retailing in 2020 - xpg consultnet in 2020: global trends, ecommerce, ... –consumer society...
TRANSCRIPT
Presented by:
David Marcotte
Senior Vice President
Kantar Retail Americas
March 2014
Retailing in 2020: Global Trends, eCommerce, and Implications
© Copyright 2014 Kantar Retail 2
www.pwc.com
www.kantarretailiq.com
Retailing 2020:
Winning in a polarized
world
A global company with
a local view into the
global future
© Copyright 2014 Kantar Retail
Agenda
Retailing in 2020
National eCommerce – Seven Indicators
Global Examples of National Excellence
Implications for Latin America
3
© Copyright 2014 Kantar Retail
The Six to Watch
4
Middle
Class
Thinking
Gender
Shift
Relocating
Labor
Consumption
Seaboard
Inland
Penetration
Bigger Data
Bigger
Answers
Marketing to
Androids
Source: Kantar Retail IQ Research
© Copyright 2014 Kantar Retail
Where’s the Middle Class?Growth and Change
5
Source: Kantar Retail IQ Research
In 2013 World Bank
stated that the Middle
Class in LA is above
30% of a low growth
population. Expected to
expand to 40% in 2030
or
2009: 210 million
2030: 300+ million
Middle
Class
Thinking
© Copyright 2014 Kantar Retail
LA is a Global Leader in Social Reward ProgramsConditional cash transfers creates a ‘different’ middle class
6Source: OECD, Kantar Retail analysis
Benefits and cash transfers
for immunization programs,
participation in school, and
health education. Coupled
to regular assistance such
as energy.
© Copyright 2014 Kantar Retail
Family Size Dramatic Drop in Latin America
7Source: OECD, Kantar Retail analysis
Longer lives, far
less children
means far more
emphasis on:
• Education
• Health &
Wellness
• Women in
Professions
• Elder Care
Smaller Families
are less expensive
overall though
spend per child
does rise,
disposable
income has
expanded
© Copyright 2014 Kantar Retail
What is Middle Class Thinking
– Stable families, two children, two
incomes
– Belief in a predictable future
– Savings and Credit based on secure
income
– Belief in investing in education
– Frugality for Splurging
– Consumer Society – Value for Value
Paid
– Wanting and getting the better things
And why that makes such a huge shift
8
Source: Kantar Retail IQ Research
Middle
Class
Thinking
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Children are special when there are less of them
9
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Shifts in Generations and Lifestyles
© Copyright 2014 Kantar Retail
History in PicturesThe Landscape of Education in 40 years
11
1971 2011
Tertiary Enrollment –
Ratio vs. 51%
Source: Kantar Retail IQ Research
Gender
Shift
© Copyright 2014 Kantar Retail
The Global Gen Y & Z Trend
12
The Rise of Women is Disruptive for more than family
Source: Kantar Retail IQ Research
© Copyright 2014 Kantar Retail
Static Societies still Generate Need
Outsourcing in the US is falling fast, in Europe it is growing
The Next Shift: China -> US, Mexico, Vietnam
India -> Philippines, Myanmar, Peru
India -> Indian-Africa, Indian-Middle East
But now it is about flexibility
13Source: “The Handbook of Global Outsourcing 2012” Oshri, Kotlavsky, Willcocks
Relocating
Labor
Consumption
© Copyright 2014 Kantar Retail
Work is Now Going Where Clients are
Low Cost = Robots
Consumers are the real driver
that is shaping where work is
done
And Robots are Helping
14
Kiva Rethink
Source: Kantar Retail IQ Research
Relocating
Labor
Consumption
© Copyright 2014 Kantar Retail
Baltic Dry Index as of Jan 2014 – Important Shift
15Source: Investment Tools.com & The Baltic Exchange
The Baltic Dry Index (BDI) is a number issued daily by the London-based Baltic Exchange.
The index provides an assessment of the price of moving major raw materials by sea.
Lowest in
15 Years
Seaboard
Inland
Penetration
© Copyright 2014 Kantar Retail
Seaboard
Inland
Penetration
Mexico is a Good Example of Change
16
Serious Port Development is starting something
Source: Kantar Retail Analysis
New Port Facility
Guaymas, Sonora
Ford Plant
Hermasillo,Sonora
Nogales
© Copyright 2014 Kantar Retail
Very Large Data is What we KnowBig Data is Using Ambiguity
17
Data Storage
Data Sources
Data Use and
Interactions
Source: KantarRetailiQ research
Data Sources
Data Storage
Data Use and
Interactions
Bigger Data
Bigger
Answers
© Copyright 2014 Kantar Retail
Visualizing data not as a
report but as flowing and
changing set of patterns
Source: Kantar Retail analysis, LinkedinLabs
Big Data Requires a New Tool MindsetDo-it-yourself Big Data (LinkedIn Labs)
Bigger Data
Bigger
Answers
© Copyright 2014 Kantar Retail
Big Data Analytics - Collusion: Another Big Data DIY
Bigger Data
Bigger
Answers
© Copyright 2014 Kantar Retail
Big Data requires New ThinkingHumans are too Slow – Omni is Too Fast
20
IBM’s Watson finds the Questions
Source: IBM, ASIMO, Amazon, KantarRetailiQ reserach
BCollaborative Filtering
What the community has
indicated it has interest in
based on cart and the
overall portfolio bought
over time
AContent Association
What is in the cart (and
prior purchases) vs.
other products that are
like them
How Amazon
looks at Big
Data to guide
shoppersAmazon Recommendations
Bigger Data
Bigger
Answers
© Copyright 2014 Kantar Retail
Retail Changes, the Shopper Even FasterBreaking through is not easy
21
“OMG! almst hit by dat
truk!”
21Source: Kantar Retail analysis
Marketing to
Androids
© Copyright 2014 Kantar Retail22
In an Omni-Channel World: Planning? Where to play, where to retreat
Source: Kantar Retail analysis, KantarRetailiQ
Marketing to
Androids
© Copyright 2014 Kantar Retail
Next?
Managing and Planning for AndroidsIn 2014, what is our shopper made of?
Source: Google23
© Copyright 2014 Kantar Retail
Agenda
Retailing in 2020
National eCommerce – Seven Indicators
Global Examples of National Excellence
Implications for Latin America
24
© Copyright 2014 Kantar Retail
Gradual Transition
Gradual Transition
MT <20% of mkt
T5 MT retailers <30% of MT
OT>50% of mkt
T5 MT retailers >60% of MT
MT <40% of mkt
T5 MT retailers <50% of MT
MT <30% of mkt
T5 MT retailers <40% of MT
PioneersCategory Specialists, Hypermarkets, Cash & Carry, and Local Food Chains
Adjacent Nation, Primary FormatsDiscounters & C-Stores = new growth formats; Hypers and C&C largest growth formats
Adjacent Nation, Pioneers, andSecondary FormatsTraditional Trade now impacted
Pure Secondary Formats, Multi-formatsDrug, Supermarket, Category Specialists
Exploration Concentration Penetration Maturation
OT>60% of mkt
T5 MT retailers >70% of MT
Multi-Format DominantHigh-capability Drug, Supermarkets & Category Specialists.Regrowth of Specialty Chains, Mom ‘n Pops with Demographic Focus
Post-Modern
Source: MVI Custom & Applied Research
Predicting National Markets
Kantar Retail’s Market Evolution Model
Tracks 3 key drivers/factors:
1. Consumer changes
2. Retail consolidation
3. Disruptive factors
(government & external
influences)
© Copyright 2014 Kantar Retail
The Canadian Problem
– Amazon exists in both US and Canada markets
– But, 90% if Canadian’s going to Amazon don’t buy
– They also don’t go to Amazon.ca
eCommerce is not the same
26
Exploration Concentration Penetration Maturation Post-Modern
© Copyright 2014 Kantar Retail
The Seven Drivers and Indicators
1 - Internet
Existence, Speed, Restrictions
Speed is not everything
2 - Access
Coverage, Cost, Throughput
How to understand eCommerce growth
27
1 Hong Kong 58.28 Mbps
2 Singapore 57.10 Mbps
3 Romania 51.98 Mbps
4 South Korea 42.22 Mbps
5 Japan 42.19 Mbps
6 Switzerland 41.63 Mbps
7 Sweden 40.84 Mbps
8 Macau 40.49 Mbps
9 Lithuania 40.27 Mbps
10 Netherlands 37.85 Mbps
11 Taiwan 36.55 Mbps
12 Denmark 34.57 Mbps
13 Latvia 32.81 Mbps
15 Iceland 31.09 Mbps
16 Bulgaria 29.20 Mbps
17 Belgium 27.82 Mbps
18 Norway 27.57 Mbps
19 Finland 26.87 Mbps
20 France 26.38 Mbps
21 Portugal 25.73 Mbps
22 Germany 25.41 Mbps
23 United Kingdom 24.78 Mbps
24 Estonia 24.61 Mbps
25 Czech Republic 24.41 Mbps
26 Hungary 22.81 Mbps
27 Slovakia 22.17 Mbps
28 Israel 22.00 Mbps
29 United States 21.75 Mbps
30 Russia 21.25 Mbps
© Copyright 2014 Kantar Retail
Access: Expanding C-Store Portfolio7-11 Global Movement into Mobility
28Source: Kantar Retail Research & Analysis
© Copyright 2014 Kantar Retail
The Seven Drivers and Indicators
3- Mobility
Power, Device, Cost,
Terms
4- Payment
Transaction, Tender,
Credit, Security
How to understand eCommerce growth
29
© Copyright 2014 Kantar Retail
Consumer Credit & Mobile Payments
The stats:
End of 2012 estimated 730 million people across Africa will have mobile phones –70% penetration
Almost 1/3 of Kenya’s GDP passes through M-PESA
In 2011 in South Africa
• 19% of smartphone users used PayPal
• 14% used a mobile payment
30Source: Kantar Retail, Google
• Mobile phones allows for the flow of money without the need to have a
large physical banking infrastructure.
• Allows for not only for purchase of in-person goods, but also facilitates
online retail in a safe and secure way.
Africa
© Copyright 2014 Kantar Retail
The Seven Drivers and Indicators
5- Fulfilment
Predictability, Assurance, Costs
6 - Value
Price, Exclusive, Cache, Time
How to understand eCommerce enablers
31
© Copyright 2014 Kantar Retail
LaModa.ruAddressing Mobility, Payment, and Fulfillment
32
In the catalog online store Lamoda.ru over 1,000 brands for men, women
and children's shoes and clothing for different price categories, with more than 2 million
products
With many manufacturers Lamoda.ru cooperates directly, otherwise we choose a
reliable, trusted suppliers.
We guarantee the authenticity of the item by certificates.
Shipping with the fitting - We have our own delivery service Lamoda Express. /
Delivery time - 1-2 days
Payment and Returns - Online shop shoes and clothing Lamoda.ru allows you to return
the pay for purchases not only cash but also bank cards
as well as through QIWI purse and Paypal.
© Copyright 2014 Kantar Retail
Amazon Investment in Shipping Costs EscalateFulfillment IS the Brand
33Source: Kantar Retail analysis; Company reports
$3.5B
NE
T S
HIP
PIN
G C
OS
TS
AS
% O
F S
AL
ES
TO
TA
L R
EV
EN
UE
AN
D C
OS
TS
(U
SD
)
© Copyright 2014 Kantar Retail
The Seven Drivers and Indicators
7- Culture
Dependence, Trust, Engagement
How to understand eCommerce explosions
34
© Copyright 2014 Kantar Retail
Short Hand: Population Pyramid Forecasting
Customer
Capabilities
Investments
Consumer
Drivers
Technology
Enablers
Gadgets (iPad)
Software (Bing)
Payment (Paypal)
Convenience
Quality
Price
Information
Dark Stores
eWarehouses, Delivery
Fleets
Website
inStore (Drive, Site 2
Store)
New
Path
to P
urc
hase
Past the Explosion of 7
Ray Gaul
VP Global Insight
London, UK
© Copyright 2014 Kantar Retail
Agenda
Retailing in 2020
National eCommerce – Seven Indicators
Global Examples of National Excellence
Implications for Latin America
36
© Copyright 2014 Kantar RetailSource: Kantar Retail analysis
Global Trend: Digital Impact: 100%
Even if you don’t sell much online (today), the impact
extends well beyond eCommerce
37
Anne Zybowski
VP – eCommerce
NYC, USA
© Copyright 2014 Kantar Retail
Global Online (b2c) Sales
2007 2012E 2017E
% of total
Retail Sales2% 6% 10%
Sales
$208bn
Total Online
b2c Sales
(trillions) –
Global
CAGR
24%
CAGR
16%
Sales
$1,298bn
Sales
$618bn
Source: Kantar Retail research & analysis
Methodology: Kantar Retail splits out sales of “C2C” from online estimates and therefore has more correct figures than
reported by other research companies (but our figures will appear smaller than what you may see elsewhere)
38
© Copyright 2014 Kantar Retail
National Markets Continue to GrowBut not always as expected
39
Steve Mader
Director Digital
London, UK
© Copyright 2014 Kantar Retail
China – OmniChannel Retailing
40
Oceanne Zhang
Shanghai
Pureplay
Convenience
Hyper
Electronic
Food
Surprisingly large regions in
China are now operating in a
omnichnanel model based on
competition and consumer
demands
© Copyright 2014 Kantar Retail
>230,000 sq. m.
UAE Malls at a Glance: One Size Fits None
Source: Kantar Retail research and analysis; Company information41
ConvenienceEntertainment
Indulgence
Core Shopper Demands: Each Format Falls Along the Spectrum
Quick, Grocery-DrivenOne-Stop Solution-DrivenBreak Up the DayFull-Day Occasion
Need Fulfillment, ImpulseTreasure Hunt, Luxury
LA
RG
ES
MA
LL
>1.1 million sq. m. >130,000 sq. m. >32,000 sq. m.>150,000 sq. m.
Sara Al-Tukmain
Kuwait / UAE
© Copyright 2014 Kantar Retail
Convenience: Align with the One-Stop Shop
Source: Kantar Retail store visits and analysis42
Mobile ServicesBanking & Money Exchange Centers
H&W, Clinics Dining
Design
GroceryMusic/Dance
Driving Lessons Mail Couriers
Kid Fun
© Copyright 2014 Kantar Retail
E-Grocery Customers
43
7-Eleven Thailand
Multi-service through partnershipExciting and youth focused
Thailand
Tied to pricing and promotions Connected to broad platform
Himanshu Pal
India / UK
© Copyright 2014 Kantar Retail
Hepsiburada.com- “The Amazon of Turkey”
http://www.pozitron.com/hepsiburada/ http://www.hurriyetdailynews.com/hepsiburadacom-sells-1-million-goods-
month.aspx?pageID=238&nID=55988&NewsCatID=345 http://www.hurriyetdailynews.com/e-commerce-on-rise-in-
turkey.aspx?pageID=238&nID=55154&NewsCatID=34544
With over 15.5 Million
visitors a month and a
range of 500,000
products from 5,000
suppliers,
Hepsiburada is
expected to generate
sales USD 500 million
in 2013
Recently partnered
with tech solution
providor, Pozitron, to
develop a mobile
platform
Vadim Khetsuriani
Russia / E.Europe
© Copyright 2014 Kantar Retail
Redefining Convenience: France Leads the “Click & Collect” Model...
45Source: Kantar Retail analysis, Company websites
France: Between 10 and 30 drive
locations opening every week
- ~1.6 million households pick up their
order at a Drive location~6,000
SKUs
62 Auchan Drives,
47 Chronodrives
“Enjoy the low price at Auchan
without going to an Auchan store”
Bryan Roberts
EU / S.Africa
© Copyright 2014 Kantar Retail
New: Device Driven Selling: Matching Shopping to Platform
The Medium… is the Engagement … is the Shopper
Steve Mader
Director Digital
London, UK
© Copyright 2014 Kantar Retail
Agenda
Retailing in 2020
National eCommerce – Seven Indicators
Global Examples of National Excellence
Implications for Latin America
47
© Copyright 2014 Kantar Retail
LTE makes tablets and smart phones a clearer
choice… along with costs
48
Two factors:
1. The expansion of high-speed
access will expand usage and lower
costs of use
2. Lower incomes already view
access as part of normal life and
worth the trade-off time much like
television
© Copyright 2014 Kantar Retail 49
Trends Shaping Consumers
The Six Global Trends all are impacting Latin America
Models and eCommerce
There is a predictability but requires a more innovation mindset
eCommerce Trends Across the Region
National models are in place
Digital into 2018
The market is already highly attuned to digital usage. eCommerce is
spreading rapidly
Contact Kantar Retail:
Eric Debarnot – Managing Director
T: +55 (11) 3066-6454
M:+55 (11) 98758-0450
www.kantarretail.com
Contact XPGConsultNet:
Willem F. Schol – Director
T: +56 (2) 2725-5323
M:+56 (9) 9432-7444
Pablo Toledo - Director
T: +56 (2) 2725-5323
M:+56 (9) 9437-4029
www.xpgconsultnet.com
Thank You!
David Marcotte Senior Vice President Americas Insights
T: +1 413 847 1067entarretail.cm
www.kantarretailiq.com