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Synchronous Selling
Seema WilliamsAnalyst, Consumer eCommerce Research
Theme
Synchronizing channels will win
customers
Agenda
Consumers shop across channels Traditional retailers face challenges Creating a synchronous customer
experience
The on-line retail growth spiral
$ $
3More categories become available
$ $More retailers sell
22
More people shop1
On-line shopping takes off
33
3944
5156
60
1013
1823
31
38
0
10
20
30
40
50
60
70
1998 1999 2000 2001 2002 2003
Millions of U.S. households On-line
households
On-lineshoppinghouseholds
Three stages of Web buying
Convenience spending Small-ticket, low-risk items
Examples: books, music, apparel, gifts
Researched purchases Information-intensive big-ticket items
Examples: travel, appliances, computers
Fulfilling essentials Low-information habitual purchases
Examples: groceries, prescription medication
In his first year . . . In his second year . . .In his third year . . .
Total: $300 to $350Total: $1,100 to $1,300
Total: $1,500 to $1,700
Convenience
Researched
Replenishment
Convenience Convenience
Researched
Today (1998) customer profile: Joe Shopper
First-time shoppers accelerate spending
In five years -- profile: Suzy Shopper
In her first year . . .Convenience
Researched
Replenishment
Convenience
Researched
Total: $1,250 to $1,400Total: $1,700 to $2,000
First-time shoppers accelerate spending
Retail Spending Growth
3 6 10 15 23 324
1120
31
43
56
12
3
6
11
20
0
20
40
60
80
100
120
1998 1999 2000 2001 2002 2003
$Billions
Convenience Researched Replenishment
$108
Consumers shop across channels
Convenience
Where did you purchase products in the last six months?
Store
Catalog
Web
Researched Replenishment
Source: Forrester’s Consumers & Technographics Retail & Media Study of 10,000 on-line consumers. *Note: Consumers who buy researched goods generally do not buy again within six months.
(multiple responses accepted)
89% 91% 98%
31%
14% 11%
29%17%
8%
Consumers will shift spending to the Web
How much do you plan to spend in the next six months in each channel?
Source: Forrester’s Consumers & Technographics Retail & Media Study of 10,000 on-line consumers. *Note: Consumers who buy researched goods generally do not buy again within six months.
(multiple responses accepted)
-63%
-4%
-23%
-20%
-28%-24%
16%4%1%
Less
More
Convenience Researched Replenishment Store
Catalog
Web
The Net is not just another channel
Theme
Synchronizing channels will win
customers
Brick-and-mortar retailers fall short
Different product= unmet expectations
Variable pricing= engenders distrust
Incomplete service= forces inconvenience
Pure-play competitors set the standards
Infinite product selection Lower prices Superior service
The solution: center customer experience around the Web
The battle to own customers is on-line
The Net offers the best communication
Most robust shopper data found on-line
Synchronizing channels
Offer depth then breadth in core products
Eliminate regional pricing Limit on-line/off-line price differential Align marketing strategies and tools
Give stores a make-over
Add kiosks to extend shelf-space Consider stores a delivery option Proliferate points-of-sale
Synchronous channels will cycle consumers between stores and sites
The pay-off:
Protect existing customer base Recruit new customers Win the game of scale
Theme
Synchronizing channels will win
customers
Summary
Consumers are cross-channel shoppers
Web storefronts will lead
Brick-and-mortar assets come into play
