Millennials, Mobile, and Marketplaces Are Changing the Future of Retail

Millennials, Mobile, And Marketplaces Are Changing The Future Of Retail

Murat Yaşar, Country Managert

November 7, 2017

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› Millennials & Marketplaces › Why Millennials are important › Marketplaces are ruling the eCommerce market. › Impact on retail

› Millennials • Millennials, or Generation Y, are defined as the demographic cohort born between 1980 and 2000 (currently aged 18 to 34 years old). • There are more than 2 billion Millennials globally (nearly one-third of global population), with 86% of them living in emerging markets. • 32% in Turkey › Marketplace • Sales that are transacted through the following platforms: Tmall, Amazon, JD, eBay, Rakuten, Aliexpress, MercadoLibre, Flipkart, Allegro, Cdiscount, and Snapdeal, which includes direct to consumer sales and sales via third-party retailers

Millennials

2015

2016

2017

2018

2019

2020

0 500 1000 1500 2000 2500 3000 3500 4000 17- 18-24 25-34 35-44 45-54 55-64 65+

Source: Forrester Data: World Online Population Forecast, 2017 To 2022 (Global)

Online and smartphone subscribers penetration (2016)

75% 73%

65% 65% 61% 57% 58%

50% 46% 46% 41% 36% 31%

10%

Ages 17 and younger Ages 18-24 Ages 25-34 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65 and older

Online Population Penetration Smartphone Subscribers Penetration

Source: Forrester Data: World Online Population Forecast, 2017 To 2022 (Global) and Forrester Data Mobile, Smartphone, And Tablet Forecast 2016 To 2021 (Global)

Purchased physical goods online (mobile)

70%

60%

50%

40%

30%

20%

10%

0% 16-24 25-34 35-44 45-54 55-64 65 and older

Metro China Metro Brazil Metro India UK US

Purchased physical good on mobile phone?” Source: Forrester Data Global Consumer Technographics® Online Benchmark Survey, 2016

Which of the following did you use to research this most recent purchase?

38%

27% 28%

20% 19% 16% 15% 11% 11% 12% 11% 8% 8% 7% 6%

Amazon Search engines Social media or blogs Store associates Online videos Overall 18-24 25-34

Source: Forrester Data Consumer Technographics® North American Retail And Travel Customer Life Cycle Survey, Q1 2017 (US)

$831 R$ 1,058 US $371 Brazil R$ 651 $652 R$ 979

¥2,036 £270 China ¥1,575 UK £192 ¥1,812 £267

27% 28% 38% 16% 20% 19% 8% 11% 15% 7% 8% 11% 6% 12% 11%

Overall 18-24 25-34

“How much in total (including shipping and handling) have you spent buying products/services online, regardless of how you paid?” Source: Forrester Data Consumer Technographics® Retail Survey, 2016 (US, APAC, EU, and LatAm)

© 2017 FORRESTER. REPRODUCTION PROHIBITED. 12 More Millennials Millennials are Millennials are are online and more engaged spending more accessing internet online and research online and prefers via smartphones. on marketplaces smartphone. before purchase.

Online tenure leads to more spending per customer

© 2017 FORRESTER. REPRODUCTION PROHIBITED. 15 In the US, Amazon is the preferred destination for product finding for Millennials How did you originally find out about the brand of this most recent purchase?

25%

19% 17%

Amazon Overall 18-24 25-34

Source: Forrester Data Consumer Technographics® North American Retail And Travel Customer Life Cycle Survey, Q1 2017 (US)

Which of the following did you use to research your most recent product before it was bought? 61% 54% 56% 50%

38% 40%

Tmall, JD.com, or Yihaodian Taobao and eBay Overall 18-24 25-34

Source: Forrester Data Consumer Technographics® Asia Pacific Survey, H2 2016 (China)

Source: Forrester Research Online Marketplace Tracker 2015 to 2017 (GLOBAL), across 16 countries in Europe, APAC, LATAM, and North America across 11 marketplaces, publication date July 2017

Source: eCommerce share from Forrester Research Online Marketplace Tracker 2015 To 2017 (GLOBAL) publication date July 2017, Market valuation

Source: Forrester Data Consumer Technographics European Retail And Travel Survey, H1 2016

Free shipping versus shipping costs

Growth of third- Online influence party retailers versus offline versus customer influence experience

Marketplace In-stock items services versus versus inventory retailer costs costs

© 2017 FORRESTER. REPRODUCTION PROHIBITED. 22 Across age, all European shoppers are more likely to use Amazon than search engines for product research Thinking of the sources you used to research this most recent purchase, which was the most influential in helping with your decision?

Source: Forrester Data Consumer Technographics® European Retail And Travel Survey, H1 2017

Reverse-showrooming: “I have researched products/services online, then purchased those products/services offline in the past three months.” Showrooming: “I have researched products/services offline, then purchased those products/services online in the past three months.”

Base: online adults 16+ and N = 17,500; Source: Forrester Data Consumer Technographics® European Retail And Travel Survey, H1 2016

© 2017 FORRESTER. REPRODUCTION PROHIBITED. 24 Example: Showrooming is more popular amongst Millennials “I have researched products/services OFFLINE, then purchased those products/services ONLINE in the past three months”

Base: online adults (16+) who have researched products/services offline and purchased online in the past three months; Source: Forrester Data Consumer Technographics European Retail, Travel, And Auto Survey 1, 2016

Toys Clothing

Source: Forrester Data Web-Influenced Retail Sales Forecast, 2016 To 2021 (EU-7) and Forrester Data: Showrooming Forecast, 2016 To 2021 (EU-7)

closures of Payless ShoeSource 808 Sports Authority 450 clothing and Rue21 400 Gap 250 accessory stores Tailored Brands 250 The Limited 250 in the US HHGregg 220 Children's Place 200 Bebe 180 Wet Seal 171 Crocs 158 Aeropostale 154 Finish Line 150 American Eagle 150 GameStop 150 JCPenney 138 Chico's 120 BCBG 120 American Apparel 110 Kmart 109 Other Categories Wolverine Worldwide 100 RadioShack – 1,000 Michael Kors 100 Staples 70 Office Depot – 700 Macy’s 68 Barnes and Noble – 223 Guess 60 Pier 1- 100 Abercrombie & Fitch 60 Sears 41 CVS - 100 Express 28