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When old becomes new

Written by Scott Thompson and Michelle Stevens
02/10/2015

Scott Thompson and Michelle Stevens review the 2015 Retail Systems Multi-Channel Conference

The connected customer is driving a revolution in retail and yet many multi-channel retailers, weighed down by legacy systems, are struggling to keep pace. That was a key message to come out of the 2015 Retail Systems Multi-Channel Conference, which took place in London during September.

Retail used to be so simple, even up to a few years ago. People travelled to their nearest store, handed over their money and took their goods home. But a new breed of customer has now emerged, they're tech savvy and demanding rich, interactive experiences. With access to smartphones, tablets etc, social media, online marketplaces, search engines and so on, the connected customer expects to be able to buy anytime and anywhere, often fusing the offline and online worlds as they research and make purchases. "Back in the 1990s retailers were very much in control. Online has changed everything and put the customer in control," observed conference chairman, Martin Newman, founder and CEO, Praticology.

Some retailers are responding accordingly, upping technology spend in such areas as websites and mobile apps and improving IT systems and ensuring that different systems talk to eachother. According to Gartner, technologies that help understand customers better, improve engagement through multi-channel experience and facilitate the buying process are high priority areas in 2015. Within stores, creating IT infrastructure to accept various mobile payment systems and digital wallets will be at the top of agendas in the second half of the year. Others, however, are falling behind. "If you need to be 100 per cent sure, you will be 100 per cent late. If you have to prove a business case for every innovative thing you do, you're probably in the wrong business and you will probably be out of business within five years," argued Newman. "I can order from Asda before 12pm and collect at High Barnet tube station after 4pm on the same day. What is the ROI for something like that? You wouldn’t do innovative things if you only worried about ROI.”

Finlay Clark, industry head - retail, Google, ventured further down that route, arguing that innovation is everything. During a presentation entitled Future of multi-channel retail, he noted: "If you think in blocks of ten years, ten years ago there was no iPhone or Android. Ten years before that online retail was just kicking off. Ten years from now computing will be more user than device-centric. There are opportunities for retailers to create fantastic augmentative experiences for their customers."

Clark's remit is to help businesses grow and get the most out of the web, developing digital solutions from the many Google products available. He gave a compelling pitch, detailing such offerings as Google Now Price Drop that alerts users of discounts online based on products they’ve searched for in the past. And somewhat unsurprisingly he also painted a picture of nimble pureplay disruptors vs slow multi-channel retailers ("they are owning the digital shelf, using real-time insights to drive sales.") Ao.com, for instance, is winning at customer service because the service culture is owned by everyone at the company. "Social media shouldn't be owned by the guy just out of University in charge of Twitter; everyone should have involvement."

But for much of the day the conference went old school, or more specifically put a new twist on an act that has been going for years. Ultimately, it’s still all about getting the basics right, selling a good product at the best price and offering great customer service. Or, as Practicology’s Newman put it, "putting customers at the heart of what we do." At previous gatherings, many online enthusiasts were quick to predict the death of the High Street; clicks beats bricks, farewell old timers, make way for a brave new world etc etc. In their rush to embrace this new world some multi-channel players have perhaps been guilty of neglecting their stores, of using them as glorified online picking warehouses or showrooms. But overall e-commerce has in fact shown itself to be the saviour, rather than the destroyer, of brick and mortar retailers.

A good example of this is Click and Collect which is driving footfall direct to the High Street. It has also sparked some innovative projects. Red Ant, for instance, has been working with Halfords and Samsung on a pilot Click and Collect service. The trial has been taking place at the retailer's Leamington Spa store, involving a range of in-store tablets for customer use as well as phones and smartwatches to help colleagues pick orders. Over 90 per cent of Halfords online orders are Click and Collect and the initiative aims to offer a fully connected service whereby staff are automatically notified of incoming customers and their orders on the screens and watches. They can use their phone or smartwatch to generate a pick list, allowing them to put new orders together while they walk around the store. Customers check in on a touchscreen kiosk at the front of the store and confirm their order, are shown any relevant upsell products and are told where to go to collect their order. They can also use the kiosk to ask for help, which pages a staff member on their phone or smartwatch.

Also doing eye catching work in this area is Doddle, the online shopping collection and returns service located in Network Rail train stations and various other hubs. The company recently opened a store at King’s Cross, its 38th in less than 12 months, and over 60,000 people are now signed up to the service. The online delivery sector often gets a bad rap as customers receive a first rate online experience and then are let down over the last mile (we’ve all waited in for the parcel that didn’t arrive or returned home to find the dreaded ‘we’re sorry, but you were out’ card in our mailbox). But Tim Robinson, CEO at Doddle, was quick to offer a defence. "Right time delivery stats in the UK are unrivalled around the world but bad experiences stick,” he observed.

Certainly, his company offers an intriguing alternative to the way we send and receive parcels. By working with retailers like Amazon and ASOS as well as carriers like DPD, items for delivery to specific Doddle stores can be grouped together by carriers. “Retailers can give more choice to their customers for online orders and can have their orders consolidated. And for carriers, they can benefit from consolidation both outbound and inbound,” said Robinson. And an interesting development due to launch later this year is Click Now Collect Now that involves retailers delivering predicted high selling items (such as electricals and fashion) to Doddle shops ahead of orders actually being placed by customers. “This could be a big part of our peak proposition in 2016/17,” predicted Robinson.

Elsewhere, a discussion panel looked at the changing role of the High Street in a multi-channel age, and the importance of both customer-facing technology and co-ordinated back end systems in that evolution. When asked what the best in-store technology was to back right now, panellist Gerald Dawson, the director of finance, operations and e-commerce at Weird Fish, observed that it very much depended on the individual business. “It depends on your customer base and your employee base as well, in terms of their capabilities. Some brands also need to be higher tech than others because of the nature of their brand halo,” he said. “The first thing I would do is have a single view of stock, to make sure that stores can see the website stock and vice versa, so it is totally joined up. Then I would make sure that store staff can pick online orders and deal with customer queries. Customers expect that, but most retailers can’t do it.”

Hayley Meenan-Wilkin, head of web operations at Maplin Electronics, agreed that many retailers were challenged from an operational perspective when it came to synchronising what e-commerce departments and store teams were doing. “A lot of big retailers have legacy systems that have been invested in hugely, and tying them up with new technology is not easy,” she continued. “For example, looking at real-time availability in-store, online and cross channel is tricky, and sometimes impossible for large retailers, because you can’t tie up where everything is. At some point there is going to be a painful investment that is necessary for people to unplug these legacy systems, and say that they need a fresh suite of information and technology that delivers one version of the truth to the customer, at all times and in all places.”

Doddle’s chief technology officer, Gary O’Connor, added: “It might be assumed there is an under investment [across the industry], but we talk to many retailers who are investing in technology. However, a lot of it is foundational stuff, so it is about how they do fulfilment and pull together data streams about customers. It takes a little while for all of that to come to the fore. Retail is also constrained by the peak – there is a period of four of five months where people don’t want to disrupt what’s there, so when you’re talking about changing the systems that stores are running with, there is a limit on the times when you can do that.”

In terms of the role of the High Street, O’Connor said that “social experience” was an important element in drawing shoppers to a physical store where they could interact with staff, be it for customer service, advice or the showcasing of products. Also addressing that point, Sarah McVittie, the co-founder of Dressipi, noted: “There was a lot of talk about the internet killing the High Street, but I think that has ended now. Consumers don’t necessarily care how they interact with brands, whether that is online, in-store or by social media. So understanding how the High Street works with these different channels is really important. It is about social experience and what genuinely works for the customer.”

This was also a theme picked out by the day’s final presenter Justin Small, the chief strategy officer at the BIO Agency, who spoke about High Streets creating “theatrical” environments for shoppers. He explained that while digital was “a crucial part of all High Street retailers’ sales funnels” – and often the first customer touchpoint – many companies still struggled to make online and mobile shopping social and interactive.

This created an opportunity for stores of the future not to simply be somewhere where shoppers went to queue to buy items. “Retail needs to become theatre,” he said. “And technology is coming out that allows that. So brands and technology need to come together to deliver that interactive, integrated theatrical experience. Retailers need to tell a story that customers can experience and believe in.” He cited large touchscreens, augmented reality and even holograms as technologies that could play a key role in stores in years to come, creating an enticing shopping environment that could be a massive advantage for multi-channel retailers over pureplay outfits “once digital is embedded as just another channel”.

It’s all about me
Whilst the growth of digital undoubtedly has raised questions about the future of physical retailing, the conference emphasised how we are social animals and, as such, the latter remains a key leisure activity and a source of enjoyment, offering instant gratification, for many. Having bought into the online is everything hype, retailers, it would seem, have finally woken up to the fact that, in order to stay relevant, every aspect of their digital experience – site, mobile, app, email – must have an in-store component. This was highlighted during a discussion panel covering the rise and rise of me-tailing. It remains a divisive buzzword ("All this talk about personalisation is a load of rubbish," remarked Weird Fish's Gerald Dawson at the beginning of the conference). But regardless of your take, it can’t be denied that the good old fashioned store is at the heart of this revolution. Enabling customers to research products and purchase them anywhere and at any time is a challenge many retailers now face. How do they put the connected customer at the heart of the retail experience, allowing them to research and complete a purchase and pay in the most convenient way? Many, it would seem, are struggling with this. "Retail has traditionally been about selling products, not building relationships. But Millennial consumers expect retailers to know them both online and offline," said Jess Jeetly, founder and managing director, Jeetly, a clothing brand for petite women that lets customers vote on which designs are manufactured.

Will Dymott, head of data & CRM, Practicology, added: "Why are retailers struggling with me-tailing and a single view of the customer? Because it's hard. They have legacy systems and store estates to contend with. They need to get all their team onboard when they are collecting data so it's done right. It's a case of people, process, technology."

There are some forward thinking retailers out there, though. Jeetly flagged up Macy’s, “an old retailer at the forefront of innovation. They were one of the first to adopt Apple Pay, they have an Innovation Lab and the Plenti rewards programme.” Donna North, co-founder, Dressipi commented: “Shop Direct, M&S and Arcadia Group all have internal teams focused on personalisation. The pureplay personalisation ventures are more nimble and flexible but they don’t have the data. Brick and mortar retailers do but their data is all over the place.”

Perhaps more than ever, retail is transforming, moving away from the rigid model of physical stores with digital channels bolted on the side, towards retailers creating flexible, personable, engaging multi-channel experiences for their customers. Clearly, there is much work to done though. To quote Google's Clark: "Online and offline are still managed separately by lots of companies, but that is being broken down." Connected customers, (sort of) connected retailers. With legacy issues still looming large, the revolution is proving to be a long one.

Further information on the conference at: www.retail-systems.com/multichannel/


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