Making the Digital Connection: Why Physical Retail Stores Need a RebootCountry Snapshot
Italy
2
Table of Content
Consumer expectations from retail stores
Are consumer expectations being met?
Retailer response
Digital Sprinters in Italy
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Shopping in brick & mortar stores is no more a pleasurable activity
3
Most Consumers view shopping in store as an avoidable
activity
Bricks-and-mortar shopping is seen by more and more
people as an increasingly onerous chore
42%
29%
40%
54%
Italy China (Lowest) Global Sweden(Highest)
39%
32%
17%
47%
Italy Global US (Lowest) Sweden(Highest)
Source: Capgemini Future of Retail Store Survey
Copyright © Capgemini 2016. All Rights Reserved
Shopping is just a chore that has to be doneI would rather wash dishes or clothes than go shopping in a retail store
Consumers want same-day delivery and ability to check product availability
4
Source: Capgemini Future of Retail Store Survey
Consumers expectations from the store
73% 73% 69% 68% 68% 68%75% 73%
67%61%
68% 67%
Check availability ofproducts in stores
Same day delivery ofproducts purchased in-
store
Digital shelves forproduct information and
comparison
Payment options likeContactless cards,
Digital Wallets,Wearable payment
devices
Tablets/kiosks insidethe store to order
products that are not instock
Store employees usingtablets/mobiles to bebetter informed when
assisting the customer
Italy Global
Copyright © Capgemini 2016. All Rights Reserved
Consumers also want lower prices and rewards for revisiting and spending time in stores
5
Source: Capgemini Future of Retail Store Survey
Consumers wants the store to serve higher function than just selling a product
66% 65%59%61%
68%
57%
Lower prices with store membership (LikeAmazon Prime)
Loyalty points for spending time in store andrevisiting
Additional activities in-store
Italy Global
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6Copyright © Capgemini 2016. All Rights Reserved
Are consumer expectations being met?
7Copyright © Capgemini 2016. All Rights Reserved
Retail executives vastly underestimate consumer’s dissatisfaction
Source: Capgemini Future of Retail Store Survey
Disclaimer: Net Promoter Score measures the loyalty that exists between a provider and a consumer. It is calculated based on responses on a 0-10 scale to a single question: How likely is it that you would recommend our company/product/service to a friend or colleague?Net Promoter, NPS, and the NPS-related emoticons are registered service marks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld
4
-6 5
11
50
33
25
-13Grocery Fashion Home
ImprovementElectronic
NPS as per Consumers in Italy
NPS as per Retail Executives in Italy
Average: 31
Average: 4
Highest, Lowest and Average NPS® by consumersItaly- Net Promoter ScoresSM comparison between
consumers and retail executives
44
30
37
1614
5 6
11
2
-21
-1
10
Grocery Fashion HomeImprovement
Electronics
US (Highest) Global Sweden (Lowest)
Average: 32
Average: -2
Average: 9
8Copyright © Capgemini 2016. All Rights Reserved
Absence of relevant discount, long queue at checkout and difficulty in comparing product explain low satisfaction scores
Frustrations for consumers in retail store
Source: Capgemini Future of Retail Store Survey
69% 69% 68% 70%72%68%
72%66%
Long queues at checkout counters Absence of relevant andpersonalised discounts/promotions
to customers in store
Difficult to compare products Absence of relevant andpersonalised discounts/promotions
to customers in store
Grocery Fashion Home Improvement Electronics
Italy Global
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Consumers are considering reducing their reliance on traditional retailers
Source: Capgemini Future of Retail Store Survey
Consumers show willingness to experiment with new ways of shopping
62% 62% 63% 62%60%56%
59% 57%
Most of shopping online instead of inthe store
Order products through intelligentdevices like smart fridges
Buy from GoogleExpress/Apple/Facebook/Amazon
Fresh
Buy directly from brands online,bypassing retailers
Italy Global
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How are retailers responding to changing consumer expectations?
11Copyright © Capgemini 2016. All Rights Reserved
58% of Italian retail executives agree that digitization in stores is slow
Source: Capgemini Future of Retail Store Survey
43%
54%
71%
58%
US (Lowest)
Global
France (Highest)
Italy
Italian retailers lack in implementation even after realizing benefits from in-
store initiatives
Percentage of Retail Executives
who Agree that Digitization in
Stores is Slow
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Store employees do not promote initiatives; this leads to slow digitization of stores
Top reasons for slow in-store digitization
40%
33%
43%
36%
40%
24%
32%
32%
37%
39%
Still implementing the foundation to enable digitalinitiatives
Customers are not using the in-store digitalinitiatives implemented
Unable to gauge the return on investment linked toin-store digital initiatives
In-store digital initiatives have not resulted inimproved sales/footfalls
Store managers/associates are not promoting in-store digital initiatives
Italy Global
Source: Capgemini Future of Retail Store Survey
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Retailers face numerous technical, process & people related challenges in transforming stores
Top Challenges for implementing the digital initiative in-store
Source: Capgemini Future of Retail Store Survey
62% 60% 62%55%
64%
53%
Difficult to gauge thebenefits of new
technology initiativeson revenue/cost
Difficult to integratelegacy retail systems to
in-store digitalinitiatives
Difficult to prioritize in-store digital initiative
among multiplealternatives
Lack of a feedbackmechanism for in-storeinitiatives implemented
Customers want thesame level of
personalization in-storeas is available to them
online
No incentives for thestore
managers/associates todrive the usage of new
initiatives inside thestore
Technological Challenge Process Challenge People/Customer/Skills Challenge
Rating as per Retail Executives
14Copyright © Capgemini 2016. All Rights Reserved
Digital Sprinters in Italy
15Copyright © Capgemini 2016. All Rights Reserved
Geographical spread of Digital Sprinters across 9 countries surveyed (Italy – 18%)
Source: Capgemini Future of Retail Store Survey
Digital Sprinters by country
17%
24%
13%
31%
24%
11%
16%
18%
5%
N = 88
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With more than 180,000 people in over 40 countries, Capgeminiis one of With more than 180,000 people in over 40 countries,Capgemini is one of the world's foremost providers of consulting,technology and outsourcing services. The Group reported 2015global revenues of EUR 11.9 billion. Together with its clients,Capgemini creates and delivers business, technology and digitalsolutions that fit their needs, enabling them to achieve innovationand competitiveness. A deeply multicultural organisation,Capgemini has developed its own way of working, theCollaborative Business Experience™, and draws on Rightshore®,its worldwide delivery model.
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The information contained in this presentation is proprietary.Copyright © 2016 Capgemini. All rights reserved.