1 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Global Consumer they will harvest the data. So the question will be, which one will you collaborate with? Trend 5 Planet friendly is due to arrive Experiential retail is coming to life Retailers are actively experimenting with experience as their most powerful tool to win and retain customers. Social currency will be more transactional Social media has become embedded In many customers purchasing journeys. Retailers need to actively engage with theses tools as consumers increasingly use them as a primary interaction point with brands and companies. The planet friendly movement has momentum. Consumers are shopping with emotion and values as much as their wallets.4 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. T rend 01 © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.5 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 5 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Deep retail is resulting in hyper personalization. Today its possible (and even likely) that retailers know what you need before you do. Deep retail: Generally understood to be the use of profound learning about customers, to allow for retailers to develop personalized, tailored shopping experiences, products and services. Hyper- personalization: Can be summarized as the use of behavioral and real- time data to create highly contextual products, services and communications relevant to a specific individual in a particular situation. For many years, every customer with a smartphone has been a source of data. However, the new frontier in personalization will analyze emotional data, eye movements and DNA in addition to searches, purchases and views to pinpoint exactly what customers need in real time. Hyper personalization is the next step in our obsession with data. In 2019 we will see retailers tap into real time behavioral data to understand consumers on an emotional level and take analytics technologies to the next level. AI, image recognition and mood analysis provide deep and detailed understandings of consumer attitudes, reactions and patterns. 6 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Giving retailers access to more and more data, effectively gives them an intimate view into the lives of consumers like never before. All in exchange for products and experiences that better meet our needs and make the experience as personal and unique as possible. Meaningful analysis and security tools will be absolutely essential for retailers to pull this off. As the importance for deep retail (to generate hyper-personalization) continues to grow, some major players have already mastered the importance of tailoring to their customers. Function of Beauty is an American brand that offers personalized haircare. The company has a simple mission: to create hair products that are built exclusively to meet the individual hair care needs of their customers. They say “tell us what you want and need for your hair, and well individually formulate and fill a product that is as unique as you!” Founder and CEO Zahir Dossa came up with the idea for Function of Beauty while pursuing his PhD in computer science at MIT. He realized that most shampoos and conditioners are made with the same basic ingredients, with very little differentiation. Despite being marketed to solve diverse hair problems and achieve different hair goals, most hair products are pretty much the same. The company uses a short quiz to learn about users hair types and goals. The results are then pumped into an algorithm that pulls from hundreds of ingredients to create a completely unique shampoo and conditioner combination. In total, Function of Beautys algorithm offers up to 12 billion custom combinations. Customers can then choose the color of their products, have their name put on the bottle, choose their preferred scent and select the size of the bottle. Customers can purchase their hair products one off or sign up to a subscription service. 1 Note: 1: functionofbeauty/about/ Case study: Function of Beauty7 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. T rend 02 © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.8 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. 8 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Paying less for more and bragging about it has become a trend in itself. Consumers are educated on pricing strategies and are now prioritizing value. With more options and information at their disposal, consumers prefer to do their own product research. This is because consumer values now encompass a variety of attributes. Consumers now expect the price to reflect their mission: value(s), convenience and experience. The traditional path to purchase has changed and now includes extensive research. 81 percent of shoppers do online research before committing to the purchase. 89 percent of these customers begin their buying process with a search engine. 2 In just a few clicks, consumers can gauge whether they are overpaying and explore alternatives until consumers achieve their missions. 75 percent of people dont think that quality necessarily goes hand in hand with high prices. 3 The proof is in the rise of alternative brands that may not have the cache of their established competitors but come in at a lower price point or offer another unique selling point. The introduction of smartphones, which coincided with a global financial crisis, enabled consumers to become more price savvy and informed than ever before. Modern shoppers dont want to pay full price and they arent afraid to share their opinions through reviews. 36 percent of 25 to 34 year olds in the UK use review sites such as TripAdvisor and Yelp. 4 Cost transparency will continue to climb in consumer priorities in 2019. The modern shopper will only be willing to pay full price if their other missions are fulfilled. Note: 2: vividfish.co.uk/blog/89-of-customers-begin-their-buying- process-with-a-search-engine-source-fleishman-hillard 3, 4: adweek/digital/81-shoppers-conduct-online-research- making-purchase-infographic/9 | © 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Note: 5: shopsavvy 6: digitalmarketingmagazine.co.uk/digital-marketing-news John Watton, Director Digital Marketing EMEA at Adobe Systems says “Consumers have become savvier, they want, and have the ability, to get the best offers, products and price wherever they go, not just on one channel or in one store. This puts the pressure on brands to ensure customer experience is optimized for every channel.” 5 Case study: ShopSavvy ShopSavvy is an American app developed to target the price savvy customer. It allows users to scan the barcode of any product and compare all the best prices on the internet and at nearby stores. It also alerts you if the retailer follows a price matching policy. The app claims to have the largest database of retailers, products and prices in the market. ShopSavvy has now become the world's most popular shopping application with more than 100 million downloads of the technology and over 50 million product scans a month. Further to the core offering, the app allows customers to share deals with friends, set price alerts, make wish-lists, get access to exclusive deals and recommends top products in greater than 450 categories. 6