Viewing entries tagged
Digital Commerce

Reducing Return Rates - Perfecting Sizing Online

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Reducing Return Rates - Perfecting Sizing Online

Improving product return rates can have a big impact to a retailer’s bottom line. ASOS has previously quantified that a 1% drop in customer returns would translate into an additional $16million to the company’s bottom line.

So how do you improve return rates? Fundamentally, one of the biggest conversion hurdles and a predictor for apparel returns is product sizing and fit. There are significant cost impacts for retailers due to the labour, shipping and inventory expenses involved.

Fits.me, a London-based developer of sizing software, estimates that around 80 percent of all clothes bought instore pass through a fitting room, so it’s not surprising that online purchases made without a fitting room interaction need to be returned. The company (used by brands including Adidas, Hugo Boss and T.M. Lewin) interviewed German shoppers and identified that 35 percent aborted potential purchases because of concerns about fit.

Globally, businesses lose an estimated $8.4 billion each year because of incorrect sizing for online purchases, according to a retail research firm IHL Group.

Providing a better fit will see a big reduction in return rates, saving money for retailers and ultimately providing happier customers. Some improvement opportunities include:

  • Improved product photography - leading retailers provide product imagery of their products on model, as well as detailing the model’s height, weight and size worn, such as this example from ASOS. This level of detail allows customers to better approximate product fit. 
  • Body scanning - emerging technologies such as Bodymetrics and Styku that use sensors developed by Microsoft for its Kintect platform to create 3D avatars will help determine the correct size. A customer simply gets scanned instore and the software compares their measurements with the exact dimensions of garments to recommend the perfect fit. Bodymetric’s scanners are already in use in select Bloomingdales and Selfridge’s locations. 
  • Product comparison tools - True Fit provides software to retailers that predicts how other garments will fit based on brands and products that a customer already owns. Their tools have had good success by reducing the return rate for a premium denim retailer from 50% to 20% for 400,000 customers. See it in use at House Of Fraser.

Whilst not directly reducing return rates, providing instore returns presents a convenient option for customers and facilitates another opportunity for brands to interact by allowing  for complimentary or alternate products to be presented. One critical aspect is to ensure that the process is seamless from a customer perspective, particularly ensuring that stores aren’t disincentivised from facilitating customer returns.

Ultimately, allowing customers to better identify sizes and brand preferences will result in a better customer experience and bottom line.


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Micro Mobile Moments

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Micro Mobile Moments

Consumers no longer go online, they live online... People are spending significantly longer online, however, that time is no longer made up of a few long sessions, it's now driven by short bursts of online activity. Previously idle moments like waiting for the bus, standing in line or sitting through TV commercials are now filled with digital engagements. The customer journey has changed into hundreds of what Google defines as 'intent-driven micro-moments' with each one an opportunity for brands to shape customer decisions.

Google recently quantified this through their Consumers in the Micro-Moment research, which identified:

  • 80% of Australians say they now access the Internet more often, but in shorter bursts
  • 81% of Australians say their smartphone searches are more focused on the information that they need immediately (like finding store locations, choosing where to eat or finding directions), compared to their desktop searches
  • 95% of users will turn to their smartphone for immediate information, ideas or advice
  • 71% of people who used their smartphone to search whilst instore trust online reviews more than the word of the sales person

Digital commerce provider Demandware recently highlighted a similar trend in their shopping index which measures digital commerce growth and is based on analysis of the shopping activity of over 200 million shoppers across 1,300 websites worldwide generating billions of dollars in revenue. They identified that phones are the driving force of digital commerce growth and shoppers are doing more than just browsing via their mobile - phones accounted for 94% of the year-over-year increase in traffic, 74% of the growth in items added to an online shopping bag and 47% of order growth.

They also identified the trend towards consumers engaging in short bursts of activity - the index shows that duration of shopping visits on mobile devices decreased 37%, whilst cross device shopping increased 10% between Q2 2014 and Q2 2105. 

This presents a number of opportunities for marketers:

  • Create a connected strategy for cross device shopping and allow shoppers to pick up where their previous ‘micro-moment’ left off
  • Tailor your customer journey to meet consumer’s 'I want to know', 'I want to do' and 'I want to buy' moments - either via products of services that provide customer utility or via content that answers their questions
  • Use personalisation on key customer touchpoints such as email or websites to accelerate the customer journey deep into their shopping experience

In short, mobile devices are changing the way we do things and where we do them.

Learn more via Demandware’s Shopping Index or Google’s Micro Moments research.

Consumers no longer go online, they live online...

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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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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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Net-A-Porter’s Social Shopping - The Net Set

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Net-A-Porter’s Social Shopping - The Net Set

Net-A-Porter recently announced that it will launch its own mobile (and Apple watch) based social network called The Net Set. The platform combines user images with products and leverages image recognition software to recommend the closest product match from Net-A-Porter’s range, then offer that item for purchase. It’s an interesting play by Net-A-Porter and continues their push into content and publishing where they are already leaders in this field via their shoppable print Magazine Porter. Both of these initiatives see them building and managing a platform themselves, therefore minimising reliance on existing media channels and deepening customer engagement. 

Another notable recent social commerce launch is LikeToKnow.it which was launched by RewardStyle in 2014 and is used by brands such as Matches, UrbanOutfitters and Vogue. LikeToKnow.it makes brand and user Instagram feeds shoppable by sending an email with the product featured in any Instagram posts that have been captioned with the LikeToKnow.it URL. The functionality requires registration and is very similar to Like2Buy, another shopping work around that bypasses Instagram’s current commerce and external linking limitations.

If The Net Set app gains traction, Net-A-Porter is uniquely positioned since it will provide a more consistent user experience, minimising the impact of customers bouncing from social network to the site and back, as well as potentially mitigating issues around cart abandonment and inventory availability. Net-A-Porter’s recent merger with Yoox should also enable them to scale and fund required growth in technical infrastructure, user acquisition and inventory range.  


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Netshoes Tiny Pop-Up Store

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Netshoes Tiny Pop-Up Store

Netshoes, a Brazilian eCommerce sporting goods company has recently launched its first physical store. That 'store' was so tiny that is was squeezed in between two other shopfronts on one of the most popular shopping streets in São Paulo. The pop-up store essentially made over 40,000 products available in a space slightly larger than an iPad. It also exposed the brand to over 35,000 daily passers-by.

The campaign execution is pretty simple and a good PR opportunity for an online only brand. This is further evidence of pureplay retailers continuing to test new retail formats

What other dormant space exists in city centres, malls or airports that could be transformed for your brand?
 


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Top 50 People In eCommerce 2015

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Top 50 People In eCommerce 2015

I'm excited and hugely humbled to be included in Inside Retail's inaugural Top 50 People in eCommerce list. My inclusion is also great recognition for my colleagues in the Michael Hill digital team and their continued success.

A judging panel of eight industry experts selected the Top 50 based on their level of industry influence as well as their active involvement in the digital strategy and implementation for an Australian-based eCommerce business. Other consideration factors were innovation, the individual's impact, market size and value. 

The list is a great sign for the continuing maturity of the Brisbane digital scene with other local talent being nominated including Nathan Bush (Super Retail Group), Michael Gillespie (Domino's Pizza) and Cameron Parker (ex Blackmilk).

The Top 50 is filled with people and businesses that I personally admire and respect including Jane Cay from Birdsnest, the team from Shoes of Prey, Justin and Lex from Surfstich, and the boys from Vinomofo. The calibre of people on the list is high and shows great signs for the continued growth of online retail in Australia.

View the full Top 50 People In eCommerce 2015 list.


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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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