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TheEmpoweredCustomerintheHomeImprovementWorld
DavidMarcotteSVPCross-Border|Cross-Industry|TechnologyKantarMarketInsights
October30th2019
2
Agenda
1. TheNewCustomer
2. TheEmpoweredExperience
3. BestPracticestoPurchase
4. TheNewComplexity
3
The Retailer Matrix of 2030 and Planning • Theoneconstancyofthefutureisthatitwillbemoreintegratedatfar
higherspeedsofconnectingdataandinformation
Smartshopper
Smarttools
SmartsourcingSmartplanning
Smartdata
Smartcomplexity
Smarthome
Source:Kantar
• Whatwilltheshopperbelikeandhowwilltheirchangedrequirementsforshoppingchangethestore?
• Whattoolsdoweneedtoexplore,evaluateandinvestinforthatfuture?
• Howwillcomplexautomationandartificialintelligence(AI)enableorcomplicatethatfuture?
• Whatwillthestoreanditsvirtualextensionsintothecommunityandhomelooklikeinthefuture?
• Howtocopeandleveragethehugeamountsofdatathatwillberapidlycreatedinthisnewenvironment?
• Howcanwemanagetherequirementoftransparencyandvaluefromtheshopperviaproductoriginsandtracking?
• WhatfinancialmovesdoIneedtoconsidernowforthetenyearjourneyaheadofus?
4
What will the shopper be like and how will their changed requirements change the store?
TheSmartShopperReality:Providingconnections,enablingflow,creatingexperiences,andseekingsimplicity…allatthesametime
CON NECT IONS FLOW
EXPER IENCES
SIMPL ICITY
Thedemandsshapingthefutureshopperareoverlappingandmutuallysupportiveoftheirneeds
Source:KantarMONITOR
5
The current customer is going in parallel paths
• Shopperswillshapetheretailandshopperlandscapeoverthenextseveralyears
Experiences
Simplicity
Connections
Flow
THEFOURKEYDRIVERS
Source:Kantar
6
Three Key Variables that are the retail requirements Allofthemaredigitallyenabledacrossallchannels:omni-digital
VALUESRULE ROUTINES?WHOWEARE
Source:Kantar
7
Agenda
1. TheNewCustomer
2. TheEmpoweredExperience
3. BestPracticestoPurchase
4. TheNewComplexity
8
25%
51%
Describes me perfectly Describes me somewhat
19%
48%
Describes me perfectly Describes me somewhat
Source: 2017 Kantar Futures (U.S. Q3 Data), ShopperScape®, April 2018
As shoppers become more empowered, they are less willing to make tradeoffs in the shopping trip
Retailers and brands must align with new shopper demands
Shoppers are more time-strapped than ever, increasingly seek
convenience.
Shoppers adopt a more holistic view of value, put more weight on
engagement.
No matter how hard I try, I never seem to have enough time to do all of the things I need to do
I’m doing more of my shopping now at retailers that provide a gratifying experience, instead of ones that just get the job done
19%
39%
Strongly agree Agree
Shoppers seek more connections, transparency through
personalization.
I prefer to shop retailers/buy brands that I feel ‘get me
9Source: ShopperScape®, March 2018
In turn, digital tools gain traction across shopping activities, highlighting channel-agnostic mindsets Interconnected tools help ensure shoppers’ needs are met, no matter how they prefer to shop
Top 10 methods of using smartphone in shopping process (Among primary household shoppers)
34% 32% 30% 28% 28% 28% 26% 25% 23% 22%
Look at retailer's ads/ promotions
Download mobile coupons
to my phone
Shop on a retailer's mobile
app
Receive notifications from retailers about deals
Connect to/ manage my
loyalty program membership
Snap photos of items I'm
considering buying
Use a retailer's app to see if
items I want are available near
me
Make a purchase on a
retailer's mobile app
Use an app to make a
shopping list
Add items to a cart/ basket for an online/ "click
& collect" purchase
Convenience
Personalization
Engagement
10
Across the interconnected path-to-purchase, experience must execute in three key ways:
Create Convenience
Provide Personalization
Enable Engagement
Source: Kantar
11Source: Kantar, retailer websites
Home improvement has matured faster than other channels toward omnichannel Supplier, Retailer, Pro, Self-Contractor, DIY Project
DIFFICULT TO NAVIGATE REQUIRES EXPERTISE NATURAL FIT FOR SERVICES
Despitechallengesofchangingmodelsandcustomers,HomeImprovementmademosttransitionsinadvanceofotherchannels
12Source: Kantar, ShopperScape®, January 2015 – December 2018, January – April 2019
And home improvement shoppers are becoming more omnichannel Nearly one-third of Lowe’s and Home Depot shoppers are shopping online and 15% are shopping both channels
The Home Depot Shopper Penetration Across Channels (Among The Home Depot Past Four Week Shoppers)
Lowe’s Shopper Penetration Across Channels (Among Lowe’s Past Four Week Shoppers)
80% 70% 69% 71% 69%
9% 14% 14% 14% 17%
11% 16% 17% 15% 15%
2015 2016 2017 2018 2019 YTD
78% 69% 69% 70% 69%
10% 14% 14% 14% 17%
12% 17% 17% 16% 14%
2015 2016 2017 2018 2019 YTD
Both In Store and Online
Online Only
Stores Only
Both (15%)
Online Only (17%)
Stores Only (69%)
13
Agenda
1. TheNewCustomer
2. TheEmpoweredExperience
3. BestPracticestoPurchase
4. TheNewComplexity
14
Home improvement retailers are capitalizing on these needs across the path-to-purchase
DISCOVERY CONVERSION ADVOCACY
Source: Kantar
15
DISCOVERY
Source: Kantar
NewTools
EngagingContent
Integration
16Source: Kantar, retailer websites, retailer apps
Digital tools create an easy source for inspiration in everyday life Remove friction, expand discovery phase beyond browsing or writing a list
17Source: Kantar, retailer websites
Home retailers leverage data to provide more personalized recommendations
Transparency helps shoppers make more informed decisions across channels
CURATED REVIEWS ENABLE TRUST ALGORITHMS GENERATE PERSONALIZED SOLUTIONS
18Source: Kantar, retailer websites
Interactive content helps shoppers discover products in a new context Create a more engaging, multi-touchpoint method of discovery
19
DISCOVERY CONVERSION
Source: Kantar
NewTools
EngagingContent
Integration
20Source: Kantar, retailer apps
Digital wayfinding tools and integrated promotions help reduce time searching for items Create a cohesive, fluid experience across all selling channels
WAYFINDING TOOLS EASILY NAVIGATE SHOPPING LISTS INTEGRATED PROMOTIONS CREATE COHESIVE CAMPAIGN
21Source: Kantar, retailer apps, websites, and earnings calls
Pro-Label calls out the DIY Create more a personalized shopping experience in a mass setting
22Source: Kantar, retailer websites
In-store services help educate shoppers, expand utility of products Create more productive use of space in stores
Source: Kantar, retailer apps, websites, and earnings calls
23
DISCOVERY CONVERSION ADVOCACY
Source: Kantar
NewTools
EngagingContent
Integration
24Source: Kantar, retailer websites
In-store fulfillment and return logistics speed access to products Evolving methods of driving convenience enhance lifetime ROI of shoppers
DEDICATED PICKUP LOCATIONS REDUCE CONGESTION CROSS-CHANNEL TOOLS REMOVE FRICTION FOR RETURNS
Source: Kantar, retailer apps, websites, and earnings calls
25Source: Kantar, retailer websites
D2C brands use personalized messaging to create more meaningful touchpoints post-purchase Enhance loyalty and advocacy by creating relevant experiences for any shopper
REMINDTHROUGHCUSTOMIZATION INCENTIVIZEFUTURETRIPS ENABLEONGOINGTOUCHPOINTS
26Source: Kantar, retailer websites
Retailer services create a complete solution, add value beyond the product level Extend relationships with shoppers beyond the initial point-of-purchase
27Source: Kantar
Actionable Insights
Understand what a multipurpose store asset means for supply chains as well as the role of product at the shelf.
Capitalize on data around purchase history and product lifecycles to encourage omnichannel behaviors through retailers’ loyalty programs.
Even on a small scale, consider relevant services that can enhance the value and lifecycle of products and ultimately create new touchpoints for shoppers.
28
Agenda
1. TheNewCustomer
2. TheEmpoweredExperience
3. BestPracticestoPurchase
4. TheNewComplexity
29
Itusedtobesimple:DIYorDoItRight
Contractor IndustrialSupply
DoItYourself
ProInstall
HomeImprovementTheCustomer
30
The current customer is going in parallel paths
Shopperswillshapetheretailandshopperlandscapeoverthenextseveralyears
Source:Kantar
31
TheHGTV,theInternet,theBathroomArmsRace…
Contractor IndustrialSupply
DoItYourself
ProInstall
HomeImprovementTheCustomer
32
Manufacture Showroom, Pro Supply, Home Improvement, Specialist ?
33
33
Example of New Need: Don’t sell nothin’ in the Bathroom… but they matter Note that most Millennials have never seen the infamous c-store “key”
Source:http://bathroomkeychronicles.blogspot.com/,KantarRetailResearch
34
The New Standards Emerged as Chains Ramped Up to Take the Lead Offered Food Service, Built in Multiple Entrances, Expanded Beverage and Bakery Selections
Source:CorporateSite,Arizonazoningdocumentation,KantarRetailResearch
34
35
Governmenthasmovedintoqualitymaterialsreflectingthesamemindsetsofbroaduse
36
New Transportation ‘Standards’ for Travelers
37
The newest wave is mass remodels and replacement for QSR
38
The Home and the Store continue to explore this “New Quality” of Smart, but now with extended requirements
Source:Kantar
39
40
The Industry as a whole is challenged and expanding into new complex and often surprising path-to-purchases
DISCOVERY CONVERSION ADVOCACY
Source: Kantar
NewTools
EngagingContent
Integration
41
David Marcotte SVP Cross-Border | Cross-Industry | Technology +1 413 847 1067 [email protected]
42
Copyright © 2019 Kantar Consulting LLC. All Rights Reserved.
501 Boylston St., Suite 6101, Boston, MA 02116 T: +1 (617) 912 2828 [email protected]
Notice
No part of these materials may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photography, recording, or any information storage and retrieval system now known or to be invented, without the express written permission of Kantar Consulting LLC. The printing of any copies for backup is also strictly prohibited.
Disclaimers
The analyses and conclusions presented in these materials represent the opinions of Kantar Consulting LLC. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion. These materials are not endorsed or otherwise supported by the management of any of the companies or organizations discussed herein.