2018 Retail Mobility. Insights

Transcription

1 2018 Retail Mobility Insights

2 Introduction Perhaps no other industry has been impacted more by the rise of e-commerce, digitization, and the disruptive power of mobile than retail. Numerous studies have focused on the shift in balance of power between retailers and consumers, and what it means; but few have delved into how this change is perceived by retail professionals leading, and reacting to, mobile innovations. This report focuses on how strongly retailer professionals feel about their organization s initiatives, and what it means for their customers, and their businesses. Mobile Retail Insights Report Methodology The Mobile Retail Insights report was executed in 2018 and captures the confidence and anxieties affecting retailers around the globe. Businesses of all sizes are represented, as is a crosssection of people who lead and work for those businesses - 54% of respondents are from companies with greater than $500M in sales, and 67% are Director level and above. Survey data was reinforced with qualitative interviews from industry leaders and practitioners. Europe 14% Mobile growth continues to accelerate. As more consumers become comfortable purchasing with a mobile device, retailers must continue developing digital experiences to match their expectations across all devices. North America 35% LAD 6% Global 40% JAPAC 2% DEBBIE HAUSS, Editor-in-Chief, Retail Touchpoints Region of responsibility identified by survey respondents Mobile Retail Insights Report

3 Executive summary The Mobile Retail Insights report illustrates an industry that has cautious optimism for mobile innovations, and how those innovations empower the consumer, and the organization. The optimism is tempered by anxiety about how to properly apply new technologies, and a sneaking suspicion that other companies are better equipped to thrive in this ultra-competitive environment. The Mobile Retail Insights analysis of retailer perceptions highlights pivotal moments for companies on the journey to differentiate offerings through customer experience, staff empowerment, and organizational capabilities. Key findings: Personalizing mobile shopping remains elusive. Across all respondents, there was broad agreement that customers expect retailers to anticipate their needs by analyzing loyalty, purchase history and brand interactions, but very few believe they are effectively personalizing the mobile shopping experiences. Retailers with the highest confidence worry about inventory. Respondents who scored higher than the median on proficiency and preparedness statements had the strongest opinions about inventory, believing they are losing transaction due to associate inability to access inventory availability data from the sales floor. They also lamented the inability of their customers to check inventory from their mobile device while in-store. Retailers with the most anxiety worry about promotions. Respondents who scored lower than the median on both axes of current proficiency and preparedness for the future are convinced they are leaving money on the table by offering general discounts to all shoppers, and single out their inability to use personalized and near-field communications to offer promotions. Many retailers are missing out on mobile empowerment. The majority of retailers focus on improving the mobile shopping experience. Fewer pay attention to mobile workforce enablement. This represents a lost opportunity to capitalize on tangible benefits (like assisted selling capabilities that include mobile checkout and inventory lookups), and intangible benefits (like the recruiting and retention benefits of a mobile-enabled workforce).

4 To see the industry from another perspective, we plotted responses across two key continuums current proficiency and preparedness for the future and mapped them into 4 quadrants to understand correlations between the two. Most respondents fell into either the Visionary or Anxious quadrants. Visionaries see themselves as highly proficient in the present and well-prepared for the future. This group was most concerned about inventory visibility, believing they are losing transaction due to associate inability to access inventory availability from the sales floor. On the other end of the spectrum are the Anxious, who score lower on both preparedness and proficiency. This group tended to be convinced they are leaving money on the table by offering general discounts to all shoppers. Less common are the respondents who scored as Comfortable those with low preparedness yet report high current proficiency. Also less frequent are those we call Optimistic, reporting high preparedness but low proficiency AVERAGE PROFICIENCY Comfortable Anxious AVERAGE PREPAREDNESS Visionary Optimistic 2018 Mobile Retail Insights Report

5 FIGURE 1 Our mobile strategy is increasing shopping basket size in store and online by catching consumers at the point of intent. Mobile strategy priorities: Unified, targeted, frictionless Strongly 9.7% Neutral 29.5% 37.2% Retailers recognize that the days of channel-specific strategies are over. Achieving a unified, omnichannel brand shopping experience Strongly 8.5% 15.1% across stores, web and mobile is one way to differentiate from your competitors. 47% Nearly 47% of respondents agree that their mobile strategy is increasing shopping basket size in-store and online by catching consumers at the point of intent (Figure 1). This illustrates that retailers are keen on breaking down channelspecific barriers and simultaneously how challenging it has become to capture shopper s attention. FIGURE 2 Customers expect us to anticipate their needs by analyzing their loyalty, purchase history and brand interaction data. 77% More than 77% of respondents agree, Customers expect us to anticipate their needs by analyzing their loyalty, purchase history and brand interaction data (Figure 2). Retailers are investing in innovations to help them recognize Strongly 24.0% 53.5% purchase intent better and optimize the buying experience around it. However, retailers continue to tread cautiously, knowing consumer concerns about data privacy are on the rise. That caution Neutral 14.0% is reinforced by findings from the 2017 Retail in 4 dimensions study Strongly 4.7% 3.9% 2018 Mobile Retail Insights Report

6 of consumer buying habits, Shoppers are open to personalization based on relevant brand interactions like the presentation of in-store offers based on purchase history but are much less enthusiastic about retailers utilizing third-party data sources. (Amber Trendell, Global Director, Oracle Retail). Bottom line: establishing trust is essential to driving authentic brand loyalty -- veering too far beyond first-party data will alienate some of your customers. Getting personalization right could yield significant financial benefits to retailers. Consider discounting practices, survey respondents acknowledge that general discounting mechanisms are not nearly as effective as discounts tailored to targeted consumers, with 62% agreeing that they are leaving money on the table by offering general discounts to 62% all shoppers (Figure 3). FIGURE 3 We may be leaving money on the table by offering general discounts to all shoppers vs. tailored offerings to target consumers. 62% 13.2%

7 Retailers are also working hard to remove friction from the buying experience, investing in mobile payments and self-service capabilities. 54% Over 54% of respondents indicated that payment options like contactless checkout, self-checkout and mobile payment are either in use today or part of their technology roadmap, though there are variations by industry (Figure 4). Respondents from the Grocery segment lead the way, with over 55% agreeing, while Hardlines appears to be further behind, with over 31% indicating that advanced payment options are not current or planned initiatives. these numbers will increase over time, but not equally. This is not surprising as self-checkout has been in play for decades, particualrly As consumers shift to mobile, online retailers must refine their checkout experience. There is a huge opportunity for retailers to optimize their checkouts by supporting one-click payments, stored cards, user profiles and much more. If they don t act, they risk losing out to competitors. Mobile is only going to become more important as consumers become increasingly comfortable using new mobile payment methods. FIGURE 4 Our current offering or technology roadmap includes advanced payment options (e.g. automatic contactless checkout, self-checkout, mobile payment and easy guest checkout). 13.5% 13.2% 13.6% Strongly 39.3% 42.1% 29.5% 28.9% 27.0% 25.0% Neutral 15.8% 15.9% 12.4% Fashion Groceries Hardlines 7.9% 0.0% 15.9% Strongly ROELANT PRINS, Chief Commercial Officer, Adyen

8 From front-end to back office: Mobile impacts productivity and satisfaction Mobile empowerment extends to employees as well, though survey respondents place less emphasis here than on the consumer s shopping experience. Fewer than half of respondents agreed with the statement We empower employees with mobile capabilities, so they can perform their jobs regardless of where they are (for example, matching a PO to an invoice from your mobile device), and over 30% disagreed altogether (Figure 5). This represents a miss for some retailers. Mobile empowerment has real efficiency-boosting applications, and there is also evidence that enabling staff with mobile capabilities that offer flexibility in how and where they perform their job responsibilities is important to attract and retain talent, especially among millennial and Gen X workers. Store associates can make or break the customer experience and we re seeing a heightened level of attention being paid to talent acquisition and retention. Equipping associates with the right tools, ones that are mobile, intuitive, and deliver accurate information, impacts job satisfaction and success. If associates don t feel set up for success, they will go elsewhere. FIGURE 5 We empower employees with mobile capabilities so they can perform their jobs regardless of where they are (for example, matching a PO to an invoice from your mobile device). 44.6% 31.4% CHRIS SARNE, Senior Director, Omnichannel Strategy, Oracle Retail

9 Scaling your omnichannel operation requires enterprise discipline We also explored confidence in organizational capabilities, to determine if business operations were robust enough to support a changing retail environment. (Figure 7) reveals that the largest retailers are far more confident than their smaller peers, with 67% agreeing with the statement, versus just 46% across the full sample. Fewer than half of respondents believe they are well-positioned logistically to support an omnichannel shopping experience (Figure 6). This is not surprising, as retailers have historically prioritized the front-end requirements of the omnichannel shopping experience and cobbled together the backend requirements. Analyzing by revenue band FIGURE 6 FIGURE 7 We are well-positioned logistically to support an omnichannel shopping experience, with distribution centers to fulfill orders placed online or through mobile, for delivery to any preferred destination (e.g. home, store, work). 26% 47% Strongly Neutral Strongly 10.5% 9.7% 24.8% 19.4% 35.7% Neglecting the merchandising, planning and supply chain aspects of omnichannel retail puts retailers in a risky position as they are unable to profitably execute. Savvy retailers are making the shift to move these critical business systems to cloud applications so that they can stay current and drive both top and bottom line results. 44% 38% <$250M $250- $500M 20% 52% $500- $750M 48% 30% $750M -$1B 22% 52% $1- $10B 15% 67% $10B+ Retailers must align organizational responsibilities around the omnichannel customer journey, which often involves consolidating online and offline groups into one. Larger retail chains may go a step further and subdivide revenue ownership by market, brand, or merchandise category groupings. BRENDAN WITCHER, Vice President, Forrester

10 FIGURE 8 Our company embraces digital and mobile but we are not investing quickly enough to keep pace with speed of technology change or consumer expectations. Netting it out: cautious optimisim, or nagging insecurity? 6.2% Strongly 10.5% 23.6% Neutral 43.3% 16.3% Strongly The 2018 Mobile Retail Insights report paints a picture of cautious optimism with average scores showing more agreement on the survey statements than disagreement. That confidence, though, is inwardly focused. When asked to opine on their organization s initiatives relative to the pace of change in the marketplace, and against unnamed competitors, more anxiety shows. 60% Nearly 60% of respondents felt that their company is embracing digital and mobile, but is not investing quickly enough to keep pace with the speed of technology change or consumer expectations. A mere 16.7% feel they are leading the market with digital and mobile initiatives (Figure 8). A similar story emerges when respondents were asked if they will face disruption from more innovative, nimble, customer-centric competition nearly 60% agreed. The anxiety is justified given the consumer expectations and the volume of possible investments a retailer could make in mobile and digital capabilities. Developing the right strategy, though, is less a question of technology, and more about making a decision on which customers you want and designing experiences and developing capabilities for that segment Mobile Retail Insights Report

11 As the Retail in 4D report revealed, the path forward is more nuanced than finding better ways to appeal to millennials or other age-based segments. The most innovative retailers focus on the personality and buying mindset of their targeted buyer be she a nomad, a player or a dealer and organize their strategies, business processes, and technology investments to support a single view of that customer. For mobile, the number one priority is speed. Consumers expect you to render the mobile experience within two to three seconds. The value proposition needs to be front and center to capture the customer at the point of intent. FIGURE 9 Our company will likely face disruption from more innovative, nimble, customer-centric organizations or service providers. 59.7% DANIEL MOURE, Chief Marketing Officer, PureFormulas 17.4%

12 Taking action In an environment where customers are more knowledgeable and competitive barriers are lower than ever, smart companies are differentiating themselves through the experiences they provide. In retail, that means a personalized, omnichannel shopping experience and associates who are better equipped to support their customers. These companies are investing in mobile and digital initiatives with applications across front and back-office processes. To thrive in a mobile-first future where customer expectations soar ever-higher, smart companies will balance their investments in customerfacing mobile technologies and experiential improvements with continued investment in the organizational capabilities needed to provide a unified multichannel shopping experience. The more retailers can fulfill on their brand promise, whether that be by delivering the right product at the right time to the right place, the stronger the bond of trust will be between retailer and consumer. Retailers need to adopt consumer technology and new innovations in the context of their brand promise. Take the Retail Mobility Assessment and see how you compare to your peers! Take the Assessment MIKE WEBSTER, Senior Vice President and General Manager, Oracle Retail