Tag Archives: Retail

Latin American Consumers Ready for Smart Home

Over three quarters of consumers surveyed in Latin America’s leading economies say they want to know more about Smart Home products, according to CONTEXT’s new survey. With no one retailer dominating the Smart Home market in the countries surveyed, this potential demand for the new global wave in technology products and services presents significant opportunities for the IT channel in Latin America.

Carried out in January 2017, the CONTEXT Survey was announced at the Global Technology Distribution Council Latin American IT Distribution Summit in Miami, USA, and covered 2,000 consumers in Brazil, Mexico, Argentina and Chile.

The general picture for Smart Homes in these countries with a combined GDP of $USD4.4TN is good, with an encouraging level of awareness. However, it is clear that this awareness is not rooted in a deep understanding of the concept. This is partly down to limited exposure to Smart Home products or ideas, with very few people seeing or hearing things about Smart Home on a regular basis.

Such limited exposure is hardly surprising, given that no one channel is doing a good job of explaining or showcasing the concept. Where people have picked up on Smart Home, it tends to be from online sites – both retailers’ and manufacturers’ – rather than from in-person contact via things like store displays. This limits the degree to which consumers can interact and engage with Smart Home products.

As well as highlighting the opportunities, the CONTEXT Survey found that worries surrounding the idea of the Smart Home are prevalent, with 9 out of 10 people having at least one concern. Some of these are serious, including views that products may malfunction, causing harm or damage to the home. Privacy concerns and a fear of identity theft are also high on the list of worries.

When asked what user scenarios were encouraging them to buy Smart Home products, the top three responses were “arriving home”, “waking up”, and “advanced security”. In terms of the Smart Home hubs people would be most likely to trust, the Survey found that while there are variations across different countries, Apple, Amazon and Google dominate. Amazon has a clear lead in Brazil, while Apple leads in Mexico and Chile. Google is in the lead in Argentina.

In summary, despite the lack of deep knowledge and the barriers this creates, the good news is that across all countries there is an appetite to learn more. This is especially in terms of how they can save money, and how they can make home living more enjoyable, easier and better.

by JD

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Filed under Connectivity, Home automation, IoT, Smart Home, Smart Technology

Eagle Flight Over Paris

On November 29th, CONTEXT hosted a special VR breakfast in cooperation with Exertis France, AMD, MSI, Oculus, and Ubisoft in the Musée de l’Armée in les Invalides in Paris. Retailers, distributors and vendors gathered for the morning to hear the results of the latest CONTEXT European VR survey.

The VR survey was designed by members of the CONTEXT Virtual Reality Research group which includes companies such as Exertis, AMD, Oculus, John Lewis, Dell, CONTEXT, Retail Week and the University of Reading.  The research highlighted the expectations of European consumers towards VR and the potential barriers to purchase of VR products. It also showed in which channel the consumer were expecting to find VR products and how much they were ready to spend. The survey gave to the various industry players a clear understanding of what concerns they should address and what they should communicate in order to allow the technology to gain greater penetration of the market. A representative of FNAC, Laura Gaztambide, eCommerce Coordinator of Video Gaming, shared FNAC’s own experience on VR products and future plans to develop this market further.

Prior to hearing the results of the VR research, attendees watched a briefing on the European gaming market presented by Jonathan Wagstaff, UK & Ireland country manager at CONTEXT, and a detailed presentation on Ancient Rome made by university professor Matthew Nicholls who has made a full virtual reconstruction of the Eternal City, the outcome of 8 years of work. This helped the attendees to assess the educational potential and usage that VR is opening up.

Guests also had a chance to try Ubisoft’s Eagle Flight VR game flying over a virtual Paris, and were welcomed by a kind note of support for the VR industry from President Francois Hollande who was proceeding to an Army review in the Invalides on the same morning.

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by SA

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Filed under Retail, Retail in CONTEXT, virtual reality

Is Black Friday dead? A US perspective

Guest blog by Chris Petersen, CEO of IMS, Inc.

Is Black Friday dead, or just rapidly waning? Data indicates the demise of the premier kickoff to holiday shopping in the US. It’s not just about the economy and consumer confidence, although those are key factors. The retail phenomena unfolding right now is about universal changes in consumer behaviour, regardless of socio-economic status.

Black Friday has declined in US retail … will the same trend happen in Europe?
In the not too distant past, stores were the premier focal point of holiday shopping. Black Friday was an event created by bricks and mortar retailers to entice consumers to come shopping on the Friday after US Thanksgiving, which always falls on the 4th Thursday of November. Since many US customers take off from work on Black Friday, it became the quintessential retailer marketing event to lure shoppers to the stores with “best deals” of the season. The theory was that if shoppers came early to find a deal, they would come back to stores for the rest of their shopping.

Not surprising, the UK and other European retailers adopted Black Friday as a promotional event to kick off the holiday selling season and draw traffic to stores. CONTEXT’s analysis of distribution trends in 2015 was very predictive for UK retail sales spiking for Black Friday. Will the trend continue in 2016?

Black “Friday” — death by a thousand clicks
Increasingly retail stores have been jumping the gun on Black Friday by offering Black Friday sales before the actual Friday. The result in the US is that there is no longer a singular event. Black Friday has suffered scope creep, and it literally has become a “Black Week” of promotions and deals.

More importantly, consumers don’t see Black Friday as just “stores” any more. Amazon and other online retailers have creatively capitalised on “Black Friday” by offering daily online deals across an entire week, or more. This has created a new trend for “Cyber Monday” which is the first Monday after the traditional Black Friday. In the US, workplace productivity actually drops on Cyber Monday as people at work scramble to get better deals on stuff they didn’t buy or couldn’t get on Black Friday. Cyber Monday is projected to be the single largest volume day of the entire holiday shopping season.

Did the same trend happen in the UK and other countries? Compared to the US, the UK has a higher % of sales occurring online, especially for technology. Many of the UK promotional ads in 2016 now in fact show the Black 5 days of deals: Thursday, Friday, Saturday, Sunday and Cyber Monday.

The net result is that today’s consumer is an empowered consumer. They are not bound by place or time of event. This translates into a much diminished effect of single retailer store events like Black Friday.

Large retailers have privately confided that Black Friday needed to “die”. The traditional approach of cramming all deals into a single day dramatically lowers prices and margin. It would be healthier for both if retailers and consumers could evaluate offers and spread shopping over a period of time. In fact, that is how today’s omnichannel shoppers are already behaving – shopping multiple days in multiple ways.

So what happened in the UK for 2016?
Were Black Friday sales up again this year? Or, did consumers shift more of their shopping purchases to Cyber Monday? How much of their Christmas budget have they spent? The final store sales numbers won’t be tallied for a couple of weeks.

However, CONTEXT is conducting consumer pulse survey right now. We are asking consumers when they shopped, and how much they purchased on Black Friday and Cyber Monday. It will be interesting to see how much they expect yet to spend in the rest of holiday season.

 

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Filed under IoT, IT Distribution, Market Analysis, Mobile technology, PCs, Retail, Retail in CONTEXT, Smart Technology, Tablet PCs

Despite continued uncertainty over Brexit, consumers must spend now to avoid price hikes

UK consumers’ confidence in their ability to weather the uncertainty around Brexit continues to slide as we approach the most crucial shopping period of the year, according to the latest Retail Pulse UK Survey carried out by CONTEXT. Across a range of criteria, the Great British public are shying away from spending. On top of this, UK retailers are getting ready to raise prices early next year as the pound continues to perform poorly. This means consumers have a choice to make; buy now – even though they’re unsure about their finances – or delay purchases and pay more later.

The CONTEXT Retail Pulse Survey is published quarterly, and examines consumer sentiment towards the UK economy and personal finances. The report for Q2 2016 showed that people 65 years and above were very bullish on Brexit—indeed, many of those surveyed likely favoured withdrawal from the EU. But just five months later, confidence in the future prospects of the economy from this age group has fallen significantly. While 42 per cent of UK 65+’s expected positive economic performance in July 2016,  feelings have swung massively in the opposite direction with 44 per cent now believing the economy will get worse.

Anxiety about the economy is also creeping into everyday purchasing decisions by all age groups. Consumers in the UK are now two times less likely to invest in electrical products—including smartphones, TVs, and notebooks— than they were in July. This is due to increased worries about the state of personal finances, with one third of all those questioned agreeing they will cut back on electrical purchases due to just this one factor alone.

The CONTEXT Retail Pulse Survey reveals the current trepidation felt in the UK. With the European Commission slashing its growth forecast for the UK for 2017, many expect inflation to rise. Factor in a weak pound, and an uncertain jobs market, it’s no surprise to see UK consumers thinking of cutting back their spending on consumer technology.

Taken as a whole, the Survey suggests a potential negative impact on retailers this holiday season, with Black Friday almost upon them. There is – however – a bright spot: stores looking to make a success of the imported American event and the run-up to Christmas should look to young professionals aged 25-34. According to the CONTEXT Survey, 22 per cent of this age group think their personal finances will improve—the most positive sentiment of any age group—and 19 per cent say they will spend more on electricals in the next quarter.

There are also other indicators in the CONTEXT Survey that suggest UK consumers may be willing to spend, despite their uncertainty. Household saving now stands at 5.1 per cent, a return to the low levels last seen just before the global financial crisis. Unsecured borrowing is also rising, reaching a 10.3 per cent year-on-year increase. This could indicate a more carefree attitude to spending amongst younger demographics. Those savvy enough to see price rises coming could increase the overall spending and make this holiday season a success for the industry.

by AS

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High Street Retail: Down but not out

At first glance, the ONS retail statistics for August painted a rosy picture of the UK retail industry. Headline figures, such as the volume and value of sales increasing 6.2% and 4.1% respectively year-on-year, suggest that there is much cause for celebration for retailers across the country. Dig a little deeper behind these figures, however, and the picture starts to look a little less pretty – especially for the high street.

So where do these positive figures come from? Food stores were actually the main drivers of growth, whereas the outlook for household goods was particularly worrisome. Year-on-year, the volume of goods purchased in-store contracted for the first time since May 2014.

Turning stores into destinations
The key challenge for high street retailers, and electrical retailers in particular, is pulling customers back into stores and encouraging them to spend. In order to do so, we expect to see companies take the initiative and begin offering consumers something that they are not able to get from online shopping: an experience.

Bricks-and-mortar stores offer retailers the opportunity to showcase their products in key ways which online cannot replicate, be it through demonstrations, experiential activities, or simply giving the consumer the chance to get their hands on the product. For example, John Lewis has recently dedicated 1,000 square feet of prime retail space in their Oxford Street branch to the smart home category. This is a long-term investment in an emerging product range, which has driven an increase in sales, and, importantly, increased the percentage of sales in store.

New technologies such as Virtual Reality present a significant opportunity for retailers to turn their shops into destinations. Take the example of AT&T in the US, which launched a Virtual Reality cruise experience across 133 of its stores using Samsung Gear VR. In the UK, EE recently partnered with BT Sport to allow football fans to watch football matches through VR headsets at four of their stores across London. Stunts like this give consumers a reason to visit the high street.

The future role of the high street
Turning high street stores into hubs of activity and showrooms for new products will drive footfall and in turn, sales. Apple’s model may prove a blueprint: it’s no coincidence that Apple’s stellar sales run parallel to bustling Apple Stores where users can try out new products.

For retailers considering abandoning the high street and going online-only, it’s worth noting that a visible high street presence can also drive online sales: when John Lewis opened a department store in Chester, for example, sales in the region climbed 30%. This also might explain why Amazon has started to rollout physical bookstores in the US; at the very least, it reveals the importance of an omnichannel approach to retail.

Omnichannel goes beyond offering the consumer multiple channels to purchase, instead focusing on the importance of delivering a seamless experience across online and in-store. Viewed in this context, a physical presence in the high street offers a vital touch-point for consumers to try products before they buy, regardless of whether that purchase happens in-store or online.

Bricks-and-mortar shops are the most personal point of connection between retailer and consumer – so, far from disappearing, we hope they will play an even greater role in driving brand loyalty and sales across channels in the future. Retailers should begin to take advantage of the unique, experiential opportunities offered by physical stores, viewing them as just one component part of a broader omnichannel strategy, where customer experience is key.

by AS

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Filed under Retail, Retail in CONTEXT, virtual reality

Allez Les Bleus in Tech Retail!

Last week at Paris Retail Week I met a number of French people who all repeated the same mantra to me – you are so innovative in retail in the UK. Well sacré bleu this is French negativism at its worst. The reality is the French are darned good at inventing new retail concepts – the hypermarket was an invention by Carrefour in the 60’s; international food retail was pioneered by Carrefour and Auchan in the 1970’s and 80’s; recently Auchan piloted the shop and collect drive-in format which was taken forward by Leclerc. And if you look at the area of retail which really interests us, a trip around Paris should remind any Brit that French creativity is not to be ignored in tech retail, and particularly connected objects.

Here is what I saw on the Paris Retail tour and in a visit yesterday to some additional stores:

  • the new Orange store in the Champs Elysees – you walk into a store with VR demonstrations on Samsung Gear headsets happening as you walk in (or at least you did last week, this week they were sadly missing) – this is a tech destination showing off smart home, health, connected car, fun gadgets, and a workspace for repair. The layout is airy and modern, the displays very Apple. My only disappointment was that the “coach” experience did not work as it should and I was left to wander round by myself. This concept store being rolled out all over Europe is part of an omnichannel strategy linking the on and offline journey of the customer. 8/10
  • Fnac Connect is on the Champs Elysees and has a small selection of connected objects and a large space dedicated to mobile phones. There is little visibility of store staff and it has not moved on since it was introduced nearly two years ago. But it is there and is being invested in as new stores are being rolled out over France in the Connect format. Inside the main Fnac store on the lower ground floor was excitement – the first display of Oculus headsets, on sale only in Fnac stores. I was underwhelmed as they were piled high next to a similar pile of HTC Vive. This is the biggest opportunity for tech retail to bring in the crowds as the Orange store has proven with the Samsung Gear and as clearly highlighted in our consumer survey on VR 7/10
  • Darty – I went to the Beaugrenelle store as I had read that it was a concept store for them. It has a dynamic welcome with a connected back to school campaign, and had a very full offer of connected objects ranged over multiple gondolas and displays. There is no doubt that Darty means business with connected objects. But what is still missing is the engagement with shoppers. What does it all mean? You are left to work it out for yourself. 7/10
  • Boulanger’s flagship store in Opera was our last visit and was a true delight. The welcome was a huge smile from the security guard – very un-Parisian. The prominent space on arrival is the collection point for the click and collect goods. Evidently this is a new generation omnichannel store. The gondolas were beautiful, airy and the signage was clear. The connected objects range was not as great as Darty but the store makes you want to shop and find someone to explain. Even as we left, the cashiers smiled at us. Boulanger has brought the warmth of the North of France to Paris and that is an unforgettable plus 9/10

On this visit I did not go to Lick, another specialist store for connected objects which we have covered previously in our Paris visits. The news is that Lick is extending its reach through a recent link-up with BHV to bring the flair of connected objects to this rather old-fashioned department store. I also saw the flagship Publicis store on the Champs Elysées which has introduced a connected objects offering (placed between champagne and wine on one side, and perfume on the other). I am not sure that they will get much traction from this as the selection of products was small and eclectic, but the overall conclusion is that the French are experimenting with tech retail, and for that I give Paris 10/10 – allez les bleus!

 

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How Virtual Reality can provide the perfect test-case for a retailer omnichannel strategy

The evolution of online retail has happened quickly. By the mid-1990s, shoppers were told that they could order a product in ‘just a few clicks’. Then with the smartphone revolution introducing the app, it became ‘just a few taps’. Now Amazon’s Echo can place Prime orders for you with ‘just a few words’.

The trouble is that very few retailers have had the time to evolve at the same pace of the digital world. The dots of the traditional store and online often remain unconnected.

Why a move towards ominchannel makes sense

This is where omnichannel fits in. For those not yet familiar with the term, it’s about retailers focusing on how the customer shops, and how the shopping experience is from their point of view.

The modern shopper’s path to purchase isn’t as clear-cut as it used to be, and shoppers value retailers that cater to both digital and physical. This means retailers need to think about how their customers research, try out, buy, return and talk about products.

How is an omnichannel strategy different to a multichannel strategy?

A multichannel retailer is one that has both online and physical stores. Many retailers, whether small-scale or household names, are multichannel retailers.

However, omnichannel goes far beyond the channels of how a customer can buy a product. It is about making entire process as seamless as possible, understanding that customers likely start online, visit a store, and increasingly want to click & collect to a destination of their choice. The customer now sets the terms, and retailers have to adapt. This means being much more joined up in how inventory is managed, evolving customer interaction across Web, social and email, and ultimately treating each customer in a more personal fashion.

So how does VR come into it?

Virtual Reality is one of this year’s breakout products. High-end headsets from Oculus and HTC are on the market to critical acclaim, Sony is launching one for PlayStation in October, and Samsung has a popular version called Gear VR which uses their Galaxy smartphones.

The interesting thing about this technology is that it is an entirely experiential product. Until you try it out, you just cannot understand how effective it is. And as it is so new, people are extra eager to see it for themselves.

Our latest research into VR revealed that that nearly four in five people would value a demo opportunity when deciding where to buy a headset, and over half would seek expert advice. A retailer that created a dedicated area to let shoppers experience VR could not only drive greater footfall to stores, but also increase cross-selling opportunities for other products.

This ability to offer consumers the chance to try out the tech that they’ve heard so much about—and three quarters of European consumers already know about VR—is a crucial advantage over ecommerce only stores.

VR presents a perfect opportunity for shrewd retailers to pair this immersive in-store experience with online content that shows them more about its possibilities. The riddle for retailers, as ever, will be to stop customers from using the store as merely a place to browse, and going elsewhere online to complete their purchase.

This is where an omnichannel strategy comes to the fore, by forcing retailers think about what customers value. Our research showed that post-sales support for VR is valued by almost half of those surveyed, home installation by four in ten. Additional services like these, can be combined with social engagement initiatives—such as asking customers to tweet or share Instagram pics of them using their VR kit—to keep the retailer relevant to the customer. Retailers can also promote in-store exclusives, and develop an online click and collect model that takes VR from being just another commodity product.

Developing an omnichannel strategy is difficult, and requires investment and a mind-set change for some retailers. However, not focusing on the customer experience and standing still is no longer an option. New challenger brands, unencumbered by legacy processes, are running with the idea of omnichannel already. Virtual Reality, because it sits at the intersection of digital and physical, is ideally suited for those retailers looking to evolve how they engage with customers.

by AS

 

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Filed under Retail, Retail in CONTEXT, virtual reality