February 28, 2019€¦ · Toby introduced IGD, a research organization that specializes in getting out into markets and speaking to shoppers where they are. In 2018, IGD visited 925

Fast insights for the path to purchaseFebruary 28, 2019

webinar

Market Logic © 2019 CONFIDENTIAL | 2Retail Webinar 2019

In February, Market Logic co-founder and CMO Elizabeth P. Morgan hosted an illuminating webinar on “Fast insights to the path to purchase” with Alison Chaltas, Global President P2P at Ipsos and Toby Pickard, Senior Innovations and Trends Analyst at IGD.

Alison Chaltas kicked her presentation off by discussing what disruption means from a shopper standpoint. We all know that technology is changing the entire world, and that we are moving away from stores. But the speed of change means that even online shopping is being disrupted, led by trendsetters like Alibaba. Shoppers now use their smartphones or voice controls to make purchases, and soon drones will be making deliveries.

So how can the retail industry keep on moving fast? Alison reminded participants to be “always open” and “do it faster” – but not to lose sight of what shoppers really want. The underlying catalyst behind the “new retail” is convenience. Price is important, but convenience is always the real driver. It is changing shopper behavior and creating new shopping rituals. Although shoppers say price matters the most, when you look at behaviors you can see that convenience matters the most. Price is what they say, but convenience is what they mean.

The definition of convenience is changing. Technology is creating new rituals. Shoppers no longer create a weekly grocery list while planning their meals ahead of time – now they ask Alexa if she can deliver the food tomorrow. For example, in the US, PlateJoy is an app that links recipe planning and shopping. It uses a subscription model and people spend $100 year to customize their food profile, for example: how many people per family, how finicky they are, how health-

Winning in the disruptive new retail

The underlying catalyst behind the ‘new retail’ is convenience. Price is what they say, but convenience is what they mean.Alison Chaltas, Ipsos

conscience they are, food preferences, etc. The app is a perfect example of how rituals have gone from the weekly family trip to the grocery store to the world of it being all done for you.

Another category that is really influencing the next generation of shoppers is apparel. Startup technologies are having a major influence in this area. Take prom dresses for example – the days of going to the mall with your mom are long gone. Teens today can pick their prom dress on an app during their lunch break – while simultaneously crosschecking the dresses ordered by the other girls to make sure there’s no overlap. These are the customers of the future, and their rituals were unimaginable a few years ago.

Retailers are also starting to sync up with tech start-ups. H&M, for example, is very experimental and very global. They try more new things from an e-commerce and omnichannel standpoint than anyone else, which can be a double-edged sword. Analysts slam them for the click & collect


“omnichannel standpoint” because the operations side says it’s not easy to do efficiently or keep track of. The challenge becomes turning from a distribution and return center into something that is profitable and still delighting for the consumer. Optimists see a really cool opportunity, and pessimists see the major challenges.

The retail megalithsAlison suggested that anyone who is interested in retail should follow Alibaba TV – she says it can teach you more about retail than anyone. Alibaba is allowing shoppers to test drive cars from a vending machine with no salesperson in sight. They bring the website into the store or to new locations. They also partner with thousands of traditional retailers in China to bring technology to “old stores” and help family businesses become a distribution center in places that don’t have immediate delivery. They have created a seamless ecosystem that wins people over, including payment on the app.

However, Amazon and Walmart are still the ones to watch. Because Amazon has made the art of in-store browsing harder and harder, they’re bringing back the bookstore concept as a place to browse and shop.

They present interesting ways of moving quickly – pop-up stores that come and go in the blink of an eye. If you are interested in learning more, Alison recommended checking out the 4-star concept.

Since Amazon acquired Whole Foods, you can use Prime Delivery and have your groceries delivered within 6-24 hours. You can even specify whether you want your bananas green, yellow or brown. No delivery fee, just a tip.

Alison also pointed out a successful example of a regional retailer in the UK: John Lewis. John Lewis is a retailer that has been around for over one hundred years. It is a traditional and classic British company that has reinvented itself in an omnichannel way ... and Amazon failed to crush it.

- 27% research in store before buying online - Over 60% research online before buying in-store - Online is 25% of sales and also increases in-store sales - Omnichannel shoppers spend 3.5x more than single channel shoppers

Walmart remains the world’s largest physical retailer, fighting with Amazon and Alibaba for market leadership. Walmart is a logistics guru – winning at getting shoppers the right product, at the right time, in the right store, for the best price. However, they have been slow to adopt e-commerce. Since they acquired jet.com, a company that ships cased goods, they have learned a lot and are creating a formidable force in e-commerce.They offer in-store pickup and are cleverly using stores as ancillary distribution centers. Shoppers can place an order from an app and the product will be placed in a bin near the door within two hours. Shoppers save tons of time by not having to run around the store – making life much more convenient, faster, and cheaper.


Companies are always on the lookout for what they can disrupt. Who would have thought that wine in a plastic flat box that fits through your mail slot would be a hit? Even the underwear industry has been disrupted by a company called Third Love, which sells bras based on a clever set of questions around measurements. Shoppers can order and return until they find the perfect fit.

Alison concluded by reminding participants that you can’t respond to all the opportunities, but there are four areas you need to focus on:

1. Voice (phone, assistants, TV, robots) 2. Moving beyond flat HTML and 2D (3D, VR, AR) 3. AI-driven personalization (make it mine, speak to me, reward me) 4. Same-day delivery

Alison shared her advice on the best growth opportunities for research: - Short, mobile questionnaires - Being at the moment of choice - Implicit system 1 thinking - Integrating multiple data sources - Fast hypotheses based on early insights - Behavioral (virtual reality, video, GPS, passive) - Social intelligence, not social listening - Activation workshops

Alison handed over to Toby to discuss last mile delivery in the rapidly changing path to purchase, which is one of the most exciting new battle grounds in retail.

Toby introduced IGD, a research organization that specializes in getting out into markets and speaking to shoppers where they are. In 2018, IGD visited 925 stores in 43 countries, and added 24,000 store photos to Retail Analysis. IGD’s shopper surveys have backed up Alison’s findings exactly. Shoppers value convenience above all else: 54% of online grocery shoppers say they are willing to pay for same day delivery of their groceries, and 48% say they are willing to pay for rapid delivery of their groceries to receive their order within one hour of placing

Entrepreneurs continue the disruption

The trajectory of new retailAdvice on learning

Last mile delivery in the rapidly changing path to purchaseit. Walmart’s e-commerce CEO Mark Lore agrees: “We can see where the puck is going – it’s toward faster delivery time.” Same-day delivery will be the bare minimum a retailer needs to offer customers.

We can see where the puck is going – it’s toward faster delivery time.Walmart E-commerce CEO Mark Lore

There are huge opportunities within the online channel for growth. IGD’s market forecasts predict staggering growth for the online channel: +49% by 2022 in the UK, +129% by 2022 in the US, and +286% by 2022 in China. This growth means that competition will grow as well.


Last mile delivery: the future is now

What was once science fiction is now science fact.Toby Pickard

The future is already here, said Toby. In the UK, Starship Technologies and Co-op deliver groceries within a few miles in a driverless cart. Tesco is going to start using the same robots to deliver goods, which will make thousands of products available within 15 minutes. Most importantly, it is a seamless experience for shoppers.

Boston, Stop&Shop is using autonomous vehicles to drive to any location shoppers choose. They can have their online order delivered, and even add on to it by choosing from a selection of fresh produce right from the vehicle (no one has to live with brown bananas or wilted lettuce, unless they so choose). Shopper’s selections will be added to their bill automatically.

Partnerships in last mile delivery are key. For example, Walmart is working with Ford’s driverless vehicles, which is an asset-light point of view for retailers who don’t have to invest in vehicles or the technology. Toby asked: when people start having autonomous vehicles, could your car do your grocery shopping? He shared an example from a trade show where an autonomous vehicle drives to an office and autonomous dogs deliver a parcel (they can even climb stairs!).

Amazon is also big disruptive innovator in the market. They will soon be coming to market in the US with six “Scott” delivery devices. Autonomous delivery robots are also getting larger and becoming roadworthy. In the US, Kroger’s autonomous vehicle “nuro” – fits a large amount of groceries, and the vehicles have a bigger range. In

Carrefour in Dubai has launched a floating supermarket. Jet skis can deliver orders to the beach, or sailboats can sail up to the shopping boat to get the goods they want. More and more major retailers are trying to ensure they are front of line when shoppers think of convenience.

Disruption in the last mile is not just happening in North America, Europe and the Middle East, but China as well. Alibaba and JD.com have bots in two major cities that run from set hubs to deliver groceries to people around that city, and they can drive in a 5km radius. JD.com is focusing on drones as well and has invested in 150 drone sites in China and some in Indonesia. They see the opportunities to open up a new market and a new frontier of consumers who live in rural or hard-to-reach areas and have smartphones and the demand for products. JD.com sees a real opportunity to access consumers that might not have been available to them before.

At high sea

Last mile innovations in Asia


Unattended in-home delivery

Time is of the essence

Speed to insights

Retailers are also experimenting with accessing people’s kitchens when they’re not at home. A delivery person would put your groceries in your fridge or freezer, and you come home to a stocked kitchen. A number of retailers are addressing security concerns by using smart locks and video surveillance. Albert Heijn and Waitrose are trialing the system, as well as other players like Walmart, Jet.com, etc. It’s the ultimate convenience: your fridge is always stocked, and you don’t even have to be there.

Elizabeth Morgan thanked Toby and Alison and introduced speed to insight by calling upon three of the issues that Alison and Toby raised that also relate to being an insights manager: - Time is of the essence - AI personalization of information - The art of browsing

The amount of consumer data the retail industry is facing requires AI to make sense of it all. Market Logic pulls together all unstructured and structured data

Toby wrapped up his presentation with a quote from Jeff Bezos’ 2018 letter to stakeholders: “People have a voracious appetite for a better way… and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary.’”

Delivery, he said, is getting quicker and quicker, which is creating more opportunities for partnerships. For more examples of last mile delivery and the speed it’s moving, Toby invited participants to visit IGD’s website: https://retailanalysis.igd.com/trends/innovation/innovation-updates.

Unattended in-home delivery is the ultimate convenience: your fridge is always stocked, and you don’t even have to be there.”Toby Pickard

to connect it in the Market Logic ® - a knowledge graph that understands the logic of the market to present relevant insights to you on your desktop. An AI news dashboard pushes relevant insights to your business stakeholders, and an AI search experience enables you to pull relevant answers to your questions. Elizabeth then shared a live software demo of a marketing insight platform that leverages AI to consolidate answers to questions across all sources of knowledge.

Click here to request the same demo.


Q&AElizabeth opened the floor for comments and questions.

A question came up for Alison: how does disruption in the omnichannel experience change the way insights managers have to think about insights and business questions? Alison reframed the question as asking how disruption in the omnichannel experience changes insights managers’ jobs, and indeed the entire industry? She named three common themes:

1. Speed. “We have to move from a world of doing these big, perfect, comprehensive studies to something where we are doing more iterative, in the moment focused way of thinking about research.” She acknowledged that it is difficult. Although there is a time and place for big P2P studies, you have to test and learn to better impact shoppers in the moment, test hypotheses, and predict where things are going. She advised that insights managers be “bipolar,” with one side of their brains thinking long-term and strategically, and the other side looking for short-term opportunities. 2. Bring behavioural science thinking into what people are doing, and System 1 thinking. Insights managers should not just be looking at what people are doing, but why. What are they thinking when they shop? She recommended a merge of psychology and research. 3. Be forward looking. “We need to move from understanding what happened last year with post mortems to using fundamental shopper research, deep understanding of the industry, predictions of where the technology is going, and human and artificial intelligence to start to predict the future.” She acknowledged that it’s a scary leap, but a necessary one.

Elizabeth then asked Alison if she was looking at an emerging framework for the P2P.

Alison replied that she was. There are frameworks for understanding; she said that we have to take a step back and not just look at research studies, but rather begin with the understanding of the journey now. “It’s physical and digital and audio – the delivery robot dogs were a first for me!” Research would not have found delivery robot dogs, so how can we do this differently and bring in the ability to not just collect research, but also activate it? Insights managers can’t just deliver PowerPoint decks anymore.

The next question was for Toby: “as last mile logistics improve, what are the opportunities for brands to go straight to consumers?” Toby affirmed that yes, there are opportunities. Complexity and cost still exist – they have to think about what the consumer can get that’s different from if they just went to their normal retailer? He named seasonal opportunities, popups, etc.

The next question was for Alison: “what other quick wins can you see in this very disruptive environment? For manufacturers?” Alison recommended going back and looking at the data you have with new sets of eyes – “and that applies to research managers in particular.” Clients have lots of data in lots of different pockets across teams – you need to synthesize what you know, connect the dots, bring smart team of people in across


functions to hypothesize around what is the art of the possible. People on insights teams are shoppers too. At Ipsos, Alison does workshops where she brings people in with industry expertise to brainstorm around what disruption means for their brand. There are all kinds of methodologies. At Ipsos, they use a SIM store to develop VR representations of hypotheses to test them, which allows them to let go of some of the more backward research methodologies.

The next question touched upon the future beyond last-mile deliver. Toby was asked about IGD’s take on how brands and retailers are looking to differentiate beyond the speed of delivery, and what the next area of focus beyond last mile delivery is. Toby said that one of the challenges that brands and retailers have is around unattended in-home delivery. Companies lose contact with their shoppers quite quickly as the retail and brand become purely functional. They will have to rethink that as it evolves, especially with personalization. How can they deliver a unique, mini wow factor?

Toby mentioned an example of the cycling company Wiggle. When you buy products through them, they send you packets of Haribo. Small gestures like that one can make a big difference. Another example is the shaving subscription service Harry’s, which sends you the blades you need when you need them. During your initial sign up, however, you fill in a survey.

They use the information you provide to create your own personalized magazine that is then sent to you. That level of personalization creates an emotional experience with an element of gamification. These companies are bringing their products

to life in a way that takes their brand beyond speed, convenience and price. Alison added that those gestures don’t need massive infrastructure, and that social media is relatively low-risk. It allows for testing and learning for personalization and promotional activity that wouldn’t be possible on a permanent website.

She recommended thinking through the role of direct-to-consumer from a fulfilment standpoint. There are examples that are logistics-driven, but a strategic decision has to be made by your company: how much do you want to change?

Do you want to make small changes or big ones? If you take a direct to consumer approach and you also have products in resellers, you need to think through your channel strategy. Direct-to-consumer can have real implications. Retailers may not be very happy if they are selling your product but they see shoppers could also buy your product directly from the manufacturer.

Insights teams have a choice: do they want to be outside the business providing data, or at the core of the business helping enable change?”Alison Chaltas, Ipsos

Elizabeth noted that synergies between what we’re trying to do to understand the shopper and make that leap to personalization through pulling all the information together, as well as how we’re trying to make life easier for insights, innovation and brand managers. She mentioned that Coca-Cola presented a case study at IIEX in Amsterdam,


showing how they have opened up their platform to have their validated research and social media feeds at the same time so teams can combine research with the latest buzz and pull it all together in one platform.

For the final question, the panelists were asked how all of this disruption is changing the role of insights managers today.

Alison summarized what had been said so far. She reiterated that “we have to move faster to be at the center of this.” Insights teams have a choice: do they want to be outside the business providing data, or at the core of the business helping enable change? As data becomes increasingly important, those insights professionals who are adept at not just collecting but also interpreting and activating data have opportunities for growth Toby said that in the past, insights managers had to be focused on their area of expertise. Now, they have to look at the world in its entirety and see what is happening in other sectors and other verticals… and be quick to spot where disruption is happening. There is the need to be constantly curious and agile, which requires a lot of data and insights.

Elizabeth reiterated that from the Market Logic perspective, insights managers just can’t humanly wrap their minds around the sea of information that surrounds them. They have to be enabled to unleash AI to do the leg work for them so they can focus on hypotheses in their multifunctional teams.

2019 © Market Logic AG. The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of Market Logic Software AG, Franklinstraße 28, 10587 Berlin, VAT Nr. DE 249354497

About Market Logic Market Logic helps the world‘s best brands to run insights-driven businesses. We do this with insights portals to share and promote knowledge, intelligence portals to analyze markets and competitors, and market insights platforms to generate insights from data and inject these in business processes. Our software is used to drive customer centricity in CPG, healthcare, retail, finance & insurance, telecom, travel and media sectors, where our clients collaborate with 600+ research agencies online. We employ 300+ software developers, data scientists and marketing professionals at regional headquarters in Berlin, Chicago, Pune and Singapore.

[email protected]

Franklinstrasse 2810587, Berlin, Germany

EUROPE223 W. Jackson Blvd, Suite 900, Chicago, IL 60606, USA

NORTH AMERICAOdeon Towers #02-01331 North Bridge Road188720 Singapore

APACWing-B, Ground FloorBusiness @ Mantri Nagar Road, Pune 411014 Maharashtra, India

INDIA

Documents

February 28, 2019€¦ · Toby introduced IGD, a research organization that specializes in getting out into markets and speaking to shoppers where they are. In 2018, IGD visited 925