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Customer Centric Retail Innovation - Bucharest May 29, 2008

This is a second keynote Alain Thys gave at the Retail Innovation Forum on May 29, 2008 in Bucharest

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Customer Centric Retail Innovation - Bucharest May 29, 2008

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  1. RETAIL INNOVATION: A STRATEGIC PERSPECTIVE FUTURELAB

  2. FUTURELAB GO TO WORK

  3. 1. GET ON A PLANE TO LEARN AND NETWORK FUTURELAB

  4. 2. IMPORT – SKILLS, IDEAS, FORMATS FUTURELAB

  5. 3. SECURE AND TRAIN THE BEST PEOPLE

  6. FUTURELAB DEGREE OF INNOVATION CREATE COPY MODIFY Develop new concepts, targeting specific local segments and needs Modify existing concepts to better match local needs Introduce global formats that already exist 4. INNOVATE LIKE ONLY ROMANIANS CAN

  7. RETAIL INNOVATION, ACCORDING TO MANY POP Systems Online FUTURELAB

  8. THEN, GO TO WORK BRANDS RETAILERS/INVESTORS Be the first to become friendly with your new customers Be first to bring a (modified) format into the market Help your existing distribution to « make the jump » Come with something « unique » which internationals can’t offer Pro-actively say goodbye to those who can‟t or won‟t innovate. Get out of the way and sell as expensive as possible. FUTURELAB

  9. BUT WE WILL START WITH INNOVATION FROM A STRATEGIC PERSPECTIVE And to be more precise: « customer centric retail innovation » Source: IBM Business Consulting Services – The Retail Divide, 2004 FUTURELAB

  10. Think Beyond the Store Broaden Your Innovation Horizon FUTURELAB

  11. Why Customer Centric? • Traditional Innovation is Broken • Competition is Changing • There‟s not much to be done at retail anyway

  12. Why Customer Centric? Quiz: Which % of innovations fail? 97% FUTURELAB

  13. Why Customer Centric? WHO COMPETES WITH MARS? CONSUMER PERSPECTIVE FUTURELAB

  14. WHY CUSTOMER-CENTRIC? FORMAT INNOVATION IS LIMITED FUTURELAB

  15. WHY CUSTOMER-CENTRIC? FORMAT INNOVATION IS LIMITED FUTURELAB

  16. WHY CUSTOMER-CENTRIC? FORMAT INNOVATION IS LIMITED FUTURELAB

  17. WHY CUSTOMER-CENTRIC? FORMAT INNOVATION IS LIMITED FUTURELAB

  18. WHY CUSTOMER-CENTRIC? FORMAT INNOVATION IS LIMITED FUTURELAB

  19. WHY CUSTOMER-CENTRIC? FORMAT INNOVATION IS LIMITED FUTURELAB

  20. Why Customer Centric? • Traditional Innovation is Broken • Competition is Changing • There‟s not much to be done at retail anyway FUTURELAB

  21. FUTURELAB CUSTOMER CENTRIC RETAIL INNOVATION Customer Centric Retail Innovation WHAT ABOUT THE CUSTOMER?

  22. REMARKABLE FUTURELAB

  23. FUTURELAB Apple Retail 2001 Sorry Steve, Apple Stores Won‟t Work (Business Week) Apple Retail 2004: Fastest retailer ever to reach the $1 billion mark a year Watch video on http://www.youtube.com/watch?v= m-Y7vZMEPrU Apple Retail 2006 Fastest retailer ever to reach $1 billion/quarter mark Apple Retail 2007 Sales per sq.meter = $ 30,176 (as comparison: BestBuy = $10,643) HOW DID THEY DO IT?

  24. DRIVERS FOR RECOMMENDATION IN ICT FUTURELAB Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008

  25. Careful segmentation and focus on students, educators and creative professionals (even now consumer appeal broadens) • A retail experience differentiated by service before, during and after sales (Genius bar) • Scenario or lifestyle Marketing & Sales vs. Product « What do you want to do ? » • Style & design • THE RESPONSE FUTURELAB Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008

  26. BREAKING ALL THE RULES No commissions • Team bonuses • Focus on experience • Fashion & design people to run computer retail • Hire for personality, attitude and customer fit … train the rest • Ron Johnson Target High identification: Tshirts, iPod, discounts, … • 3 week immersion at start of job ONLY on customer relationship skills and understanding customer needs/lifestyle • All product training is online (except geniuses) Training on store computers or borrowed laptop • • MickeyDrexler The Gap FUTURELAB

  27. RESULTS Apple: 2007 Net Promoter Performance and 5 Year Trend vs. Overall B2C High Tech Computer Hardware Manufacturers FUTURELAB Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008

  28. RESULTS Total Customer Value of an Apple advocate is almost twice that of the industry average FUTURELAB Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008

  29. Revenue Growth % 2007 vs 2008 Source: Fortune Magazine, May 5,2008 24,3 13,8 8,4 6,5 6,2 5,5 0,8 HP Dell Apple Xerox Sun NCR Pitney Bowes RESULTS FUTURELAB

  30. HOW ABOUT YOU? 5 To Customer Centric Retail Innovation steps FUTURELAB

  31. Image by : Zombiefactory, CC-license 2.0 #1 TAKE THE CUSTOMER PERSPECTIVE FUTURELAB

  32. HOTSPOT HOTSPOT Building Preference Use & Service Awareness Purchase Repurchase Loyalty Advocacy THE CUSTOMER JOURNEY – BRAND/RETAIL PERSPECTIVE FUTURELAB

  33. Flipchart Time Which are the steps in the customer journey when booking a holiday? How could you innovate on them? THE CUSTOMER JOURNEY CUSTOMER PERSPECTIVE FUTURELAB

  34. THE CUSTOMER JOURNEY CUSTOMER PERSPECTIVE 1. I dream of going on holiday 2. I research my holiday 3. I plan my holiday 4. I select my holiday 5. I purchase my holiday 6. I receive travel documents & tickets 7. I anticipate departure 8. I prepare my trip 9. I travel to my destination 10.I discover my destination 11.I experience my destination 12.I record my memories 13.I share my experience 14.I travel back home 15.I share my memories How Can You Innovate Now? LVMH - AOL Time Warner UBS - Richemont FUTURELAB

  35. THE CUSTOMER JOURNEY CUSTOMER PERSPECTIVE How About You? TRAVEL CARS BANKING FOOD Photo Nils Bremer, cc. 2.0 FUTURELAB

  36. FUTURELAB Photo: Joeannenah, cc: 2.0 #2 GET THE CUSTOMER HEARTBEAT

  37. 1. I dream of going on holiday 2. I research my holiday 3. I plan my holiday 4. I select my holiday 5. I purchase my holiday 6. I receive travel documents & tickets 7. I anticipate departure 8. I prepare my trip 9. I travel to my destination 10.I discover my destination 11.I experience my destination 12.I record my memories 13.I share my experience 14.I travel back home 15.I share my memories WHAT DO YOUR CUSTOMERS REALLY CARE ABOUT? WHICH EMOTIONS ? ARE ALL EMOTIONS EQUALLY STRONG? FUTURELAB

  38. FUTURELAB BUT DON’T JUMP TO CONCLUSIONS … THINK SCENARIOS

  39. #3 FOCUS YOUR EFFORTS FUTURELAB

  40. WHERE SHOULD YOU FOCUS? FUTURELAB

  41. FUTURELAB WHICH IS THE EASIEST PATH TO WALK? Photo: StuSeeger, cc 2.0

  42. AIRLINES BANKS COMPUTERS INNOVATORS SEEM TO DISAGREE PHARMA UTILITIES PROCESSED FOOD Source: The Doblin Group FUTURELAB

  43. THIS ALSO APPLIES TO CUSTOMER CENTRIC INNOVATION 1. I dream of going on holiday 2. I research my holiday 3. I plan my holiday 4. I select my holiday 5. I purchase my holiday 6. I receive travel documents & tickets 7. I prepare my trip 8. I travel to my destination 9. I discover my destination 10.I experience my destination 11.I record my memories 12.I share my experience 13.I travel back home 14.I share my memories Observation Most of the travel industry focuses on those areas which have least or most negative emotional involvement FUTURELAB

  44. DEBATE: ARE YOU A PENGUIN? FUTURELAB

  45. CROSS YOUR INNOVATION LANDSCAPE WITH THE CUSTOMER ENGAGEMENT High Opportunities for meaningful differentiation Areas to keep up or stay ahead Customer Engagement Copy when proven only Look at the niches Low High Low Innovation Intensity FUTURELAB

  46. #4 MAKE SURE YOUR PEOPLE ARE WITH YOU FUTURELAB

  47. perception 80% of CEO‟s believe of believe their brand provides a superior customer experience 8 % of their customers agree (Bain & Company) FUTURELAB

  48. Watch video on: http://www.youtube.com/watch?v=xa aAYVUWP0I We show that we value our customers by serving them well, putting their needs and interests at the center of everything we do. (from the AOL mission statement) FUTURELAB

  49. BAD EMPLOYEE? FUTURELAB

  50. FUTURELAB ONLY 5% OF THE WORKFORCE UNDERSTANDS THE STRATEGY (when innovating this gets even worse). Source: Norton, D. Aligning your Strategy to the Customer Value Proposition, 13/9/2005

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