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Wednesday 16 October 2019

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Connected shopping

Written by Liz Morrell
10/01/13

There is no doubt that multi-channel is the present and future of every major retailer on Britain’s High Streets today. And yet there are still those behind the times according to Josh Pert, CEO at BT Expedite & Fresca. “It’s surprising how many retailers are still considering what their multi-channel strategy should be. As an industry, we are still in a phase of discovery and testing of consumer appetite, but
this is coming to an end,” he says. “There is a new generation of customers who don’t think about multi-channel, but just expect it.”

Craig Sears Black, UK MD for Manhattan Associates, believes failing to embrace its importance is simply not an option. “Whether retailers realise it or not, they’re in a race with every other competing retailer to the finishing line of multichannel customer satisfaction,” he notes.

Where the internet has changed buying patterns massively mobile is changing the multichannel field even faster. Chris Withers, head of smarter commerce at IBM UK & Ireland, refers to a survey from IBM that shows the percentage of consumers using their mobile device to make a purchase during the run-up to Christmas 2012 is already 15.7 per cent, up from 9.8 per cent on the same day in 2011, whilst mobile traffic is now 21.5 per cent of the total, versus 12 per cent on the same day in 2011. “Retailers must invest in mobile-optimised sites for different devices such as smartphones and tablets, based on an understanding that consumers go mobile for different parts of the shopping journey,” adds Withers.

Dr Satya Ramaswamy, global head of mobility at TCS says that his research shows that by 2015 sales transactions via mobiles, including tablet devices, will have shot up by 50 per cent over 2012 levels in Europe. “Interacting with customers through their mobile devices, geo-location services and digital in-store promotions can build brand loyalty and deliver a more enjoyable experience,” he says.

Karen Dracou, head of omni-channel development at John Lewis, points out the greater proliferation of channels is actually simplifying rather than complicating customers shopping patterns. “Where once our customers were shopping across multiple channels, with the advancements in technology, specifically mobile technologies, our customers no longer see a separation in channel and are increasing just shopping ‘the brand’. It is the retailer’s challenge to provide a seamless, consistent journey across all of the brand’s touchpoints to meet this new, emerging, technology-savvy, consumer,” she observes.

The internet has opened up retailers businesses in a way that has never been possible before – creating a huge virtual selling room which can be extended virtually anywhere. However, Stefan Schmidt, VP of product strategy at hybris says customers want to choose how they access the virtual selling room and that retailers shouldn’t try to force them down one route. The future will not be about dominating or growing one single channel to outshine all others, it will be about finding the right mix of all the instruments at hand, including old fashioned ones such as the printed catalogue,” he says.

Many experts believe retailers are getting it wrong by concentrating too much on which channels their customers are using to shop. Daren Ward, associate partner at multi-channel strategy advisory firm Glue Reply, and a former M&S principal architect in the IT division, says retailers should be looking not at the channels themselves but at the ability of the channels to hold a conversation with customers. “Different channels add an artificial complexity that the customer isn’t interested in. The customers want to hold a meaningful conversation with retailers regardless of channel, on premise, online or on the go, and they want to include their friends in this conversation,” he argues.

Because of this he says retailers must simplify their options. “Stop creating channels. Consider the customer proposition and make it as simple as possible,” he continues.
The old adage that traditional stores will disappear is unlikely to bear fruit. What is happening however is a change in retailers’mindsets as to the number of stores they have, with a desire for flagship locations and a need to use the stores they do have to showcase their brands, products and customer experience rather than simply just to sell their goods.

Retailers are increasingly responding to this showrooming trend – with House of Fraser’s internet hub stores at the extreme of this. Jon Copestake, retail analyst at the EIU says this will continue. “Stores will evolve to become interactive showcases for products and the retail brand that houses them. Bricks and mortar will focus increasingly on the areas that cannot be reproduced in the digital domain such as customer services, returns for goods, Click and Collect, paying instore and the sale of impulse or time sensitive products where waiting for delivery is not an option,” he notes.

New trends
John Lewis’ Dracou says this is a trend that is already evident at the department store giant but she says stores will continue to play a pivotal role. “This is where customers and the brand come face to face. Physical shops need to evolve to continually provide customers with a reason to visit. This can be through inspirational product, in store theatre or playing a key role in supporting the local community, to name a few,” she says.

Chris Osborne, retail industry principal at SAP UKI, says the role of staff is also changing, becoming ever more important in the showrooming world. “Even with the most up to date multimedia capability there is no substitute for actually seeing, touching and (in some cases) smelling the goods. People also want to talk to other people so the role of store associates needs to evolve so that they become more like friendly advisors than order takers. That requires better training and talent management,” he observes.

It also requires a change in attitude for staff and the business so that a seamless link is provided between the channels. “Those retailers who can innovate their business processes and successfully tear down the walls they have crafted so neatly between store, catalogue, call centre and web will prevail,” argues hybris’ Schmidt. “As painful at it might be, the realisation has to sink in that success does not hinge on one channel, but the right composition of them all.”

The key to this is largely having a single view of the customer, according to Ron Curry, AVP, retail and consumer goods practice UK, Cognizant, and this will continue to be a priority for retailers to adapt their systems to cope. “Often we find retailers’ business policies are in direct conflict with a truly integrated customer experience, such as not allowing online returns to a shop, which must change. The next issue is enabling a business ‘single view of the truth’, so customers are treated equally across all channels and all employees have the information required to provide a good service,” he says.

And as retailers increasingly get to grips with the future of their multi-channel strategies so they will get more sophisticated with what they are asking from them according to Vince Russell, managing director at WiFi provider The Cloud who is already providing free in-store WiFi for a number of retailers. “For example retailers can analyse traffic from their e- and m-commerce sites, as well as usage of their free WiFi service, to gather customer data based on what customers have bought, what products they’ve searched for and what sites they have visited. They can then analyse it to gain a better understanding of their shoppers. In doing this, they are able to more accurately target shoppers with mobile advertising, or email discounts in order to drive the right customers to the right products and as a result boost sales,” he comments.

Rob Durkin, CEO of FusePump, believes the introduction of 4G mobile technology and the reduction in price that has prompted in 3G handsets will mean this trend continues. “This is important because it means that high quality browsing technology is now available to more people. It could see a step change in the increase of mobile channel purchases, especially after Christmas and early in the New Year. We think more stores will begin to offer free Wi-Fi so that customers can browse in-store on smartphones and tablets,” he says.

The future, given the massive step change in retail over the last few years, is hard to predict but further sophistication is likely. “Give it five years and predictive analytics will work out what we need to buy from the supermarket and it will be delivered to our homes before we’ve even realised we’ve run out,” he says. “I can also foresee a time where consumers publish their wish-list through social media and retailers respond directly to them with a personalised offer,” he continues.

NFC will also change the multi-channel landscape – both through its use for payments to speed up the transaction process and for location based marketing and targeted promotions. However hybris’ Schmidt says retailers should remember that at the heart they are still running stores and so the traditional principles of retailing largely still apply. “The difference though is that the store is now a virtual room, that spans globally and the windows are not made of glass anymore but of electronic devices of all shapes and styles,” he observes.


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