Future of internet retail

Future of internet retailing Martyn Perks Twitter: martynperks [email protected] www.thinkingapart.com

Everything appears to be moving at breakneck speed…

Apple Newton, 1987 Microsoft Tablet, 2000 Apple iPad, 2010

The slow march of technology

Presentation: The future of internet retailing, London College of Fashion, June 2011 thinking apart ltd www.thinkingapart.com

Technology has become incredibly cheap

New mums

Teenagers

So whats going on in fashion right now?

High-end

Low-end

High-end

Part 4: Fashion retailing

Retailers with online/physical stores see sales rise 22% on 2009 Sales increase by 6% for stores with physical locations only

Capgemini index, June 2010)

Future growth will be harder Easy successes have been won Expect switching of customer loyalty than new customers Retailers should focus on maximising revenue online

Internet retail trends 2010, Verdict

Online/physical growth

In 2009, £5.4bn spent online in 2009, 17% increase over 2008. Online-only retail declined in favour of stores who offer multichannel shopping. Interactive Media in Retail Group 2010

Multi-channel growth

Global survey of more than 500 businesses found companies estimate they are losing the equivalent of 24% of their annual online revenue due to a bad website experience. “Reducing customer struggle”, Econsultancy & Tealeaf, June 2011

Mistakes continue


The future lies in getting four areas right

Discovery

Differentiation and innovation will be key

Product

Brand Service


Sources of Information Used to Research Products Before Making a Purchase According to US Moms*, Sep 2010

Recommendations from family/friends 62%

Review of recommendation websites 40%

News and information websites 33%

Magazine/articles 31%

Company/corporate websites 28%

Medical professional 26%

Personal or review blogs 15%

Facebook 15%

Mom-focussed social networking communities 10%

Source: NPD Group, "Social Media Moms: How Networking impacts Purchase Behaviours", Child's Play Communications, Dec 13, 2010

“Several factors hinder teens from buying online, including lack of access to payment methods like credit cards. But for most teen girls, online shopping is simply not social enough for them to give up their trips to the mall.” Piper Jaffray, “Taking Stock with Teens: Spring 2011”, April 6, 2011

Discovery: reaching out in the real world


65.9% would often use tell-a-friend feature when offered an incentive 34.0% of consumers would tell-a-friend if just asked to do so by a website. Source: lucid marketing, “How use moms share and spread information: Health Edition 2011”, April 2011

Tell-a-friend


Shopping parties!

Mobile discovery

0

10

20

30

40

50

60

70

I prefer to try onclothing before

buying

Clothes sizes lackconsistency

I buy from 2-3favourite stores

My size sells outmore quickly than

others

It is easy to buyclothes that fit me

All

16-24

Source: GMI/Mintel

Feeling towards shopping for clothes by age group, April 2011

Product: deliver value around it


Sizing: Not making it easy

Too complicated!

TopShop -- “European” Shopping & Entertainment Center, Moscow

Virtual shopping

TopShop -- “European” Shopping & Entertainment Center, Moscow

Even for men!

Virtual fitting rooms

Telling a friend


Its new slogan of 'modern, sexy, cool' didn't resonate. Instead consumers continued to see it as a safe stalwart. Trying to shift away from its middle-of-the-road appeal to something more modern and exciting alienated its core audience and proved a very risky move. Mintel 13 Oct 2010

Brand: protect, grow, nurture

18-34 year olds 35+ year olds

Utilitarian traits

Value 54% 67%

Quality 37% 42%

Function 30% 36%

Durability 30% 36%

Ease of use 18% 23%

Superficial/image-concious traits

Innovation 12% 8%

Looks 11% 5%

Popularirt 9% 4%

Uniqueness 8% 5%

Prestigious 5% 1%

Luxury 3% 2%

Preferred Product Attributes According to US Internet Users, by Age, July 2010

Source: Resonate Networks, "Engaging Generation Y: Insights About Motivations that Drive Purchase Decisions", Oct 28 2010

“Millennials need ―external validation‖ and value products and services that convey their success to others while rewarding themselves."

Value wins


Brand authenticity


Future of Internet Retailing

Niche content back in vogue


Designers want to connect with you


23% of consumers reported hassle of returns puts them off shopping online.

22% of consumers prefer online stores with a reserve and pick-up service

31% prefer to return/exchange items in store that they have bought online, thus creating a big advantage for multichannel retailers

Under 25s are the most concerned by return difficulties: retailers need to address their concerns as they are such a major force. E-Commerce, UK – 2008/2010, Mintel research

Service: major area for improvement


Solving the collection nightmare

In-store pickup

Offer flexible delivery times



Easier payments for vendors

Listen to your consumers but go much further than they expect

The future? “The best way to predict the future is to invent it.” Alan Kay, computer scientist

References and websites

Slide 5: Technology has become incredibly cheap—Shopify www.shopify.com

Slide 6: New mums & teenagers—On new mums, see their new found power—even rejecting Prime Ministerial candidate David Cameron: http://www.timesonline.co.uk/tol/news/politics/article6924035.ece

On the rise of teenagers using technology in privacy to their parents, see: http://www.spiked-online.com/index.php/site/article/5166/

Slide 8: Online/physical growth—“Acquiring new customers will become a challenge – maintaining existing customer loyalty and developing systems to create repeat business are likely to be key features of successful online retailing in the years ahead.” Internet retail trends 2010, Verdict

Slide 9: Multi-channel growth—See Online retail the real 2009 winner, Michael Conway, On Internet Business http://www.oninternetbusiness.com/2010/01/online-retail-the-real-2009-winner/

Slide 15: Mobile discovery—Scandit see http://www.iscandit.com/

Slide 19: Virtual shopping—TopShop “European” Shopping & Entertainment Center, Moscow. See Wired: http://www.wired.com/beyond_the_beyond/2011/05/augmented-reality-kinect-fitting-room-for-topshop-moscow/

Slide 21: Virtual fitting rooms—See Corte Ingles http://eci.virtualtwo.com/

Slide 22: Telling a friend—See Magic Mirror http://www.magicmirror.me/

Slide 23: Brand: protect, grow, nurture—See Guardian http://www.guardian.co.uk/media/2010/oct/12/gap-logo-redesign

Slide 25: Brand authenticity—Solerebels http://solerebelsfootwear.weebly.com/ and Denum Therapy: http://denimtherapy.com/

Slide 26: Niche content back in vogue—See: Alex and Alexa www.alexandalexa.com

Slide 30: In-store pickup—See FT http://www.ft.com/cms/s/0/0811d9e8-7393-11df-bc73-00144feabdc0.html

Slide 32: Easier payments for vendors—Square www.squareup.com


http://www.shopify.com/

http://www.timesonline.co.uk/tol/news/politics/article6924035.ece

http://www.spiked-online.com/index.php/site/article/5166/



http://www.oninternetbusiness.com/2010/01/online-retail-the-real-2009-winner/











http://www.iscandit.com/

http://www.wired.com/beyond_the_beyond/2011/05/augmented-reality-kinect-fitting-room-for-topshop-moscow/















http://eci.virtualtwo.com/

http://www.magicmirror.me/

http://www.guardian.co.uk/media/2010/oct/12/gap-logo-redesign





http://solerebelsfootwear.weebly.com/

http://solerebelsfootwear.weebly.com/

http://denimtherapy.com/

http://www.alexandalexa.com/

http://www.ft.com/cms/s/0/0811d9e8-7393-11df-bc73-00144feabdc0.html










http://www.squareup.com/

The end.

Future of internet retailing Martyn Perks Twitter: martynperks [email protected] www.thinkingapart.com

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Future of internet retail