The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle

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The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
The New
Topography
of Retail
Mapping emerging consumer trends

                    2018
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
Methodology

   The research cited in this paper was
   conducted in 2018 with over 15,500
   consumers across five key regions:
   Europe (France, Germany, Italy, Spain,
   Sweden, UK) NA (Canada, USA), LATAM
   (Brazil, Chile, Mexico), Middle East
   (Saudi Arabia, UAE) & India and APAC
   (Australia, China).

   Independent research and creative
   consultancy, Morar HPI, conducted
   the survey which explores consumers’
   attitudes and expectations when it comes
   to the retail shopping experience now
   and in the future. This report is based
   on the findings from this study.
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
Introduction

Retail continues to be mercurial as consumers react and adapt to
technological developments. With new technologies predicting,
dictating and mirroring the 21st-century shopper, retailers continue
to make tough decisions about tech investments to keep pace with
a shifting marketplace that reaches across continents and cultures.
In this landscape, the global village defines the digital age we live in.

It’s a landscape that can be hard to navigate with    they’ve bought and what promotions they’ve
varying levels of trend adoption in different parts   used when pursuing a return.
of the world, and consumer perceptions and
expectations shifting globally as technology          Behind a plethora of consumer choice lies
and advanced services forge ahead.                    new technology, which is driving the global
                                                      shopper’s purchasing experiences and
Across the globe, there’s been a growing              exposing consumers to even bigger and
disquiet about the way technology can be a            bolder technological innovations – from facial
clairvoyant as consumers go about their online        recognition for purchase security to drone
life. This perceived encroachment on privacy          deliveries. Not surprisingly, high-growth markets
has resulted in significant measures such as          such as Brazil, Chile, China, India and the Middle
the General Data Protection Regulation (GDPR)         East are more open to these compared with
legislation, illustrating consumers’ sensitivity      more mature markets (such as Europe and North
and concern about the importance of protecting        America), which at the moment seem to
their privacy. Fatigue around sharing personal        be more set in their ways.
data has set in prompting retailers to reassess
brand transparency to offer a more anonymous          Into the already complicated geographical
shopping experience. Around the world, 86             landscape steps the notion of consumer
percent of global consumers state they would          personas. As we explored in previous research:
ask brands to remove their personal data if a         Retail in 4 Dimensions 2017, the traditional
similar regulation was implemented in their           approach to segmentation is no longer adequate.
region.                                               Understanding consumer behaviors and triggers
                                                      is essential to relating to and earning the right
                                                                                                           The Nomad:                     The Dealer:                    The Player:
Consumers are also demanding more traceability        to be remembered on an individual basis. When
                                                                                                           The Nomad is a nimble          What motivates this            This avant-garde shopper
in their personal shopping history. There seems       thinking about consumers we think about their
                                                                                                           shopper but expects            shopper is the hunt, the       is looking for the perfect
to be an expectation among consumers that             buying behavior and how they navigate through
                                                                                                           retailers to keep up, having   thrill of the chase. And       mix of brand, product and
retailers should know the full history of their       each journey. The three personas – The Nomad,
                                                                                                           full knowledge of her          what’s the prize? The best     experience. The Player
purchase, whether they visit the brand online,        The Player and The Dealer – all exert influence
                                                                                                           shopping journey from          offer, the lowest price, the   seeks out great shopping
in-store or both. Shoppers are agitated when          across the globe. Such a complex, multifaceted
                                                                                                           purchase to returns.           biggest bargain.               experiences, incorporating
having to explain returns, discounts, special         picture of trends, territories and personas means
                                                                                                                                                                         cutting-edge technology
offers they might have utilized; they expect          it’s more important than ever for retailers to
                                                                                                                                                                         across every touchpoint.
instantaneous, 360˚ knowledge of what                 remain agile.
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
The New Topography of Retail

Privacy and
                                                                                                                                                             87%
                                                                                                                                                         of consumers in
                                                                                                                                                      North America would
                                                                                                                             75%                       request that brands
                                                                                                                      of consumers believe            remove their personal

Anonymity
                                                                                                                       that ‘personalized’             information if given
                                                                                                                       offers from retailers                the option.
                                                                                                                          are different to
                                                                                                                         ‘relevant’ offers.

The introduction of GDPR legislation in          would do this for all brands they interact           52%
                                                                                                    of consumers
Europe is not the driver of the seismic shift    with, compared to 34% of Europeans. In
                                                                                                  across the globe
in attitudes towards privacy and security,       LATAM, 90% of consumers would exercise          are aware of GDPR.
but rather the net effect of heightened          the right to select which retailers have
concern over the collection and use of           access to their data, and in the Middle East,
personal information. It has had a massive       India and APAC this response rises to 91%.
impact on the retail sector and represents a
                                                                                                                                                          16%
                                                                                                                                                         of European
global trend, with 52% of consumers across       Globally, 75% of consumers believe there                                                              consumers feel
the world aware of the regulations. Not          is a distinction between ‘personalized’                                                               that the offers
surprisingly, 72% of European consumers          offers and ‘relevant’ offers, and only one in                                                       they receive from
are aware of GDPR compared to only 25%           five consumers feel offers from retailers are
                                                                                                                                    56%             retailers are ‘always
                                                                                                                              of consumers feel
of North American consumers. What is             always personalized to them. This perception                                                           personalized’.
                                                                                                                              that personalized
surprising however is the level of sensitivity   that communications are not personalized                                    offers are important
outside of Europe and the desire to exercise     means retailers need to work harder to                                       to their shopping
the right to be forgotten. 87% of consumers      understand consumer preferences, all                                             experience.
in North America indicated that they would       potentially with less data from the consumer
request that brands remove their personal        as they exercise their right to keep details
information if given the option, and 45%         confidential.
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
Retailers in Europe especially need to adapt    Consumers who exhibit similar patterns to
   to appeal to an ‘anonymous’ shopper.            The Dealer – seeking out the best offer, the
   Only 16% of European shoppers feel that         lowest price, the biggest bargain – are ripe
   the offers they get from retailers are either   for conversion in this new environment
   “always relevant” or “always personalized”,     of anonymity. 65% of global consumers
   compared to about 20% globally. But it’s        reported that they browse online several
   clearly important, with 56% of consumers        times a week and 47% of them indicated
   in Europe stating that personalized offers      that it would be “awesome” to receive
   and promotions are important to their           real-time offers based on what they’ve
   overall shopping experience. This shows         been browsing.
   that there is an opportunity for retailers

                                                   Anonymous
   who are willing to take personalized
   communications to the next level using
   discreet, intelligent methods.
                                                   personalization
                                                   is the next step
                                                   in capturing
                                                   shoppers at the
                                                   point of intent.

                                                                                                        47%
                                                                                                  of shoppers say that it
                                                                                                                                   55%
                                                                                                                               of global consumers
                                                                                                                                                             65%
                                                                                                                                                         of global consumers
                                                                                                  would be ‘awesome’ to         think it’s important      reported that they
                                                                                                  receive real-time offers   that an online checkout    browse online several
                                                                                                  based on what they’ve      process does not require       times a week.
                                                                                                  been browsing online.          an account setup.

Source: Morar HPI
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
The New Topography of Retail

Insatiable Appetite
for Information
When it comes to shopping, consumers             to explain what they ordered, when they
are keen to have visibility into virtually       ordered it, the promotion they used or if the
everything. When they order something            item was on sale or special offer, delivery
online, they want to be able to track the item   charges incurred and the exact amount they
from production to delivery, whether that’s      paid. They expect all this intelligence to be
on their doorstep or in a store. And if they     at the fingertips of the retailer. And they will
decide to return it they don’t want to have      be impatient if it’s not.

                                                                                                                 52%                   58%                   60%                  72%
                                                                                                               of consumers          of consumers          of consumers        of consumers
                                                                                                              state that a key     surveyed expect         in NA expect      surveyed expect
                                                                                                                influence on      retailers to always   customer service     granular tracking
                                                                                                            loyalty is knowing    know the reasons        teams to know       of their delivery
                                                                                                             that retailers are     for their return.    the date of their         status.
                                                                                                            acting sustainably.                         original purchase.

                                                                                                    Over half of consumers expect to be able to         Such granular level of knowledge is
                                                                                                    research and reserve items online for same          also applicable to the customer service
                                                                                                    day pick-up in-store. And if items are being        experience, particularly when it comes to
                                                                                                    delivered to their homes, a massive 72% of          returns. When returning an item, 58% of
                                                                                                    customers expect real-time updates on the           consumers globally expect retailers to
                                                                                                    location of an item throughout the delivery         always know the reasons for their return,
                                                                                                    process. Over half think it’s important to          ensuring a hassle-free returns process.
                                                                                                    know where their item is coming from, too           In North America, shoppers are more
                                                                                                    – shoppers want to know that retailers are          demanding, wanting retailers to know
                                                                                                    acting sustainably and limiting their impact        details such as the date of the original
                                                                                                    on the environment, with 56% saying that            purchase (60%, compared to the global
                                                                                                    this knowledge would influence their loyalty        average of 52%) and the method of
                                                                                                    to a grocery retailer and 52% to a fashion          payment used (57%, compared to the
                                                                                                    retailer.                                           global average of 47%).
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
This transparency and omnichannel               which makes keeping them satisfied tricky.
  intelligence is particularly important for      Consumers expect to be able to chart their
  The Nomad. Effortlessly flitting through        own course and simultaneously expect
  the shopping experience from browsing to        retailers to be able to pinpoint the exact
  purchase – whether it’s online, in-store or a   data point they need in an instant. The
  mixture of the two – full product information   challenge for retailers is how to make this
  at the touch of a button (on mobile, via an     information available in a seamless,
  app, on a laptop or in a kiosk in-store) is     real-time manner.
  essential for this fast-paced consumer –

                                                                                                     54%                   73%                  74%
                                                                                                of consumers feel         of LATAM         of consumers think
                                                                                                that kiosks where     shoppers expect        knowledgeable
                                                                                                  you can look up      to know where        instore staff are
                                                                                                  products in the       an item was        important to their
                                                                                                store, or available        sourced,        brand experience.
                                                                                                for delivery are an     regardless of
                                                                                                 important aspect         pick-up or
                                                                                                   of their retail    delivery location.
                                                                                                    experience.

Source: Morar HPI
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
The New Topography of Retail

Big, Bold
Technology

Consumers in high-growth markets are            the idea of using virtual reality at home to
leading the way for retailers to make big,      put together looks to try on in-store or have
bold moves in experience technology.            delivered, while this appeals to a smaller
Virtual sales assistants, interactive kiosks,   33% of consumers in Europe, North
in-store robots, facial recognition             America and Australia.
                                                                                                        42%                                                 61%
                                                                                                     of consumers in                                 of consumers in India
technology, driverless cars, drone
deliveries – it’s all about faster, bigger      Across the board, technology enthusiasts
                                                                                                    LATAM think that
                                                                                                virtual sales assistants
                                                                                                                                   57%                  love the idea of
                                                                                                                                                      deliveries by drone
                                                                                                                             of consumers in the
and better experiences.                         think in-store facial recognition, virtual         in the fitting room      Middle East think that      or driverless car.
                                                sales assistants in fitting rooms, kiosks       are important to their        being recognized
Retailers across Brazil, Chile, China, India    where you can upload an image of an item            retail experience.       in-store with facial
and the Middle East will benefit most by        (or a celebrity or influencer wearing a                                    recognition technology
incorporating bold new technologies into        coveted piece) and get recommendations                                       to ensure purchase
                                                                                                                            security is important.
their retail experiences. Some 60% of           for similar or related items, and automatic
consumers in these regions think it would       replenishment based on subscription
be “awesome” to have near real-time             preferences are important (around 57%
delivery of online purchases by drone           of respondents). Enthusiasm is more muted
or driverless cars. This drops to 32% in        in Europe, Australia and North America
more mature markets. Likewise, 64% of           with only around 28% of consumers
consumers in high-growth markets love           thinking such facilities are important.
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
Looking more closely at consumers across        In thinking about how these trends will
  the high-growth territories, in LATAM, 42%      eventually bleed into other markets we
  of shoppers think virtual sales assistants in   look to The Player, who loves radical new
  fitting rooms are important. In the Middle      shopping propositions and revels in the
  East, where most consumers still make           opportunity to enhance a retail experience
  their purchases in bricks-and-mortar stores,    through innovative new ideas. For The
  there is a real appetite for in-store facial    Player it’s all about the how not the what.
  recognition technology to ensure purchase       Retailers looking to engage this consumer
  security and prevent fraud. Consumers           and attract them like a moth to a flame
  in India, on the other hand, where online       would do well to look to consumer
  shopping is huge, love the idea of drone        behaviours in high-growth markets.
  or driverless car deliveries. All territories
  offer opportunities for retailers to build
  integrated experiences through
  technological advancements.

                                                                                                       35%
                                                                                                  of consumers say that
                                                                                                                                    59%
                                                                                                                                of consumers in the
                                                                                                                                                                73%
                                                                                                                                                           of consumers in LATAM
                                                                                                  kiosks where you can         Middle East think that      think self-checkouts on
                                                                                                  upload an image of an       being recognized instantly    their personal mobile
                                                                                                 item, celebrity or other       as a loyalty member          device is important.
                                                                                                    inspiration and get        with facial recognition
                                                                                                  recommendations for         technology is important.
                                                                                                     similar or related
                                                                                                  products is important
                                                                                                to their retail experience.

Source: Morar HPI
The New Topography of Retail - Mapping emerging consumer trends 2018 - Oracle
High-growth markets are
leaning into big bold tech

% of consumers that love the idea of…

 Linking a fitness tracker          Automatic replenishment   Being recognised instantly in      Using virtual reality at home to   Using an in-store robot or        Delivery of online purchases
 (e.g. fitbit) to my supermarket/   based on subscription     store with facial recognition as   navigate a personalized in-store   online chat assistant to curate   by drone or driverless car.
 grocery store to get product       preferences.              a loyalty member.                  experience.                        a personalized wardrobe.
 suggestions.

       High-growth

       Developed
                                                 59                                                             64                                                                60

                                                                           55
             51
                                                                                                                                                   47

                                                                                                                        33                                                                32
                                                         30
                     24                                                           25
                                                                                                                                                       23
Conclusion:

A Connected
Future
Technological innovation and a globally       transparent about your brand and your
interconnected world has given rise to        operations. Making big, bold investments
new possibilities that delight and disquiet   in technology means establishing a single
retail consumers. Connecting, cultivating     view of the customer, inventory and
and captivating the modern shopper            order so that you can deliver the end-
requires new thinking around                  to-end experience customers expect.
segmentation, engagement and
establishing trust.                       Achieving a single, 360-degree view of
                                          your customers and your inventory is
Understanding your best customer and      no longer a competitive advantage but
architecting an operation that attracts   a basic requirement to thrive. Retailers
them and establishes a meaningful         who meet this requirement first will build
relationship between them and your        stronger relationships with customers,
brand means giving them the right to      create space for innovation projects and
be forgotten. Delivering on your brand    make more strategic decisions that
promise – from the point of manufacturing maximize their growth.
to doorstep delivery means being
Create the Moment. Cultivate Affinity.
Captivate your Customers.

Oracle provides retailers with a complete, open, and integrated suite
of best-of-breed business applications, cloud services, and hardware that
are engineered to work together and empower commerce. Leading fashion,
grocery, and specialty retailers use Oracle solutions to anticipate market
changes, simplify operations and inspire authentic brand interactions.
For more information, visit our website at www.oracle.com/retail.

© Oracle 2018

Oracle Retail
Oracle Corporation
World Headquarters
500 Oracle Parkway
Redwood Shores, CA 94065

P: 1.650.506.7000
oneretailvoice_ww@oracle.com
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