Hagen Presentation English

Retail Trends and Visual Merchandising
Presented By: Dalan Bronson Principal & Senior Consultant
Retail Trends
The Changing World Demographic changes Aging population Changing family make-up Ethnic trends Time pressures Changing shopping habits Consumer attitude adjustment
Demographics
Demographics
Changing Population Changing Households
Demographics Ethnic Diversity Income Polarization
Canadas Population is Shifting to Older Age Cohorts

Canadian Population by Age Group (% of Total) 100% 80% 60% 40% 20% 0% 2001 2006 2016
CAGR 0116 55+ 3554 2534 204 519 <5 3% 0% 1% 1% -1% 0%
Baby Boomers
Generation Y
American Population is Also Ageing

American Population by Age Group (% of Total) 100% 80% 60% 40% 20% 0% 2001 2005 2015
CAGR 0115 55+ 3554 12.8% -1.0% +3.6% +4.5% +0.8% +3.8%
Baby Boomers
Generation Y
2534 2024 519 <5
Spending Implications of Changes in the Canadian Population

1,400,000 1,100,000 800,000 500,000 200,000 -100,000 -400,000
Net Population Change 20012011

Career Spending Teen Wear
348,100
Early Retirees
1,412,600
Older Retirees
910,800
Replacement Spending
167,100
0 to 9 9
-360,300
10 to 19
-119,000
20 to 34
35 to 54
55 to 64
65+
Proportion of the American Population Over 50

34% 32% 30% 28% 26% 24% 22% 20% 1970 1975 1980 1985 1990 1995 2000 2005 2010
32.4%
24.4%
Chicos
For the Ageing Boomer
Shifting Family Demographics

5% 14% 19%
57% No earners One earner, wife Other earner types
5% One earner, husband Dual-earner
Only 19 percent of married-couple families fit the traditional model of a stay-at-home mother and breadwinner father.
More Women in the Workforce

But Have Their Needs Been Met?
80% 70% 60% 50% 40% 30% 20% 10% 0% 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
75.2%
36.7%
Exploding Ethnic Population

Percent of the U.S. Population
40% 35% 30% 25% 20% 15% 10% 5% 0%
1980 1985 1990 1995 2000 2005 2010
31.3 26.5 24.2 19.7 21.5 29.1
33.5
Hispanic Asian Black
Canada has a Growing Asian Population

450,000 400,000 Chinese Population 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Toronto Vancouver Montreal Canadian Cities Calgary Edmonton 52,110 51,855 41,290 409,535
Chinese Population by City

345,665
20% 18% 16%
Chinese Population Chinese population as a % of total population
14% 12% 10% 8% 6% 4% 2% 0%
What will the implications be for packaging and promotion languages, sizing, and style trends?
T&T Supermarkets
Clean, well-lit stores and prepared foods bring North American convenience to T&Ts broad array of Asian grocery items.
Chinese Population as a % of the Cities' Total Population
Income Polarization
$140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 1970 1975 1980 1985 1990 1995 2000 2005 Top Fifth Fourth Fifth Third Fifth Second Fifth Lowest Fifth
Long term economic trends have created a growing spread between the haves and have-nots in both Canada and the U.S.
Consumer Behaviour
Consumer Behaviour
Five Big Trends
Time Compressed
Shifting Priorities
Customer Control
Health and Wellness
Market Polarization
The Value Paradox
Consumers are Wealthier
Value is More Important
Trading Up & Trading Down
Tale of the Tape

90 80 70 60 Share of Sales 50 40 30 20 10 0 87 89 91 93
Discount Vs. Department Stores
95
97
99
2001 2003
2004 2005
Department Stores
Discount Stores
10
Dollar Stores
80% 70% Household penetration 60% 50% 40% 30% 20% 10% 0% < $20,000 $20,000$29,999 $30,000$39,999 $40,000$49,999 $50,000$69,999 $70,000+ 74% 77% 71% 74% 67% 71% 64% 66% 58% 2002 61% 2003
45%
49%
Household income
Higher-income households are the fastest growing segment of dollar-store shoppers. Households at all income levels are increasingly visiting dollar stores.
Time is the New Commodity

Want more time than money Struggling to juggle work and family Feel hassled to shop Shopping less often Have less leisure time 44% 50% 50% 52% 60%
Consumers are deprived of time. Retailers offering tailored and convenient shopping experiences will satisfy shoppers.
11
Sobeys Express
Urban Sobeys Express locations cater to time starved consumers with an extensive array of prepared foods.
Harrods 102
Harrods up-market convenience store targets affluent professionals with its in-store pharmacy, prepared gourmet food, and concierge service.
12
Having Satisfied Our Basic Needs, Consumer Priorities are Shifting
Goods
Services
Mass Products
Individualisation
Having Satisfied Our Basic Needs, Consumer Priorities are Shifting
Items
Solutions
Products
Experiences
13
Goods
Services
Over 80% of women prefer to do something for themselves rather than buy something for themselves.
Products
Experiences
Torontos GotStyle menswear store pulsates to live DJ music and offers women accompanying their boyfriends champagne while they judge potential outfits.
14
Shopper Expectations
LOW
Importance of Price
Entertainment Experience Value Added Information Commodity Transaction
HIGH
The challenge for retailers is managing the shift upwards.
Experience and the Price of Coffee
$$$
Commodity
Service
Experience
15
The Starbucks Experience
Id like a triple shot, double cupped, no sleeve, extra dry, no whip, sugar-free, Lactaid, vanilla latte with legs
Indulgence
Godiva
The Cupcake Shoppe
sen5es Bakery
16
Build-A-Bear Workshop
Experience Based
17
Personalised and Customised
Wellness
Vitamin Water
Tesco Organic
PC Blue Menu
18
Wellness Mega Trends

Weight Loss Anti-Ageing Holistic Vitality
Male Beauty
Healthy Rejuvenation
Organics
Whole Foods
Whole Foods, Whole People, Whole Planet
19
Technology
TiVo
Roomba
iPhone
The Internet is Changing How We Shop

90 80 70 60 50 40 30 20 10 0
Percentage of Households
Own PC Use Internet as Resource Buy Online (last 3 mos) Broadband Access
96
97
98
99
00
01
02
03
04
19
20
19
19
19
20
20
20
20
20
05
20
Retail Technology
RFID
Self Check-Out
Chip & PIN
Cross Channel Influence Is Significant

Store Percent of Customers who Purchased Something Previously Catalogue Seen in Another Channel
Visit
Buy
26% 26%
Buy
Visit
25% 22% Base: Visited stores Visited Website Received catalogue
39% 68% Online Example: 68% of all online customers who received a catalogue, first shopped the catalogue then bought online
21
Internet to Influence Nearly Half of U.S. Retail Sales in 2010

$1,250 $1,000 $750 23% 27% 33% 37% 41% 45% 50%
Percent of Sales
30%
30%
Sales
$500 $250 $0 2004 2005 2006 2007 2008 2009 2010
10%
-10%
Online retail sales Percentage of total retail sales
Online-influenced retail sales
Implications
22
Retail is Getting Tougher

Retail Space per Capita
20.5
Retail Sales per Square Foot

$260
7.9
$202
1972
2000
1970
2001
Retailers Under Pressure to Respond

Retail Life Cycle
Home Improvement Lifestyle Retailers Teen Specialty Retailers Supercenters Quick Casua l Rest. Hard Discount Dollar Stores Hypermarkets Office Superstores Supermarkets Fast Food C-Stores Wholesale Clubs Discount Stores
Drug Stores
Sales & Profit Growth
Traditional Furniture Gen. Stores Merch Department . Stores Music Retailers Toy Superstores
Personalization/ Customization Home Delivery
Variety Stores
E-commerce
Digital Download Automated Shopping
Emerging
Growth
Maturity
Decline
23
New Compressed Lifecycle

Emerging Growth Maturity Decline
02
210 Years
1015
15+
Retail Innovation
Business Model
Technology
Format
Innovation
Experience
24
Retail has Changed Forever

Consumers Want Convenience
24 Hour Stores
Automated Grocery Stores
Home Delivery
Shoppers have more control over where, when and how products and services are purchased than ever before.
Put Stores Where I Live, Work and Play.
Home Depots Manhattan location brings convenience to the heart of the city by delivering product directly to shoppers from its New Jersey warehouse.
25
Regional Focus
Neighbourhood Market
26
Neighbourhood Market
Fresh at Last
Give Me an Experience
Rainforest Caf provides a wild dining experience.
27
Pike Place Market is renowned for its airborne fish.
Dinner in the Sky takes the average dining experience to new heights.
28
LuLu Lemon
PR Event
Organise Around my Needs

Best Buys Barry Concept
29

Best Buys Jill Concept

Best Buys Ray Concept
30
Differentiating Stores Elements and Visual Merchandising
31
Retail Has Changed Forever
Everything Matters
But Consumers Matter Most
32
Parting Thoughts
When you come to a fork in the road, take it. "You can observe a lot by watching. "The future ain't what it used to be.
Coffee Break
33
Visual Merchandising Trends and Techniques
Presented By: Dalan Bronson Principal & Senior Consultant
Discount Department & Superstores
34
Wal-Mart Supercentre
Neat, Clean, Tidy Easy to shop and understand.
No problem navigating this store
35
Compelling? Colour blocked, well signed, fresh.
Get everything under one roof... Good use of support collateral to educate the consumer.
36
Target
Highly successful discount department store but visual presentation is very important.
Target
Same store? Dramatic end-cap showing unbeatable pricing and value.
37
Target
Lifestyle presentation of product to show the customer how it will look in-home.
Target
Emphasis on price and value throughout the store with extensive use of visuals.
38
Target
Movies for $14.44. cant miss the message.
Target
Use of visual collateral to create some excitement in an otherwise dull environment.
39
Target
Customer buying aids Helping the customer to make a buying decision.
Real Canadian Superstore
Beauty Products in a Supermarket Visual presentation is flawless.
40
A powerful presentation of frozen seafood. Compelling and easy to shop.
Mass presentation Stimulating and well priced.
41
Shoppers Drug Mart
Food in a drug store.serving the convenience needs of customers.
Shoppers Drug Mart
Same store.offering Cosmetics presented in a more upscale environment.
42
Costco
Another retail format.with a concise consumer proposition, extremely well executed visually. Clear product statements.
Food Stores
43
Whole Foods
An Organic Food Store What an experience! Color blocked vegetables.
Whole Foods
High visual impact with colour
44
Whole Foods
Dominant product statement
Whole Foods
Hot Food Bar as part of the experience.
45
Whole Foods
The best cheese assortment in town.
Whole Foods
Linens in a food storecategory blurring.
46
Urban Fare
The place to go for candy.Power Wall.
Urban Fare
Mundane product presented in mass tells a story.
47
Urban Fare
No better place to go for water.
Ikeafood
Simple to understand.well organized, vertically presented for impact and ease of shopping.
48
Marks & Spencer Simply Food
Great name.simple and easy to shop.
Food Emporium
Mass displays compelling the customer to buy.
49
H-E-B
A food experience catering to Hispanics.
H-E-B
Inviting presentation, well signed and easy to shop the store.
50
H-E-B
No difficulty understanding what this is. pre-packaged dinners.
Category Killers
51
The Great Indoors
Everything for indoors presented in a Lifestyle theme.
The Great Indoors
Ambiance abound.lighting, decorator colours, but functional.
52
The Great Indoors
The best assortment anywhere for bath fixtures.
Office Depot
Product Solutions. a clear offering for the customer.
53
Office Depot
Very organized, well signed and easy for the customer to shop.
Best Buy
Technical product, with many confusing features. Best Buy simplifies the experience.
54
Home Depot
Lifestyle presentation at Home Depot.. enticing the customer to buy.
Concept Stores
55
JCPenney Pop Up Store
Exciting and temporaryPop Up Stores.
Fashion inspired with powerful visual collateral.
56
Enticed to walk in?
WaMu Bank
This is a bank.that understands the affect of visual merchandising on the customer.
57
WaMu Bank
Crisp and attractivea bank with an ambient environment!!
Land Rover
Dramatic! Does this catch your attention?
58
Land Rover
If you didnt want a Land Rover BEFORE. You want one NOW.
Meow Mix Caf
A Pop Up Store in New York
59
Meow Mix Caf
Everything you ever wanted for your cat.
Meow Mix Caf
What a special event.great marketing.
60
Fashion Stores
Coach
Windows tell the story.
61
Coach
Simple is better.
Coach
Ambiance.lighting, music, scent.
62
H&M
A multi-level fashion experience strong use of visuals to tell the story.
H&M
Powerful assortments housed in a fashion destination.
63
H&M
More and more retailers are aiming to make the total experience a pleasant one.
Jacob
Another fashion store.very good use of visuals to entice the customer to enter.
64
Jacob
Great use of props to show the customer various optionswith add-on items.
Jacob
Power wall.simple, uncluttered and easy to shop.
65
Reuhl
by Abercrombie & Fitch
Sex and fashion. presentation is designed to stimulate.
Hollister Co.
by Abercrombie & Fitch
More sex and fashion. use of props to tell the story.
66
Old Navy
Value fashion with navigation signage to make the buying decision easy.
Uniqlo
Mass merchandised fashion compelling and simple.
67
Uniqlo
Power wall.powerful in its simplicity.
Uniqlo
Easy to visualize the product, through great use of props.
68
Other Specialty Stores
Apple Store
Here we have a retail experience. are you enticed to enter?
69
Apple Store
Functional and exciting at the same time.
Apple Store
Contemporary space with the Apple Theatre
70
Apple Store
Theatre for customer events and product understanding.an Experience.
Nokia
A mall kiosk with flair.
71
Nokia
Great use of visuals to depict lifestyle. welcoming and easy to shop.
Natura
Simple and organized.easy to understand.
72
Sephora
.Introduces an innovative, convenient way to shop for cosmetics.
Sephora
Awesome product assortment presented in a very organized display
73
Sephora
Allowing the customer to touch, feel, and test the product without needing staff.
Sephora
Another one of Sephoraa simple and yet inspiring environment to shop in.
74
Dyno
Neat, clean, tidykey to making the customer experience easy.
Dyno
Mass product presented to stop the customer.
75
Best Cellars
Wine Cellareach bottle defined, quenching that thirst for understanding every sip.
Best Cellars
An experience to behold.
76
LCBO
A learning experience.in a FUN environment! This IS retail.
LCBO
Ontarios answer to Experiential liquor retail.
77
LCBO
Clear, concise category presentation presented vertically.easy to shop.
LCBO
No clutter.well organized and good clarity of offer.
78
LCBO
Now.for the fun! Wine tasting.
Adidas
Store exterior and windows are a customer magnet.
79
Adidas
Functional, but entertaining
Manchester United Store
Manchester United..Megastore based around a football team.
80
Compelling visuals and store ambiance.
Neat and organized...simple to navigate.
81
Simple but compelling merchandise statements.
Godiva
Hand dipping chocolates in the window.
82
Experience Stores
American Girl
More Experiential Retail.
83
American Girl
A little girls dream come true...
American Girl
Special events.a party place for the American Girl.
84
American Girl
Time for Mom and Dad to bring out the credit cardnot hard to shop here!
American Girl
Meticulously merchandised, making it impossible NOT to buy!!
85
American Girl
Smiling and enthusiastic sales associates too
Adopt-A-Bear Factory
Another Retail Experience.
86
Individualized, customized teddy bears.
Made by you, for you.
87
Bass Pro Shops
Everything for the outdoors Experience.
Bass Pro Shops
The most complete product assortment, set in an exciting, stimulating store.
88
Bass Pro Shops
An outdoor Experience set in a store
La Niche
Creating an aquatic Experience raised sales by 30%.
89
La Niche
Store ambiance and dominant assortments.
La Niche
Down to every last detail An experience for the customer.
90
Rainforest Caf
The Ultimate Caf Experience
Rainforest Caf
People go to eat and to be entertained.
91
Rainforest Caf
All senses are touched.
Rainforest Caf
Hard not to tell someone about your experience.
92
SummaryWhat can you do in your own store?

1. Neat, clean, and tidy with a clear offering 2. Create some excitement (ambiance) 3. Highlight merchandise with stories 4. Simple is better 5. Use signage and support collateral to sell 6. Do the five second test every day
Thank You and Keep in Touch
The Retail Shop.

Toronto Chicago Montreal www.jcwg.com (450) 458-2870 Dalan Bronson dbronson@jcwg.com
93

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Retail Trends and Visual Merchandising

Presented By: Dalan Bronson Principal & Senior Consultant

Demographics Ethnic Diversity Income Polarization

Canadas Population is Shifting to Older Age Cohorts

CAGR 0116 55+ 3554 2534 204 519 <5 3% 0% 1% 1% -1% 0%

American Population is Also Ageing

2534 2024 519 <5

Spending Implications of Changes in the Canadian Population

Net Population Change 20012011

Proportion of the American Population Over 50

For the Ageing Boomer

Shifting Family Demographics

57% No earners One earner, wife Other earner types

5% One earner, husband Dual-earner

More Women in the Workforce

Exploding Ethnic Population

31.3 26.5 24.2 19.7 21.5 29.1

Hispanic Asian Black

Canada has a Growing Asian Population

Chinese Population by City

20% 18% 16%

Chinese Population Chinese population as a % of total population

14% 12% 10% 8% 6% 4% 2% 0%

Chinese Population as a % of the Cities' Total Population

Health and Wellness

The Value Paradox

Consumers are Wealthier

Value is More Important

Trading Up & Trading Down

Tale of the Tape

Discount Vs. Department Stores

Time is the New Commodity

Having Satisfied Our Basic Needs, Consumer Priorities are Shifting

Having Satisfied Our Basic Needs, Consumer Priorities are Shifting

Entertainment Experience Value Added Information Commodity Transaction

The challenge for retailers is managing the shift upwards.

Experience and the Price of Coffee

The Starbucks Experience

The Cupcake Shoppe

Personalised and Customised

Wellness Mega Trends

Whole Foods, Whole People, Whole Planet

The Internet is Changing How We Shop

Chip & PIN

Cross Channel Influence Is Significant

25% 22% Base: Visited stores Visited Website Received catalogue

Internet to Influence Nearly Half of U.S. Retail Sales in 2010

$500 $250 $0 2004 2005 2006 2007 2008 2009 2010

Online retail sales Percentage of total retail sales

Online-influenced retail sales

Retail is Getting Tougher

Retail Sales per Square Foot

Retailers Under Pressure to Respond

Sales & Profit Growth

Personalization/ Customization Home Delivery

Digital Download Automated Shopping

New Compressed Lifecycle

Retail has Changed Forever

Automated Grocery Stores

Put Stores Where I Live, Work and Play.

Rainforest Caf provides a wild dining experience.

Pike Place Market is renowned for its airborne fish.

Organise Around my Needs