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Customer Experience

Digital Distruption For Retail Stores

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Digital Distruption For Retail Stores

Digital tools and communications continue to influence instore shopping experiences. Deloitte's latest report Navigating the New Digital Divide indicates that digital interactions influenced 40% of instore retail visits in Australia during 2014.

Whilst the level of influence may not be surprising for many retailers, it highlights how digital is rapidly changing the way customers shop and make purchase decisions. Digital and traditional channels are blending and complementing each other along the whole retail customer journey.

Australian shoppers have a similar level of digital influence to those in the US and Canada and are ahead of most European countries. Deloitte's survey ranked digitally influenced retail sales as follows - US (49%), Canada (41%), Australia (40%), Germany (30%), The Netherlands (30%) and the UK (27%).

Digital tools will continue to be crucial to the future of the store, not simply contributing to its demise as some have predicted. Of Australians that are digitally engaged, 65% use digital tools before heading into store or making a purchase decision, with an additional 31% using digital tools during their shopping trip. The top activities that Australian shoppers complete during their shopping trip are comparing products, accessing product information and checking product availability.

The trend is clear - customers are completing substantial research and have a desire to know significant product details before making their purchase decision. All of this research acts as a significant opportunity to drive customers to the store.

The upside for retailers is clear, customers using digital tools and devices before and during their shopping trip convert at a 25% higher rate and have a higher average order value than those that don't.

My key takeaways to succeed in the digital-physical fusion:

  • Measure digital engagement along all customer journey touchpoints – simply measuring online channel sales misses the bigger picture as digital has a significantly broader influence on retailers' success.
  • Incorporate digital into your instore experience - over thirty percent of customers use digital tools whilst instore to compare products, prices, reviews or participate in experiential activities. How can you leverage this interest to assist in their purchase and after sales experience?
  • Base your strategy on the buying habits within in your retail segment - the level of customer research, interactivity and expected after sales relationship will differ dramatically depending on your category or product.
  • Align organisational incentives - it's imperative that there is no conflict between stores and digital sales or servicing channels. Be guided by how your customers choose to interact with your brand.

Fundamentally, retailers must understand their customers’ path to purchase (across time, devices, channels and technologies) to build a series of digital touch points to meet their needs along the way.

View a summary of findings from Deloitte's research below, or read the full research here.


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Virtual Reality = Immersive Experiences

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Virtual Reality = Immersive Experiences

Virtual Reality is finally delivering on its promise of enabling immersive customer experiences and provides an opportunity for customers to engage with a product, service or place without  physically being there. With the advent of Google cardboard, and upcoming releases from Oculus Rift and HTC Vive, there will also be significantly more consumer interest in the area over the coming months.

Virtual and augmented reality will require a rethink of online storytelling techniques. Many notable brands are now introducing these elements in flagship stores where the experience can be predominantly about storytelling and less about commerce. Here are some recent practical applications of virtual reality for brands:


Oakley


In an experiential brand activation, Oakley has built a sunglasses case that lets you see through the eyes of a pro athlete. After purchasing the sunglasses, customers can reuse the box by turning it into a Google cardboard VR device to see Oakley athletes showcasing extreme sports. The campaign allows customers to watch from the wave, the mountain, the dirt, from mid-air or the sky as athletes compete in extreme events.


Savannah College of Art & Design (SCAD)


SCAD is providing thousands of potential students the opportunity to take virtual tours of its campuses in Savannah, Atlanta, Hong Kong and France. SCAD distributed 10,000 pairs of the  specially designed cardboard goggles to potential and current students. Eventually the tools are planned to be used to facilitate participation in virtual events at remote campuses.


Ted Baker


Ted Baker’s recently refurbished Regent Street store was the scene for a virtual reality treasure hunt to celebrate the store opening. The experience allowed customers to virtually dash around some of London’s most iconic locations.
 


Content Creation


As usual, it’s not just about the technology, the right creative content approach is required. Virtual reality content creation once required significant custom hardware and software. This is no longer the case with Google recently demonstrating the Jump camera rig (see below) which comprises 16 GoPro cameras in a circular array. The size and arrangement of the cameras is designed to work with the corresponding Jump software to transform 16 separate pieces of video into stereoscopic virtual reality video. The final videos are super high resolution - equivalent to five 4K TVs and shortly YouTube will provide the perfect distribution medium for Jump videos, allowing immersive VR content to be streamed directly to smartphones.  


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Delivery Disruption - A New World Of Collection Opportunities

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Delivery Disruption - A New World Of Collection Opportunities

Online purchases in Australia are booming, however we still lag behind more mature eCommerce markets such as the UK where online retail is 14% of total retail spend. Recent research by eBay provides insights into one of the significant adoption hurdles - delivery issues. The research indicated that 47% of Australian online shoppers can’t receive personal deliveries at work, additionally 39% have had to re-direct online purchases to an address that isn’t their home. Finally, almost a quarter (23%) have had to take leave or work from home to receive an online delivery.

A snapshot of 5 potential alternate delivery solutions follows:

Drone Deliveries

Some (including Amazon) see drones as the future of commercial deliveries. Amazon plans to use this future system to provide deliveries to customers in 30 minutes or less using small automated unmanned aerial vehicles.  There are significant regulatory hurdles to overcome, however the potential capabilities and efficiencies could be significant.

Amazon are rapidly iterating, are currently testing their ninth drone generation and continue to expand capabilities such as avoidance sensors and algorithms that allow the Prime Air drones to see obstacles and avoid collisions. The current version of the drones carry a 2.3 Kilogram (5 pound) payload which is sufficient to deliver almost 90% of the products in Amazon's inventory.


Woolworths & Selfridges Provide Drive Through Collection Points

Woolworths recently announced a new 'lean retail' strategy to drive their three year growth plans. Growth initiatives include a range of new click and collect locations as well as drive-through collection points to increase customer convenience.

Woolworths launched Australia's first drive-thru supermarket in 2012 allowing customers to pre-purchase online or via mobile device, then present photo ID at the drive through and have an attendant load groceries into their car. Selfridges has offered a similar drive through click and collect service since 2013 in their flagship Oxford St store in London.

 


Collect eBay Orders From Woolworths Stores

In an unlikely alliance, eBay and Woolworths began a trial in February enabling eBay customers to pick up online purchases across 90 Woolworths and BigW stores in Sydney and Tasmania. Woolworths hopes the click and collect service will increase foot traffic and sales in its stores, whilst eBay expects the deal to fuel online sales by providing shoppers with more options to take delivery of their orders.

If the trial proves successful, there is plenty of scope to ramp up the service - 91% of Australians live within 10 Kilometres of a Woolworths store. The scale of the Woolworths store network should in turn drive customer demand for eBay's delivery option.

 


Deliver Directly To Your Car Boot

You no longer need to be at home or the office to collect a package nor visit a store during its opening hours to pick up your order. Both Audi and Volvo are piloting programs to allow couriers to locate and access your vehicle - even when you’re away from it - to drop off packages. Access is provided by a digital key that is activated once you’ve accepted the delivery and is deactivated as soon as the car is locked again. Customers receive delivery updates via smartphone apps.

One potential hurdle to adoption will be the level of trust that's required from the car owner. Volvo's initial trial had positive customer feedback with 92 percent of participants saying they found the delivery option more convenient than receiving their online orders at home.

Audi is trialling a similar car boot delivery system with Amazon and DHL.

 


Uber Local Deliveries

Uber is disrupting many industries, not just incumbent taxi companies.

Uber launched Uber Essentials late last year as a trial in Washington DC, allowing customers to order snacks, toiletries and cleaning supplies from within the Uber app and have them delivered within 10 minutes or less. This is an early experiment to gauge viability and has a limited and eclectic product range such as folding snow shovels, Doritos, deodorant, razors and ping pong balls.

Uber has also built capabilities around fresh produce deliveries via their UberFresh service and delivers meals for lunch and dinner via UberEats.
Uber is rumoured to be close to launching a merchant delivery program that would allow same day delivery for online purchases through UberRush couriers and Uber drivers. The merchant program appears to target high-end brands (including Neiman Marcus and Tiffany’s), offering the ability to deliver inventory that is locally available on the same day that the customer places the order.

The future for Uber deliveries would appear to be a combination of these (and other) services - online purchases, fresh food, take away food and more - into a single logistics framework that is dispatched via network of existing drivers and couriers. A significant part of Uber’s power comes from its intelligent routing algorithm, theoretically allowing one driver to deliver food, an online purchase and a passenger all at the same time.

 

What's next on the delivery horizon?

 

 

Image credits:
http://www.thecarconnection.com/news/1090467_volvos-roam-delivery-service-puts-junk-in-your-trunk-while-youre-not-around
http://www.pocket-lint.com/news/130524-uber-kicks-off-uber-fresh-a-lunch-delivery-service-in-us-for-limited-time
http://popupcity.net/selfridges-opens-drive-thru-for-online-purchases/
http://www.businessinsider.com.au/you-can-now-collect-ebay-items-from-woolworths-and-big-w-stores-2015-2


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Measuring Beyond Conversion

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Measuring Beyond Conversion

I had the privilege of recently seeing Neil Hoyne, Global Program Manager Customer Analytics for Google deliver an entertaining presentation on how to make measurement more customer-centric

Neil’s presentation details how online analysis has migrated from traffic centric (hit counters!) to conversion centric and more recently to customer-centric measurement and actions. Neil provides a range of examples from retailers in topics such as attribution, effective customer acquisition, justifying investment and measuring customer interactions throughout their relationship.

One of his initial points is that only 6% of marketing decisions are made using company data. This leaves a significant proportion of marketing actions that are driven by intuition or gut feel. Many organisations have significant richness in their information and data, however a gap exists in knowing how to drive action from that data.

The challenge and solution are well summarised:

As marketers and analysts, we need to put in the work and be able to take the next steps with our data: tell the whole story to our teams and stakeholders and be consultative in decision making and direction.

Neil’s full presentation is captured below.


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Lend Your Eyes To The Blind

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Lend Your Eyes To The Blind

Best described as simple and brilliant, the Be My Eyes app enables sighted volunteers around the world to provide realtime help to blind people in need of assistance. 

The tool makes use of relatively straightforward set of smartphone functionality to enable live video chat - essentially allowing volunteers to be the visually impaired person's eyes. Volunteers can assist when they have time and the app features simple gamification elements to encourage participation. At the time of writing over 164,000 sighted volunteers have offered assistance to over 16,000 blind people.

Be My Eyes is a non-profit organisation based in Copenhagen that launched earlier this year utilising IndiGogo as crowd sourced support for their initial funding. That funding is set to expire later in 2015 and they are reviewing alternate funding models such as subscriptions, sponsorships or donations.

Check out the service via the video below:


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TopMan Personal Shopping Experience

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TopMan Personal Shopping Experience

Topman have recently launched an online personal shopping program to provide personalised style advice, demonstrate the latest trends to customers and provide online purchases.


From the Topman site, customers can either book a physical appointment at the flagship Oxford Circus store or schedule a video chat shopping consultation. After the online appointment, customers are redirected to the Topman site where they can purchase items they selected in the session just like a typical online transaction.


As part of the scheduling process, Topman requests your sizing information, the reason for your styling session ("holiday shop” or a "seasonal update") and allow you to upload reference images of yourself and styles that inspire you.  This information allows one of the Topman styling squad to make tailored recommendations to meet your needs.


The underlying technology and execution of this experience is relatively straightforward and aligns well with the TopMan brand and target audience.
Topman is poised to launch the digital personal shopping experience to customers all over the world following the UK trial.

See an explanation of the service below:

Meet the Topman personal shopping team:

Personal shopping has featured in Topman's flagship Oxford Circus physical store since 2011:

Topman's sister company Topshop have recently developed great social selling campaigns and social instore selling during London Fashion Week.

What other industries could benefit from a personal touch?


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The Internet Of Things For Retail

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The Internet Of Things For Retail


The Internet of Things (IoT) is the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment. The topic was a key item on the agenda at the recent National Retail Federation (NRF) 2015 expo in New York and has the opportunity to be truly transformative. It’s an area of retail that is full of buzzwords, but is likely to have a significant influence on future customer retail interactions.

Gartner predicts that there will be 4.9 billion connected things in use during 2015 (up 30% from 2014) and 25 billion in use by 2020. The IoT will impact all facets of consumer’s lives including ‘connected’ cars, homes and offices.

There is a significant opportunity for brands to use the IoT for retail innovation and connected products to make their instore experience more immersive. One tangible example is customer checkout - imagine being able to walk into a store, grab what you want and simply leave. Through a range of sensor technologies placed strategically around stores, retailers will be able to recognise customers uniquely as they enter the store, stores will have customer payment preferences on file, customers will then be billed when they leave the store with the merchandise, essentially bypassing the checkout.

The Internet of Things has the opportunity to be unobtrusive, reduce customer fiction and provide efficiencies (particularly at peak times), however there are opportunities for more immersive experiences. For example, using connected products to allow customers to learn more or have personalised recommendations made for them instore. Retailers could present information in the physical store that the customer has already researched online via their laptop or mobile device. Meanwhile, credit card providers have already partnered with several retailers to offer real-time promotions based on a customer’s location and credit card activity.

The number of connected devices in the IoT will generate inconceivable volumes of data. To provide perspective of the scale of data involved, a new fleet of Boeing planes by Virgin Atlantic will reportedly generate half a terabyte of data per flight. Virgin Atlantic IT Director David Busman recently noted “Literally every piece of that plane has an Internet connection, from the engines to the flaps to the landing gear”.

Ultimately the IoT isn’t just a way to get people to spend more money - it’s an opportunity to help customers get exactly what they need and for retailers to gain a better understanding of each customer’s interests and habits.

Want to learn more?

  • IFTTT (If This Then That) is a service that lets you create powerful connections and a great starting point to understand the possibilities of connected services.
  • Harvard Business Review has a good synopsis of the complexity of managing privacy in the IoT.
  • Cisco has a good visual summary of how the IoT will help retailers and other businesses deliver information and offers to customers.
     

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Interactive Store Hoarding

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Interactive Store Hoarding

New York fashion label Kate Spade has created a personalised shopping experience by embedding touchscreens within a construction hoarding at an upcoming store in New Jersey.

The resulting experience merges online and offline worlds, enabling customers to engage with products in new ways and helps Kate Spade maximise exposure and potential sales.

Shoppers interact through touch screens, responding to typically whimsical Kate Spade questions such as – “Sparkle: a little or a lot?” and “Dream dinner party: pizza on fine china or desert served first?” – before being given personalised product recommendations and the option to purchase digitally with complimentary shipping.

As well as making the most of previously wasted retail space whilst store renovations are underway, the brand is also able to capture data on relevant local customers for subsequent instore events and promotions once the store opens.

See the interactive store hoarding in action below:



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New Retail Formats

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New Retail Formats

The future is a digital-physical fusion

Some suggest that the continued rise of digital technologies will make the role of local retail stores obsolete. However, recent Ipsos research and leading real world examples suggest that the relationship between digital and in-store shopping is far more nuanced and interconnected.

One of the key outcomes from the research was that consumers visit stores for much more than just the purchase transaction - they want a more informative, entertaining and customised experience. The research indicated that shoppers are significantly more likely to shop in stores where they get personalised product recommendations as well as exclusive offers.

In short, we expect more than ever from retailers and want them to anticipate our needs as we progress through a purchase journey. Welcome to the return of retail theatre!

 

Digital to Physical Transition

Leading digital retailers such as Warby Parker and Bonobos are continuing to launch physical stores, but not in a traditional manner. Andy Dunn, Bonobos CEO states "we were wrong at the beginning. In 2007 we started the company, and we said, 'The whole world is going online only. All we're going to do is be online.' But what we've learned recently is that the offline experience of touching and feeling clothes isn't going away."

Bonobos are a great example of using unique physical spaces with their Guideshops, which provide customers the ability to determine sizing and be styled by experts instore, all during a personalised appointment (you'll even be offered a cold beer from the fridge). Items are ordered on behalf of the customer and are delivered directly to their home or office.

Bonobos have also recently launched Groomshops which allow guys that are getting ready for that special occasion to have as much fun as the Bride - think Say Yes To The Dress for dudes.

Warby Parker’s physical locations provide a similar level of brand experience and product interaction. Their store in Chicago includes a video jukebox corner, a resident portrait photographer and of course the ability to try all of their glasses on before ordering.

Digital leaders are leveraging the scalability and functionality of their digital/ eCommerce infrastructure for efficiency and using their physical spaces to showcase amazing brand experiences. This provides a great mix of customer experience and operational efficiencies (with online distribution centres managing the logistical aspects such as providing the stock holding and shipping).

 

Physical Leveraging Digital

There are many great examples of digital technologies transforming physical businesses. I've previously highlighted how retailers like Kate Spade and Sportschek are creating immersive digital experiences.

Nordstrom and Walgreens are widely recognised as established retailers that are leading the way in their omnichannel execution. The key tenants of both of their strategies is their achievement of inventory visibility across multiple customer channels as well as leveraging their stores as assets for customer interactions.

 

The Future Is A Digital-Physical Fusion

Many terms have been created to describe the phenomenon of merging physical assets and digital enablement tools – digical, digital-physical fusion and phygital. Fundamentally, consumers will continue to have high expectations about how they shop. Successful businesses are mapping their customer experience journey to understand how digital technologies can support and enhance each customer interaction.

Combining physical and digital assets promises to transform nearly every aspect of every industry. Are you ready?


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Default To Open

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Default To Open

Your default mode should be to share everything...
— Eric Schmidt


I'm currently engrossed in one of the books from my Christmas holiday reading list - How Google Works by Eric Schmidt and Jonathan Rosenberg. Eric is Google's Executive Chairman and Jonathan previously managed the company's consumer, advertiser and partner products so they write with authority on Google’s inner workings.

One of the key take ways for me was with respect to business communication. Their view is that when it comes to communication, businesses should default to being open and they should maximize the velocity and volume of the flow of their information.

Two great examples stood out for me:

The Google Board Report
Every quarter, Google executives create an in depth report on the state of the business providing data and insights on the business and products (nothing particularly unusual so far). What is surprising is that this detailed report is shared with every Google employee, along with a video from Eric presenting the slides that were delivered to the board. There are some elements that are redacted for legal reasons, but the default is to provide open communication and share. Google has shared every board presentation in this manner since they listed on the NASDAQ in 2004 and they have not had issues with respect to leaking of confidential information.

The key result is that nobody complains that they aren't aware of what's going on within the company. It's all there for their consumption.
 

Google OKRs
Another example of transparency at Google is their OKR process. OKRs are the Objectives (strategic goals to achieve) and Key Results (the way which progress towards the goal is measured) that every Google employee defines and publishes each quarter. It's a first person account of the things that they are working on and care about. The open nature of this information allows anyone in the business to understand anyone else's business priorities.

The OKR process starts at the top with Larry Page (Google’s CEO) posting his OKRs and communicating them at a company-wide meeting. The various business and product leads will then join in to define what each OKR means for their team and to review how they performed for the last quarter. Following on from this each staff member documents their own OKRs without any doubt of what the company's priorities are for the next quarter.

Google’s OKR process helps to maintain alignment across teams even as their organisation scales rapidly (they currently have over 50,000 employees).

I've been fortunate to work in a number of fantastic organisations, and I can only see an upside for staff engagement with increased organisational transparency. 

A good summary of the book follows, it's a worthwhile read!


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