Review of the Omnichannel Summi Super Panel: 7th Feb
The CMO of K3 recently attended and hosted a panel at Omnichannel Summit 2018
Sitting on this retail panel:
Ian McBeth, former Head of IT, Furniture Village
Martin Newman, Non-Executive Director, White Stuff
Tony Brown, CEO, Beales Department Stores
Ed Duggan, CFO & Commercial Director, Fishpools Furniture Store
Steve Gray, Director, SG Retail
Retailers must build their businesses around the customer
Retailers must fully acknowledge that a different mindset is required to run their businesses today and that they have to listen much more to their customers otherwise the consequences could be serious.
This was the warning that emerged from a panel discussion hosted by Natalie Bruins, K3 Retail at the Retail Bulletin Omni-channel Summit 2018 in central London that brought together a group of experienced retailers to consider the theme: ‘Connected Retail and Technology – rethinking how to reach and engage with your customers.”
Changing mindsets needed
The panel included Martin Newman, founder of Practicology and non-executive of White Stuff, who suggested: “A lot of leaders in the UK don’t have the right mindset. They still see the world of the mid-1990s. It could be too late for some brands that might not be here in six months. There’s been a real change in the past 20 years. In the 1990s retailers had the balance of power and consumers had limited choices. But in this web-driven era there is a proliferation of choices and disruptors have come into the market.”
He highlighted how the likes of Amazon have emerged and that it has been tough for traditional retailers to compete: “Amazon has the broadest range of products, price transparency, market leading logistics, and good customer service.”
In addition, Steve Gray, director of SG Retail, points out that among the “amazing things about Amazon is that [founder] Jeff Bezos has “aligned shareholders with a strategy of not worrying about profits and instead focusing on growth, which makes it so hard to compete with it”.
Focus on servicing the customer
But all is not lost because there are ways to compete. These revolve around taking a much more customer-centric approach than retailers have been taking. Many have simply been talking a good story about how they have been putting the customer at the heart of their business.
Newman says: “There is lots of low hanging fruit. If retailers went across all parts of their business and said we’re customer-focused regardless of what we sell then there will be things they could do. But they could not rely on still using old KPIs [like sales per square foot] any longer.”
Delivering a rich experience for customer across the whole of their multi-channel journey and not just thinking about the end sale is imperative, according to Ian McBeth, former head of IT at Furniture Village, who suggests: “The user experience is across the board. The sale is only part of it. If retailers don’t design the [whole] journey then customers will simply look at the products online. They need to focus on all the experience and not just the end sale.
Understanding the requirements
This requires a very different approach and it has to start with talking to the customer and understanding their requirements in an increasingly digitally-forward environment. Gray says: “The challenge for companies is to properly understand their customers, how valuable they are, whether they are regular shoppers, the share of wallet they give, how committed are they to the retailers products, and would they be an advocate of the business?”
He suggests very few CEOs take a view of the profitability of their business by segments of customers (regardless of channel) and instead continue to only look at store profitability. Tony Brown, CEO of Beales Department Stores, understands this situation and has been working hard to remodel the business around a greater knowledge of the customers and use of data in the organisation.
Greater use of data to personalise
“When opening a new store we looked at demographics and spoke to groups of customers – from our loyalty programme. From this we decided what brands they wanted in the store. Putting Louis Vuitton bags into a store in Wisbech, Cambridgeshire, won’t work. We’ll not put them in just because the buyers like them,” he says.
That retailers still largely do not engage with customers about their product selections is a mystery to Newman who says: It’s amazing how retailers select products without asking customers what they want. They should be asking them what products they’d like to see next season.”
Understanding customers is now critical to Beales. “We did a storyboard of customers’ online journeys and we then decided to do it across the whole business. You can learn a lot from this,” says Brown.
One learning of this was the introduction of furniture pop-up stores in some of the smaller Beales department stores that are attractive to the shopping journeys and behaviour of younger customers. Because of Millennials’ unwillingness to wait for furniture Beales provided next day delivery. “This means we have to hold the stock [in the store] but we sell out in a short space of time,” says Brown.
Beales also introduced tablets into the pop-ups in a move that is being replicated across the retail industry. Ed Duggan, CFO & commercial director at Fishpools Furniture Store, says: “Technology in-store is vital. We’ve now got the assisted sell and have removed the desk tops in-store. Orders are now done on the tablets.”
He suggests it would be easy to adopt all manner of technologies but that the objective is to see what best fits the business and customers’ requirements. Care has to be taken to ensure that technology solutions enhance the customer experience rather than impacting it negatively.
Technology as a an enabler not an inhibitor
McBeth agrees: “Don’t let technology be a barrier to the sales person. Give customers product information [via devices] but don’t put virtual reality headsets on them because nobody will use them. Retailers need to put things in-store that adds value.”
He very much believes that the selling of furniture involves the input of the sales assistant on the shop floor and that it is their product knowledge that helps build order value in a way that cannot be replicated as effectively online.
For Newman it is about integrating technology into retail environments where there are pressure points and friction affecting the customer experience. He points to checkouts and changing rooms as definite pressure points for fashion retailers and cites the solution introduced into the Rebecca Minkoff store in Soho, New York City. There are large interactive mirrors fitted into the changing rooms on which shoppers can swipe through the store’s range of clothing and select any items for immediate delivery to the room for them to try on.
As more of these types of solutions hit the market it will surely be evidence that retailers are changing their mindsets for a digital age as well as listening to customers in order to fully understand how the multi-channel shopping experience of shoppers can be improved.
