1.
THE FUTURE OF RETAIL: 2014
BI Intelligence

2.
IsThis How People Really LikeTo Shop?
Image: Reuters

3.
OrThis?
Images: Kim Bhasin / Business Insider

4.
Let’s Face It —The Old Retail Model Is Dying
Image: Brian Sozzi / Belus Capital Advisors

5.
Fast
Image: Nicholas Eckhart

6.
Hundreds Of Retail Stores Are Closing

7.
Because Store Sales AreTanking

8.
Holiday Quarters Have BeenTerrible For Physical Retail

9.
Where Are Shoppers Going?

10.
Online!
We Are Here

11.
“We’re in the midst of a profound
structural shift from physical to digital
retail ... it’s happening faster than I could
have imagined. ”
— Jeff Jordan, partner at
Andreessen Horowitz, January
2014

12.
E-Commerce Is Driving Nearly All Retail Growth In US

13.
1 In 20 Retail Dollars Are Already Online

14.
Mobile Is Also Gaining Fast

15.
‘New Retail’ Is Nearly EqualTo Old Guard In MarketValue

16.
Venture Capital Is Cashing In

17.
Amazon Continues GrowingVery Quickly

18.
But Other Retailers Are Also Growing Online Sales

19.
Amazon Got Started With Media Sales
Amazon Is Now ~14% Of All E-Commerce

20.
The Signs Are Clear —
E-Commerce Is Booming.
Shippers Were Overwhelmed By
The MassiveVolume Of
E-Commerce Orders Over Christmas 2013
Images, Right: Reuters

21.
TheTop Categories — Electronics, Media, Clothing

22.
Let’s Look At Some Of The Retail
Categories Individually

23.
ELECTRONICS
Image: Reuters

24.
Best Buy IsVulnerable. 85% Of Sales From Electronics.

25.
Best Buy Offline Sales Plummeted 15% LastYear
BI Intelligence Estimate

26.
All Of Best Buy’s Growth Is Online
BI Intelligence Estimate

27.
Amazon Was Once SmallerThan Best Buy. Not Anymore.
Amazon
Already
1.7X Best
Buy

28.
MEDIA
Image: Reuters

29.
Media Is StillTheTop E-Commerce Category ~$25 Billion

30.
Media Sales Are Going Digital

31.
Benefiting Apple And Amazon

32.
CLOTHING AND ACCESSORIES
Image: Reuters

33.
MoreThan 13% Of All Clothing Sales Now Occur Online

34.
J.C. Penney IsVulnerable. 83% Of Its Business Is Clothing
And Accessories.

35.
In-Store Sales At J.C. Penney Declined 10% LastYear
BI Intelligence Estimate

36.
Online Is Growing, But Overall J.C. Penney Still InThe Red
BI Intelligence Estimate

37.
Gap Has Done Better
BI Intelligence Estimates

38.
16% OfThe Gap’sTotal Retail Sales Are Now Online
BI Intelligence Estimates

39.
HOME AND FURNITURE
Image: Reuters

40.
15% Of All Furniture Sales Now Occur Online

41.
Helping FuelThe Rise Of Home Goods Online Retailers

42.
FOOD AND BEVERAGE
Image: Reuters

43.
For Groceries, Online Sales Are Still A Blip

44.
DespiteThe Early Efforts Of Amazon And Others
Image: Reuters

45.
What AboutThe
‘Everything Retailer,’ Wal-Mart?
Image: Reuters

46.
Some Perspective. Wal-Mart Is Still Much Bigger
Than Amazon.

47.
Wal-Mart’s Advantage Is Still In Physical Retail
Wal-Mart still has 4,100 stores within five
miles of two-thirds of the U.S. population —
The Wall Street Journal, October 2013

48.
Online Is Still Just 2% Of Walmart’sTotal Sales
BI Intelligence Estimates

49.
But Sales Growth Is Coming From Online
BI Intelligence Estimates

50.
And Walmart Is Investing In Social And MobileTech R&D

51.
Retail Is About Offering PeopleThe Services
And ProductsTheyWant — OnThe Devices
And MediaThey Use
Image: Amazon

52.
The Web
52% of all retail
sales areWeb-
influenced

53.
Smartphones AndTablets

54.
Especially iPhones And iPads. ~75% OfTraffic.
iPad
iPhone
Android Phone
Android Tablet
Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
Source: Monetate
Ecommerce Website Traffic By Mobile Pla orm

55.
Mobile Is Now ¼ Of All E-CommerceTraffic …
PC
Tablet
Smartphone
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
Source: Monetate
Ecommerce Website Traffic By Device

56.
0
20
40
60
80
100
120
140
160
Am
azon
eBay
W
al-M
art
Apple
Target
BestBuy
The
Hom
e
Depot
Ticketm
aster
Etsy
Low
es
(Millions)
Source: comScore
Leading Retailers' Digital Audience Popula on
By Device
Desktop Only Desktop + Mobile Mobile Only
Retailers Are Finding Huge Audiences On Mobile …

57.
… And On Social Networks

58.
What DoToday’s Customers Want?
Image: Amazon

59.
They Want Price And Convenience
Convenience
Price

60.
AndThey Want Individualized Services And Offers

61.
They WantTo BuyThings On Mobile! PayPal Does
~$30 Billion In MobileTransactions
PayPal Mobile
Braintree Mobile*
$0
$5
$10
$15
$20
$25
$30
$35
2008 2009 2010 2011 2012 2013
U.S.DollarsInBillions
*PayPal counted a small por on of Braintree's transac on volume as its own in the last 12 days of Q4 2013.
Source: PayPal
PayPal Mobile Transac on Volume
(Including Braintree 2013)
PayPal purchased Braintree in late 2013.

62.
Starbucks Payments App Does It All
Images: Starbucks AndSquare

63.
Which Is Why It Is So Successful: $1 Billion In Annual
Volume!

64.
The ShiftTo Online Retail Is Global
Image: Reuters

65.
Alibaba Drives $157 Billion In Gross MerchandiseValue

66.
China’s JD.Com Saw Sales Boom LastYear

67.
Mobile Will Account Of 15% Of Chinese E-Commerce Sales

68.
E-Commerce IsTaking Off In India,Too

69.
Henry Blodget
CEO & Editor-in-Chief
Tony Danova, Research Analyst
Marcelo Ballvé, Editorial Director
BI Intelligence is a subscription service from Business Insider
that provides in-depth insight, data, and analysis of digital industries.
More info at intelligence.businessinsider.com
Cooper Smith, Research Analyst
John Heggestuen, Research Analyst
Emily Adler, Senior Research Editor
Mark Hoelzel, Research Analyst