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need for speed disrupting the omni-channel

PLUS 11 category-specific insights best offers to disrupt the omni-channel how to fight showrooming


With consumers embracing the omni-channel, the path to purchase is accelerating. Today’s retailers need faster ways to compete for customers who are making decisions in shorter timeframes. The key to closing more sales as deal-seeking speeds up? Limited-time dynamic discounts that create a sense of urgency.


NEED FOR SPEED

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A NEW ERA IN RETAIL

KEY FINDINGS

ONLINE V. IN-STORE

dynamic-price strategies that preserve margins

always-connected devices change shopper behavior

See the parago omni-channel index™ scores

ALSO INSIDE methodology6 categories and products

8

smartphones = showrooming

12

product research

14

by the numbers

18

disrupting the omni-channel | 3


INTRODUCTION

the need for speed in retail IN EVERY MAJOR CATEGORY, consumers are using multiple devices to research and shop faster than ever. Price sensitivity continues to be at an all-time high, which is driving the desire to find the best deals. The path to purchase has accelerated, both online and in-store. This new parago omni-channel study reveals that price, features and availability are the most important factors in purchasing decisions for products and services. Brand is still a consideration, but a limited one for most income groups. Now, a new factor is coming into play: the need for speed to close more sales. Rodney Mason CMO rodney.mason@parago.com 972.538.7336 twitter.com/rodmoose

the path-to-purchase is shorter than ever Online comparison-shopping is condensing the path-to-purchase. Across 11 different retail categories, the average purchase time is less than 2.25 days. Today’s consumers know they can research quickly to identify the best deals. This very narrow window of opportunity requires fast, nimble promotional strategies.

disrupt the path and sell more Dynamic pricing — the ability to remain competitive with real-time, best-in-market prices — is quickly becoming a necessity. But maintaining healthy margins is still a must, too. The answer? Dynamic-price™ rebates that can create urgency with limited-time deep discounts. To get additional detailed findings and key insights for your industry, contact me. Good selling! Rodney Mason 4 | need for speed


“Retailers have a lot to contend with in this new era of shopping: highly competitive prices from e-tailers like Amazon, rising smartphone adoption, the showrooming boom and incredibly price-sensitive consumers. For retailers to thrive, they need to disrupt the path-to-purchase with a dynamic, real-time pricing model. Not just online, but in brick-and-mortar stores, too.� — Rodney Mason parago CMO

disrupting the omni-channel | 5


METHODOLOGY To identify emerging omni-channel path-to-purchase shopping trends, we conducted this research during the 2013 peak holiday shopping season through an original online survey.

GENDER

51%

OWN VS. RENT

49%

66%

REGION Pacific

12%

Mountain

7%

West North Central

8%

West South Central

9%

East North Central

17%

East South Central

6%

New England

5%

Middle Atlantic

19%

South Atlantic

18%

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Over 1,900 people who represent the US consumer population responded to this survey.

34%


EDUCATION

INCOME

less than high school

3%

high school diploma some college  vocational/technical degree 

≤$19,999

16%

20%

$20,000 to $49,999

30%

28%

$50,000 to $99,999

25%

$100,000 to $199,999

20%

5%

college graduate

29%

≥$200,000

3%

graduate school

15%

prefer to not disclose

6%

MARITAL STATUS in a relationship or living with partner 13%

married 50%

widowed/divorced/separated 10%

EMPLOYMENT

never married 24%

AGE

employed full time

40%

18–29

21%

employed part time

12%

30-48

34%

unemployed

9%

49–67

35%

homemaker

9%

67+

10%

student

7%

retired

18%

disabled, not able to work

5%

disrupting the omni-channel | 7


CATEGORIES & PRODUCTS Our extensive study includes 11 retail categories and 16 specific product groups with an overview of today’s omni-channel shopping trends.

CATEGORIES

auto parts

office supplies

clothing

pet products

electronics

sporting goods

furniture

subscription services (broadband, cable, utilities)

groceries home improvement/ building supplies

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toys


The parago omni-channel index™ scores identify productspecific propensity for purchase in the omnichannel. See page 16 for scores by product.

PRODUCTS

athletic shoes

lawn & garden supplies

beer

dog food

Blu-ray DVDs

printer paper

cable packages

stand mixers

car batteries

televisions

cosmetics/ personal care

tires

jeans

video games

laundry detergent

washing machines

disrupting the omni-channel | 9


PRICE-SENSITIVITY = DEAL SEEKING a new era in retailing: the path to purchase can now be interrupted at any time

65% 4 out of 5 88%

of shoppers reported being more sensitive to price

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18- to 48-year-olds own smartphones

of consumers look for deals, rebates and best prices before shopping


2 of 5

people shop on their tablets

95%

of people shop on their computers

average time-to-purchase in 11 retail categories is

≤2.25 DAYS

99%

of people with $50,000+ incomes shop on computers

disrupting the omni-channel | 11


SMARTPHONES = BUY ONLINE IN-STORE

70%

of shoppers between 18- and 48-years-old actively showroom HIGHEST SMARTPHONE OWNERSHIP

ages 18–29 85%

ages 30–48 74%

all adults 62%

income $50,000–$99,999 63% income $100,000+ 75%

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HIGHEST SHOWROOMING ACTIVITY

ages 18–29 73%

ages 30–48 60%

all adults 48%

income $100,000–$199,999

64%

income $200,000+ 63%

HIGHEST IN-STORE SMARTPHONE PURCHASES

ages 18–29 45%

ages 30–48 40%

all adults 29%

income $50,000–$99,999 32% income $100,000–$199,999

39%

income $200,000+ 46%

disrupting the omni-channel | 13


PRODUCT RESEARCH

before shopping, people research a lot look for deals, rebates & best advertised prices

review circulars and print ads

check online for best prices

97%

94%

92%

Most shoppers’ research is completed within two days with two retailers in consideration.

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DIGITAL RULES Google, Amazon and retail websites beat all other sources for finding deals

disrupting the omni-channel | 15


OMNI-CHANNEL INDEX™

propensity to buy in the omni-channel v. in-store PRODUCT

would consider purchase in omni-channel v. in-store

TV

72%

stand mixer

72%

DVD Blu-Ray Ultra Violet

69%

video game

64%

washing machine

59%

printer paper (case)

57%

athletic shoes

52%

jeans

49%

cosmetics/personal care

41%

lawn & garden supplies

39%

tires

38%

car battery

37%

laundry detergent (100 oz.)

29%

dog food

27%

beer (case)

15%

triple-play cable package*

100% *would consider purchase in omni-channel v. provider phone bank

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OMNI-CHANNEL TRUMPS IN-STORE

Google

in-store displays

retail websites

Amazon

newspaper/magazine

TV

social media

mobile apps

preferred omni-channel comparison sources

auto parts

1

2

3

5

4

6

7

8

electronics

1

4

3

2

5

7

6

8

furniture/housewares

1

3

4

2

5

(tie)

office supplies

1

4

3

2

5

(tie)

sporting goods

1

3

2

4

5

toys

1

4

3

2

groceries

4

1

3

home improvement/building supplies

2

1

pet supplies

2

clothing subscription services

CATEGORY

6 6

6

(tie)

6

6

(tie)

(tie)

7

(tie)

7

(tie)

5

6

(tie)

(tie)

5

2

(tie)

7

(tie)

3

4

5

6

(tie)

(tie)

1

3

5

4

6

7

8

3

2

1

4

5

(tie)

2

3

1

5

4

(tie)

6

6

6 7

7

7

6

6 7

6 7

6

(tie)

(tie)

6

(tie)

7

disrupting the omni-channel | 17


BY THE NUMBERS Most shoppers’ research is completed within two days with two retailers in consideration.

days to buy

PRODUCT

stores/website visited

athletic shoes

1-2

69%

1-2

54%

beer (case)

1-2

82%

1-2

86%

car battery

1-2

79%

1-2

66%

cosmetics/personal care

1-2

82%

1-2

74%

dog food

1-2

87%

1-2

80%

DVD Blu-Ray Ultra Violet

1-2

70%

1-2

55%

jeans

1-2

76%

1-2

62%

laundry detergent (100 oz.)

1-2

88%

1-2

81%

lawn & garden supplies

1-2

73%

1-2

65%

printer paper (case)

1-2

82%

1-2

69%

stand mixer

3-6

77%

3-4

80%

tires

1-2

68%

1-2

57%

triple-play cable package

3-6

75%

1-2

50%

TV

3-6

68%

3-4

77%

video game

1-2

73%

1-2

61%

washing machine

3-6

66%

3-4

67%

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LIMITED-TIME REBATES = BEST DISRUPTION We asked what type of limited-time offer would disrupt shoppers’ paths-to-purchase and cause them to act immediately. Time-sensitive dynamic-price™ rebates were more effective than instant discounts in 11 different retail categories. Time sensitivity was included to determine propensity to buy now.

rebate

instant

neither

athletic shoes

43%

21%

35%

beer (case)

43%

22%

36%

car battery

49%

20%

31%

cosmetics/personal care

48%

22%

31%

dog food

44%

20%

36%

DVD Blu-Ray Ultra Violet

39%

21%

40%

jeans

46%

20%

34%

laundry detergent (100 oz.)

47%

24%

30%

lawn & garden supplies

48%

18%

34%

printer paper (case)

46%

20%

34%

stand mixer

39%

21%

40%

tires

43%

22%

35%

triple-play cable package

41%

24%

36%

TV

35%

24%

42%

video game

44%

24%

31%

washing machine

47%

19%

34%

PRODUCT

A portion of savings realized by retailer was included in rebate value to provide best offer. disrupting the omni-channel | 19


we create engaging solutions that inspire action & impact results We are the world’s most comprehensive, single-source provider of incentives and engagement. Many of the largest brands in the world consider parago a trusted partner. We offer:

consumer rebates & promotions

prepaid rewards & incentives

sales & channel management

IN DEPTH: To view a complete category or product path-topurchase — including media, purchase place, and other preferences — schedule a brief meeting with us. We will walk you though additional detailed findings and provide key industry opportunities.

© 2014 Parago, Inc. All rights reserved.

energy rebates & incentives

Rodney Mason CMO rodney.mason@parago.com 972.538.7336 twitter.com/rodmoose

need for speed: disrupting the omni-channel