Michelle Beeson, Analyst Webinar Introducing The New Retail Segmentation: Making Sense Of Emerging Patterns Of MultiTouchpoint Shopping Michelle Beeson, Analyst May 1, 2014. Call in at 10:55 a.m. Eastern time

Agenda Introducing Forrester’s retail segmentation Definitions Methodology Emerging patterns of multitouchpoint shopping across markets Researchers and Holdouts Traditional Web Shoppers Mobile Shoppers and Super-Shoppers Key takeaways

Traditionally we would think of people going online from their laptops or desktop computers Image source: http://www.deviantart.com/art/lia-and-laptop-41561288

Increasing number of devices and touchpoints available to consumers 4 Source: September 26, 2012, “The Always Addressable Customer” Forrester report

Introducing Forrester’s Retail Segmentation By 2017, there will be 2.34 billion smartphones in the world. Source: February 11, 2013, “Forrester Research World Smartphone Adoption Forecast, 2012 To 2017 (Global)” Forrester report

By 2018, nearly half of EU-7 eCommerce sales will take place on tablets and mobile phones. Source: December 4, 2013, “Forrester Research Mobile And Tablet Commerce Forecast, 2013 To 2018 (EU-7)” Forrester report

Digital touchpoints and devices play a key role in influencing purchase decisions, even if the financial transaction is then offline.

And what will be the next digital touchpoint to enable along the customer journey?

Engaging the perpetually connected consumer across touchpoints Source: March 26, 2013, “Manage The Cross-Touchpoint Customer Journey” Forrester report

Introducing Forrester’s retail segmentation Segment definitions and methodology

Forrester’s new retail segmentation Is global and compares shopping behavior across markets, Recognizes a continuum of shopping behavior, identifying dominant behaviors Identifies increasingly sophisticated multitouchpoint shopping behavior                           

Forrester’s global retail segmentation framework Super Shoppers Regularly buy online through traditional devices and also mobile or portable devices Mobile Shoppers Regularly buy online using only mobile devices including feature phones, smartphones and tablets Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop Researchers Regularly research online but do not yet regularly buy online through any devices Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Forrester’s global retail segmentation framework Super Shoppers Regularly buy online through traditional devices and also mobile or portable devices Mobile Shoppers Regularly buy online using only mobile devices including feature phones, smartphones and tablets Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop Researchers Regularly research online, but do not yet regularly buy online through any devices. Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Forrester’s global retail segmentation framework Super Shoppers Regularly buy online through traditional devices and also mobile or portable devices Mobile Shoppers Regularly buy online using only mobile devices including feature phones, smartphones and tablets Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop. Researchers Regularly research online, but do not yet regularly buy online through any devices. Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Forrester’s global retail segmentation framework Super Shoppers Regularly buy online through traditional devices and also mobile or portable devices Mobile Shoppers Regularly buy online using only mobile devices, including feature phones, smartphones, and tablets. Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop. Researchers Regularly research online, but do not yet regularly buy online through any devices. Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Forrester’s global retail segmentation framework Super- Shoppers Regularly buy online through traditional devices, and also through mobile or portable devices. Mobile Shoppers Regularly buy online using only mobile devices, including feature phones, smartphones, and tablets. Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop. Researchers Regularly research online, but do not yet regularly buy online through any devices. Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Forrester’s global retail segmentation framework Super- Shoppers Regularly buy online through traditional devices, and also through mobile or portable devices. Regularly buy through digital touchpoint(s) Mobile Shoppers Regularly buy online using only mobile devices, including feature phones, smartphones, and tablets. Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop. Researchers Regularly research online, but do not yet regularly buy online through any devices. Do not regularly buy through digital Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Globally, shoppers turn to very different touchpoints to shop online Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Europeans use digital touchpoints to shop, yet still the majority do not buy online 45% regularly buy through digital touchpoint(s) 55% Do not regularly buy through digital touchpoint(s) Base: 17,522 EU-7 online adults (18+) (percentages may not total 100 because of rounding); Source: European Technographics® Online Benchmark Survey, 2013

Emerging patterns of multitouchpoint shopping Researchers and Holdouts

Researchers and Holdouts Super- Shoppers Regularly buy online through traditional devices, and also through mobile or portable devices. Mobile Shoppers Regularly buy online using only mobile devices, including feature phones, smartphones, and tablets. Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop. Researchers Regularly research online, but do not yet regularly buy online through any devices. Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Trust in delivery services, security of financial details online and seeing a product in person are road blocks to online purchase.

Sweden and France have the greatest proportion of consumers who do not regularly buy digitally Do not regularly buy through digital touchpoint(s) Base: 17,522 EU-7 online adults (18+) (percentages may not total 100 because of rounding); Source: European Technographics® Online Benchmark Survey, 2013

Swedish department store chain Åhléns has no eCommerce function on its website Source: April 8, 2014, “European Retail Segmentation: Emerging Patterns Of Multitouchpoint Shopping” Forrester report

French online retailer Spartoo uses payment alternatives bypass the need to share financial details Source: April 8, 2014, “European Retail Segmentation: Emerging Patterns Of Multitouchpoint Shopping” Forrester report

Italian online retailer ePrice provides a delivery and payment alternative through its pick & pay service. Source: ePrice (http://www.eprice.it/p/pick-and-pay)

Emerging patterns of multitouchpoint shopping Traditional Web Shoppers

Traditional Web Shoppers Super- Shoppers Regularly buy online through traditional devices, and also through mobile or portable devices. Mobile Shoppers Regularly buy online using only mobile devices, including feature phones, smartphones, and tablets. Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop. Researchers Regularly research online, but do not yet regularly buy online through any devices. Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Web shopping is mainstream across Europe In the UK, 53% regularly buy through digital touchpoint(s) Base: 17,522 EU-7 online adults (18+) (percentages may not total 100 because of rounding); Source: European Technographics® Online Benchmark Survey, 2013

Web sales will continue to grow in Europe € million Source: March 25, 2013, “Forrester Research Online Retail Forecast, 2012 To 2017 (Western Europe)” Forrester report

UK fashion retailer Next increases convenience and immediacy for online orders by providing next-day collect-in-store for online orders. Source: Next (http://www.next.co.uk/)

Dutch online retailer Wehkamp deploys a range of techniques, using analytics and customer insight to constantly fine-tune its web presence and drive relevant shopping experiences Source: Wehkamp (http://www.wehkamp.nl/)

Emerging patterns of multitouchpoint shopping Mobile Shoppers and Super-Shoppers

Mobile Shoppers and Super-Shoppers Regularly buy online through traditional devices, and also through mobile or portable devices. Mobile Shoppers Regularly buy online using only mobile devices, including feature phones, smartphones, and tablets. Traditional Web Shoppers Regularly buy online through “traditional” devices — browser-based desktop or laptop. Researchers Regularly research online, but do not yet regularly buy online through any devices. Holdouts Don’t regularly research or buy online through any devices. Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

By 2015, Shop Direct, an online retail group in the UK, expects every transaction to involve a mobile device at some point in the customer journey.

Italy and Spain leapfrog traditional web shopping to become Super-Shoppers Base: 17,522 EU-7 online adults (18+) (percentages may not total 100 because of rounding); Source: European Technographics® Online Benchmark Survey, 2013

Daily deals attract super shoppers in Italy Daily deals attract super shoppers in Italy. SaldiPrivati’s mobile app provides sales alerts to take advantage of daily deals no matter the location Source: http://www.saldiprivati.com/MySaldiPrivati/Sales/ListSales.aspx?tag=DONNA&tagname=DONNA

Over a three-month period, 24% of Spanish mobile phone users used their phones to research a product, which was the highest proportion of any European market. Source: European Technographics® Retail Survey, 2013

Zara’s smartphone app supports multiple stages of the customer journey Source: April 8, 2014, “European Retail Segmentation: Emerging Patterns Of Multitouchpoint Shopping” Forrester report

Key takeaways

Understand your end-to-end customer journey Source: January 29, 2014, “Introducing The Global Retail Segmentation” Forrester report

Support seamless transitions between touchpoints customer choose to use.

Mobile is the glue.

Remember the influence of digital on the overall shopping experience Source: March 26, 2013, “Manage The Cross-Touchpoint Customer Journey” Forrester report

How can Forrester help? Selected Forrester Research April 8, 2014, “European Retail Segmentation: Emerging Patterns Of Multitouchpoint Shopping January 29, 2014, “Introducing The Global Retail Segmentation” Data The Retail Segmentation framework is embedded in Forrester's global Technographics® benchmark surveys and is available in more detail on a country- by-country basis to Technographics customers.

Michelle Beeson +44 (0)20.7323.7677 mbeeson@forrester.com http://blogs.forrester.com/michelle_beeson @MbeesonBeeson