors in pricing its products 1 9 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 52 8 Shoppers view my organisation s products and services more as commodities now than five years ago Our margins are higher than the margins of most of our competitors 1 If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 1 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Targeting the right shoppers to achieve sales volume and revenue objectives Segmenting and profiling shoppers Reducing the cost of sales Cross-selling or upselling shoppers Measuring/optimising effectiveness of marketing and promotional campaigns 28 Maximising repeat purchases and building loyalty among shoppers 28 Gathering shopper intelligence in the course of providing service 2 Measuring the satisfaction of shoppers Generating promotions/campaigns 18 Involving shoppers in product/service development (eg, co-creation) 18 Building long-term relationships with store management 1 Ensuring that shopper complaints are resolved quickly 1 Creating effective collateral 8 Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Developing and sharing a detailed picture of shopper behavior and preferences Making each unit aware of how the others have interacted with a given shopper 1 Prioritising resources directed towards shoppers by total value over the life of the relationship Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales 2 Establishing common definitions, assumptions and data Helping each function find and act on ways to support the others 25 Integrating tracking of shoppers from initial contact through to post-sales service 22 Presenting shoppers with a consistent picture of the organisation 2 Our company sees no need to integrate our marketing, sales and service activities /Not applicable 9 Economist Intelligence Unit

11 Appendix 1 Overall survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. In which of the following ways does your organisation empower shoppers? Select all that apply. Global economic downturn Changing needs of shoppers Significant demand shifts for our products/services 28 Emergence of new competitors 2 Finding access to credit/capital 1 Emergence of new markets for our products and services 15 Focusing on sustainability efforts 1 Disruptive technology developments 1 Accessing key components or resources through our supply chain 9 Changing needs of store management 9 In which of the following ways does your organisation empower store management? Select all that apply. Improving online or self-service support tools for store managers Making prices and sales terms more transparent for easy comparability by store management 28 Improving usability, search and navigation of store-facing websites 2 Investing in self-service tools for store employees across multiple channels (web, mobile devices, ) 2 Building or supporting online communities 2 /Not applicable 1 1 Offering additional value along with products (eg, in-store service, merchandising improvements, sustainable packaging) 52 Improving usability, search and navigation of shopper-facing websites Creating educational forums for shoppers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach) 8 Building or supporting online communities of shoppers 2 2 Don't know 9 What avenues of customer feedback is your organisation best and worst at collecting and using to improve the experience of shoppers? Select up to three from each column. We are best at collecting and using We are worst at collecting and using Point of sale feedback 9 2 In-store sales staff 1 Our own e-commerce site(s) 2 Third-party e-commerce sites 1 Phone order interaction 2 15 Direct response feedback Call center customer service interactions Targeted focus groups Online social media efforts Economist Intelligence Unit

12 Appendix 1 Overall survey results How well is information from all sources used to accomplish the following goals? 1 Consistently and systematically 2 5 Not at all Empower salespeople Empower customer service Create effective marketing campaigns Refine product development process Forecast demand Improve service to shoppers Improve retail offerings and selections Adjust pricing My organisation s greatest challenges in using information from store management employees and shoppers to improve the customer experience are: Select up to three. Putting recommendations into action 5 Persuading shoppers to share experiences, both positive and negative Persuading store employees to share feedback from shoppers, both positive and negative 2 Synthesising information from retail outlets into coherent recommendations Distinguishing relevant from irrelevant shopper information 25 Monitoring the results of actions in terms of shopper behaviour and marketing metrics 25 Synthesising information from customer service into coherent recommendations 22 Dealing systematically with extremely high volumes of information from stores 18 Demonstrating to shoppers that their comments are being addressed 1 Synthesising information from online channels into coherent recommendations In which region are you personally based? Asia-Pacific Western Europe North America Latin America Middle East and Africa Eastern Europe Who are your organisation s primary customers? 2 Individuals (eg, retail) Businesses or other organisations (eg, business-to-business) 15 An equal mix of both Economist Intelligence Unit

13 Appendix 1 Overall survey results Which of the following best describes your title? Board member 2 CEO/President/Managing director 15 CFO/Treasurer/Comptroller 5 CIO/Technology director 5 C-level executive 5 SVP/VP/Director 9 Head of Business Unit 8 Head of Department 1 Manager What are your organisation s global annual revenues in US dollars? $5m or less $5m to $1bn $1bn to $5bn $5bn to $1bn $1bn or more What are your main functional roles? Please choose no more than three functions. General management Strategy and business development 22 Sales 22 Customer service 2 Finance 18 Marketing 1 IT 1 Operations and production 1 Information and research 9 Human resources 9 Supply-chain management Procurement 5 Risk 2 R&D 2 Legal Economist Intelligence Unit

14 Appendix 2 Americas survey results Appendix: Americas survey results In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to customers Operational excellence: Creating highly efficient processes Product innovation: First to market with groundbreaking new products or services Each of the organisation s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to No coordination; 2. Ad hoc coordination;. Some procedures. Procedures 5. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns 25 Executing promotions/campaigns Measuring effectiveness of promotions/campaigns Developing and launching new products Analysing and segmenting shoppers Gauging shopper satisfaction Responding to shopper demands or complaints Incorporating shopper feedback into products/services Economist Intelligence Unit

15 Appendix 2 Americas survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most shoppers consider 1 Compared to our competitors, my organisation s shoppers are more loyal My organisation has an accurate way to estimate the lifetime value of customers 1 22 My organisation prioritises sales and marketing resources based on each customer s lifetime value 5 19 We are currently developing a social media strategy My organisation has more flexibility than its competitors in pricing its products Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 5 Shoppers view my organisation s products and services more as commodities now than five years ago Our margins are higher than the margins of most of our competitors 11 If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 19 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Targeting the right shoppers to achieve sales volume and revenue objectives Reducing the cost of sales Measuring/optimising effectiveness of marketing and promotional campaigns 9 Gathering shopper intelligence in the course of providing service Segmenting and profiling shoppers 25 Maximising repeat purchases and building loyalty among shoppers 25 Cross-selling or upselling shoppers 18 Measuring the satisfaction of shoppers 18 Involving shoppers in product/service development (eg, co-creation) 1 Generating promotions/campaigns 11 Creating effective collateral 11 Ensuring that shopper complaints are resolved quickly 11 Building long-term relationships with store management Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Developing and sharing a detailed picture of shopper behavior and preferences Helping each function find and act on ways to support the others 2 Prioritising resources directed towards shoppers by total value over the life of the relationship 2 Making each unit aware of how the others have interacted with a given shopper Establishing common definitions, assumptions and data 25 Integrating tracking of shoppers from initial contact through to post-sales service 25 Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales 25 Presenting shoppers with a consistent picture of the organisation 21 Our company sees no need to integrate our marketing, sales and service activities /Not applicable 9 1 Economist Intelligence Unit

16 Appendix 2 Americas survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. In which of the following ways does your organisation empower shoppers? Select all that apply. Global economic downturn Significant demand shifts for our products/services Emergence of new competitors 2 Changing needs of shoppers Finding access to credit/capital 1 Disruptive technology developments 1 Emergence of new markets for our products and services 11 Changing needs of store management 11 Focusing on sustainability efforts 11 Accessing key components or resources through our supply chain In which of the following ways does your organisation empower store management? Select all that apply. Improving online or self-service support tools for store managers Making prices and sales terms more transparent for easy comparability by store management 2 Improving usability, search and navigation of store-facing websites Investing in self-service tools for store employees across multiple channels (web, mobile devices, ) 21 Building or supporting online communities 1 /Not applicable 1 1 Offering additional value along with products (eg, in-store service, merchandising improvements, sustainable packaging) Creating educational forums for shoppers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach) Improving usability, search and navigation of shopper-facing websites Building or supporting online communities of shoppers 25 Don't know What avenues of customer feedback is your organisation best and worst at collecting and using to improve the experience of shoppers? Select up to three from each column. We are best at collecting and using We are worst at collecting and using Point of sale feedback 5 21 In-store sales staff 9 21 Our own e-commerce site(s) Third-party e-commerce sites 18 2 Phone order interaction Direct response feedback 1 11 Call center customer service interactions 25 Targeted focus groups Online social media efforts Economist Intelligence Unit

17 Appendix 2 Americas survey results How well is information from all sources used to accomplish the following goals? 1 Consistently and systematically 2 5 Not at all Empower salespeople Empower customer service 11 Create effective marketing campaigns Refine product development process Forecast demand Improve service to shoppers Improve retail offerings and selections Adjust pricing My organisation s greatest challenges in using information from store management employees and shoppers to improve the customer experience are: Select up to three. Persuading store employees to share feedback from shoppers, both positive and negative Putting recommendations into action Synthesising information from retail outlets into coherent recommendations 2 Persuading shoppers to share experiences, both positive and negative Synthesising information from customer service into coherent recommendations Monitoring the results of actions in terms of shopper behaviour and marketing metrics 25 Distinguishing relevant from irrelevant shopper information 21 Dealing systematically with extremely high volumes of information from stores 21 Demonstrating to shoppers that their comments are being addressed 1 Synthesising information from online channels into coherent recommendations In which region are you personally based? North America Latin America 18 Asia-Pacific Eastern Europe Western Europe Middle East and Africa Who are your organisation s primary customers? 82 Individuals (eg, retail) Businesses or other organisations (eg, business-to-business) 18 An equal mix of both 18 1 Economist Intelligence Unit

18 Appendix 2 Americas survey results Which of the following best describes your title? What are your main functional roles? Please choose no more than three functions. Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director C-level executive 11 SVP/VP/Director 1 Head of Business Unit Head of Department Manager What are your organisation s global annual revenues in US dollars? 18 $5m or less $5m to $1bn $1bn to $5bn General management Strategy and business development 21 Finance 18 Customer service 18 Operations and production 1 Marketing 1 Sales 1 IT 11 Risk Procurement Supply-chain management Human resources Information and research R&D Legal $5bn to $1bn 1 $1bn or more 18 1 Economist Intelligence Unit

19 Appendix Asia-Pacific survey results Appendix: Asia-Pacific survey results In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to customers Operational excellence: Creating highly efficient processes Product innovation: First to market with groundbreaking new products or services 1 1 Each of the organisation s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to No coordination; 2. Ad hoc coordination;. Some procedures. Procedures 5. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns 2 2 Executing promotions/campaigns Measuring effectiveness of promotions/campaigns Developing and launching new products Analysing and segmenting shoppers Gauging shopper satisfaction Responding to shopper demands or complaints Incorporating shopper feedback into products/services Economist Intelligence Unit

20 Appendix Asia-Pacific survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most shoppers consider 2 Compared to our competitors, my organisation s shoppers are more loyal 1 1 My organisation has an accurate way to estimate the lifetime value of customers 2 My organisation prioritises sales and marketing resources based on each customer s lifetime value 2 We are currently developing a social media strategy 1 My organisation has more flexibility than its competitors in pricing its products Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 1 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 1 Shoppers view my organisation s products and services more as commodities now than five years ago 2 Our margins are higher than the margins of most of our competitors 1 If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 2 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Targeting the right shoppers to achieve sales volume and revenue objectives Cross-selling or upselling shoppers Measuring the satisfaction of shoppers Generating promotions/campaigns 2 Segmenting and profiling shoppers 2 Maximising repeat purchases and building loyalty among shoppers 2 Gathering shopper intelligence in the course of providing service 2 Measuring/optimising effectiveness of marketing and promotional campaigns 2 Building long-term relationships with store management 2 Reducing the cost of sales 2 Involving shoppers in product/service development (eg, co-creation) 2 Ensuring that shopper complaints are resolved quickly 1 Creating effective collateral Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Developing and sharing a detailed picture of shopper behavior and preferences Making each unit aware of how the others have interacted with a given shopper Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales Prioritising resources directed towards shoppers by total value over the life of the relationship Establishing common definitions, assumptions and data 2 Integrating tracking of shoppers from initial contact through to post-sales service 2 Helping each function find and act on ways to support the others 1 Presenting shoppers with a consistent picture of the organisation 1 Our company sees no need to integrate our marketing, sales and service activities /Not applicable 5 19 Economist Intelligence Unit

21 Appendix Asia-Pacific survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. In which of the following ways does your organisation empower shoppers? Select all that apply. Global economic downturn Changing needs of shoppers 5 Emergence of new markets for our products and services 2 Significant demand shifts for our products/services 2 Emergence of new competitors 2 Focusing on sustainability efforts 1 Accessing key components or resources through our supply chain 1 Finding access to credit/capital Disruptive technology developments Changing needs of store management In which of the following ways does your organisation empower store management? Select all that apply. Improving usability, search and navigation of store-facing websites Making prices and sales terms more transparent for easy comparability by store management 2 Improving online or self-service support tools for store managers 2 Building or supporting online communities 2 Investing in self-service tools for store employees across multiple channels (web, mobile devices, ) 2 /Not applicable Offering additional value along with products (eg, in-store service, merchandising improvements, sustainable packaging) Improving usability, search and navigation of shopper-facing websites Building or supporting online communities of shoppers Creating educational forums for shoppers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach) 1 What avenues of customer feedback is your organisation best and worst at collecting and using to improve the experience of shoppers? Select up to three from each column. We are best at collecting and using We are worst at collecting and using Point of sale feedback 5 1 In-store sales staff Our own e-commerce site(s) 2 Third-party e-commerce sites 2 Phone order interaction Direct response feedback Call center customer service interactions 1 1 Targeted focus groups 2 2 Online social media efforts 1 2 Economist Intelligence Unit

22 Appendix Asia-Pacific survey results How well is information from all sources used to accomplish the following goals? 1 Consistently and systematically 2 5 Not at all Empower salespeople 1 1 Empower customer service 2 Create effective marketing campaigns 1 1 Refine product development process Forecast demand Improve service to shoppers Improve retail offerings and selections Adjust pricing My organisation s greatest challenges in using information from store management employees and shoppers to improve the customer experience are: Select up to three. Putting recommendations into action Persuading shoppers to share experiences, both positive and negative Monitoring the results of actions in terms of shopper behaviour and marketing metrics Synthesising information from retail outlets into coherent recommendations 2 Dealing systematically with extremely high volumes of information from stores 2 Demonstrating to shoppers that their comments are being addressed 2 Persuading store employees to share feedback from shoppers, both positive and negative 1 Distinguishing relevant from irrelevant shopper information 1 Synthesising information from customer service into coherent recommendations 1 Synthesising information from online channels into coherent recommendations In which region are you personally based? Asia-Pacific Latin America North America Eastern Europe Western Europe Middle East and Africa Who are your organisation s primary customers? 1 Individuals (eg, retail) Businesses or other organisations (eg, business-to-business) 1 An equal mix of both Economist Intelligence Unit

23 Appendix Asia-Pacific survey results Which of the following best describes your title? Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director 1 C-level executive SVP/VP/Director Head of Business Unit Head of Department 1 Manager 1 What are your organisation s global annual revenues in US dollars? 1 $5m or less $5m to $1bn $1bn to $5bn $5bn to $1bn $1bn or more What are your main functional roles? Please choose no more than three functions. General management Customer service Marketing 2 Sales 2 Finance 1 IT 1 Strategy and business development 1 Operations and production 1 Human resources 1 Information and research Supply-chain management Risk R&D Procurement Legal Economist Intelligence Unit

24 Appendix EMEA survey results Appendix: Europe Middle East and Africa survey results In your view, which of the following best represents the core strength of your overall business? Select only one. Customer service: Providing superior service to customers Product innovation: First to market with groundbreaking new products or services Operational excellence: Creating highly efficient processes Each of the organisation s customer-facing departments influences the shopper via different channels. For each of the processes below, how closely do your marketing, sales and customer service units work together? Please rate on a scale of 1 to No coordination; 2. Ad hoc coordination;. Some procedures. Procedures 5. Broad, systematic and units are completely not systematic established, but not established, regular consistent integration of separate or consistent consistently followed interaction information and strategies Planning promotions/campaigns Executing promotions/campaigns Measuring effectiveness of promotions/campaigns Developing and launching new products Analysing and segmenting shoppers Gauging shopper satisfaction Responding to shopper demands or complaints Incorporating shopper feedback into products/services Economist Intelligence Unit

25 Appendix EMEA survey results Do you agree or disagree with the following statements? Agree Disagree In chosing to do business with my organisation, price is the single most important factor most shoppers consider 2 Compared to our competitors, my organisation s shoppers are more loyal 1 1 My organisation has an accurate way to estimate the lifetime value of customers 2 1 My organisation prioritises sales and marketing resources based on each customer s lifetime value 9 58 We are currently developing a social media strategy 8 My organisation has more flexibility than its competitors in pricing its products 55 9 Despite the recession, my organisation has greatly strengthened customer relationships over the past 12 months 58 1 We are more engaged in developing products or services collaboratively with customers than we were 12 months ago 5 8 Shoppers view my organisation s products and services more as commodities now than five years ago 1 1 Our margins are higher than the margins of most of our competitors If there is no difference in price, my organisation can win the sale based on service, convenience, brand reputation or other intangibles 81 1 In your view, which of your organisation s activities are most in need of improvement? Select up to four. Segmenting and profiling shoppers 8 Targeting the right shoppers to achieve sales volume and revenue objectives 5 Cross-selling or upselling shoppers 2 Reducing the cost of sales 9 Maximising repeat purchases and building loyalty among shoppers 2 Measuring/optimising effectiveness of marketing and promotional campaigns Gathering shopper intelligence in the course of providing service Measuring the satisfaction of shoppers 2 Involving shoppers in product/service development (eg, co-creation) 19 Generating promotions/campaigns 1 Building long-term relationships with store management 1 Creating effective collateral Ensuring that shopper complaints are resolved quickly Which of the following would provide the biggest benefits in integrating your organisation s marketing, sales and service activities? Select up to three. Making each unit aware of how the others have interacted with a given shopper Establishing common definitions, assumptions and data 2 Developing and sharing a detailed picture of shopper behavior and preferences 2 Prioritising resources directed towards shoppers by total value over the life of the relationship Presenting shoppers with a consistent picture of the organisation Helping each function find and act on ways to support the others Measuring the probability that shoppers will turn into buyers, and using these scores to guide sales Integrating tracking of shoppers from initial contact through to post-sales service 2 Our company sees no need to integrate our marketing, sales and service activities /Not applicable 5 2 Economist Intelligence Unit

26 Appendix EMEA survey results Which of the following trends have had the greatest impact on your business over the past 12 months? Select up to three. In which of the following ways does your organisation empower shoppers? Select all that apply. Global economic downturn Changing needs of shoppers 9 Finding access to credit/capital Emergence of new competitors Significant demand shifts for our products/services Accessing key components or resources through our supply chain 1 Changing needs of store management 1 Focusing on sustainability efforts 1 Emergence of new markets for our products and services 1 Disruptive technology developments 1 In which of the following ways does your organisation empower store management? Select all that apply. Investing in self-service tools for store employees across multiple channels (web, mobile devices, ) Improving online or self-service support tools for store managers Building or supporting online communities Making prices and sales terms more transparent for easy comparability by store management Improving usability, search and navigation of store-facing websites 19 /Not applicable 81 9 Improving usability, search and navigation of shopper-facing websites 52 Offering additional value along with products (eg, in-store service, merchandising improvements, sustainable packaging) 5 Creating educational forums for shoppers (eg, online content, in-store content, communities of interest, direct-to-consumer outreach) 2 Building or supporting online communities of shoppers 2 What avenues of customer feedback is your organisation best and worst at collecting and using to improve the experience of shoppers? Select up to three from each column. We are best at collecting and using We are worst at collecting and using Point of sale feedback 8 In-store sales staff 2 2 Our own e-commerce site(s) Third-party e-commerce sites 1 5 Phone order interaction 2 1 Direct response feedback 5 Call center customer service interactions 1 1 Targeted focus groups Online social media efforts 25 Economist Intelligence Unit

27 Appendix EMEA survey results How well is information from all sources used to accomplish the following goals? 1 Consistently and systematically 2 5 Not at all Empower salespeople Empower customer service Create effective marketing campaigns Refine product development process Forecast demand Improve service to shoppers Improve retail offerings and selections Adjust pricing 9 19 My organisation s greatest challenges in using information from store management employees and shoppers to improve the customer experience are: Select up to three. Putting recommendations into action 52 Distinguishing relevant from irrelevant shopper information 5 Persuading shoppers to share experiences, both positive and negative Synthesising information from retail outlets into coherent recommendations 2 Synthesising information from customer service into coherent recommendations 2 Persuading store employees to share feedback from shoppers, both positive and negative 19 Monitoring the results of actions in terms of shopper behaviour and marketing metrics 19 Demonstrating to shoppers that their comments are being addressed 1 Dealing systematically with extremely high volumes of information from stores 1 Synthesising information from online channels into coherent recommendations 1 In which region are you personally based? Asia-Pacific Latin America North America Eastern Europe 1 Western Europe Middle East and Africa 1 Who are your organisation s primary customers? Individuals (eg, retail) 5 Businesses or other organisations (eg, business-to-business) 1 An equal mix of both 2 Economist Intelligence Unit

28 Appendix EMEA survey results Which of the following best describes your title? Board member CEO/President/Managing director CFO/Treasurer/Comptroller CIO/Technology director C-level executive SVP/VP/Director Head of Business Unit Head of Department Manager 1 What are your organisation s global annual revenues in US dollars? 19 2 $5m or less $5m to $1bn $1bn to $5bn $5bn to $1bn $1bn or more What are your main functional roles? Please choose no more than three functions. General management Strategy and business development Sales Finance 19 Information and research 1 Customer service 1 Marketing 1 IT 1 Procurement Supply-chain management Human resources Operations and production R&D Risk Legal 52 2 Economist Intelligence Unit

29 Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor the sponsors of this report can accept any responsibility or liability for reliance by any person on this white paper or any of the information, opinions or conclusions set out in the white paper. Cover image: Shutterstock 28

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