Foreword

Retail ecommerce sales, 2014–19
Source: eMarketer, September 2015, www.eMarketer.com

Online vs offline

Henri explains that on the back of the success of digital personalisation, retailers are recognising both the rise in customer expectation and the differentiation that personal service can offer. But what does that experience look like into the future? From individually created recipe ideas and ingredients lists in supermarkets to intuitive, customer-inspired fashion recommendations, retailers have the chance to transform customer engagement.

Over the past decade, the internet and smartphone revolution have started to change the rules of shopping and presented retailers with the challenge of their lives as they strive to stay ahead of the digital curve. Whilst retail companies have focused much attention on honing their online offering, a recent survey of 2,000 UK consumers highlights that shoppers are still increasingly frustrated with both the online and instore experience of many retailers.

Most consumers who shop instore do so for one simple, self-evident reason: the opportunity to see, touch and try products. The second most popular choice for shopping instore is usually ‘immediacy of purchase’, which was chosen by 54 per cent of consumers in recent research. This demonstrates how consumers want instant gratification from their shopping experiences, making it even harder for online-only retailers to keep up.

Omni-channel

However, it is also clear that shoppers are embracing multi-channel shopping. According to a survey by Google and Ipsos OTX research, 51 per cent of shoppers research products online and then purchase instore, whilst 32 per cent visit the store, research online then finally return to the store to purchase.

This is being fuelled by the rise of smart devices, but it is also an opportunity for retailers to empower store associates and capitalise on the opportunity instore as well as online. How? By store associates connecting online and offline experiences to increase sales on both channels.

To match the online experience, a store associate needs access to a customer’s complete online and offline transaction history. By knowing who the customer is, how they shop and with real-time access to inventory availability across all stores, fulfilment centres and suppliers, store staff can, effectively, sell any item located anywhere in the network, and provide an experience that matches that of the website.

Within this omni-channel model, the role of the store assistant is becoming critical. The fact that mobile-toting consumers have more information than the assistants has become widely recognised – with 71 per cent of consumers claiming that this is the case.

Of course, if the online channel was a smooth experience, then the customer simply collects the item, likes it and goes away happy, it is all good. When a problem arises – if the customer does not like this product and wants to swap it for another, for example – the whole situation gets far more complicated and a retailer’s lack of end-to-end omni-channel support becomes patently clear.

Today, for example, just a handful of retailers can offer a single swipe option in this situation, requiring, instead, customers to embark upon a complex mix of cancelled and new transactions. Not so good.

In order to increase sales online, retailers must ensure that they have a frictionless experience on all their channels. And that means buying online, collecting instore, swapping that purchase for a product of different value or spending vouchers to buy something a little more expensive – all in one transaction. It also means an experience that includes pertinent recommendations – a pair of shoes to go with the dress bought last week or a cashmere throw to balance the cushions being collected from store. Today, just a few – some of the world’s most innovative retailers – have the tools, technologies and processes in place, which enable their sales assistants to deliver that quality of experience.

Ranzie Anthony is the founder and executive creative director of Athlon, a design and technology agency that employs 60 people, and he sums up the multi-layered nature of the omni-channel experience like this:

Source: Courtesy of Athlon, a design and innovation company.

What consumers really want

The research from Manhattan Associates showed that across both online and instore shopping, price is the number one attraction for two-thirds (67 per cent) of shoppers. No surprises there, but what is next on the list? Fast delivery, at 51 per cent, and flexible returns at 42 per cent, take the second and third spots.

The message is clear: if you are not competing on price, you are competing on speed of deliveries and your returns policy.

In addition to this, a quarter (26 per cent) of respondents stated a consistent experience across all retail channels as important, underlining the need to provide consistent information, personalisation and fulfilment options to online customers and instore customers alike.

And it does not stop there. Personalisation is a huge driver for many consumers, with 49 per cent saying they would interact more with store associates if the shopping experience were tailored; showing that a personalised, relevant and timely experience is absolutely key.

However, a one-size-fits-all approach will not work here; the model, therefore, must be customer-led. Retailers should be using information about a customer’s shopping habits – including products browsed but not bought – as well as a single view of available stock across the business, to deliver a far more personal and truly engaging shopping experience. And with 45 per cent of Millennials shopping both instore and online, retailers need to be prepared, and equip themselves with the technology to offer the same personalised experience across every channel.

Customer expectations have changed radically over the past decade and the online experience has become a powerful, engaging and increasingly personal event. That personalised, relevant and timely experience should also be delivered across all channels in order to provide the best possible customer service. The tide is turning and retailers urgently need to reconsider the quality, relevance and personalisation of the overall experience.

Mark Woodhams is the senior vice-president and managing director for EMEA at NetSuite, a global ecommerce infrastructure provider, and he suggests that, ‘Customer expectations have always outpaced retailers’ ability to meet them. It’s the nature of the industry.’

To compound their challenges, the surge in promotional discounting means retailers are virtually in constant sale mode. In particular, retailers are struggling to produce profits on Black Friday and Cyber Monday, the busiest sale days of the year. In 2015, the average percentage of sales of marked down goods has eroded retail’s contribution to the UK economic output by more than £20.3 billion, according to research from Planet Retail in March 2016.

So, therefore, the main themes we will explore throughout this book are:

1. Embracing omni-channel Today’s savvy omni-channel shoppers are connected at every step of their ideal shopping experience from start to finish; they know exactly where to find things on your website, which retailer offers the best click & collect service, and which will let them return without a receipt.
   It is time to connect the dots with technology and information that allows retailers to provide a great, if not superb, service. Consumers now do their research before even entering the store, which means they know what they want. So, when they come into the store, do not leave them hanging around whilst your staff check the stock room or ask another member of the team. Empower your staff with the technology to make the purchase there and then, the same as they would online.
   Shopping is not just a hobby, it is a science and retailers must start connecting the offline and online customer journeys in order to make the grade. Consumers are going to become only more and more connected, so retailers who want to sell more online must not forget the importance of the store, especially when it comes to the upsell opportunity. Store assistants are key to this and they must have the knowledge, skill-set and desire to offer the best possible experience. How about going one step further still and providing technologies that allow store assistants to match up online and instore data in order to get to know a customer’s preferences, with real-time access to inventory availability across the whole store network. Or take the ultimate leap of faith and follow in the footsteps of retailers like Apple or Dixons, where the store experience is very similar to that of the website and the store associate plays an interactive and fundamental part in the buying process from start to finish.
   These retailers are great examples because they did not only invest in the staff and technologies, they provided them with everything they needed to ensure the customer not only feels looked after, but also leaves the store with everything they wanted and more. This team approach will be one that continues to pay off for the retailers that embrace it, way into the future.
2. Increased customer centricity Consumers are stating openly that they crave a personal experience. Therefore, it is time to not only understand the individual, but also the segments they fit into and their different requirements. For example, Millennials appear to be the generation of personalisation, with 56 per cent of them saying they would interact more with a brand if the experience was tailored, compared to 46 per cent of over 55s.
   Retailers must embrace this and build those personal relationships you find at local butchers and bakers. This change in mindset will allow retailers to take advantage of technological innovation and engineer a cultural shift that will help to deliver a personalised experience across every channel.
   However, this model will, of course, need to vary from retailer to retailer. Not all supermarkets, for example, can ensure a personalised service online as well as every sales assistant offering that same personal shopping experience instore – not only would that interfere with essential jobs, such as restocking shelves, but many will not have the skills or desire to deliver such services. However, within a luxury environment, where the majority of customers are likely to want a more personal service, the experience can be more personal and tailored to the needs of the individual.
   It is also important to remember that today’s consumer wants a frictionless experience. And that may mean buying online, collecting instore, swapping that purchase for a product of different value or spending vouchers to buy something a little more expensive – all in one transaction. It also means an experience that includes pertinent recommendations – a pair of shoes to go with the dress bought last week or a cashmere throw to balance the cushions being collected from store. Today, just a few – some of the world’s most innovative retailers – have the tools, technologies and processes in place that enable them to deliver that quality of experience. You could be one of them.
3. Conquer the final impression More than half of consumers stated fast delivery as a key component when deciding what is most important to them during a shopping experience. So, what should you be doing to address this?
   With 20 per cent of consumers saying they prefer to shop online, long gone are the days where shipping in five to seven business days was acceptable. Delivery expectations have changed; consumers are now expecting action on an order within minutes of when it is received and, subsequently, they think processing should be complete within a couple of hours. It is time to assess your fulfilment performance and see where it can be improved. Consumers want the instant gratification they can receive instore to be matched online, which means retailers must make every effort to get their products to their consumers as quickly as possible at the lowest cost.
   The simple way to achieve this is to work the whole network harder by moving fulfilment responsibility away from just the distribution centre and bringing it to the high street, where stores can be empowered to pick and pack orders, process returns and see where everything is in the supply chain.
   And today’s forward-thinking retailer needs to not just overcome these challenges but also create a foundation to build on success for the future. With more and more online retailers jostling for space on the high street, the old ‘it’ll get there when it gets there’ mentality will not cut it any more.
   Creating a single stock pool with real-time availability across the business network gives retailers with physical stores a unique opportunity to create outstanding customer experiences, across the entire gamut of bricks and clicks, moving from a siloed, expensive supply chain to a unified omni-channel business where profits are protected.
   And do not forget it is not just about delivery. What if the consumer does not like the item or it does not fit? Do not underestimate the importance of a flexible returns policy, with 43 per cent of consumers saying this is most important to them during the shopping experience. Some consumers even said they would buy more online if they could return to store; showing all aspects of the journey must be considered.

Christer Holloman

London, September 2016

P.S.

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