Innovation in retail

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Innovation in retail
7th International Russian Retail
Congress Moscow, September 4 2008
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Its all about the customer
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Meeting demands of tomorrows customers
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How can we reach them?What can we innovate to
reach them?
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How can we reach them?
To be taken into account (following Peter Fisks
Marketing genius book)

• Traditionally marketing approaches are under
  fire
• 54 of US consumers have banned telemarketing

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How can we reach them?
To be taken into account (following Peter Fisks
Marketing genius book)

• Purchase decisions are made in an instant
• The average decision about which brand to buy is
  made in 2.6 seconds

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How can we reach them?
To be taken into account (following Peter Fisks
Marketing genius book)

• Markets are much more competitive than ever
  before
• Intensity has on average tripled in the last 10
  years

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How can we reach them?
To be taken into account (following Peter Fisks
Marketing genius book)

• Products are quickly imitated and outdated
• Life cycles have on average reduced by 70 in the
  last 10 years

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How can we reach them?
To be taken into account (following Peter Fisks
Marketing genius book)

• Customers face a confusing barrage of noise
• The average person comes across aproximately 300
  messages every day

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How can we reach them?
To be taken into account (following Peter Fisks
Marketing genius book)

• Technology has become central to our buying
  behaviours
• The Internet is used by 42 of consumers before
  buying a new car

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How can we reach them?
To be taken into account (following Peter Fisks
Marketing genius book)

• People rely on people more than ever
• 75 of consumers say they trust personal
  recommendation most
• Kind-a word of mouth marketing

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How can we reach them?

• So, apparently the rules are changing
• The customer is, more than ever before, the real
  sovereign of the model

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How can we reach them?
The rules are changing from Push to Pull model
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The rules are changing from Push to Pull model

• The Case Of Zara

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The rules are changing from Push to Pull model
The store as the vehicle of communication and
branding, focused on the costumer
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The rules are changing from Push to Pull model

• The customer, at the center of the model
• Brands Humility
• The store, as a meeting space with customers
  (100 target)
• Brands Recognition
• The Company renounces to other ways of
  communication
• Brands Focus

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The rules are changing from Push to Pull model

• The customer at the center of the Business Model
• 1.- The perceived space
• Meticulous stores location (true advertising
  vehicle)
• Architectural proposals of external and internal
  elements
• Careful design of the store windows
• Deep product display analysis for the customer
  (trends, colours)
• Quality of products
• Excellency in Customers Service

Brands truth
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The rules are changing from Push to Pull model

• The customer at the center of the Business Model
• 2.- The non-perceived space
• A logistic structure dedicated to each and every
  stores service worldwide
• A commercial net that analyzes the offers
  reaction transmitting the information in real
  time
• A Design Team in constant creative strain
• Flexible Manufacturing Lines coordinated
  (Proximity model vertical integration)

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• 1.- The perceived space
• Investments
• Product display
• Ecological concern
• Social Responsibility

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Investments Salamanca - San Antonio del Real
Monastery
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Investments Salamanca - San Antonio del Real
Monastery
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Investments Salamanca - San Antonio del Real
Monastery
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Investments Salamanca - San Antonio del Real
Monastery
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Investments Salamanca - San Antonio del Real
Monastery
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Investments Salamanca - San Antonio del Real
Monastery
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Investments Salamanca - San Antonio del Real
Monastery
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Investments Bologna - Italy
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Investments Bologna - Italy
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Investments Greece Kapnikanea
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Investments Greece Kapnikanea
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Investments Elx Capitolio Cinema
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Investments Elx Capitolio Cinema
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Investments Elx Capitolio Cinema
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Investments Elx Capitolio Cinema
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Investments Elx Capitolio Cinema
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Locations Tverskaia Moscow
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Locations Ginza Tokio
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Locations 5th Avenue New York
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Locations Knightsbridge London
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Locations Kurfurstendam Berlin
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1.- The perceived space a) investments
Strong Capex

• Foreseen Capex for 2008 Aprox. 1 Bn
• Openings Plan

international openings
Range
ZARA
PULL BEAR
MASSIMO DUTTI
BERSHKA
STRADIVARIUS
OYSHO
ZARA HOME
UTERQÜE
total net openings
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1.- The perceived space b) Product display
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• 1.- The perceived space
• Environmental concern
• Social responsibility

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Sustainable store project

• 1.- The perceived space
• Environmental concern
• Social responsibility

Ecological concern in every single procedure at
the stores
Store Sustainability System
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Sustainable store project
1. Ecoeficiency store model

• Aim
• To define a scientific ecological model for the
  stores by the Inditexs Arquitectural Team and
  the Environmental Department in coordination with
  Vigos University.
• To define a whole new eco-store ilumination,
  electric devices, bags, materials even gift
  cards.
• To reduce 20 of current consumption.

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• 2.- The non-perceived space
• Business Model
• Logistics

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2.- The non-perceived space a) Business Model
Integrated Process
Customer product / stores
Design
Sourcing
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The Inditex GroupSuppliers
2.- The non-perceived space b) Logistics
Suppliers in over 50 countries.
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The Inditex GroupInternational Presence
2.- The non-perceived space b) Logistics
Stores in 70 Countries.
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Conclusions
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Conclusions
From a Push to a Pull model (the customer as the
sovereign)
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Conclusions

• Tomorrows model must be a model based on the
  customer
• Constant learning of Customers reactions
• Business Model based on flexibility to react
• Growth Strategy as a way to communicate the
  brand. Some key elements Store, Product,
  Logistics and Human Resources

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Conclusions
... The most brilliant managers have one skill
in common they can think in the same way than
customers. ... In marketing the only thing that
really matters is to understand and to respect
the perceptions that customers have in their
minds. Jack Trout
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Thanks
Innovation in retail
7th International Russian Retail
Congress Moscow, September 4 2008