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The Next Evolution: Store 3.0™
An executive perspective on retailer readiness for tomorrow’s store
Executive summary
The retail environment is changing rapidly. In the last several years, consumer adoption of emerging technologies has dramatically changed shoppers’ behaviors. While the store experience will remain important for many shoppers, it’s a far cry from the role it once enjoyed when a physical store was the only place where a merchant and customer could connect. Stores are now becoming just one part of a larger, more connected customer experience. And retailers are struggling with how to remain relevant as environmental and societal pressures force them to rethink their operating model.
Today, many consumers hop on smartphones or tablets to browse social networks or shopping applications to find product information, read customer reviews, compare prices, or buy items. In a recent study, 42% of shoppers used smartphones for shopping-related activities at least once in the past year for apparel, while 48% used devices to shop for consumer electronics.1
While online sales for retailers are still a small percentage of total sales across all channels, online sales growth rates are greatly outperforming the traditional brick-andmortar channels every year. In fact, the average growth rate of online sales has been about 20% annually, while the growth rate for traditional retail sales lags far behind, averaging about 3% per year (see Exhibit 1).
Exhibit 1: Retail sales growth from 2000 to 2010 (Base: 2000) e-Commerce 500% –
400% –
300% –
The rise of mobile:
• 41% of shoppers have checked competitors’ prices on their smartphones while in a retail store.2
• Shoppers who use their mobile devices in the store are 6% more likely to make an in-store purchase.3
• In mid-2010, only 12% of the top 500 U.S. online retailers had websites compatible with mobile browsers, while 7% had apps.4
With these sizeable shifts in
An executive perspective on retailer readiness for tomorrow’s store
Executive summary
The retail environment is changing rapidly. In the last several years, consumer adoption of emerging technologies has dramatically changed shoppers’ behaviors. While the store experience will remain important for many shoppers, it’s a far cry from the role it once enjoyed when a physical store was the only place where a merchant and customer could connect. Stores are now becoming just one part of a larger, more connected customer experience. And retailers are struggling with how to remain relevant as environmental and societal pressures force them to rethink their operating model.
Today, many consumers hop on smartphones or tablets to browse social networks or shopping applications to find product information, read customer reviews, compare prices, or buy items. In a recent study, 42% of shoppers used smartphones for shopping-related activities at least once in the past year for apparel, while 48% used devices to shop for consumer electronics.1
While online sales for retailers are still a small percentage of total sales across all channels, online sales growth rates are greatly outperforming the traditional brick-andmortar channels every year. In fact, the average growth rate of online sales has been about 20% annually, while the growth rate for traditional retail sales lags far behind, averaging about 3% per year (see Exhibit 1).
Exhibit 1: Retail sales growth from 2000 to 2010 (Base: 2000) e-Commerce 500% –
400% –
300% –
The rise of mobile:
• 41% of shoppers have checked competitors’ prices on their smartphones while in a retail store.2
• Shoppers who use their mobile devices in the store are 6% more likely to make an in-store purchase.3
• In mid-2010, only 12% of the top 500 U.S. online retailers had websites compatible with mobile browsers, while 7% had apps.4
With these sizeable shifts in