Review: Omnichannel Futures 2024
Retailers now have the potential to interact with customers over myriad touch-points and in a highly personalised way but they should be selective about the channels and technologies they use and just focus on those best suited to their brands.
Speaking at The Retail Bulletin’s Omnichannel Futures Conference 2024 in central London recently Mark Dunhill, former CEO of Stelar, told a packed room of delegates: “What matters most to your customers? Technology has opened up a Pandora’s Box of expectations to them. They are now more demanding of personalised experiences, of being involved in the making of products, and having the ability to easily send them back. As brand owners you have to identify what matters most otherwise you could be lost [in the many options.”
What’s best for the brand
Considering the best options for the brand is very much part of the strategy of Michael Truluck, chairman of Joe Browns, which is on an omnichannel journey that very much involves learning from those retailers that have already pursued such paths. “We’re not at the front of the omnichannel journey so as we are late to it we can use the latest technology [and learnings]. I actually cannot stand the word omni-channel, it needs a new name. It’s just retail. We’ve got to ensure everything we do is all about the product.”
At present Joe Browns generates 95% of its sales online and the strategy is to become more omnichannel partly through adding more stores to the current four that could take the estate to 20 within the next three years. What underpins its activities is data, which Truluck admits is not being fully exploited yet even though the amount of data it generates from its online business is “massive”.
Peter Scott, board advisor at Pure Pet Food, says his business has been focused on the data that is being captured from customers and how it impacts the experience and ultimately sales. “At Pure we’ve worked on the website (60% of sales) journey that involves asking customers questions such as their email, name and kind of dog, its age and how active it is. We can then use this in future communications with the owner using the dog’s name and breed. We think about these upfront questions not just to secure that first sale but for the customers’ lifetime value,” he says.
Mark Guest, managing director of the retail sector at CONCENTRIX + Webhelp, suggests great care has to be taken with this data: “The more data there is the worse it can be as it gets silo’d. Success comes to those retailers who can better manage the data pre and post-sale. They can use it to differentiate their service.”
Data leading the way
Learning more about customers can also come from using AI technology, according to Titus Trossel, retail business development advisor at Artisse AI and former group corporate development manager at Currys, who says: “It can learn things about customers that you didn’t know. This can help personalise the journey online for customers.”
At Currys he says AI was used as a co-pilot for employees in the call centre and in-store. “The challenge was product knowledge and AI can supercharge their knowledge. It’s a tool for employees to be able to answer questions such as alterative product recommendations and provide use-case examples. It can add valuable information and help with conversations. Most retailers have two or three-year transformation projects underway and AI needs to be brought into these.”
However, care has to be taken with AI – particularly around data. Gareth Jones, marketing director at Mon Panier Latin, says a major barrier to adopting AI is the data side of things. “The least attractive bit of technology is data but if data is poor quality then generative AI spouts out rubbish. When you look at any AI solution it can only learn from what you feed it. Retailers need to learn how to communicate with AI,” he suggests. A second major barrier to AI adoption, according to Jones, is ignorance: “Many people do not understand it. But the time to start using AI is now.”
Jackson Versitano, regional manager for UK, IRE & RoEMEA for Lightspeed Commerce, believes there is also a nervousness about AI and there needs to be more awareness about it in the market. “Initially it was a big, expensive thing but now there’s an opportunity for all retailers to take it on. Start with chatbots and then move on. There’s the opportunity to make smarter forecasts and with pricing you can see who else is in the market and what people are spending on. If retailers are not there now then they need to get involved.”
Gracia Amico, chair at Closer Pets, agrees that things have progressed quickly with AI and there are many use-cases: “People were all saying chatbots were horrendous but not now. They are getting better than humans. They can pull data together from anywhere and get closer to consumers. Gen AI can understand the movement of pets and could be used to control the remote feeding of pets.”
There is also a warning from Jo Causon, CEO of The Institute of Customer Service, about the potential backlash over the balance of the human/digital interaction and the use of data in this dynamic. “Fundamentally it’s about the trust of the brand and customers giving them data. The authenticity of a brand really matters and retailers need to work out how to embody that in the customer experience.”
Against this backdrop, and the increased use of AI, Causon says organisations need to build risk strategies that involve the customer: “There are reputational risks and what’s the communications strategy for this. On the risk register how prominent is the customer?” There is also a need to handle the risks of protecting the data and the infrastructure around it.
Joanna Ward, Strategic Accounts Manager for the Retail Segment EMEA at Vertiv, says: “The critical infrastraucture within the retail enviroment, has not been prioritised for many years. This is negatively affecting the customer experience, commercial and operational efficiency. Retailers need to focus on the critical infrastructure of back-of-house supporting the front-of-house”
Bringing people together
This protection of the store environment is more important than ever as bricks and mortar has become increasingly recognised as a long-term vital part of retail that works in tandem with online. This alignment towards an omnichannel model can be a challenge –especially for some employees.
Charlotte Rees-John, head of the retail, leisure & hospitality sectors at Irwin Mitchell, says: “There can be a feeling of them and us with employees. Some will say they will not work with online. This will be from a place of fear so they won’t engage. As an employer it’s a massive opportunity to share the story and the strategy with these people. If you can get buy-in from all employees then they’ll be the greatest advocates. From doubters to believers, but retailers will have to do some work on this. They need to have conversations so there is no them-and-us situation.”
This scenario has been a challenge for Neil Stapleton, customer experience & change management at Skipton Building Society, who admits to tension between the high street branches and the rest of the business including online. “Culturally it’s a huge journey for us to give an omnichannel experience to our customers. It’s about culture. We’re having to help our customers become more digitally savvy and our main asset is our colleagues in-store and in the contact centre who are both needed to help our customers move on [to be more digital.”
Greg Tufnell, founder of Prime Advantage Capital Partners, agrees there has to be buy-in across the business to deliver an omnichannel experience and cites a previous role where 85% of online returns went back into stores and had to be handled by the store teams who had to be engaged in the overall vision for the business and their work recognised via relevant KPIs.
Shopping across channels
Edward Osborne, group operations director at Fox International Group, says such scenarios highlight why it is “critical to blend the numbers across the channels”. This dynamic is fully understood by Tara Carlile-Swift, founder & managing director at Freckleface Home Fragrance, who says: “Our store teams are encouraged to get people to buy online. But it’s very hard to purchase a new fragrance online for the first time so that’s why the stores are critical for the brand connection. It’s very hard to get the connection through digital. Both channels feed off each other and it doesn’t matter where the sale comes from.”
Part of the strategy of Alix Thompson-Burn, head of digital at Bird & Blend, is to focus on building a cohort of people who shop across channels – as it is known they are ultimately more valuable customers. “We’ve targeted them specifically. When we’ve offered online them a free drink in-store with a specific code then the take-up has been very high. Where there are differences in the channels – such as we have workshops in-store – then we can drive people between the various channels,” she explains.
Managing the channels
One important aspect for retailers is the management of the products across the channels. Gregor Murray, former ecommerce channel development director at Kellogg’s, cites Lego as the best-in-class retailer/manufacturer at omnichannel as it recognises that what people buy in Tesco versus Amazon and Lego’s own stores and website are very different and it supplies them each with different ranges. “Tesco is about £15 children’s toys while Amazon is the full range and its own website is exclusives,” he says.
Managing the stock mix across channels has become even more relevant with the rise of marketplaces of which there are as many as 150 in Europe, according to Barry Tong, managing director of Sol Retail, who says care has to be taken because they are getting expensive to use.
Emma Thackray, co-founder of Hip Pop, is fully aware of the costs: “As a FMCG brand we have to be careful about what we focus on. We could be distracted by marketplaces and spend an awful lot of time and money on small marketplaces. We focus on our own website and Amazon. We work with an Amazon agency because Amazon is its own world. You have to be all over your P&L. Be solid on your price position.”
For Kimmo Jukuri, global head of external products & partners at H&M, the upside to marketplaces is they can help retailers to diversify their assortment and enter new categories and markets.
Reaching a broader spread of customers was the priority for Richard Saint, head of ecommerce at Sue Ryder, when he started using eBay to sell higher-value donated goods. This has traditionally been done centrally but he is working on enabling all 400-plus shops to list their own goods online.
“If an item has a value of £50-60 then the shops would send it to the online team but this has a carbon footprint so we’re looking to do it at all the shops where they could list and dispatch the items,” he explains, adding that the charity also wants to go a step further and use technology to speed up the listing process.
At the moment a single listing can take seven to eight minutes to complete but this can be done in only 30 seconds with a camera mounted above a table and the relevant AI software. Saint says Sue Ryder is looking to work with a partner to implement such a set up and boost the revenues the charity can generate from donated goods.
