OmniChannel Mhe Retail Index 2018 Results

¿Where are you vs your competitors in an omnichannel context and where to go?

Leading retailers concentrate their efforts in those omnichannel initiatives that, mainly through mobile, have a greater impact on costumer experience and that entail an important operational transformation in the physical store. Here lies the main challenge of the sector.

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Decathlon, leader for the second consecutive year

Decathlon, Kiabi and Ikea lead the top 10 of the multisectorial ranking. There is a strong omnichannel activity going on in 2018, highlighting that 6 of the top 10 brands that join the group of featured in this edition of 2018.
There is still room to incorporate possible new omnichannel initiatives. The most advanced score is 2/3 of the theoretical maximum possible.Top Ranking Omnichannel MHE 2018

Ikea Mobile Omnichannel MHE 2018

Advanced and Laggards

The level of omnichannel development is not linear and the digital gap between Advanced and Laggards operators is widening.
By areas, marketing is the main gateway to omnichannel and is where there is less difference between Advanced and Laggards.
On the other hand, in Store and Mobile areas, the gap between the two groups of retailers is more noticed.
Initiatives where there is a wider gap between Advanced and Laggards are: real stock visibility in store, click & collect and own app.Advance vs Laggard Omnichannel 2018Adnace vs Lggards by Area MHE

2018 vs 017 Evolution

The initiatives that retailers have incorporated the most, are those that integrate the physical store through the mobile in the customer’s journey related to payment methods, Click & collect and availability of stock.

Differences between the various Retail sectors

Leisure and Technology continues to maintain its leadership in the omnichannel field. There is a progressive convergence between sectors, highlighting the strong growth of Fashion.ranking by sector omnichannel MHE

methodology Omnichannel MHE 2018

Area and Chains Omnichannel MHE Retail Index 2018

Omnichannel is not a mere additional layer to the conventional management in Retail

The incorporation of new omnichannel initiatives makes more evident the need to transform and integrate conventional channels to achieve greater real operational efficiency, and not only additional costs for the existing business model.

Mhe works for retail chains and brands optimizing formats in an Omnichannel environment

SERVICES

International vision, consumer insights and external benchmarking

Omnichannel environment transformation

  • Customer Experience optimization
  • Assortment adaptation
  • Promotional activity optimization
  • Commercial efficiency in store operations
  • Locations strategy and POS typology

If you want to confirm where are you vs your competitors in an omnichannel context and where to go do not hesitate to contact us

More Info: carlos.dominguez@mheconsumer.com

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Retail Promotional Activity: Customizing in time, each event, each moment, each channel

Retail promotional activity analysis between July and December in Spain. PromoMap, promotional activity management optimization tool. More than 11,800 communication actions in 20 fashion retail chains in Spain analysed.

Confluence between events and seasons

Seasonal concept is replaced by the individual strength of each of the retail calendar promotions.

Strong predominance of common external events vs thematic campaigns by brand and chain

Although seasonal events are common, the attributes of each brand are reflected not in the concept of each event but in the execution in the different channels of the retail calendar.

 

Mhe Promo Map 2018 - Retail Calendar by Brand

Highlights the growing importance of Black Friday compared to other promotional events

Specially, for the strong digital communication and its materialization in aggressive actions of % Discount.

An aspirational communication opportunity is detected at the beginning of the season

Not used at the same level of aspirational communication compared to the rest of events.

Mhe Promo Map 2018 - Content Mix by Event

 

Mhe works for Retail chains and brands optimizing their promotional activity

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It is essential for the chains to find the balance between aspirational and price communications in each of the events

 

Mhe Promo Map 2018 - Content by Brand

Zara focused on aspirational content, specially strong at the beginning of the season, such as winter.
Primark with its aspirational communications adds value to the brand, 8 out of 10 messages are aspirational.

Mhe Promo Map 2018 - Retail Calendar. Events by chain- Zara

Inside Price communications, it outstands the usage of % Discount and unit selling price

Mhe Promo Map 2018 - Price Promotions Typology by ChannelHighlights the % Discount on half of the analysed price actions, being “50%” the most communicated discount and “70%” the maximum discount. Usage of unit selling price relatively upwards, highlighting its application in some players such as Primark, Decathlon and Alcampo. Low number of actions related to multipurchase, currently represents 10% of communications, highlighting its greater relevance in “back to school“ event.

 

 

Promotions with an omnichannel nature

Retail promotional activity is not channel exclusive, same promotions converge in different channels.

The store continues to have an essential role in price type communications…

… specially in the first third of the store and in communications in central fixtures, reserving the perimeter mostly for aspirational messages.

Mhe Promo Map 2018 - Content of Communications in Store

The e-Mail continues to have strength in chain’s communications

Represents 15% of the total number of communications with a similar breakdown between aspirational and price, with reatilers such as Mango where it doubles its weight amongst all the communications.

In Social Netwoks, 9 out of 10 communications have an aspirational content

Facebook has, relatively, a greater weight in price communications. There is a strong growth in the use of Instagram in communications. Primark makes the most profit from the Social Network (83% of communications are through this channel).

Mhe, retail consultancy, works with brands and chains in strategy and operations for omnichannel environment.

More info: luis.leal@mheconsumer.com

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Market Mapping is a commercial tool to improve assortment performance

Provides

  1. Price Architecture. RetailMarket-Mapping-Evolution
  2. Product Mix
  3. Assortment Range
  4. Color Architecture
  5. Visual Merchandising and Communication

Eases

  1. Objective Monitoring of Competition
  2. Validation of the Positioning and Internal Consistency
  3. Assortment Planning and Merchandise Management

Objective pricing and assortment benchmarking to check current positioning vs competitors

MORE DETAIL

Available departments

  • WomanMarket-Mapping-Price Range
  • Man
  • Child (boys/girls 3-14 years)
  • Baby (0-3 years)
  • Footwear and handbags
  • Underwear and lingerie
  • Home textile

 

 

 

 

 

More tan 60 main commercial formats analyzed in Spain with 4 waves per year, it is monitored seasonally:

  • Spring / Autumn: March and May
  • Autumn / Winter: September and November

 

 

More info: luis.leal@mheconsumer.com

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Mhe Retail Highlight. Innisfree new cosmetics retail concept in NYC

Amorepacific Group, korean natural cosmetics leader (sales over 4.500 million €) has recently opened a new retail format entering Usa Market. It is already present in Asia with over 1.600 stores it proposes an innovative and refreshing format of 150 sqm in Union Square NYC. An assortment of 900 options offers an strong specialisation on skin care and natural cosmetics with a very high degree of personalisation for each customer. Mask assortment with an entry price as low as 2 Usd provides and easy reach to the range elaborated (80% of it) with natural ingredients coming from the korean volcanic island Jeju. Innisfree

It has taken 17 years to Amorepacific, already present in USA with other brands of its portfolio, to jump into the USA with the new Innisfree store concept we have recently visited. At the same time they have started their online operations to offer a real omnichannel experience to their clients. Over 150 new products have been added to match and adapt to USA tastes and preferences. 

The store design prioritise to communicate the main differentiator Innisfree value: 80% of their products have natural ingredients for  Jeju volcanic Korean Island where the Group is implementing improvements to increase the sustainability of their activities in line with the environment.

The visual merchandising and packaging of the products facilitate that the cosmetics are used not only in the intimate bath/room of the clients but elsewhere with the practical help of  the customer hand bag.Innisfree

 

Customize a sheet mask. Observe how the store speaks to Innisfree’s commitment to sustainability.

The two-level store features a private mezzanine that houses make-up artist masterclasses, K-beauty skin care training, green living classes, and sheet mask, My Palette, and My Compact walls that allow shoppers to customize products based on their skin needs.

 

Mhe works for retail chains and brands optimizing formats in an Omnichannel environment

RETAIL STRATEGY

Loyalty programme rewards not only the purchase yuo make but also the number of packages you recycle.

 

A wide product  sample module encourages the discovery and interaction with the product assortment. 

 

 

Innisfree, with this new retail format, provides natural cosmetics sector an innovative, refreshing and easy to reach approach making a good use of interaction and personalisation with the client. It is not likely we will have to wait another 17 years till this Tiger jumps into the European continent.

 

More info: carlos.dominguez@mheconsumer.com

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Amazon Books. Physical store. Back to the future

Many successful online initiatives have been incorporated to a physical context with a traditional wooden atmosphere, excellent location, low merchandise density, and distilled assortment with the help of advanced sales analytics and customers ratings. Overall, it is a magnificent promotional tool for its PRIME service with substantial discounts in the selling price.

Traditional-Environment

Two years after the opening of its first physical bookstore, Amazon is operating with fifteen selling points in experimental phase.
We have recently visited the two establishments located in New York, the last one in 34th Street, opened only 4 months ago.
Lower in- density store compared to its sector (3.000 options vs 5.000 in regular conditions), eases the display of a more clear and effective visual merchandising. Frontal presentation of the books and the area dedicated to divide each one of the titles provides aid in the search of what you are looking for.

Mhe-valoraciones-Amazon-Books

The biggest innovation is the usage of the available online analytics to distil its huge assortment and be able to really offer the selection of more relevant books and with higher sales for the customers at the store. Among other criteria, Amazon apply the following:

  • online customers’ ratings. For example, book segmentation with a rating higher than 4,8 – over 5 – with more than 10.000 opinions
  • those books which customers have taken less than 3 days reading it completely in a mobile device, such as kindle
  • titles with higher number of reservations and pre-sales to its effective launch
  • books with higher acceptance level among online readers in the specific area where the store is located
  • cross recommendation of a book for those interested in other based on online sales analytics

Specific opinions and comments made by other digital customers are displayed individually on store shelves providing genuine help among the readers  

Mhe works for Retail chains and brands optimizing their formats in an Omnichannel environment

RETAIL STRATEGY

Prime-Offers

Books aren’t labelled individually with selling price because customers members of Prime service have succulent discounts, displayed in-store, above 25%. In practice, this duality of prices (Members / Non Prime members), converts the physical store in the best promotional machine of this service/subscription that is having so much success, and that Amazon encourages now with higher strength through monthly fees (10€) more affordable for new customer segments.

Children’s reading segment is over-dimensioned in a deliberate way to provide interaction possibilities which are not available online.

Besides books, Amazon offers in its stores an excellent display of digital reading devices, voiced personal assistants, digital services as music and tv. In short, an excellent opportunity to offer a showroom with interaction possibilities with the product and support of curated sales assistants.

Sale system is self-service with main support of digital devices and selective specialized staff maintaining in every case an environment of freedom of movement and action for store visitors.

Promotional activity is a reflection of what they have online and take advantage of the seasonality of each moment to make the product more relevant for the customer. For example; selection of titles of physical training as part of the promises and good wishes for the beginning of the year.

For purchase and payment of the products customers both the conventional ways and the Amazon own app can be used, having full integration between physical and digital channels.

In short, we can identify a fusion of digital initiatives, innovative in the world of physical bookstores, inside a wooden environment and traditional design including a little coffee area that brings into customers mind other stores of conventional chains, such as Barnes & Noble that have suffered the digital transformation in this sector.

We are facing a business model with great advances of digital integration and keeping relevant and conventional aspects of a bookstore. The fact that Amazon only has 15 stores (in two years) claims that Amazon Books will continue to evolve before proceeding to its potential expansion. It will be an authentic Back to the Future.

MHE, retail consultancy, works for brands and retail chains in strategy and operations in omnichannel environment.

More info: carlos.dominguez@mheconsumer.com

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Use the most appropriate channel for each moment and for each type of communication

Promotional activity analysis during Xmas period in Spain (between Thursday 14 to Friday 29 December 2017). More than 1,200 communication actions in 20 fashion retail chains in Spain.

Communication strategies that add value to the brand vs. communication strategies that look for sales

Primark, with a strategy of low prices, performs a greater number of aspirational communications (3 out of 4) through the different channels adding value to the brand, compared to the Hypermarkets and Kiabi environment where they place more emphasis on the communication of promotions.

Communications-Content-by-Brand

Promo Map, promotional activity management optimization tool.

Mhe works for Retail chains and brands optimizing their promotional activity

MORE DETAIL

Communications’ content is dynamic and change along the season, even along the same week

During Xmas period, only 25% of the communications had promotional content, while during Black Friday they boosted up to 60%. Even in the previous days to Xmas, promotional communication disappeared.Mhe-Promo-Map-Xmas-2018-Communications-Content-Xmas-vs-BFNavidadCarrefour miniaturaThe store remains as the main vehicle for promotional communication

Store concentrates the highest percentage of communications with promotional content (2 out of 3 in-store communications). Social Networks and Web are used by chains to generate brand image.

Communications-Content-by-Channel

Half of promotional communications are unit selling price

“Discount” type of promotion is 30% of total communications on Xmas, compared to 80% on Black Friday.

Mhe-Promo-Map-Xmas-2018-Promotions-Discount-Xmas-vs-BF

Instagram is the favourite channel for brands to communicate with their customers

Most of the content of this channel is aspirational (85%), while on Facebook, that percentage drops to 63%.Mhe-Promo-Map-Xmas-2018-Communications-by-Social-Media

Navidad Springfield

 

Mhe, retail consultancy, works with brands and chains in strategy and operations for omnichannel environment.

More info: luis.leal@mheconsumer.com

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