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From Cross-Channel Management to sustainable retail innovation
Retail Innovation
Recent acquisitions to deepen offering in an integrated approach
5 years old… benefiting from our 99 year legacy of pioneering in the consulting business
Number 1 consulting thought leader
Deep Consumer & Retail expertise
Digital Business Strategy & Technology
Go To Market Strategy
Innovation
Category Management
Organisation, Change & Leadership
Logistics Strategy
The market will continue to shift to digital - everywhere
Cross-Channel will move from differentiator to qualifier
Building sustainable retail innovation capabilities is key
Key messages
There is motion in the ocean …
Chinese online auctions >800 mn items listed >500 mn registered users Gross merchandise volume >RMB 1 trillion (120 bn €)
Most popular camera: iPhone
Source: Internet Research, Booz & Company analysis; Die Welt
5.1 bn own Mobile Phone 4.2 bn own Toothbrush
Recently announced store closures: Thalia: planned 20 stores Karstadt: > 30 stores sold (total 117 left) Görtz: planned 14 stores
Share of online vs. offline book purchases
in Germany
2008 2012
YoY % Change of Personal Disposable Income
Source: The Economist Intelligence Unit 2013
… and consumer spending is under pressure in Europe
BRIC Countries
North America
Western Europe
15%
10%
5%
0%
-5%
2002 2004 2006 2008 2010 2012
Changing customer behavior leads to new desires
Behavior shifts
Regional Global
Groups Individuals
Purchase Rental
Marketing Referral
Functional Emotional
Paid Free
Zero tolerance
Price transparency
Loyalty erosion
Seamless experience
Technology Drivers
Smart Devices, Cloud
Real-time data Social Media Always on
6 Source: Booz & Company analysis based on Euromonitor historics and external benchmarks
Online players try to address these desires
Retail Sales Footprint 2012 vs. 2020
Several options exist on how to react …
PRICE
ONLINE CATEGORY KILLER
UNIQUE PRODUCT
OFFLINE SHOPPING EXPERIENCE
DIGITAL PRODUCTS & SERVICES
CUSTOMER SERVICE
CROSS-CHANNEL SHOPPING
EXPERIENCE
CUSTOMIZER
CUSTOMIZER
PRICE
ONLINE CATEGORY KILLER
UNIQUE PRODUCT
OFFLINE SHOPPING EXPERIENCE
DIGITAL PRODUCTS & SERVICES
CUSTOMER SERVICE
CROSS-CHANNEL SHOPPING
EXPERIENCE
… or become Amazon
Brick-and-mortar can offer unique customer experience
Customer Experience
Analytics & Customer
Insight
Product & Pricing
Brand Management
Supply Chain Mgmt. &
Logistics
Operating Model
Information Technology
Customer- Centric Strategy
Booz & Company Cross-Channel Framework
Building a true Cross-Channel model is complex
Company
Apple
3M
Samsung
GE
Microsoft
Toyota
P&G
IBM
Amazon
1
2
3
4
5
6
7
8 Tie 8
10
Once cross-channel becomes a “qualifier”, Innovation is key to maintain differentiation
Source: Booz & Company Global Innovation Study 2012
2
3
4
5
6
7
8 Tie 8
10
Rank
53
26
86
6
30
5
1
72
17
48
2011 $US Bil.
$2.4
$5.2
$1.6
$9.0
$4.6
$9.0
$9.9
$2.0
$6.3
$2.9
R&D Spending
Actual R&D
Spend
Perceived as
innovative
Product
Product to Service
Insight / Big Data
Format
Supply Chain / Speed
Store Operations
Customer Service
Cost / Price
Channel
Innovation can take many faces
Building a sustainable innovation capability is crucial – few retailers have it
Innovation
Processes
(Ideation to
Market)
Innovation
Capabilities
(Analytics,
Online) Innovation
Operating
Model
(Central or
Decentral?)
Innovation
Network
(External
Partners)
Innovation
Funds
(Internal,
M&A)
Innovation
Mindset
(Fast, Test,
Scale)
Innovation
Strategy
(Leader,
Follower?)
Wrap-Up
The market will continue to shift to digital - everywhere Digital is the future in all categories, but high-street will remain relevant Unique consumer experience is crucial to differentiate
Cross-Channel will move from differentiator to qualifier Understand the role and relevance of cross-channel to differentiate If you do it, do it right!
Building sustainable retail innovation capabilities is key Embed innovation fundamentally in your retail operating model
(organization, processes, budgets, people, information) Innovation principle: Think big ! Test small ! Fail or scale fast !
THANK YOU
www.booz.com
www.boozdigital.com
Booz & Company GmbH
Benedikt Schmaus
Bockenheimer Anlage 44
60322 Frankfurt am Main
+49-170-2238-437