Insight: a review of TRB’s Omnichannel Futures conference
Greater processing power and super-charged analytical capabilities are making it possible for retailers to introduce increasingly personalised experiences for customers and it is this that is proving the differentiator in an omnichannel world.
This was certainly the view conveyed at The Retail Bulletin Omnichannel Futures Conference 2019 in London recently by Tom Summerfield, consultant at Footasylum, who told a packed room of delegates: “I value personalisation over everything. To be successful in an omni-channel set up will involve more personalisation across all of the [retailers’] eco-system.”
AI boosting retailers’ messaging targeting
Working with artificial intelligence (AI) specialist Peak, Footasylum has utilised the data from across its stores and online business to better target its audience and achieve improved conversion rates from communications that benefit from personalisation.
Mylo Portas, customer success manager for retail at Peak, says: “By bringing the data together it allows us to see the customer at every stage of the journey. We can build up a rich picture of each customer.”
By using this knowledge it has been possible to “reverse engineer the Facebook algorithms”, which involves streamlining the process whereby the social media platform is given much more detailed information. This means the targeting of specific groups can be undertaken for much less cost. “We can build ‘smart lists’ and triggers that can then be plugged into Facebook and Google to run campaigns,” says Portas.
More for less with data-led marketing
The result is that Summerfield says “we can send less but better marketing”, which has delivered a return on advertising spend 10-times higher than would be achieved by traditional digital marketing.
Ed Whatmore, ecommerce director at Mountain Warehouse, agrees that personalisation is the key driver of success and the company is at the early stages of its journey of using data to deliver a more personalised experience online. It is also looking to implement visual search as yet another way to help customers better discover products and reduce the number of clicks it takes them to find the relevant goods.
Visual search is one of the ways that the interface, and the way people search, is changing. Elena Cochero, futurist at Unruly, says: “We’ve now got new search engines – with voice and visual search. At the moment only 17% of people [in the US] with smart speakers use them for shopping. It’s a nice-to-have, not necessarily an essential. But if you are driving then it’s different. You effectively have a PA in the car. In the next year or two anyone will be able to have a PA.”
The major worry for retailers and brand owners is that in this visual and audio search world they could be bypassed: “If customers do not state the brand they want then the platform will make the choice.”
Build up the barriers to entry
The one area where retailers can seek to avoid this potential disintermediation by the technology platforms is through their store estates. Lalit Suryawanshi, enterprise architect at Wilko, says: “We’re worried about our retail store portfolio [of 400 stores]. The last few years we’ve worried about digital and Amazon taking our business. We then suddenly saw Amazon Go and it might be the future of retail for some needs but not for everything.”
To address the changing state of the market Wilko is in the midst of a transformation of its stores that include trials with ranging and formats. The two new stores being tested involve measuring any sales increases and identifying any correlation with employees assigned to customers. Pay is based on overall company performance and is not sales-based.
“A lot of retail processes need simplifying and the checkout process could be faster. We’re bringing more experience into stores and freeing up store colleagues to support this,” says Suryawanshi.
Tough for older retailers to initiate change
Melanie Goldsmith, managing director of Smith & Sinclair, says such activities can be hard for traditional retailers to undertake. She cites John Lewis and its recent opening of a store in London’s White City that had been dubbed its ‘experience’ store: “It was interesting how hard it was to get them to take risks. Introducing experiences is so new that it has a lot of barriers to entry from senior executives.”
Goldsmith says it can be a good idea for large retailers to work with the likes of Smith & Sinclair and do things “underground” that then spread by word of mouth once proven. “Using an external resource to test things is the best way to get experiences into a large structure,” she suggests.
Kathryn Malloch, head of customer experience at Hammerson, believes in this test mentality and recommends retailers take a test & learn approach – especially when considering implementing technology in-store. “It’s a good idea to build a use-case before investing heavily. Be prepared to fail fast.”
Revitalising the mall
Hammerson has implemented technology of its own in the malls it operates – including a visual search tool within its app that exposes new brands to shoppers. They take a photo of a product and the solution brings up retailers in the mall that stock similar items.
It has also enlivened the centres by providing events, pop-ups and experiential initiatives that are often done in conjunction with brands. In addition, Malloch says the company works with retailers: “We’ve a beacon network that lets us do push notifications to retailers through our app. With department stores like Selfridges we’ll work closely to share data and insight. We’ve got a view of customers through the centre, not just in the retailer’s store.”
What all these changes amount to for retailers is a digital transformation – that is enveloping the whole retail industry. But there has to be an understanding of what it actually means, according to Martin Francis, former interim managing director of Watches of Switzerland, who says retailers should not start out by saying they need such a transformation just because everybody else is saying it.
Start with the customer
“They need to start with the customer. They need to restructure the organisation to put the customer at the centre. Unless they understand the customer’s needs then they’ll get nothing right. Everyone with a legacy business would not choose to operate it the way they are now. E-commerce was put into businesses as a silo and retailers now need to look at the clarity of their business,” he says.
Darren Williams, founder of DW Exec, very much agrees with this thinking. “There are still far too many silos. I don’t like omnichannel and multichannel as it is all about understanding the customer. Many companies have lost sight of their customers. The whole channel thing is a red herring and it is frustrating to me.”
Long way to go on transformation journey for many retailers
Whatever you choose to call the favoured model the reality is that to get to it requires a great amount of work by retailers. Hilary Large, sales & marketing director at skiing retailer Chill Factore, says she is very much focused on change and is centring things on her customers – who add some complexity to the business as they fall into two radically different camps of families and millennials.
“It’s hard having two different segments. You have to marry the two together in-store and online. We’ve put video on the site and changed how we speak to certain groups. We’re also looking at personalisation. We’re on a creaky platform now but we’ll re-platform the front and back-ends. We’re only at the foothills [of digital transformation]. We’re a small business so can’t afford to spend lots of cash. We need to do it gradually,” explains Large.
To see Retail Bulletin’s upcoming range of retail conferences click here.
