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eCommerce

The Path To Unified Commerce

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The Path To Unified Commerce

While the business pages buzz with glowing reports of climbing revenue driven by a unified consumer experience – now even seamlessly integrated with the customer’s daily life, many retailers just need to know where to start.

Behind the single brand your customers see there can still be a big divide between store and digital, constrained by legacy infrastructure and a cultural resistance to embracing change.

Here in Australia, we read about omnichannel success stories in the US - like Macy’s revelation last year that its customers who shop across channels are eight times more valuable than single channel shoppers.

These rewards don’t come easily:

Macy’s underwent a major journey of organisational change to become deeply customer-centric and support this new world of ‘micro-moment’ shopping.

There are local heroes too. Myer’s latest results show its online business delivering revenue increases of 70%. The rise in profitability, outstripping sales growth, was attributed by CEO and MD Richard Umbers to Myer’s recent omnichannel efforts, in particular expanding instore iPad services and investing in click and collect capabilities.

In 2015, more than two-thirds of retailers from over 45 countries surveyed by the global National Retail Federation expected to increase revenue, margins and brand value thanks to omnichannel.

Yet it is no surprise at all that the road to customer centricity has twists, turns and potholes. According to a November 2015 article in the Wall Street Journal, half of all consumers picking up in store had problems collecting.

And the logistics only get more interesting when you venture into more ambitious omnichannel territory like real-time inventory checks and cross-channel returns and promotions.

So how best to avoid costly pitfalls, and the corresponding negative business fallout? Australian retailers of all sizes are examining their organisational structures and working to establish internal commitment to improving the consumer experience – and ultimately, to place the customer at the heart of operations

Becoming truly customer-centric often starts with the purchase. Technology is a key enabler, allowing Sportscraft, Saba and JAG customers to click and collect, browsing and purchasing online at leisure but still taking home must-have new releases the same day.

Mecca and Michael Hill first established accurate real-time inventory visibility (so consumers can find items in stock at nearby stores). Over time, they added technology to make social content shoppable.

Linking to photos shared by consumers on social media builds customer engagement, and embedding product data and purchase capabilities into social content opens up a brand new channel for purchase .

The best advice is to move at your own pace. Useful things to consider at the start are:

  • Map the ideal customer journey and interaction points for your brand – make the ideal state your roadmap.

  • Execute incremental changes: start small, use pilot trials, measure success and engage with stakeholders across the business to deliver real results.

  • Start by providing real-time inventory visibility to enable your customers to buy across different channels.

  • Investigate click and collect and shipping from store to add flexibility in purchase and fulfillment.

It takes commitment to build the cultural change required, but the rewards justify the effort.

L2Inc data published in 2015 contrasted net sales for ecommerce pureplays (77 cents on the dollar) with omnichannel players offering online purchase and in-store return: 95 cents on the dollar, replacing lost revenue with incremental in-store spend during the return process.

Offering both in-store pick-up and in-store returns delivered even greater value as shoppers exchange and add to their purchase.

The omnichannel buzz isn’t dying down, but it is changing, with talk about moving beyond channel concepts altogether into an uber-unified customer-centric world of ‘digical’ or ‘phygital.

There are plentiful opportunities for Australian retailers to leverage emerging technology to serve the customer better, faster and more efficiently.

Originally posted at http://www.ragtrader.com.au/advisors/unlocking-new-channels

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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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Mary Meeker's 2015 Internet Trends Report

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Mary Meeker's 2015 Internet Trends Report

Mary Meeker has just published the 20th version of her influential annual assessment of digital trends and the Internet economy. She has a history of recognising the biggest digital trends and identifying the most important start-ups.

Her Internet Trends 2015 presentation runs to 196 slides and is heavy with detail. Below is my tl;dr version with 17 key slides highlighting the relevant global trends.

You can view the full presentation below or download the PDF.

 

There is still significant upside for mobile advertising spend growth. Print continues to receive significant media spend relative to the number of eyeballs...

 

Mobile video viewing has provided an opportunity for different video orientations... (see snapchat, periscope and meerket)

 

Apparently men use pinterest too...

 

Visual media drives Internet usage for teens...

 

consumers now expect almost anything to be available just in time...

 

Cyber attacks grow in scale and awareness...

 

creative and knowledge based jobs continue to outpace routine and manual occupations...

 

The millennials have arrived as the largest generation in the Workforce - soon to be the generation with the highest purchasing power...

 

It's not all about money for millennials...

 

Opportunity for Incomes to be materially supplimented by additional income streams...

 

Tencent provides insight into the scale of hundreds of millions of chinese internet users...

 

India is rapidly entering the internet mainstream with over 200 Million internet users, growing over 37% last year...

 

The Indian market is already driving growth for global Internet Leaders...

 

Indian Internet use continues to be more mobilised than almost all other countries...

 

Design continues to heavily influence leading customer experiences...


You can view the full presentation below or download the PDF.


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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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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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Next Generation Geolocation Services

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Next Generation Geolocation Services

Have you ever had a package incorrectly delivered? Tried to find an address in Japan? Been unable to validate your address in an online form? It's time for a modern solution!

what3words is seeking to revolutionise location information and addressing with a simple and memorable solution. The UK startup has partitioned the whole planet into around 57 trillion 3m x 3m squares, and assigned each square a unique 3 word address. The solution removes the need for street numbers, street names or postcodes. The interface is amazingly simple and memorable - it's very easy to remember three little words.

what3words has been translated into multiple languages and has a really small file size (10MB for the details of the whole earth) so it can be used on basic devices without Internet connectivity and in the developing world.

The solution should reduce costs for online merchants by reducing redelivery fees and also opens up significant opportunities in developing countries where addressing standards have not yet been defined or for personalised services where increased location granularity is advantageous.

It even makes a great word disassociation game. Checkout:

See how what3words plans to address the world:


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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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