Jon Stine
Director, Cisco Consulting Services
January 13, 2014
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Web-based survey
N = 1,174
Margin of error <3%
Digital Shopping
Behavior Survey
Conducted Nov. 2013
Representative of the U.S.
broadband population by age,
income, region
Source: Cisco Consulting Services, 2013
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RETAIL AND PERSONAL DATA
DIGITAL SHOPPER BEHAVIOR
IN-STORE DIGITAL CONCEPTS
Consumer trust
stands between
retailers and new
value
1 in 5 is now
an Über-Digital
At risk: ~$100B per annum
in incremental industry value
And mobile is the norm
Say hello to the future
Which brands will
mash-up the net
and the store?
They’re waiting
Still asking if you need guest
Wi-Fi?
In front of us: an “s-curve”
leap in behavior and
expectations
Source: Cisco Consulting Services, 2013
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INNOVATION
INVESTMENT
LEADERS
INNOVATION
INVESTMENT
Business and Societal Impact
MOST
Retail
Information
Technology
Networked
Retailing
Immersive
Retailing
Digitized Interactions
Omnichannel
Internet of
Everything
Retailing
Sense Know Act
Digitize business
processes
Standards
Systems
E-BUSINESS
DATA FUSION
RIGHT TIME
HYPER-LOCALIZED
Intelligent Connections
Source: Cisco Consulting Services primary research, 2013; Forrester, 2012; National Retail Federation, 2012
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Sources: New York Times, 2013; Retail Technology, 2013; IT News Daily, 2013
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DIGITAL MASS
ÜBER DIGITALS
80% 18%
Digital
Research
Browse
Purchase
Median Age 40-44
Last Year 11%
Smartphone
Research
Browse
Purchase
Median Age 30-34
Source: Cisco Consulting Services Primary Research, 2013
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The Vast Value
of the Internet of Everything
Internet of
Everything
Retailing
Sense Know Act
North America Retail Unrealized Value at Stake in 2013
DATA FUSION
RIGHT TIME
HYPER-LOCALIZED
Source: Cisco Consulting Services, 2014; n = 1,174
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Select up to three
DIGITAL MASS
ÜBER DIGITALS
80% 18%
46%
38%
30%
30%
Personalized promotions
via touch-screen or smartphone
Personalized products specifically for me
Personalized shopping lists
Personalized service
53%
47%
38%
34%
Source: Cisco Consulting Services Primary Research, 2014
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What if retailers could…
DIGITAL MASS
CAPTURE DATA
ÜBER DIGITALS
TO CREATE
Transactions; On-hand inventory on order Improved in-stock
69% 27% 42%
44% 82%
35%
Past buys; Store location; On-hand inventory Personalized digital offers
77% 38%
39%
37%
37% 74%
Store traffic; Orderqueue No checkout lines
67% 26% 41%
43%
37% 80%
Smartphone in store; Location In-store way-finding
57% 20% 37%
33%
38% 71%
APPEALING
VERY APPEALING
Source: Cisco Consulting Services, 2013
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Financial
Hospitals,
physicians Institutions,
banks
However:
56%
54%
Credit card
companies
47%
Government
agencies
37%
How much would you trust
these companies/institutions
to protect your personal data
and use it to provide
something you value?
National
retail
brands
31%
Internet
companies
18%
Source: Cisco Consulting Services, 2014; n = 1,174, Percentage answering 7 and above on a 10-point scale 1=not trust at all 10=trust completely
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DIGITAL MASS
ÜBER DIGITALS
Past purchasing history with this brand
57%
59%
Basic information about me (name, age, etc.)
52%
56%
Likes and dislikes (opt-in)
48%
49%
Information from products I am using
27%
TRUST CLIFF
30%
Past purchasing history from other brands
24%
29%
TRUST CLIFF
My location
20%
29%
Source: Cisco Consulting Services, 2013
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DIGITAL MASS
ÜBER DIGITALS
Time spent in the store
34%
47%
Location in the store
35%
44%
Products you try, but don’t buy
36%
43%
QR codes or barcodes you scan
27%
TRUST CLIFF
32%
Your walking path in the store
26%
30%
TRUST CLIFF
None of the above
25%
13%
Source: Cisco Consulting Services, 2013
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Select up to three
DIGITAL MASS
ÜBER DIGITALS
Guaranteed percentage savings on next purchase
52%
51%
Specific dollar savings on my next purchase
52%
53%
World-class privacy policy
39%
31%
Ability to use loyalty points at more than one retailer
TRUST CLIFF
24%
27%
TRUST CLIFF
Admission into a club that receives priority service
11%
18%
Admission into a club that receives priority offers
22%
27%
Source: Cisco Consulting Services, 2013
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Here’s what I think every business should tell consumers
about their data collection programs
Michael Nadeau, publisher,
September, 2013
1
Exactly what data is being collected
Clearly communicate and explain exactly the type of data
being collected
5
How the data is being analyzed and reported
If it’s being analyzed in the aggregate, say so
and explain what that means
2
How the data collection technology works
Boil the complex tech terms down into clear lay terms.
Once you know, is there a reason to fear “metadata?”
6
Who is seeing the data
People might assume that you share their data
with other businesses. Be clear about your policies.
3
How the data is being secured
Show the steps you’re taking to prevent data
from being hacked or misused
7
4
Why the data is being collected
Show them the problems being solved,
the value being created
8
The consumer benefits of data collection
Most important, shoppers will provide personal
information if they feel they’re getting equal value in
return.
It’s opt-in
Give your shoppers a choice
Source: Data Informed, September 2013; Cisco Consulting Services, 2013
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Percentage of respondents doing now or interested in doing
DIGITAL MASS
81% 18%
Last Year
54%
57%
ÜBER DIGITALS
97%
60%
66%
62%
62%
65%
PC at home
Phone in store
Tablet at home
Phone on the go
Phone at home
Touch-screen in store
Last Year 11%
99%
100%
95%
90%
91%
82%
Source: Cisco Consulting Services, 2013, percentage of respondents doing now or interested in doing
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DECISION JOURNEY
RESEARCH
PC
In store
DO IT NOW
U.S. 2013
BUY
60%
In store
39%
Online PC
Mobile
In store
33%
Mobile
Online PC
32%
26% 86%
27%
23%
22%
Über Digital 2013
INTERESTED
72%
66%
59%
56%
25% 84%
70%
54%
20% 92%
62%
20% 90%
24% 86%
Click ’n Collect
Kiosk
In store
12%
35%
47%
28%
40% 68%
Source: Cisco Consulting Services, 2013
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What are the three most important sources of information you use to help make buying decisions?
Online reviews retailer website
Friends and family
Online reviews expert sources
60%
44%
58%
52%
Friends,
family
Online
reviews
Store employees
Online
reviews
Online Friends, 42%
reviews family Online
experts
29%
Online
experts
49%
46%
43%
Friends,
family Online
experts
21%
Store
Assoc.
15%
12%
Store
Assoc.
Store
assoc.
2010
2012
2013
Source: Cisco Consulting Services, 2010-11-12-13, 2010: n = 1004; 2012: n = 1007; 2013: n = 1,174
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Roughly 50% will research a $100 product; more than 75% will research when more than $250
DIGITAL MASS
ÜBER DIGITALS
80% 18%
87%
85%
76%
47%
25%
14%
>$500
<$500
<$250
<$100
<$50
<$10
86%
84%
80%
54%
28%
17%
Source: Cisco Consulting Services Primary Research, 2013, percentage responding “very likely” to research a product online
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DIGITAL MASS
ÜBER-DIGITALS
81% 18%
32%
24%
51%
49%
I prefer to use my own device
I prefer to use store devices
I prefer to use a store app
I prefer to use a browser
51%
18%
64%
58%
Source: Cisco Consulting Services Primary Research, 2013
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Digital Shoppers Want “Safe” Self-Service
DIGITAL MASS
ÜBER-DIGITALS
81% 18%
64%
22%
11%
I prefer to shop on my own,
but with help when I need it
I prefer to shop on my own
I prefer help from store employees
all the time
64%
19%
14%
Source: Cisco Consulting Services Primary Research, 2013
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How have your expectations for shopping changed over the past two years?
DIGITAL MASS
ÜBER DIGITALS
80% 18%
71%
61%
58%
58%
50%
Better values
Price visibility
Wider range
Information access
Faster
79%
72%
72%
75%
64%
Source: Cisco Consulting Services Primary Research, 2013, percentage responding “very likely” to research a product online
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Most important reasons to shop in a physical store
DIGITAL MASS
ÜBER DIGITALS
80% 18%
2013
~90% of all
non-grocery
transactions
occur in the
store
67%
52%
51%
9%
Look at, touch, compare products
Use purchases immediately
Avoid shipping charges
Get advice from store staff
67%
49%
42%
12%
2015
~85% of all
non-grocery
transactions
will occur in
the store
Sources: Forrester, 2013 (not including cars, trucks, gasoline, grocery, food service); Cisco Consulting Services 2013
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Percentage responding frequently or always
1
2
3
4
BEST PERSONAL PRICE
MOBILE CONCIERGE
BEAT THE BUZZER
CONNECT THE DOTS
63%
42%
35%
34%
Opt-In. Smartphone. Scan.
Opt-In. Smartphone.
Gamification.
Gamification.
Calculates all your relevant offers,
coupons, loyalty points.
Greets, guides, provides.
At home or in store.
In-store. Smartphone.
Interest- and location-based
information, offers.
PC or smartphone.
Collect tokens or QR codes
throughout the store.
Your personal price. Now.
Your retail remote control.
Special promotion now
in limited time.
Act now and win!.
Act now and win!
Source: Cisco Consulting Services, 2013 (U.S. data, n= 1,174), percentage responding frequently or always
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Percentage responding frequently or always
1
2
3
4
BEST PERSONAL PRICE
MOBILE CONCIERGE
BEAT THE BUZZER
CONNECT THE DOTS
63%
42%
35%
34%
CONSUMER
ELECTRONICS
71%
CONSUMER
ELECTRONICS
47%
GROCERY
37%
CONSUMER
ELECTRONICS
37%
ÜBER DIGITALS
82%
66%
56%
55%
Source: Cisco Consulting Services, 2013 (U.S. data, n= 1,174), percentage responding frequently or always
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Percentage responding frequently or always
5
6
7
8
REMOTE CONSULTATION
ENDLESS AISLE
SOLUTION BUILDER
SOCIAL SHOPPING
31%
29%
29%
21%
Mobile or fixed screen.
Online or in-store.
Online or in-store.
Smartphone. Social.
One-click connect.
Fixed screen and smartphone.
Fixed screen or smartphone.
Post photos. Pin ideas.
No appointment.
See brand’s entire inventory
on desired SKUs.
Suggested project shopping lists.
Send to professionals, friends.
Recipes. Outfits.
Whaddaya think?
Talk to the brand’s best.
What, why, and how.
Nearby stores. Dotcom.
Vendor.
Source: Cisco Consulting Services, 2013, percentage responding frequently or always
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Percentage responding frequently or always
5
6
7
8
REMOTE CONSULTATION
ENDLESS AISLE
SOLUTION BUILDER
SOCIAL SHOPPING
31%
29%
29%
21%
HOME
IMPROVEMENT
39%
32%
APPAREL
HOME
IMPROVEMENT
33%
HOME
IMPROVEMENT
24%
ÜBER DIGITALS
50%
50%
50%
43%
Source: Cisco Consulting Services, 2013, percentage responding frequently or always
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1
2
3
RETAIL AND PERSONAL DATA
THE ÜBER DIGITALS
DIGITAL SHOPPER BEHAVIOR
Deliver a world-class
data policy. Make the
benefits clear.
1 in 5 is too big to
ignore.
Shoppers will
choose digital
experiences.
What is your IoE
strategic plan?
Winning Über
Digitals: It’s a step
change.
Do you have the
infrastructure to
deliver it?
Will you win your slice
of the ~$100B per year?
Will you climb the digital cliff
or run into it?
Are you ready now?
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EXECUTIVE EXCHANGE
1
VALUE ASSESSMENT
STRATEGY & PLAN
BUILD & MANAGE
2
3
4
5
6
Start
Current State
Desired
Future State
Gap Analysis,
Roadmap,
Test Plan
Test
Run
Align
Understand
Envision
Plan
Pilot
Scale
Success metrics
Current state
Commitments
Compelling events
Stakeholders
Market transitions
Root cause
Sustainable brand
differentiation
Sustainable value
creation
Use cases
What’s missing
When/how to
reach goals
Architecture/
infrastructure
Concept UE/UI/
lab testing
Professional
services
Implement pilots
Technical services
Launch plan
Managed/
operating services
Quantified value
creation
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Let’s Talk.
Cisco Consulting Services – Retail
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Thank you.
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