Future of Retail Industry - customers, fusion of online and offline shopping, mobiles, smartphones, computers, TVs, e-commerce, mobile payments, retail banking, shopping malls, Big Data - retail keynote for Samsung

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Notes on Futurist keynote lecture for 1000 VIP Samsung clients from across Latin America, in Mexico – watch the video above - slides are below on the right. Audience of computers, mobile phones and electrical appliance retailers from Brazil, Mexico, Colombia, Argentina, Peru, Venezuala, Chile, Ecuador, Guatemala, Haiti, Bolivia, Dominican Republic, Honduras, Salvador, Costa Rica, Uruguay, Panama.

Expect Mobile boom in Latin America retailing

Mexico will see 6 million new mobile users in 2013 – reaching around 30% of the population, the highest in Latin America.  30 million people in Mexico already own a smartphone – up 49% in a year – and 60% of 25-34 year olds are using smartphones.

The Android operating system is now installed on over 70% of all new smartphones in Latin America, winning market share mainly from Blackberry during 2012 and 2013.

Impact of smartphones on Brazil Retail

Mobile use influenced 72% of all retail sales in Brazil in 2013, among phone owners, according to Cisco.  The main influence is still family and friends but with the boom in social media, that influence is increasingly likely to be via Facebook (>1 trillion page views a month) or some other social platform.  The second most important influence is manufacturers, while the third is online consumer reviews of retailer websites.

Compare with impact of mobile on UK retail

Mobile influenced $29bn of retail sales in the UK in 2013 and as mentioned above, over 50% of all online retail sales in the UK are now made on a mobile device.

But we are only in the first hour of the first day of the digital retail world.  What about tomorrow?

Need a world-class retail industry keynote speaker for your event? Phone or e-mail Patrick Dixon now.

Location – based marketing is the next big thing - Big Data

The world of mobile is opening up a whole new world to marketers, who are hungry for live streams of “Big Data”. They want to know where a customer is to help predict what kind of things a customer may ready to hear about.

Here’s an example of location-based marketing and use of Big Data.  Coca Cola has developed an App which records your favourite drink, and also a vending machine that can produce infinite variations of different taste elements to create a customized drink for you.

As you walk around, Coca Cola can (with permission) see where you are.  If you are close to a machine, it tells you.  As you approach, it makes and delivers the drink.  As you take it, the machine knows to charge your phone for payment.

Here is another example.  I step into a London taxi where a flat screen is running news items. The taxi can sense that I am wearing a pair of glasses which contain an RFID chip (radio frequency identification device). These are the size of a grain of sand, and are able to transmit basic data when asked, such as what the product is, where it was sold and so on.

So the taxi now knows that:

- I am wearing variable lens glasses – which means I need reading glasses as well as correction for distance.  That means I am probably over 50 years old

- I am wearing designer glasses – which means I am probably interested in premium brands and have a middle class income

So without any further data, the taxi computer is able to select a customized advert for…..

“Have you thought about laser correcting eye surgery from a local London clinic – press this button now for a 25% discount if you ask this cab to drive you there for a brief explanation…”

We can go a stage further.  My mobile phone company can see I am on the move, after making my way slowly down the street.  A logical deduction from Big Data is that I am in a taxi.  Pattern recognition shows that this usually happens at around this time of day, on Tuesdays and Thursdays.  So now the mobile phone company can probably make a very accurate guess about my destination.  And since the mobile phone company may also be seeing over 50% of all my online purchases and over 50% of web searches, we can begin to see the powerful position such companies are in.

Future of retail is about emotion

All great retail success is about understanding how customers think and feel.  And market research is a poor guide.  Market research tells you what your customers thought and felt yesterday but they are often wrong in being able to tell you how they will think and feel tomorrow.

Pay close attention to your customers, listen to what they are saying, especially about their experience buying from your store or website.  But don’t believe them when they are telling you about whether they are likely to start using a particular new technology or not.  People change their minds when they experience the future right in front of them.

The web has made us and our customers very impatient – most people in my audiences around the world tell me that they press the back button on a web browser in less than 5 seconds if a web page takes time to load.  That means losing 90% of customers in 5 seconds.  Or even if you don’t lose them, it means that they are counting the seconds and looking at their watches, becoming slightly irritated. Think about it. 

The same applies to robot answering systems in retail call centres.  Most of my audiences say that they get really cross when they are asked to press loads of buttons and options when they phone to get help.  Seconds matter.

So how long does it take to find a shop assistant to help with a question you have?  How long to wait in the checkout?  How long to complete an online transaction?  No surprise then, that every keystroke or mouse click you save on a redesigned web journey for your customers, will increase the numbers of customers passing on to the next step towards a sale.

Growth of e-commerce in Latin America

If you want to see the future of online retail in Latin America, just take a look at North America, Europe or Asia.

70 million people are already online in Mexico (58% of adults), 88 million in Brazil (46%), 28 million in Argentina (67%), 10 million in Chile (59%) and 10 million in Peru (34%).

While it is true that in these nations, most consumers are still very uncomfortable about buying online, that is changing fast.

Compare with the UK where 33% of some groups of people have stopped watching conventional TV because they only watch TV online, and where 12% of all retail is now online shopping, of which over 50% of purchases are using a mobile device.

Global e-commerce hits $1.5 trillion in 2014

Online sales will exceed $1.5 trillion in 2014, of which $100bn will be in Latin America, $6.2bn in Mexico (up 40% in a year).  Most of Latin America’s online sales are on websites owned by traditional retailers.

And sales per online user each year are also growing fast – averaging $578 across Latin America:  $854 in Mexico, $717 in Brazil and $380 in Argentina.

How are people paying?  With low penetration of credit cards and bank cash cards, newer payment systems are booming.  PayPal for example has seized 52% of all online payments in Mexico.

Latin America Economic Outlook

Mexico, Brazil and the US have marched almost in step together from 2003 to 2014, in timing of the 2009 economic crisis, the sharp partial recovery in 2010, and the gradual growth in GDP since, which in the case of Brazil was close to 4% in 2013.

The truth is that the global economy never stopped growing because of the engine of Far East emerging economies, including India and China.  We have seen astonishing growth in nations like Vietnam, and the entire region will continue to power into the future, sustained by the growth of their own middle class, and by pushing up the value of manufacturing from low grade goods to world class products.

Growth of Latin America Middle Class

The middle class has grown by 50 million people in Latin America over the last decade.  56% of the population of Brazil is now middle class – 113 million people. And in response we are seeing an explosion of larger retailers to meet their needs and desires.  And the wealth is spreading rapidly from major cities like Rio de Janeiro and San Paulo.

We are seeing the same in retail in Chile for example, where you will find Latin America’s largest shopping Mall – Costanera.  The same in Peru where Censosud alone is opening 14 huge new retail stores in 2014.

Future of Shopping Malls

Shopping Malls are all about scale and customer experience: creating a huge “WOW” as people enter.  A place for leisure as well as shopping.  A destination in its own right.

So in consumer electronics, that means a place with large stores which stock the biggest and most eye-catching items.  People go in to browse, and usually come away with cheaper mass-market products, but the premium products in the window draw them in.

The future of traditional bricks and mortar retail will be all about theatre, creating atmosphere, memories.  Watching a demonstrator fly a small helicopter in a toy store, seeing someone have their nails polished using a revolutionary new technology, watching the bread being made, the meal being cooked.

How to make the sale

Successful stores in future will be those that know how to bring the customer to the point of sale rapidly without them feeling intruded on or forced.

One of the fastest ways to kill a sale is for the sales assistant to approach someone within 5 seconds of entering the store.

“Can I help you?”
“No – I am just looking.”

How many times have you been asked that question and how many times did it make you want to run right out of the store.

The best sales assistants are aware of customers as they work their way around the store, and offer sensitive help:

“I’m here if you need me.  There’s a great promotion on the shelf over there.”

Or – if you can see a customer is lingering:
“Yes it’s a great product – we like it because….”

In a digital, multichannel, social media world, the key is not selling at people, but becoming an expert advisor or friend to them along their journey of life.

Need a world-class retail industry keynote speaker for your event? Phone or e-mail Patrick Dixon now.


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