The New Face of Retail: Retail and Consumer Trends Reshaping the Landscape

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The new face of retail
Retail and consumer trends reshaping the landscape
The materials contained in this document are intended to supplement a
discussion with L.E.K. Consulting. These perspectives are confidential
and will only be meaningful to those in attendance.
L.E.K. Consulting LLC, 75 State Street, 19th Floor, Boston, MA 02109, USA
T: 617.951.9500 F: 617.951.9392 www.lek.com
©2014 L.E.K. Consulting
April 2014

CONFIDENTIAL
DRAFT
2
A number of major trends are reshaping the U.S. retail landscape
More spending among high and
low income levels as middle
class is squeezed
Hourglass
economy
1
Population is becoming older
and more ethnically diverse
Demographic
shifts
2
Information transparency and
accessibility creating empowered,
sophisticated consumers who
expect more from retailers
Uber consumers3
Digital tools and channels
have reshaped the purchase
cycle… and role of physical
stores
Omni-channel6
Paper and broad-based ad
vehicles declining, but not
dead
Decline of
traditional media
7
Balance of power has moved
to new channel segments
Channel shifts8
International markets provide
source of growth in otherwise
low growth world
International10
Brands establishing direct
consumer relationships and
building own commercial
channels (stores and e-com)
Brands going
direct to consumer
9
Consumers want specialized
brands, products, and
experiences that deliver on
specific needs
Smaller and
focused is better
4
Brands / retailers building a deeper
understanding of consumers and
tailoring product, messaging, and
experience to their specific needs
One-to-one
customer
engagement
5

CONFIDENTIAL
DRAFT
3
The rising income inequality gap is squeezing the middle class, resulting in
an “hourglass” economy
Source: U.S. Census, CBRE; L.E.K. research and analysis
Top 20%
Bottom 20%
50
100
60
0
10
20
30
40
70
80
90
Lowest quintile
Second quintile
2005 2010 20121975 1980
Highest quintile
Fourth quintile
1985 1990 1995 2000
U.S. shares of household income
(1970 – 2012)
1970
Third quintile
1
2
3
4
5
 The highest 20% of earners
accounted for more than half of the
income earned in 2013, up from 43%
in 1970
 Upper-middle class proportion of
income has declined ~2ppt since
1970, largely at the benefit of the top
quintile
 Meanwhile, the share of middle-
income households has markedly
declined
- Third quintile middle-class share
has declined 3ppt since 1970, or
20% of its relative share
 Lower-income households have
largely maintained income levels and
even increased spending power, due
in part to government assistance
(transfer payments, tax credits,
subsidy programs, etc.)
1
2
3
4 5
Macroeconomic indicators suggest these
trends are structural and unlikely to
change in the near future
Hourglass economy1

CONFIDENTIAL
DRAFT
4
The effects of the hourglass economy can be seen all around us
Source: Bloomberg, Forbes, QSRWeb.com, USDA, Financial Times, Savings.com,, Euromonitor, NRN, company websites
The new face of retailHourglass economy1
 Private label accounts for nearly 23% of unit sales in the U.S.
 Dollar General added ~650 stores in 2013 and plans to open 700 additional stores in 2014
 Deals offered by major department stores and apparel retailers increased 63% between 2009-2012,
with average discounts rising from 25% to 36% over the same period
 P&G developed dish soap Gain specifically targeting low-income brackets; the product achieved retail
value sales growth of 70% in 2012
 Fast casual restaurant traffic rose 8% in 2013, compared to a decrease of 1% and 2% for casual dining
and midscale restaurants, respectively
 The luxury market in the Americas grew ~4% p.a. from 2008-2013
 Global sales at LVMH grew ~4% in 2013
 Neiman Marcus experienced same store sales growth of ~6% in the first half of FY 2014
 Whole Foods’ 2013 profit was up ~20% YoY
 Patron Tequila has capitalized on “ultra-premiumization” to reach >2M cases/year
 BMW posted record sales of over 309K units in the U.S. in 2013, representing 10% growth over 2012

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5
Note: * Non-Hispanics only
Source: U.S. Census Bureau, L.E.K. Analysis
CAGR %
(2012-20F)
0.9
3.2
2.0
1.0
2.3
0.8340
320
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
U.S. population by ethnicity
(1980-2020F)
Millions of people
2020F20121980
Total
Demographic shifts are changing the composition of the U.S. consumer base
Demographic shifts2
180
200
160
140
120
100
80
300
320
340
280
260
220
240
40
60
20
0
U.S. population by age group
(1980-2020F)
Millions of people
Kids (3-8)
Infants (0-2)
2020F
333
2012
314
1980
227 Young Adults (18-29)
Middle Youth
(30-44)
Tweens (9-12)
Seniors (60+)
Mid-Lifers
(45-59)
Teens (13-17)
0.1
CAGR %
(2012-20F)
0.4
0.1
0.5
0.3
0.7
0.8
Total
(0.2)
(0.5)
2.9
American Indian
& Eskimo*
White*
Hispanic
Black*
Two or More
Races & Other*
Asian & NHPI*
∆ million
people
(2012-20F)
0.2
1.7
2.7
3.0
10.8
1.6
20.0
∆ million
people
(2012-20F)
0.4
(0.3)
0.1
0.8
1.1
4.0
(2.5)
15.5
19.0
81% of U.S. population growth
coming from Seniors (60+)
76% of U.S. population growth
coming from Hispanic and
Asian households

CONFIDENTIAL
DRAFT
6
Forward-looking consumer businesses are finding ways to exploit these
trends
Source: U.S. Census Bureau Consumer Expenditures Report, Euromonitor, Convenience Store News, Kurt Salmon, Latin Post, Whole Foods, L.E.K. analysis
Demographic shifts2
Aging population
Ethnic diversity
Broaden products and
engagement tactics to cater
to an older consumer base
without losing focus on the
younger demographic
Evolve traditional approaches
(product, marketing,
distribution, etc.) to access
growing ethnic consumer
segments
Channel
and location
presence
Evolve
product for
consumers
Tailored
media /
advertising
• Hispanics spend more on food than any other item and more
on apparel & services than any other consumer group
• 61% of Hispanics shop with a child or another adult, vs. 38%
of gen. pop.
• U.S. Hispanics consume more media via mobile phones &
magazines than non-Hispanics, but less on tablets & TV
• Hispanics have a different channel mix (e.g., over-index in
bodegas and dollar stores)
• 7-11 growing in Hispanic neighborhoods to compete with
bodegas
Contemporary
needs
Tailored
offerings for
seniors
Key
segments
intrinsically
advantaged
1
2
3
1
2
3
• Retailers directly targeting seniors and giving them specific
experiences / products (e.g., Amazon’s easy-to-navigate
micro-site for older consumers)
• Certain categories should see out-sized benefits due to key
themes (e.g., travel & leisure, heath & wellness, etc.)
• Today's seniors are different (e.g., live longer, are healthier)
• They’re physically active and want to look / dress / feel
younger
• They are digitally savvy

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7
Today’s consumers are highly informed and savvy, which is raising the bar
for retailers and brands to win their business
Source: L.E.K. analysis
Customers “know” the
products better…
…understand they
have a multitude of
options…
…know exactly what
each of those options
are charging…
 Ability to instantly
shop and compare
across channels /
brands
 Access to countless
sources of
information
 With online product
reviews, real
consumer
experiences matter;
it’s no longer just
about marketing
 A deeper
understanding of
products and their
attributes means
falling short on any
one attribute can be
devastating
 Visibility and
access to countless
brands / products
 Outside the confines
of the physical (e.g.,
mall and shelf), the
universe of options
is vast and
competition is much
greater
 Price transparency
has never been
greater
 Consumers are
sophisticated in
comparing price and
value
 Digital makes
everything
convenient; there’s
no longer a reason to
pay higher price
 Consumers don’t
have tolerance for
paying price
premium
Uber consumers3
…and therefore
require true
differentiation
 The product and
value proposition
must clear and
compelling
 Need to
differentiate and
eliminate choice;
consumers must
want YOUR product

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8
For example …
Source: Pew Internet & American Life Project, Google Shopper Marketing Council Insights
21
15
9
0
5
10
15
20
25
30
2010
15%
Researched a Product / Service
Online Yesterday (2004-2010)
% of Americans
20072004
Mobile is accelerating this trend
79% of smartphone owners use their device to assist with
shopping at least 1x / month; of these shoppers:
44% make price comparisons
44% find promo offers
31% find product information
31% find product availability in-store
30% find product reviews
84% use to help shop while in-store
Uber consumers3 The new face of retail

CONFIDENTIAL
DRAFT
9
Consumers have increasingly higher expectations of retailers and brandsAbilitytobuyonline,
pickupin-store
50%
71%
Abilitytoviewin-store
inventoryonlineSource: Forrester, Accenture, Oracle
Consumers expect …
73%
Onlineandin-store
pricingtobethesame
61%
Onlineandin-store
promotionstobethesame
Responsewithin
2hoursofcomplaint
onTwitter
52%
Uber consumers3 The new face of retail

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DRAFT
10
These rising consumer expectations are putting pressure on retailers to
evolve their go-to-market strategies to meet consumers’ needs
Before… Today!
Price
Selection
Convenience
Availability
Selection, Availability, Price, Convenience
Free shipping /
returns
Multi-channel shopping,
delivery, & returns
Bigger selection
Same / next day
delivery
Personalized
experiences
Uber consumers3
Impartial
recommendations
Consistent
engagement
Easy navigation
Promotions
Whatever, wherever, and whenever

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11
Brands are becoming increasingly specialized across categories … and
bigger is not always better
Source: Company websites, L.E.K. analysis
Smaller & focused
is better
4
Food & beverage
Personal care
Apparel & accessories
Other
Energy / recovery Sport performance
Healthy lifestyle
Cosmetics Health & wellness
Bath & body
Outdoor apparel Focused lifestyle
Active lifestyle
Technology
Fitness & clubs
Fast food

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12
Brands and retailers are building more robust datasets of their customers;
sophisticated data analytics can unlock substantial benefits via more
tailored strategies (experiences, messaging, assortments, offers, etc.)
Source: Experian, Company websites, L.E.K. analysis
One-to-one customer
engagement
5
Transaction
history
Behavior by
channel
Demographic
information
Stated
preferences
Sophisticated data analytics
Tailored offerings delivering enhanced value to consumers based on their specific needs
Personalized messages
perform 10x better in
terms of revenue
generated per message,
than traditional batch
and blast emails

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13
Deeper insights are enabling companies to establish stronger connections
with consumers and deliver a more compelling value proposition
Note: * As told to Advertising Age
Source: Advertising Age, MGI, ICLP, Internet Retailer, Retail Touch Points, Company websites, L.E.K. analysis
One-to-one customer
engagement
5
 Shoedazzle steers customers in the direction of the product which they would
most likely be interested in by collecting shopping preferences via a quiz prior
to giving the customer product recommendations
“… We ask them what they’re looking for next month… They tell [our client services team]
what they’re looking for and ultimately that information informs the algorithm …”
Chief Marketing Officer, Shoedazzle
 Harrah’s considers its loyalty program “the vertebrae of the company” and utilizes
customer data to personalize the guest experience before, during, and after
visits
“… We know if you like golf, chardonnay, down pillows, if you like your room close to the
elevator, which properties you visit, what games you play, and which offers you redeem …”
Former CMO, Harrah’s*
 Amazon utilizes collaborative filtering to generate add-ons and adjacent
product recommendations
- The company attributes up to 30% of sales to its recommendation engine
 Williams-Sonoma uses personalized e-mail targeting by combining shopper
history with broader demographic information on ~60 million households (e.g.,
income, home values, and number of children)
- The company cites a 10-18x better response rate of these targeted emails
 Revolve Clothing allows shoppers to build their own digital boutiques, which they
curate with assortments of their favorite products and designers from the store
- The company cites that shoppers using the interactive feature are 6x more likely to convert than
consumers that browse on the standard e-commerce site

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14
The traditional purchase path …
Awareness
Consideration
Purchase
Intent
Omni-channel6

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15
… has been dramatically changed by technology
Educate
Compare
Reflect & share
Omni-channel6
Awareness
Consideration
Purchase
Intent

CONFIDENTIAL
DRAFT
16
The lines between offline and online shopping experiences are blurring
In-store
Online
51%
Research
online and visit
store to
purchase
44%
Research
online and buy
products
online
17%
Visit a store
first, and then
purchase
online
32%
Research
online, visit
store to view
product, then
return online
to purchase
Source: Google Think Insights
The new face of retailOmni-channel6

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17
Some examples of the way consumers are engaging outside the store …
52% of shoppers share retail-related
posts via social media, of which:
• 51% post pictures of items they’re
interested in
• 37% post items they’ve purchased
• 29% post about coupons / sales
65% of tablet device
owners used their
device for shopping
activities in Q3 2013
Blogs are most likely
to influence a
purchase after retail /
brand sites; they rank
favorably for trust,
popularity &
influence
Source: Nielson, JiWIre, Shop.org, Business Insider

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DRAFT
18
Retailers are experiencing a significant channel shift as consumers
increasingly utilize e-commerce in lieu of stores
*Note: 2011 is the most recent year with annual figures; analysis excludes Building materials and supplies stores, Health and personal care stores, and
General merchandise stores because of data limitations, and Nonstore retailers and Gas Stations because of relevance
Source: U.S. Department of Commerce, L.E.K. analysis
Store-based retail sales
are not growing; virtually
all growth in consumer
spend is being captured
by e-commerce
Omni-channel6
7
2
4
5
7
8
9
18
22
0
2
4
6
8
10
12
14
16
18
20
22
U.S. online sales as percent of total
retail sales* by product category (2013E)
Percentage
Computerand
electronics
Appareland
accessories
Books,music,video
Auto&parts
Furnitureandhome
furnishings
Healthandpersonal
care
Toysandhobby
Foodandbeverage
Total
82,046
133
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
In-store E-commerce
Change in U.S. retail sales, 2006 – 2011*
$M

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19
*Note: Traffic data is collected from 60,000 traffic-tracking devices installed at malls and large retailers
Source: Wall Street Journal, ShopperTrak, L.E.K. research and analysis
18
21
25
34
0
5
10
15
20
25
30
35
40
2013201220112010
Total mall and large retailer foot traffic for
November and December 2010-2013 (ShopperTrak)
Billions of Visits*
-20%
The widely cited fall in mall traffic is the most visible sign of the rapid
change that retailers are facing
Omni-channel6
• Fewer store visits and transactions
• Non-destination categories (e.g., impulse,
add-on purchases) particularly at risk
• Stores are playing new roles
 Traffic to U.S. retailers is declining, in large
part due to a shift to digital tools and
e-commerce
- There is a lesser need to go to stores given
other options for research and purchase
 Shoppers also aren’t using physical stores to
browse as much anymore
- Shoppers visited an average of
5 stores per mall trip in 2007, vs.
3 stores in 2013
 These trends continue to prevail and should
drive even further e-commerce penetration

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20
To win business in this new multi-channel environment, companies must
define what ‘omni-channel’ means for them and make investments to enable
this
Omni-channel6
Channel strategy
Single view of
the customer
Organizational
alignment
Fulfillment /
logistics
Marketing Merchandising
Increased:
Traffic
Engagement
Sales
Loyalty
Seamless,
holistic
customer
experience
Omnichannel
interactions
Foundational
enablers
1 2 3
4 5 6

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21
We believe that developing an omni-channel strategy is best done by
considering the needs across the full consumer lifecycle
Learn
Research
Purchase
Support
Share
Consumer engagement lifecycle
Product
Whatever
Whenever
However
Channels
Marketing
and tools
Increase
awareness
Share and socialize
Expand community
Drive
consideration
and selection
Post-purchase
support
Facilitate the purchase process
Source: Company websites; FierceRetail; BusinessInsider

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22
Engagement with traditional media continues to decline…
Decline of traditional
media
7
Source: Editor and Publisher Yearbook, Alliance for Audited Media, Nielsen Media Research
4343
49
52
54
0
5
10
15
20
25
30
35
40
45
50
55
U.S. weekday newspaper circulation
(2004-12)
Millions of subscriptions
121008062004
-8
-9
-8
-9
-11
-15
-10
-5
0
5
10
15
U.S. magazine single-copy sales
(2008-12)
Percent change in sales
121110092008
0
1
2
3
4
5
6
7
8
9
10
12100806
U.S. broadcast television ratings
(2004-12)
Average rating per night
2004
CBS
ABC
NBC

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23
… however, the growth of digital provides retailers with increasing
opportunities and formats to engage with consumers
media
7
0
5
10
15
20
25
30
35
40
45
50
20122011201020092008200720062005
U.S. advertising revenue by media (2005 – 2012)
Billions of dollars
Newspaper
Internet
Radio
Cable television
Broadcast television
Note: * “Social media advertising” encompasses all money spent on ad formats across social networks, including both display and native advertising
Source: Pew Research Center, IAB, PWC, BIA / Kelsey
CAGR %
(2005-2012)
(1.1)
16.8
3.7
(12.1)
(2.7)
0.0Total
Marketers are still
spending the same amount
on advertising, but through
different media
11
10
8
7
6
5
0
2
4
6
8
10
12
14
16
U.S. social media advertising growth (2012-17F)*
YoY percent growth
17161514132012
Social media
advertising is projected
to grow at a CAGR of
~19% through 2017

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24
Retailers and brands are working hard to effectively realign their marketing
strategies in this environment
Marketing objectives
Reactivate lapsed customers
Build awareness
Engage / retain customers
Acquire new customers
Stimulate purchases
Marketing tools
media
7
How do you
effectively deploy
these tools?

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25
The balance of power within the retail channel has also evolved dramatically
Note: 1Excludes food, motor vehicle and parts dealers, and gasoline stations; 2Includes H&M, Inditex and American Apparel; 3IIncludes TJX, Ross Stores & Stein Mart;
4Includes mass merchants (e.g., Wal-Mart); 5Includes Dick’s Sporting Goods, Staples, Office Depot, Barnes & Nobles, PETCO, PetSmart, Toys R Us, Best Buy, Circuit City,
Bed, Bath & Beyond, Guitar Center, Linens and Things & Borders
Source: U.S. Department of Commerce, WSJ; TJX Investor Information; International Council of Shopping Centers; ICSC; L.E.K. analysis
Change in U.S. Retail Sales by Select Channels (2003-2013) 1
CAGR % Total Retail Sales 1 : 4.0%
-2.0
2.6
3.1
3.7
5.1
5.4
6.9
7.1
11.7
-12 -8 -4 0 4 8 12
Department Stores
Grocery
Big box specialty5
Off-Price Retail3
Fast Fashion2
Outlet Stores
Drug Stores
Dollar Stores
Mass Merchants & Clubs4
• Growth supported by the entry of international retailers such as Zara,
H&M and Uniqlo
• U.S. sales at Zara more than tripled between 2007-12 and Uniqlo plans
to expand its store count from ~20 currently to 200 by 2020
• Costco grew from ~430 to ~650 locations from 2003-13
• Walmart and Target successful in expanding geographically and driving
traffic with super-center format
• ~4,300 and ~2,800 stores added at Dollar General and Family Dollar,
respectively, since 2003
• Growing market share by substantially expanding food & consumables
offer, growing private label, and building destination categories
• Subject to industry consolidation (e.g., Eckerd, Duane Reade)
• Faced challenges in some categories (e.g. photography) which the
category has sought to counter by placing more focus on grocery type
items & increasingly fresh food
• Competing with warehouse clubs and supercenters at the lower end
• Premium / specialty segment (e.g., Whole Foods) seeing continued
growth
• More brands going direct with own stores and online
• May/Federated merger resulted in net store closings
• Many regional department stores have declared bankruptcy (e.g.,
Hacketts, Loehmann’s & Mervyn’s)
• Model which delivers treasure hunt for top brands at great value has
driven consistent growth, even through tough market conditions
• TJX added ~650 stores between 2003 and 2013 and plans to add ~100
new locations across the U.S. in 2014
• Outlet center openings have grown from ~2 per year in 2008 to ~8 per
year in 2011
• Center owners have relaxed or abandoned former radius restrictions
• Channel has struggled to compete on the basis of breadth of product
range since the emergence of online retailers such as Amazon
• Littered with bankruptcies, e.g., Barnes & Noble, Linens and Things,
Circuit City. Many others facing major challenges
Channel shifts8

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26
Brands are increasingly going directly to the consumer
Brands going direct
to consumer
9
 Forgoing the traditional
wholesale route of selling through
multi-brand retailers
Many brands are…
 Increasingly making websites
more commercial and marketing /
selling directly to consumers
 Relying on Amazon’s Marketplace
to increase awareness and tap into
Amazon’s ~85 million unique
monthly visitors
 Building direct consumer
relationships and engagement via
social media, community outreach,
content, and value-add services
 Opening outlet stores to convey
full brand representation and drive
incremental sales of full-price and
liquidation goods
Significant incentives for brands to go direct include: higher margin capture, controlling
customer relationship, and compensating for weaker points of physical wholesale distribution

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27
Source: SEC filings, MarketWatch, Company websites, Forbes, Seattle Times, Reuters, Business Week, L.E.K. analysis
Brands across categories are pursuing global strategies to capitalize on
macroeconomic tailwinds
Geographic distribution of sales (Percent of 2012 sales)
Retailer N. America Europe Asia ROW
68% 5% 8% 19%
48% 11% 38% 3%
64% 22% 14% -
42% 25% 16% 17%
70% 20% 10%
40% 13% 7% 40%
32% 39% 29%
EXTRA! EXTRA!
“Walmart to invest more in Mexico this year”
“Tiffany & Co is embarking on major
expansion plans, bringing its ubiquitous
name to new areas, including India”
“Ralph Lauren reaches worldwide audience with
its Olympic made-in-America designs”
“Going forward, market penetration in
China and e-commerce growth look to be
two of the biggest contributing growth
factors for Nike”
“This Bud’s for you, Brazil – AB InBev to
introduce Budweiser as a premium brand
in Latin America’s largest nation”
International10

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28
Retailers are increasingly expanding to emerging economies in Asia, Africa
and Latin America as the middle class in these geographies grows
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Size of worldwide middle class* population (2009-30F)
Millions
North America ~(2)
Europe ~1
Middle East & N. Africa ~49
Sub-Saharan Africa ~83
Asia Pacific ~148
Central & S. America ~31
30F
~4,900
20F
~3,200
2009
~1,800
CAGR%
(2009-30F)
Note: * Defined by Brookings Institution as households with daily expenditures between US$10-US$100 / person in purchasing power parity terms; North
America includes U.S. and Canada only; Europe includes the EU5, Russia, Scandinavian countries as well as Eastern European countries; Asia
Pacific includes China, India, other Asian countries as well as Oceania ; ** India 2012 data extrapolated
Source: Brookings Institution, L.E.K. analysis
Europe & North
America’s combined
share falls from 54% to
20% of the total middle
class population
International10

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29
So, what are the implications?

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30
In light of these trends, retailers and brands should consider the following:
 Challenge the status quo and ask yourself, “Are we really delivering a compelling value proposition
to the customer?”
 Consider how you can position brands against distinct consumer segments and their needs to
separate yourself from the competition
 Embrace the hourglass economy and look to exploit opportunities at the top or bottom – don’t get
caught in the middle
 Find ways to activate key customer groups to take advantage of shifting income, age, and ethnicity
demographics, as well as changing consumer expectations
 Define what omni-channel means for you, and build a pragmatic plan to get there
 Holistically embrace digital and rethink the go-to-market channel plan, including the role of stores,
channel mix, links between digital and traditional stores, and the appropriate media mix to drive traffic
and customer acquisition / loyalty
 Build one-to-one relationships with your consumers and ‘own’ your brand engagement plan with them
 Refine pricing and promotion frameworks to maximize total margin dollars and profitability
 Evolve the organizational structure and capabilities to meet the realities of today’s business model
 Determine whether international is an opportunity for you and, if so, start planning now
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Potential keys for success
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CONFIDENTIAL
DRAFT
31
 Do we have the right brand / product mix to compete
in today’s market?
 Do we have a robust consumer segmentation that
helps drive corporate strategy?
 Are we micro-targeting consumers? Do we even
have the capability to?
 How does our loyalty program differentiate in an
increasingly crowded space?
 Does our channel plan embrace technological
changes and the role of digital? Is our store strategy
aligned to demand and role shifts?
 Do we have the capabilities, org structure,
infrastructure, and incentives in place to win and
support growth objectives?
 How can we preserve profitability without losing
share in an increasingly price-transparent
environment?
 Are there activities 'on the edge' of our core business
that could drive differentiation, revenue and / or
customer satisfaction?
 Do we have an actionable plan to grow international?
Companies are asking themselves a number of key questions, and taking
action to evolve their businesses to win in this new market landscape
Key questions to ask Potential areas to focus
 Strategic customer segmentation and
prioritization
 One-to-one customer relationship management
 Next-generation loyalty program
 Market-based store network, role and footprint
plan
 Pricing and promotion optimization by
objective, market, brand, etc.
 Omni-channel definition and plan with clear
priorities and timeline
 In-store customer service best practices and
training to deliver value to customer and
increase conversion
 Org structure and capabilities evolution
 “Edge” strategy (e.g., adjacent categories,
services)
 International expansion (e.g., market selection,
go-to-market planning, business optimization /
distributor management, implementation)

The New Face of Retail: Retail and Consumer Trends Reshaping the Landscape

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