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Capitalizing on the Smarter Consumer Global View

Understanding the changing retail industry due to smarter consumers & their technology preferences globally. Study by IBM Institute for Business Value, insights into consumer behavior & trends in mature and emerging markets, with rise of mobile tech & e-commerce.

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Capitalizing on the Smarter Consumer Global View

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  1. Retail Industry Perspective Capitalizing on the Smarter Consumer Global View Capitalizing on the Smarter Consumer Global View IBM Institute for Business Value Understanding and Responding to the Consumers Wants and Needs

  2. “Sales of 4,500,000 iPads in 3Q 2010”* Today’s consumers are fundamentally changing industries, brands, interactions, and relationships Source: Fortune October 5, 2010 http://tech.fortune.cnn.com/2010/10/05/how-many-ipads-has-apple-really-sold/

  3. So what characterizes these smarter consumers? Instrumented Interconnected Intelligent 662 million active users on Facebook 95 million tweets are sent each day 75% of people don’t believe that companies tell the truth in advertisements 45% of consumers ask friends before purchasing 5 billion mobile phones connections globally 3 out of 4 business leaders say more predictive information would drive better decisions

  4. Emerging Mature Australia (2274) France (2200) Brazil (2200) Argentina (2200) Canada (2221) UK (2200) Chile (2200) Colombia (2200) Germany (2200) Italy (2200) United States (4121) China (2200) Mexico (2200) IBM’s Institute for Business Value (IBV) studied this new consumer taking into account 13 countries in both the mature and emerging markets Total Surveyed Population = 30,624 Source: Institute for Business Value Retail 2011 Global = 30624

  5. Technology: Instrumentation has increased year-to-year and mobility has increased 92% globally 25% 75% 13% 68% Mobile technologies have almost doubled globally and is already more widely accepted in the growth markets Website usage continues to rise 2009 2010

  6. 75% 39% 80% 43% Websiteshave increased 7 % Kiosksare popular across all countries 24% 25% 37% 37% Willingness to use TVs to make purchases is growing as a preferred technology like mobile Mobile technologies has increased 48% globally and is still more widely accepted in the growth markets Instrumentation has increased year to year and mobility is 48% higher in Chile than the global percentage Global Chile Source: Institute for Business Value Retail 2011 Global = 30624; Chile = 2200

  7. The profile of today's Smarter Consumer Attitudes Influences Technology Expectations

  8. Attitudes

  9. Consumers attitudes are optimistic globally but they are not going back to pre-recession spending levels Attitude Toward Income Attitude Toward Shopping • 70% of global consumers are optimistic about the future of their income • 46% believe income will stay the same • 24% believe income will increase by 20% in the next 5 years • Optimism was not limited to the higher income brackets Spending only on needs 20% 19% Searching out sale items Waiting longer to purchase 16% Kiosksare popular across all countries 12% Buying more online Purchase items to reward yourself 11% Trading up/down in some categories 10% Spend more on travel/entertainment 8% Eating out more 5% Source: Institute for Business Value Retail 2011 Global = 5188

  10. Influences

  11. Trust Ranking Product experts 18% 16% 21% Retail/Manufacturer Customer Reviews 45% Family/Friends Globally, 18% of consumers are influenced by the retailer or manufacturer Who do you trust to provide honest feedback on product information and product reviews? Source: Institute for Business Value Retail 2011 Global = 30624

  12. Trust Ranking Product experts 21% 23% 23% Retail/Manufacturer Customer Reviews 33% Family/Friends While in Chile, 21% of consumers are influenced by the retailer or manufacturer Who do you trust to provide honest feedback on product information and product reviews? Source: Institute for Business Value Retail 2011 Chile = 2200

  13. From awareness to research, consumers are influenced by numerous consumer media that they control Consumers Moment Greatest Influences During Product Awareness and Research Product Awareness Product Research TV/Radio/Billboard Friends / Family Retailer Store TV/Radio/Billboard Top 5 Influences Friends / Family Retailer Store Mobile Apps Search Engine Retailer Website Emails Online Streaming Mobile Apps Social Media Emails Search Engine Social Media Magazines Online Streaming Retailer-Controlled Retailer Website Magazines Consumer-Controlled Shopping Portal Shopping Portal Source: Institute for Business Value Retail 2011 Global = 30624

  14. Compared to the global average, Chilean consumers are using search engines and online streaming to find new products and do research Consumers Moment Greatest Influences During Product Awareness and Research Product Awareness Product Research TV/Radio/Billboard TV/Radio/Billboard Retailer Store Search Engine Top 5 Influences Search Engine Retailer Website Mobile Apps Online Streaming Magazines Retailer Store Retailer Website Magazines Mobile Apps Social Media Friends / Family Online Streaming Social Media Friends / Family Retailer-Controlled Emails Shopping Portal Consumer-Controlled Emails Shopping Portal Source: Institute for Business Value Retail 2011 Chile = 2200

  15. Expectations

  16. Listen to me Empower me Know me Serve me The Future is about ME

  17. Serve me A personalized interaction remains the top demand • Convenience: Top area for retailer innovation • Provide the right products and appropriate variety of brands • Allow customers to see inventory availability before going to store • Loyalty programs that can be used at other retailers • Service: Most important loyalty drivers • Make it feel like a pleasure to help me • Have employees that are knowledgeable about products/services • Allow me to return products without hassle or questions asked • Easy way to order items not in stock “Serve me” Source: Institute for Business Value Retail 2011 Global = 30624

  18. Listen to me Consumers are actively engaging with social media and are expecting their voices to be heard • With which social networks do you have an account? (select all that apply) • 45% of consumers have media sharing sites • 33% of consumers belong to a social network • How often do you visit social media sites? • 5% visit social media daily /weekly to post comments • 75% casually participate monthly by responding to posts or writing reviews • 37% are influenced by external reviews • More than half of “connected” consumers state social media interactions influence their spend Source: Institute for Business Value CRM Global n =1056

  19. Know me • Personalize Promotions (#1 purchase influencer) • Most likely to increase spend • Top consideration when determining where to shop • The area retailers need to improve most • Personalize Shopping (Most important factors) • Provide preferred receipt type • Recognize me in the store or online • Remember preferred payment method • Personalize Assortments (Most important loyalty drivers) • High quality/low price private label products • New and unique products • Manufactured or grown in my country (tied) • Environmental friendly/sustainable products (tied) A personalized interaction remains the top demand Source: Institute for Business Value Retail 2011 Global = 30624

  20. Apply discounts/coupons to loyalty program • Notice of upcoming sale or promotion • Receive relevant email from a retailer they trust who has products they love Top 3 Reasons Consumers Open and Read Emails % that provide secondary emails or decline to provide Consumer Interaction Check out 64% Shopping Online 56% Loyalty Program 76% It’s hard to get to know consumers, when 59% of consumers do not provide the retailer their primary email Source: Institute for Business Value Retail 2011 Global (US, UK, Australia, China, Mexico, Germany only) = Cater Buying = 8680, Household Changes = 2328, Services = 949

  21. Retailers have a vested interested in enabling m-commerce “Empower me” I want to opt in! I don’t care • Promotions in the Store • 63%Proactively communicate promotions to me based on what scan • 61% Allow me to check prices from other physical and virtual locations Service In The Store 50% Help me find the customer service desk or associate 48% identify myself in store or mobile for help 44% Allow me to order out-of-stock items 43% Provide the most efficient route through store 41% Allow me to take a picture/text to get product information Mature Market Emerging Market Source: Institute for Business Value Retail 2011 Chile = 2200

  22. 1 Listening and Learning 1 Enabling and Executing Empowering the Consumer 1 Analytics to listen to consumers Single View of Consumer across channels Consumer self select interaction Learn from consumer controlled content Consumers choice of the interaction channel Actionable analytics around merchandising and marketing Key factors of influence and motivation Consumers providing suggestions Make the interaction personalized across channels Change sales to service associates Responding as a smarter retailer involves listening to the customer, making changes to the organization and improving the shopping experience

  23. Gracias Jill Puleri Vice President, Global Industry Leader - Retail jpuleri@us.ibm.com www.ibm.com/iibv Si desea conocer más sobre las soluciones de negocio de IBM, visítenos en: www.ibm.com/ar/services O escribanos a smart@ar.ibm.com

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