INVESTING IN EXPERIENCE - 2019 PWC IRISH RETAIL & CONSUMER REPORT: PWC.IE/RETAILCONSUMERREPORT - PWC IRELAND
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2019 PwC Irish Retail & Consumer Report: Investing in Experience pwc.ie/retailconsumerreport
How PwC can help In this era of constant change, businesses want partners who understand transformation. Technologists with a human touch, who bring business understanding combined with innovative solutions to your business problems. We support our clients to think beyond the expected and the everyday to develop long-term transformational strategies which deliver sustainable growth. For more information, visit pwc.ie
Contents
S E C T I O N 1 S E C T I O N 2
Overview Customer experience Store remains front
is a key differentiator of mind
02 04 10
S E C T I O N 3 S E C T I O N 4 S E C T I O N 5
It’s all about Creating a sustainable Engaging consumers
Mobile first customer experience through emerging
technologies
15 21 29
1 | 2019 PwC Irish Retail and Consumer Report
Overview 47%
Ireland’s consumer remains
cautious and value-conscious,
particularly as Brexit and the
global economic climate remain
uncertain. of Irish respondents said that they
expect to quickly and conveniently
We are delighted to present the 2019 While near full employment in
navigate the store
PwC Irish Retail and Consumer Report. Ireland is boosting economic
customers. Consumers will do
activity, the growth of disposable
It is part of PwC’s global insights the choosing, and their choices
income remains under pressure.
initiative which canvasses the opinions are increasingly influenced by the
This presents opportunities
distinctive values and experience
of consumers across 27 territories, for those retailers and brands
they encounter.
including over 1,000 in Ireland. who can match and exceed the
expectations of ever more savvy
Irish shoppers expect seamless
consumers.
and friction-free shopping
experiences. They expect to walk
Pay for the experience
into the store and navigate it
Excelling at customer experience
logically and rapidly. They expect
is increasingly coming to the fore
to have access to knowledgeable
of many corporate strategies as
and helpful sales assistants,
retailers and brands attempt to
pay using contactless or mobile
John Dillon satisfy the demands of the more
technology and have the option
Retail & Consumer discerning, more informed and
to click and collect. Our survey
Practice Leader, more demanding customers.
PwC Ireland shows that Irish consumers are
Businesses need to think
willing to pay for a seamless
beyond the traditional approach
experience. The survey highlights
of targeting a set of chosen
that investing in experience is
02 | 2019 PwC Irish Retail and Consumer Report
41%
key for the future of retail and social media, having a serious ‘mobile’. Irish retailers need to
those who can invest in the right influence on buying patterns. consider the integration of ‘voice’
areas will achieve quantifiable While stores remain front of mind, into marketing campaigns as this
Return on Experience, or ROX, there is growing pressure from new wave of technology takes
a measurement that will enable online retailers and the need for hold. Through data analytics
of Irish consumers are prepared to pay
companies to understand the stores to create a compelling a premium for sustainable products and artificial intelligence, the
value of investments relating to proposition has never been transactional nature of the retailer-
the customer experience. greater. Stores need to constantly and the need to provide a range shopper relationship will produce
evolve and innovate in order to of products that are ethically more insightful and actionable
sourced, organic and locally
9%
Mobile first, boosted by social satisfy consumers who are clearly
media, but store remains front interested in store shopping albeit produced. This consciousness
of mind in a different way. The frequency will continue to grow with the
of shopping (daily or weekly) is greater awareness of climate
The survey reveals a doubling of positive at 54% and is up from change, resource depletion and the
smartphone shopping compared 46% last year. implementation of carbon taxes.
of global consumers are using Smart Voice
to last year, while at the same time, Assistants to shop online every week
in-store shopping remains critical. Growing consciousness of Embracing new technology
Mobile shopping is experiencing sustainability data. Analysis of this should help
exponential growth, boosted by New emerging technologies will to inform which experiences
continue to cause disruption and
54%
The survey highlights that should be invested in.
Irish consumers care about businesses need to respond. The
sustainability and are willing to survey highlights that shoppers The survey confirms that retailers
pay for it. Their values and beliefs are embracing new technologies and brands who provide the
matter in the purchasing journey. faster than anticipated, with the right product at the right price
Companies need to be mindful importance of smart devices set combined with superior customer
of Irish respondents shop In-store either
of the growing consciousness of to grow. Globally, ‘voice’ has experience will be the most
daily or weekly (excluding grocery), up
sustainability amongst customers the potential to become the new successful in the years ahead.
from 46% last year
03 | 2019 PwC Irish Retail and Consumer Report
Customer experience
is a key differentiator Winning through
experience
Excelling at Customer Experience is at the heart of many corporate strategies Business can no longer rely on the
as retailers and brands attempt to satisfy the demands of the more discerning, traditional approach of targeting
a set of chosen customers.
more informed and more demanding customers. Consumers will do the choosing,
and their choices are increasingly
influenced by the distinctive value
and experience they encounter.
Experience is everything for the
digitally empowered consumer,
who will buy more, be more loyal
and share advocacy with their
network. People are increasingly
loyal to the brands, retailers,
services and devices that
consistently provide exceptional
value with minimum friction
or stress. A positive brand
experience can be more influential
than great advertising.1
04 | 2019 PwC Irish Retail and Consumer Report
Experience is everything for proposition, capabilities, and discerning and proactive in their
the leading companies in this portfolio of products and services purchase journeys and interaction
space. They deliver a consistent will grow business requires laser with brands, most organisations
experience across all their focus on how well the business need to invest far more in customer Demographics
touchpoints, analysing the costs,
benefits, and performance of
is meeting elevated consumer
expectations related to the
experience.
vs behaviours
their multichannel ecosystem and customer experience. The challenge is to use new
adapting accordingly from the technology with purpose to make Traditionally companies
data they receive. The Experience Organisations need to map the customer experience feel have used demographics
Economy 2 has created an consumers’ purchase journey, more human, eliminating the pain to understand consumer
integrated customer experience isolate the touch points and points whilst at the same time sets. This allowed for
rationale, steering brands and factors that drive experience, and empowering employees. The the development of
retailers beyond products and then invest in the key elements of human touch is the connector, concepts, such as Baby
services into selling engaging the company that will move the creating real connections by Boomers, Generation X
holistic consumer experiences. needle on those interactions and enabling technology to feel more and Millennials. But those
yield measurable results through a personal and giving employees catch-all terms are exactly
The payoffs for great experiences Return on Experience (RoX). the tools they need to create that - catching all and
are tangible: up to 16% price better customer experiences. making generalisations
premium on products and RoX is a measurement that will commonplace, missing the
services, plus increased loyalty.3 enable companies to understand
1. The marketer’s dilemma – The new capability agenda nuance of the individual
for marketers and their partners.’ Strategy& PwC 2017
However, traditional return on the return they are generating on customer and their
2. Term describes businesses selling memorable
investment (ROI) metrics are no investments made into the parts experiences as products - ‘Welcome to the Experience
particular wants, needs,
longer sufficient on their own to of the company directly related to
Economy’, Harvard Business Review, July-August 1998. expectations and values.
determine a company’s success. the customer experience. Given 3. ‘Companies have lost the human touch in customer
experience’, PwC Global Survey 2018
Evaluating whether the value that consumers today are far more
05 | 2019 PwC Irish Retail and Consumer Report
Exhibit 1:
Who took part? A view across generations *Young Millennials (23-26), Core Millennials (27-31), Mature Millennials (32-36).
‘Mature’ Gen Z Millennials* Generation X Baby Boomers Greatest Generation
17-22 23-36 37-51 52-71 72+
17% 33% 27% 23% 0.4%
Today’s consumer can be Natives had access to smart Mature millennials were born intentions more thoroughly.
compartmentalised in a way that devices since their infancy, and between 1980 and 1990, and
takes account of their attitudes they consume vast amounts of were part of the first wave of Generation X tend to be more
to information and how best to information at a rapid pace. Their consumers of the internet age. loyal to the brands that shaped
engage with them, particularly on currency is social influences, Their loyalty to specific brands is them, less likely to diversify
an experiential level. validation, trends, and values not assured. They tend to be the in their tastes, and do not
that extend beyond the product. second wave of adopters of new exhaustively research their
The new wave of modern They are willing to hand over data ideas and disruption brands. They purchases. They also are less
consumers, Young and Core about themselves but need to can be influenced by social media concerned with the opinion of
Millennials and Gen Z, grew see a meaningful return on it. And and peer approval. They are well others or getting the validation of
up in a world that has always they thrive on experience. versed with using multiple screens their peers.
been connected. These Digital and will research their buying
06 | 2019 PwC Irish Retail and Consumer Report
The millennial mix Exhibit 2:
Top three attributes influencing
store experience (out of 14).
Which of these attributes would
In order to further understand significantly improve your
these demographic differences, shopping experience?
the 2019 survey examined how
behaviours across the millennial Young Millennials Core Millennials Mature Millennials Generation X
(23 – 26) (27 – 31) (32 – 36) (37 – 51)
grouping differ by age.
Young
35% 42% 39% 50%
Millennials Ability to quickly and
Even within established consumer conveniently navigate
(23-26) the store
demographics there is divergence
in expectations and requirements
across the range of ages. This
means that retailers and brands
In-store Wi-Fi with
fast simple login 32% 37% 33% 38%
need to be aware of their customers
Core
Millennials
and make sure they are able to
adapt accordingly depending on
Quick and easy
payment methods 31% 35% 33% 37%
what they want and need.
(27-31)
50%
Take the example of the in-store
experience where the ability The different expectations among experience with deep consumer
to quickly and conveniently millennials highlights that they cannot insights beyond demographic trends
navigate the store was ranked be considered as one cohort. There is a key step in generating RoX.
the top priority by all age groups are important and differing preferences Building and acting on rich customer
in Ireland. However, the level that exist amongst them. Mature insights can support an organisation
Generation X feel the ability
Mature
of importance attributed to millennials display behaviours, driven on its journey towards creating to quickly and conveniently
Millennials
navigation was higher among by changing lifestyles and priorities. and sustaining credible customer navigate the store is the most
(32-36) significant attribute to improve
older respondents. experiences. store experience
Brands need to be able to pivot
07 | 2019 PwC Irish Retail and Consumer Report
accordingly. Blending customer
Actions
1 Dig deeper into behaviours to understand
your customers
3 Use mobile and social to build consumer and
employee communities with a purpose
The 2019 Global Consumer Insights Survey Integrating the customer experience and
clusters behavioural characteristics into different employee experience is a lot easier when both
consumer profiles. These insights enable deeper groups are highly motivated to be associated
and more relevant personalisation than the paid with a particular brand or organisation. In the
media approach of segmenting customers by era of dynamic, always-on communication, this
demographics alone. Demographics can’t tell can contribute to an enduring relationship which
marketers how, when, where and why consumers leads to lifetime loyalty.
shop. Behavioural and attitudinal attributes can
build and act on these insights.
4 Build on “magic moments” along the
customer journey
2 Fuse Customer Experience and Employee
Experience
In an age of ever-expanding digital options,
consumer loyalty can and does vanish with the
An organisation trying to improve customer touch of a button. To minimise that possibility,
experience without considering the employee organisations should focus not just on talking
experience is missing an integral part of the about experiences but on building them focusing
equation. Customer interaction starts with the on those “magic moments” earns loyalty and
people on the front line. creates a relationship that endures beyond the next
product search.
08 | 2019 PwC Irish Retail and Consumer Report5 Treat consumers’ data with respect, and deliver
value in exchange for it
Customers want the companies they interact with
to protect their personal data, and they’ll take
their business elsewhere if they don’t trust that a
company is safeguarding their personal particulars.
Organisations need to anticipate this demand and
rethink how they use consumer data, to what extent
they let consumers determine its usage, how they
value it, and how they’ll deliver value against it. There
is also the paradox that exists between the availability
of data and rising levels of distrust and growing
regulation. Data is the opt-in enabler for consumers
that will allow them to optimise their own bespoke
experience that satisfies their individual needs, from a
trusted provider.
6 Win the trip
Today there are more trips, more choices, more of
everything. Companies can win over the customer
both in-store and online by understanding what they
are trying to experience and then make it easier
for them to accomplish that goal, whether through
ease of navigation, breadth and quality of selection,
price, quality of advice or exclusivity.
09 | 2019 PwC Irish Retail and Consumer Report2 Store remains
front of mind
The in-store experience remains the most immediate connection between
consumer and product. With growing pressure from online retailers, this
is the time to focus on creating a compelling store experience.
10 | 2019 PwC Irish Retail and Consumer ReportThe Value Physical stores need to constantly
evolve and innovate in order
Shopping in-store remains
important for Irish customers.
was that they prefer to see and
interact with products before they
of In-Store to remain relevant. The right The overwhelming reason that make their buying decisions.
combination of price, value they gave for this in the survey
It is clear that while shopping and convenience together with
in physical stores remains seamlessly integrated online and Exhibit 3:
something the majority of offline experiences are key to Buying behaviours - Frequency of shopping by channel (daily and weekly, excluding grocery)
consumers still expect, they making the customer experience
How often do you buy products using the following shopping channels?
are seeking more from their one that keeps shoppers returning
shopping experience. It is those again and again.
retailers who improve their 41%
customer experience agenda In terms of the in-store In-store 46%
who are most likely to win experience, the ability to quickly 54%
the shopping trip. With online and conveniently navigate the
store, access to well-informed 16%
shopping continuing to grow,
sales personnel and quick and PC 14%
the store still offers retailers
21%
an opportunity to create real easy payment methods are
engagement with the people who the attributes that consumers 10%
matter most. In addition, creating surveyed said would most Tablet 7%
2017
a seamless store and online significantly improve their in-store 13%
experience is a key differentiator, shopping experience.
11% 2018
and so building a complementary Mobile/
10%
Smartphone
online offering is key to delivering 20% 2019
the complete package.
11 | 2019 PwC Irish Retail and Consumer ReportThe importance of in-store surveyed as one of the most Over a third (34%) of Irish
Exhibit 4:
experience is critical when significant improvements retailers consumers said that ensuring
Buying Behaviours – In-store
considering the frequency of in- could make to improve their in- Store navigation reigns supreme sales associates have deep
store shopping. It remains strong store experience. Combined with product knowledge was critical to
even in the digital era. Over half the fact that a ‘fun’ experience Which of these attributes would significantly
improving the in-store experience.
improve your in-store shopping experience?
of the consumers who took part via store design and atmosphere In-store and increasingly online,
in the survey still shop weekly or was the fourth most popular employees directly interact
more frequently in-store. improvement, it is clear that
experience and navigation are 47% with customers and shape the
consumer experience. They set
Creating intertwined. Retailers and brands
must begin to design smarter
Ability to quickly and
conveniently navigate the store
the emotional tone and often
make the difference between
Experience
[64% Baby Boomers]
spaces so that customers can winning consumers’ affections and
navigate stores quickly and easily.
Destinations business, or leaving them cold.
While consumers are generally
By optimising areas including
layout, signage along with
34%
Quick and easy payment
Click and Collect
satisfied with their in-store technology such as self-service methods (including mobile
experience, the continued growth kiosks, and mobile payment options, and contactless) A growing feature in Ireland is
of online retail and increasing retailers have the opportunity to the concept of Click and Collect,
expectations means that stores create an engaging proposition. which enhances customer
should aim to become experience
centres, not just places to purchase. Investing in, and improving the 34% experience and, more importantly,
drives customers into stores. Last
The ability to quickly and employee experience, is one Sales associates with a deep year, 17% of survey respondents
knowledge of the product range
conveniently navigate the store of the key drivers of creating [55% Baby Boomers]
stated that they availed of
was identified by half of those delightful customer experiences. services to place and pay for
12 | 2019 PwC Irish Retail and Consumer Report17% Delivering
Many retailers are integrating
Click and Collect solutions as a
way to drive footfall into stores. a seamless
Importantly, this provides a key
customer touch-point. However, experience Exhibit 5:
of respondents stated that they used getting customers to collect their Considering the delivery process for
Click and Collect services in 2018 When it comes to paying for
product in-store helps manage online orders, what is most important?
delivery challenges, and provides delivery, 88% of respondents
customised orders and collect an opportunity to address the stated that they are willing to pay
later in-store. Young millennials the associated charges. However, 45%
complex and often costly issue of #1 in
are high users of such services, managing product returns. 50% expect their deliveries within Availability of Western
free returns Europe
with 44% expected to buy in this two days and a further 33% are
way in 2019. This type of offering Consumers are clearly interested willing to wait three to five days.
can relate to both the collection of in Click and Collect with the Factors of most importance to 41%
grocery and non-food categories ability to reserve online for Irish customers are the availability Getting product as
as well as the emerging interest in store collection being ranked of free returns (45%), and quickly as possible
the pre-ordering of food-to-go. as a priority by a quarter of knowing the exact delivery date at
respondents. In addition 29% the point of ordering (44%). 29%
44%
ranked the ability to return Ability to return
to a store
items through a store as a key
priority. Both of these generate
24%
opportunities for in-store customer
engagement which would not Ability to reserve online
be available if the customer was for collection in-store
of Young Millennials expect to use
Click and Collect in 2019 purely shopping online.
13 | 2019 PwC Irish Retail and Consumer ReportThe Micro-Trip Actions
A growing trend in grocery
shopping is the micro-trip, where
consumers spend less than
five minutes in store. Changing 1 Understand your shoppers
Meeting the needs of differing consumers is a challenge. However, by fully
lifestyles combined with growing
understanding their different demands also creates a real opportunity. Meeting the
urbanisation are key factors in
demands of older shoppers who have prioritised easier navigation and experienced
this trend. Younger shoppers
sales personnel along with the needs of younger shoppers who focus on other
behave differently to their parents’
aspects including wifi and quick payment methods will create a winning formula.
generation. A quarter of Irish
consumers undertake micro trips
at least daily compared to 31% of 2 Make the store a destination
young millennials. With consumers seeking new experiences and higher levels of customer service,
make their store visit a memorable one. Customers are making a conscious
As these limited interactions decision to shop in-store against a crowded online and store based competitive
become more common, the landscape. Win the trip.
frictionless experience will
become a customer expectation. 3 Build a complementary online store
The ease of navigating across Ensure your online store complements and supports your bricks and mortar store.
the store and ease of payment If properly integrated, it is the consumer who wins as shopping is made easy.
will play a large part in generating Maximise your assets to drive online customers in store. Click and Collect and
return business for stores as the online returns are easy ways to engage face to face with online customers. Ensure
core experience improves. your store personnel are fully trained and understand the sales potential of directly
engaging with these customers.
14 | 2019 PwC Irish Retail and Consumer Report3 It’s all about
mobile first
As retailers and brands look to create more seamless
and friction-free shopping experiences, technology
is now the great enabler. Online and in-store, mobile-
based research, shopping and payments are now
easier and more reliable than ever.
30%
The ubiquity of mobile shopping is
happening even faster than previously
anticipated. Our belief that mobile
shopping would grow over the next five
years is being realised now, with 20% of
of consumers purchased online
weekly or more often in 2018,
consumers now using mobile as part of
compared to 24% in 2017 their weekly shop.
15 | 2019 PwC Irish Retail and Consumer ReportMobile shopping are keeping pace with their UK
and US counterparts. They remain
In store mobile Exhibit 7:
Do you use your mobile device to
One in five are shopping via significantly behind Chinese payments make in store payments?
mobile weekly or more frequently, consumers, more than half of
whom use their mobile devices Mobile technology is having a 16%
a figure that has doubled since
significant impact in the area of
2017. In this area, Irish consumers to shop weekly or more often.
mobile payments. These include
the use of mobile or digital wallets 24%
which allow contactless payments
Exhibit 6:
on card terminals using fingerprint or
Weekly or more frequent purchases via mobile device
facial authentication on the device.
2018
16% of all Irish consumers
22%
Ireland 11% 10% 20% used their mobile device to
make payments in 2018. This is
UK 21% 22% 23% expected to grow to 22% over the
34%
US
17% 16% 25% next 12 months. Globally, 34%
of consumers paid in-store using
China mobile payment methods, up from
52% 52% 55%
24% a year earlier. The growth 2019
of mobile payments is being
most rapidly adopted by young
Ireland UK
millennials, 32% of whom expect
2017 2018 2019 to use the technology this year.
16 | 2019 PwC Irish Retail and Consumer ReportMobile at the opportunities to engage with
consumers.
them to buy particular products
and services. In this group, fashion
It is apparent that social media
has a much greater influence in
heart of channel and technology goods are most certain categories such as fashion
(51%) and technology (49%).
integration While a third of consumers only
use social media to keep in touch
frequently purchased. 28% of Irish
consumers are also influenced Understanding the opportunities
that this presents needs to be
with family and friends, more than by reading positive social media
The integration between offline fully considered.
and online is a business reality a quarter believe that it influences reviews.
that many retailers are grappling
with. However, getting it right is
Exhibit 8:
imperative as consumers expect
What’s going on vs. what’s on sale; Social media’s main use is to stay in touch
a seamless experience between
both worlds. Understanding the Thinking about social media channels and how you use them, which of the
path to purchase is at the heart of following activities describes your online behaviour?
channel integration. Consumers
may research online and purchase
offline and vice versa. Social media
advocacy can be a significant
influencer while shoppers are
25% 28% 15%
investigating their options.
I browse social media to seek I have been influenced to I have made a purchase
Given the rise of mobile shopping inspiration for purchases. buy a product or service following directly from social media.
reading positive reviews
and payments, social media has
37% Gen Z and 25% Core
become an even more crucial Young Millennials 38% Gen Z Millennials
touchpoint for retailers to create
17 | 2019 PwC Irish Retail and Consumer ReportCategories at risk There are a number of categories
that are at risk of online disruption
Exhibit 10:
For each of the following categories, how many of
of disruption as the transition from in-store your purchases have you made online in the last 12
months?
to online purchasing evolves.
Exhibit 9:
Consumer electronics, toys, Products purchased online (more than half).
“Shop now!” – shopping straight
from a social feed occurs most within sports equipment, homeware, Books, music, movies
26%
fashion and technology appliances and DIY are some of and video games
the categories that remain in the Clothing and footwear 18%
In which of the following categories do
you feel social media has influenced bricks and mortar domain.
Grocery 14%
your purchase decisions most?
While a number of these items Consumer electronics 13%
are not bought online frequently,
51%
Health & Beauty 12%
there is huge potential disruption.
49%
Given the rising influence of Jewellery/Watches 11%
mobile in shaping the retail
36%
Toys 11%
and consumer environment, in
30%
Do it yourself/
addition to the lack of disruptors home improvement
8%
in these categories, retailers and
Sports equipment/outdoor 7%
brands have the opportunity to
provide a different proposition Furniture and homeware 7%
for consumers through carefully
Fashion Tech Travel Food Household Appliances 7%
crafted, digital-first strategies.
18 | 2019 PwC Irish Retail and Consumer ReportChanging Exhibit 11:
Retailers and brands must take
advantage of the rise of mobile
throughout each consumers’
personal social networks, creating
channels What types of adverts are most
influential?
shopping and constantly innovate greater awareness and revenues.
their social media marketing, Given that previous iterations
Brand impressions are influenced with the goal being a seamless of this report have illustrated
from a combination of Paid, multi-platform experience. the unwavering loyalty of Irish
Owned and Earned Media. Increased brand engagement consumers, winning them over can
Optimising the marketing mix is through social media platforms result in long term repeat business.
dependent on the consumer’s has been driven by growing
need and the stage at which the consumer demand. Retailers
Stop the press
customer is engaged. There is an
enormous opportunity for savvy 45% have a “captive audience” and
by adopting the latest technology - sourcing of
companies to use digital tools to Traditional TV advertising such as shoppable tags and
enhance social experiences along [35% for Gen Z but 57% for Baby
Boomers]
proximity-based marketing, they current affairs
the purchase journey. It is easier have an opportunity for immediate
than ever to encourage positive conversions. With television and social
sharing and commenting about media now competing as key
products and services - which may Advocacy is another important consumer influencers, we are
be more valuable than advertising aspect of social media. As also experiencing shifts in how
because of its authenticity. authenticity and brand loyalty are Irish consumers are keeping
While TV advertising continues
22%
Social media advertising
important aspects of influencing,
consumers are inspired to
abreast with current affairs. As
advertising forms a key aspect
to lead the way, it is clear that [30% for Gen Z but 14% for
purchase goods and services from of current affairs programmes,
social media adverts have a Baby Boomers] brands trusted by their friends gaining a deeper understanding
real influence on the younger and family. Becoming a trusted of where consumers are spending
generations. brand can create a ripple effect their time is critical as brands
19 | 2019 PwC Irish Retail and Consumer Reportassess how they build and manage their
advertising strategies.
Actions - Three key priorities for winning on mobile
Exhibit 12:
Traditional media is a key influencer. However,
the role of social is growing especially amongst
younger shoppers.
1 Lead with a mobile-first strategy
Which source do you turn to first for news or to With mobile now the key online platform to drive growth, adopting a mobile
keep on top of current affairs? first strategy is critical. With consumers choosing mobile as a key shopping
platform, those retailers who excel are the most likely to win. Similar to the
34%
store, there needs to be a focus on winning the trip.
go directly to
traditional media
2 Understand the role of social
The role of social is changing and is becoming more influential every year
Baby Boomers = 52%
especially with younger shoppers. Customer segments need to be clearly
defined and understood in order to craft the most relevant social media
strategy. With consumers now using social more as an integral part of
36%
go directly to new media
their purchase journey, failure to influence potential customers, and more
importantly, their spend is a lost opportunity
3
Core Millenials = 45%
Blend traditional and new media
With traditional media sources such as, television and newspapers being
challenged by the next generation media, this needs to be given due
22%
go directly to a social
consideration. Whilst TV continues to lead the way in terms of advertising,
influence and traditional news sources, this is changing as new technologies
media channel disrupt the existing norms. Understanding how customers digest their
Gen Z = 45% advertising and current affairs is critical to gaining share of mind and wallet.
20 | 2019 PwC Irish Retail and Consumer Report4 Creating a sustainable
customer experience
Loyalty and trust are essential to the experience for many consumers.
21 | 2019 PwC Irish Retail and Consumer ReportWhile the economics of price and Organisations who are able to This presents a clear potential
convenience are still important, consistently and transparently for new entrants and industry
consumers are balancing demonstrate their alignment stalwarts alike to construct their
41%
influencing factors such as quality, brand and product story around
the social approval of friends and the values of responsibility,
the environmental impact of the sustainability, authenticity and
products they are purchasing. transparency.
Each factor adds value and
contributes to the totality of of consumers are prepared to pay a Companies need to be mindful
their experience. It is timely for premium for sustainable products. of the growing sustainable
companies to start to think more consciousness of their customers
about the values that add to the with their customers’ values and the need to provide a range
Return on Experience. and beliefs have an additional of products that are ethically
advantage when it comes to sourced, organic and local in
Ultimately, consumers are seeking where spend is directed, and nature. This consciousness will
to engage with brands where how trust and loyalty are earned. continue to grow with the greater
trust exists. Sustainability is Socially, environmentally and awareness of climate change,
good for the environment, good locally conscious retailers and resource depletion and the
for business and also enables brands will have additional implementation of carbon taxes
a relationship based on trust attributes that add to the and levies.
to be built with consumers. customer experience. Investing in
With consumers prepared to those considerations throughout In addition, business has the
pay premiums for sustainable the production and supply chain opportunity for differentiation by
products, this is an opportunity will add to customer experience themselves by examining and
not to be missed. and ultimately benefit your brand. improving their own environmental
22 | 2019 PwC Irish Retail and Consumer Reportand carbon footprint. Leading When it comes to their Irish consumers can be grouped
organisations have implemented understanding of sustainability into four different typologies:
comprehensive sustainability
Exhibit 13:
programmes and have stringent
Consumer typologies based on approach to purchasing sustainably
standards for themselves and
their suppliers. This creates a Please indicate which statements best reflect how you purchase in a sustainable way?
different style of engagement
with consumers compared
to competitors who have not
adopted this defining strategy. Protectors Environmental The green
Plastic
activists and promoters activists travellers
Understanding Seeking an end Decision-making From origin to Carbon footprint
motivations to plastic pollution on protecting and
promoting sustainable
end – considering
the impact
concerns
behind
behaviours
sustainability I buy items with
less packaging
I choose sustainable
products to
From origin to end
– considering the
Carbon footprint
concerns
help protect the impact
Irish consumers show a high I avoid the use environment I consciously
of plastic where I choose products choose more
degree of awareness about possible (i.e. I choose sustainable with a traceable sustainable ways
environmental issues and plastic straws, products to set an and transparent to travel
cutlery) example to others origin
understand the influence that their
purchasing decisions can have I buy brands that I look for
promote sustainable products with
on production, marketing and practices environmentally
packaging decisions. friendly packaging
23 | 2019 PwC Irish Retail and Consumer ReportIn order to maintain trust and they will pay more for sustainably in some instances score higher
Exhibit 14:
loyalty, it is very important for produced non-food items. on taking action than their
brands and retailers to understand Please indicate which statements
The traditional linear model of global counterparts. Consumer
best reflect how you purchase in a
these typologies, to know what sustainable way. ‘take, make and throw away’ is motivations around sustainability
motivates them and to identify the being superseded by the circular are driven primarily by packaging
Reduction in plastics and
specific drivers that influence their packaging are priority economy model of ‘reduce, priorities, environmental concerns
purchasing decisions. reuse and recycle’. The circular and living sustainably.
economy promotes a low-carbon,
Reasons for
52% sustainable society and in turn, a In terms of their shopping
green, organic and local lifestyle. decisions 52% of Irish consumers
choosing This presents as many stated that their priority is to
sustainable opportunities as it creates
challenges. Corporate social
seek to avoid the use of plastic
packaging where possible
products I avoid the use of plastic where responsibility strategies can compared to 41% globally and
possible (Baby Boomers = 67%) struggle to align the whole of 49% stated that they seek to
Thirty-two percent of our their supply chain with consumer buy items with less packaging
survey respondents say they demands and expectations. The compared to 37% globally.
choose sustainable products to story that retailers and brands
help protect the environment, 49% tell needs to be watertight and Organisations can leverage the
49% look for products with transparent from end to end. growing awareness of sustainability
environmentally-friendly among Irish consumers and
packaging, and 52% avoid the Irish consumers show a providing alternatives to 100%
use of plastic when they can. In high degree of awareness packaged goods and by working
addition, two-thirds of the Irish I buy items with less packaging of sustainability and the across the entire value chain to
(Baby Boomers = 65%)
sample is willing to pay for locally- environmental impact of actively reduce packaging and
produced food items, and 41% say production and disposal, and associated waste.
24 | 2019 PwC Irish Retail and Consumer ReportSustainability
creates a
premium
When it comes to food items
there are a number sustainable
attributes that Irish consumers
are willing to pay more for. These Sustainable awareness is more The main reasons why Irish consumers choose Irish produce include:
include locally produced food heightened among the Generation
(68%), organic food (56%) and Z consumer (age 37 – 51) who Exhibit 15:
packaging that is sustainable in outstrip the average in terms of
What are your main reasons for purchasing Irish products?
nature (49%). In relation to non- their environmental awareness. For
food items Irish consumers show example 58% of Gen Z are willing 2018 2019
a higher degree of awareness to pay a premium for ethically Buying Irish has a positive
62% 67%
of how a product is made with produced non-food items and 53% effect on the Irish economy
over 40% willing to pay more for chose brands that are well known Quality of the product as
45% 58%
for their sustainable practices. it is locally produced
both ethically and sustainably
produced product.
68%
To support local retailers 52% 57%
Local matters Food traceability is more
44% 43%
guaranteed as the food is local
Irish consumers are acutely aware
Products are only
of the impact that their purchasing 10% 13%
available in Ireland
power has on the Irish economy
of Irish consumers are prepared I do not purchase
and actively seek to support Irish 3% 3%
to pay a premium for locally Irish products
produced food. producers where possible.
25 | 2019 PwC Irish Retail and Consumer ReportAcross many of these dimensions, Exhibit 16:
opinions related to buying Irish are Two thirds of consumers buy Irish products to support the Irish economy
showing positive improvements What are your main reasons for purchasing Irish products?
versus 2018, suggesting that Irish
retailers increase their focus on 59% 56% 61% 73% 69% 76% 46% 44% 56% 61% 61% 64%
how they source and promote
local Irish products.
However, a real challenge exists
as the younger shoppers are not
seeing as strong a connection
between buying Irish and the
associated positive impact
for the local retailers and the
wider economy. It is the mature
shoppers who are making these
positive connections and with
this group accounting for 50% Buying Irish has a positive effect on To support local retailers
the Irish economy
of the respondents, this is an
issue not to be ignored. However,
getting younger shoppers to see
the positive effect that shopping Gen Z Young Core Mature Gen X Baby
locally can have on the wider Millennials Millennials Millennials Boomers
economy needs real focus.
26 | 2019 PwC Irish Retail and Consumer ReportActions - Three ways to sustain your business through sustainability strategies
1 Address the packaging challenge
Consumers are seeking products with less plastic packaging and therefore
this needs to be a key priority as retailers and brands develop their products.
Brand owners have a key role to play in reducing plastic usage and packaging
waste. However, collaboration across the value chain is essential if growing
consumer expectations are to be satisfied
2 Maximise the potential to obtain a premium
Consumers are expressing a willingness to pay a premium for locally produced
goods. This presents a real opportunity to leverage this through the effective
branding and marketing of locally produced foods. The entire value chain need
to work together to ensure the effective execution of these brand strategies.
3 Make local important to the younger shopper
It is clear that the older shopper makes the connection between purchasing
Irish products and the positive impact on the local and wider economy.
However, this is not as apparent across all age groups - younger shoppers not
seeing the connection to the same extent. Retailers and brands need to be
aware of this and seek to positively influence these consumers.
27 | 2019 PwC Irish Retail and Consumer Report28 | 2019 PwC Irish Retail and Consumer Report
5 Engaging
The traditional path to purchase that CEOs in all industries believe
is being replaced by a highly that the application of AI will
personalised consumer journey, significantly change the way they
consumers
enabled by smartphones, digital do business.However, only half
assistants, and other personal have plans to pursue AI strategies
devices, and embedded in new at present compared to 77%
through
forms of logistics such as Click globally.
& Collect and same-day delivery.
In this new world, every product The report recommended that
emerging
and brand is always accessible, Irish CEOs need to understand
information is limitless, variety how AI can be applied in their
is infinite, and delivery is nearly businesses, and ensure their
technology
instantaneous. It’s not yet clear organisations have the right talent,
which shopping habits will catch data and technology to exploit
on most widely, but those that do these opportunities.
will heavily influence which brands
people will buy and which retailers The same recommendation
To really understand consumers motivations, and brands will succeed. applies to retailers and brands.
needs and experiential expectations, They need to be thinking beyond
To help unlock growth potential, the current use of AI to consider
companies need to look to the future beyond brands and retailers need to pay the customer experiences of
the current transactional purchasing decisions. close attention to emerging digital the future. Irish consumers will
technologies, such as Artificial adopt, accept and use emerging
Intelligence. The 2019 PwC CEO technologies like voice-activated
Survey findings for Ireland show smart devices.
29 | 2019 PwC Irish Retail and Consumer Report51%
Irish consumers currently use their The Internet of Things (IoT)
smart home devices for a number movement is now expanding to
of purposes, predominantly to devices outside of wearables and
access information like news and home appliances. This growth
weather reports. Retailers should will be compounded by the
of Irish respondents use their
pay attention to the extent that introduction of 5G networks in smart home device to access
consumers use their devices to the next few years. Aspects of the information such as current
affairs and weather. 48% use
research their options or actually retail and consumer goods value these devices to stream music.
make those purchases. If Ireland chain are set for further disruption
maintains the trends seen in other in 2019 and beyond, including
countries - and we are seldom transportation and manufacturing.
behind the curve - then the extent
to which people research and Consumers continue to push
The Connected
shop online will only increase in other boundaries as well. Nearly a Home
the years to come. quarter of Irish consumers (22%)
would like to have an autonomous The Irish consumer is generally
Retailers and brands who can vehicle today, and an additional open to new technological
create seamless experiences, 21% would consider one in the innovations, in particular smart
from interacting with a smart future. They are most interested home entertainment and smart
device, to putting the right in automotive features that have home energy meters. Despite
product in the consumer’s line of eliminated the human element of year-on-year growth in ownership
sight, to purchasing and delivering driving. In the digital healthcare (8% in 2018 to 13% in 2019),
the goods to their door, will reap arena, 39% of respondents are almost half of consumers
the rewards of this technological using healthcare, wellness or surveyed (47%) are currently not
revolution. fitness apps on their mobile planning to purchase one at all.
devices.
30 | 2019 PwC Irish Retail and Consumer Report9%
Getting Vocal
AI-powered digital voice assistants The importance of smart devices
are another modern tool that will only grow in the next five years
contributes to a frictionless and Irish retailers need to integrate
of global consumers using Smart Voice
purchase journey, with 9% of global voice into evermore sophisticated Assistants to shop online every week
consumers telling us they use the marketing campaigns.
technology to shop online weekly
or more frequently. In some ways
“voice” could have the potential to
become the new “mobile.”
Exhibit 17
Which of the following smart home devices do you currently own, or plan to buy in the future?
Search and social moved to
mobile devices must faster than There’s no place like a connected home
anticipated, and it’s likely that the
pivot to voice technology will be just
as speedy. This means not only do
companies need to take a design
lens to mobile experience, but also
consider how voice technology in Own/Plan Smart Smart Smart Smart Smart Home Smart
homes, cars and elsewhere will to Own Appliances Energy Meter Home Appls Home Ent Voice Assts Wearables
affect customer experience.
I currently own 18% 15% 14% 40% 13% 28%
The bar for brand leadership will
I plan to purchase
continue to shift as organisations 30% 35% 28% 29% 24% 19%
in the future
launch ever-more friendly
consumer technologies.
31 | 2019 PwC Irish Retail and Consumer ReportAutonomous
Vehicles
Exhibit 18:
A driverless future – consumers are ready to embrace driverless cars
As technology advances, the thirds (62%) interested to find Which of the following statements best describes how you feel
about a vehicle like this?
vehicle of the future could be fully out more or would consider
‘connected and autonomous’. one in the future. This positive
22%
Excited, I would like
These vehicles which can also be outlook increases with younger to have one now
driven by a human if required, can demographics, rising to almost Generation Z = 32%
operate completely autonomously three-quarters (71%).
21%
I would consider it
in navigating roads, stopping at in the future
traffic signals and responding to Ongoing developments Generation Z = 25%
potential hazards. and partnership with car
Irish consumers are generally
manufacturers illustrates the
importance of connectedness and 19% Quite interested to
find out more
positive about the prospect of ubiquity among devices, and this
fully connected and autonomous
vehicles, with almost two-
now extends to motor vehicles.
17% Unsure how I feel
about it
14% I would dislike this
type of vehicle/
8%
I don’t think this type
of vehicle will ever be
commercially viable
32 | 2019 PwC Irish Retail and Consumer Report34%
of Irish consumers identified reducing
driver fatigue as the most attractive
feature of an autonomous vehicle
The most desired
features are those
that take the
human ‘element’
out of driving
decisions
33 | 2019 PwC Irish Retail and Consumer ReportActions - Three ways to make sure technology makes your business tick
1 Accept disruption
New emerging technologies are real threats to existing businesses. Accepting
and understanding the role that they will play in the shaping of your future
strategy is essential. Seek out opportunities to determine how your market and
customers will change with the advent of these emerging digital solutions. Do
not only view them as a threat but also as an opportunity.
2 Intelligent digital
Seek out opportunities to digitise your business. Artificial Intelligence and
Robotic Process Automation are real and are delivering tangible benefits to
organisations that are adopting them as part of their business processes.
Businesses must integrate intelligent digital solutions in order to gain vital
competitive advantage.
3 People are still at the heart of business
With consumers placing factors such as store navigation and customer
experience at the top of their wish lists, make sure not to build digital solutions
that create barriers between you and your customers. Technology must enable
and enhance the customer experience rather than detract from it.
34 | 2019 PwC Irish Retail and Consumer Report35 | 2019 PwC Irish Retail and Consumer Report
Contacts
Methodology
John Dillion
Partner, PwC Ireland Retail & This survey was carried out in Autumn/Winter 2018 having
Consumer Practice Leader 1,005 Irish online consumers in Ireland representative by:
+353 1 792 6415
john.p.dillon@pwc.com • Age • Region
• Gender • Income
• Employment status
Owen McFeely PwC’s Global Retail and Consumer practice, in conjunction
Director, PwC Ireland with PwC’s Research to Insight (r2i), administered a global
Retail & Consumer Practice survey (21,480 participants) to understand and compare
+353 1 792 8162 consumer shopping behaviours and the use of different
owen.mcfeely@pwc.com retail channels across 27 territories including Ireland.
Grace McCullen
Senior Manager, PwC Ireland,
Retail & Consumer Practice At PwC Ireland we are determined to focus on the
+353 1 792 5617 issues affecting Irish business leaders, provide insights
grace.mccullen@pwc.com that are valuable and actions that are of practical help.
We’d welcome your feedback on this report.
36 | 2019 PwC Irish Retail and Consumer Report
Take our 1-minute survey37 | 2019 PwC Irish Retail and Consumer Report
© 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with over 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.ie. 06480
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