The NewTopographyof RetailMapping emerging consumer trends

2018

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.

It’s a landscape that can be hard to navigate with varying levels of trend adoption in different parts of the world, and consumer perceptions and expectations shifting globally as technology and advanced services forge ahead.

Across the globe, there’s been a growing disquiet about the way technology can be a clairvoyant as consumers go about their online life. This perceived encroachment on privacy has resulted in significant measures such as the General Data Protection Regulation (GDPR) legislation, illustrating consumers’ sensitivity and concern about the importance of protecting their privacy. Fatigue around sharing personal data has set in prompting retailers to reassess brand transparency to offer a more anonymous shopping experience. Around the world, 86 percent of global consumers state they would ask brands to remove their personal data if a similar regulation was implemented in their region.

Consumers are also demanding more traceability in their personal shopping history. There seems to be an expectation among consumers that retailers should know the full history of their purchase, whether they visit the brand online, in-store or both. Shoppers are agitated when having to explain returns, discounts, special offers they might have utilized; they expect instantaneous, 360˚ knowledge of what

they’ve bought and what promotions they’ve used when pursuing a return.

Behind a plethora of consumer choice lies new technology, which is driving the global shopper’s purchasing experiences and exposing consumers to even bigger and bolder technological innovations – from facial recognition for purchase security to drone deliveries. Not surprisingly, high-growth markets such as Brazil, Chile, China, India and the Middle East are more open to these compared with more mature markets (such as Europe and North America), which at the moment seem to be more set in their ways.

Into the already complicated geographical landscape steps the notion of consumer personas. As we explored in previous research:Retail in 4 Dimensions 2017, the traditional approach to segmentation is no longer adequate. Understanding consumer behaviors and triggers is essential to relating to and earning the right to be remembered on an individual basis. When thinking about consumers we think about their buying behavior and how they navigate through each journey. The three personas – The Nomad, The Player and The Dealer – all exert influence across the globe. Such a complex, multifaceted picture of trends, territories and personas means it’s more important than ever for retailers to remain agile.

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.

The Nomad:The Nomad is a nimble shopper but expects retailers to keep up, having full knowledge of her shopping journey from purchase to returns.

The Dealer: What motivates this shopper is the hunt, the thrill of the chase. And what’s the prize? The best offer, the lowest price, the biggest bargain.

The Player: This avant-garde shopper is looking for the perfect mix of brand, product and experience. The Player seeks out great shopping experiences, incorporating cutting-edge technology across every touchpoint.

The New Topography of Retail

Privacy and Anonymity

The introduction of GDPR legislation in Europe is not the driver of the seismic shift in attitudes towards privacy and security,but rather the net effect of heightened concern over the collection and use of personal information. It has had a massive impact on the retail sector and represents a global trend, with 52% of consumers across the world aware of the regulations. Not surprisingly, 72% of European consumersare aware of GDPR compared to only 25% of North American consumers. What is surprising however is the level of sensitivityoutside of Europe and the desire to exercise the right to be forgotten. 87% of consumers in North America indicated that they would request that brands remove their personal information if given the option, and 45%

would do this for all brands they interact with, compared to 34% of Europeans. In LATAM, 90% of consumers would exercisethe right to select which retailers have access to their data, and in the Middle East, India and APAC this response rises to 91%.

Globally, 75% of consumers believe there is a distinction between ‘personalized’ offers and ‘relevant’ offers, and only one in five consumers feel offers from retailers are always personalized to them. This perceptionthat communications are not personalized means retailers need to work harder to understand consumer preferences, all potentially with less data from the consumer as they exercise their right to keep details confidential.

52% of consumers

across the globe are aware of GDPR.

16% of European

consumers feelthat the offers

they receive from retailers are ‘always

personalized’.

75% of consumers believe

that ‘personalized’ offers from retailers

are different to ‘relevant’ offers.

56% of consumers feel that personalized

offers are important to their shopping

experience.

87% of consumers in

North America would request that brands

remove their personal information if given

the option.

55% of global consumers think it’s important

that an online checkout process does not require

an account setup.

47% of shoppers say that it would be ‘awesome’ to receive real-time offers based on what they’ve been browsing online.

65% of global consumers reported that they

browse online several times a week.

Source: Morar HPI

Retailers in Europe especially need to adapt to appeal to an ‘anonymous’ shopper. Only 16% of European shoppers feel that the offers they get from retailers are either “always relevant” or “always personalized”, compared to about 20% globally. But it’s clearly important, with 56% of consumers in Europe stating that personalized offers and promotions are important to their overall shopping experience. This shows that there is an opportunity for retailers who are willing to take personalized communications to the next level using discreet, intelligent methods.

Consumers who exhibit similar patterns to The Dealer – seeking out the best offer, the lowest price, the biggest bargain – are ripe for conversion in this new environment of anonymity. 65% of global consumers reported that they browse online several times a week and 47% of them indicated that it would be “awesome” to receive real-time offers based on what they’ve been browsing.

Anonymous personalization is the next step in capturing shoppers at the point of intent.

When it comes to shopping, consumers are keen to have visibility into virtually everything. When they order something online, they want to be able to track the item from production to delivery, whether that’s on their doorstep or in a store. And if they decide to return it they don’t want to have

to explain what they ordered, when they ordered it, the promotion they used or if the item was on sale or special offer, delivery charges incurred and the exact amount they paid. They expect all this intelligence to be at the fingertips of the retailer. And they will be impatient if it’s not.

The New Topography of Retail

52% of consumers

state that a key influence on

loyalty is knowing that retailers are

acting sustainably.

72% of consumers

surveyed expect granular tracking of their delivery

status.

58% of consumers

surveyed expect retailers to always know the reasons

for their return.

60% of consumers in NA expect

customer service teams to know the date of their

original purchase.

Insatiable Appetite for Information

Over half of consumers expect to be able to research and reserve items online for same day pick-up in-store. And if items are being delivered to their homes, a massive 72% of customers expect real-time updates on the location of an item throughout the delivery process. Over half think it’s important to know where their item is coming from, too – shoppers want to know that retailers are acting sustainably and limiting their impact on the environment, with 56% saying that this knowledge would influence their loyalty to a grocery retailer and 52% to a fashion retailer.

Such granular level of knowledge is also applicable to the customer service experience, particularly when it comes toreturns. When returning an item, 58% of consumers globally expect retailers to always know the reasons for their return, ensuring a hassle-free returns process. In North America, shoppers are more demanding, wanting retailers to know details such as the date of the original purchase (60%, compared to the global average of 52%) and the method of payment used (57%, compared to the global average of 47%).

Source: Morar HPI

54% of consumers feel that kiosks where you can look up products in the

store, or available for delivery are an important aspect

of their retail experience.

73% of LATAM

shoppers expect to know where

an item was sourced,

regardless of pick-up or

delivery location.

74% of consumers think

knowledgeable instore staff are

important to their brand experience.

This transparency and omnichannel intelligence is particularly important for The Nomad. Effortlessly flitting through the shopping experience from browsing to purchase – whether it’s online, in-store or a mixture of the two – full product informationat the touch of a button (on mobile, via an app, on a laptop or in a kiosk in-store) is essential for this fast-paced consumer –

which makes keeping them satisfied tricky. Consumers expect to be able to chart their own course and simultaneously expect retailers to be able to pinpoint the exact data point they need in an instant. The challenge for retailers is how to make this information available in a seamless, real-time manner.

The New Topography of Retail

Consumers in high-growth markets are leading the way for retailers to make big, bold moves in experience technology. Virtual sales assistants, interactive kiosks, in-store robots, facial recognition technology, driverless cars, drone deliveries – it’s all about faster, bigger and better experiences.

Retailers across Brazil, Chile, China, India and the Middle East will benefit most by incorporating bold new technologies into their retail experiences. Some 60% of consumers in these regions think it would be “awesome” to have near real-time delivery of online purchases by drone or driverless cars. This drops to 32% in more mature markets. Likewise, 64% of consumers in high-growth markets love

the idea of using virtual reality at home to put together looks to try on in-store or have delivered, while this appeals to a smaller 33% of consumers in Europe, North America and Australia.

Across the board, technology enthusiasts think in-store facial recognition, virtual sales assistants in fitting rooms, kiosks where you can upload an image of an item (or a celebrity or influencer wearing a coveted piece) and get recommendations for similar or related items, and automaticreplenishment based on subscription preferences are important (around 57% of respondents). Enthusiasm is more mutedin Europe, Australia and North America with only around 28% of consumers thinking such facilities are important.

Big, Bold Technology

42% of consumers in LATAM think that

virtual sales assistants in the fitting room

are important to their retail experience.

57% of consumers in the

Middle East think that being recognized

in-store with facial recognition technology

to ensure purchase security is important.

61% of consumers in India

love the idea of deliveries by drone

or driverless car.

Source: Morar HPI

Looking more closely at consumers across the high-growth territories, in LATAM, 42% of shoppers think virtual sales assistants in fitting rooms are important. In the MiddleEast, where most consumers still make their purchases in bricks-and-mortar stores, there is a real appetite for in-store facial recognition technology to ensure purchase security and prevent fraud. Consumers in India, on the other hand, where online shopping is huge, love the idea of drone or driverless car deliveries. All territories offer opportunities for retailers to build integrated experiences through technological advancements.

In thinking about how these trends will eventually bleed into other markets we look to The Player, who loves radical new shopping propositions and revels in the opportunity to enhance a retail experience through innovative new ideas. For The Player it’s all about the how not the what. Retailers looking to engage this consumerand attract them like a moth to a flame would do well to look to consumer behaviours in high-growth markets.

59% of consumers in the

Middle East think that being recognized instantly

as a loyalty member with facial recognition

technology is important.

73% of consumers in LATAM think self-checkouts on their personal mobile device is important.

35% of consumers say that kiosks where you can upload an image of an item, celebrity or other

inspiration and get recommendations for

similar or related products is important

to their retail experience.

High-growth markets are leaning into big bold tech

% of consumers that love the idea of…

High-growth

Developed

Linking a fitness tracker (e.g. fitbit) to my supermarket/grocery store to get product suggestions.

Being recognised instantly in store with facial recognition as a loyalty member.

Using virtual reality at home to navigate a personalized in-store experience.

Using an in-store robot or online chat assistant to curate a personalized wardrobe.

Delivery of online purchases by drone or driverless car.

Automatic replenishment based on subscription preferences.

59

55

25

64

3330

47

23

60

32

24

51

Conclusion:

A Connected FutureTechnological innovation and a globallyinterconnected world has given rise to new possibilities that delight and disquiet retail consumers. Connecting, cultivating and captivating the modern shopper requires new thinking around segmentation, engagement and establishing trust.

Understanding your best customer and architecting an operation that attracts them and establishes a meaningful relationship between them and your brand means giving them the right to be forgotten. Delivering on your brand promise – from the point of manufacturing to doorstep delivery means being

transparent about your brand and your operations. Making big, bold investments in technology means establishing a singleview of the customer, inventory and order so that you can deliver the end-to-end experience customers expect.

Achieving a single, 360-degree view of your customers and your inventory is no longer a competitive advantage but a basic requirement to thrive. Retailers who meet this requirement first will build stronger relationships with customers, create space for innovation projects and make more strategic decisions that maximize their growth.

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

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