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Omnichannel

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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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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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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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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eBay’s Quest To Reinvent Retail

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eBay’s Quest To Reinvent Retail

US based fashion label Rebecca Minkoff started as an online only brand in 2005 and opened their first physical boutique in Tokyo in 2012.  Recently, they have partnered with eBay to launch their version of the ‘connected store' to showcase eBay’s latest technology for reinventing instore shopping. The SOHO flagship store has an interactive mirror which allows customers to create a 'try on’ wishlist and receive a notification when their selected items are waiting for them in the change room. It also identifies items as they are being tried on and makes matching product recommendations (functionality that is usually reserved for online retailers).

The technology doesn’t stop with the interactive mirror though. In addition, the store features a ‘connected wall’ display (a 122inch ultra high definition screen) which shows lookbooks and fashion runway footage. Infrared sensors mounted in the ceiling are used to monitor how users engage with the wall. Merchandise tags are equipped with RFID to track which items customers try on and provide real time inventory availability. Employees use iPads to take payment and handle instore customer requests, whilst customers are able to checkout with PayPal using the interactive mirrors.

This is another example of eBay’s strategy to become a venue for all commence - not purely online retail - which has seen it integrate with physical retail destinations, where the vast majority of retail transactions still take place.

These kinds of immersive digital experiences will continue to be expected by customers as mobile device usage becomes ubiquitous and technology such as RFID enables retailers to build captivating instore experiences. These tools also provide businesses with a richness of data as customers progress through the shopping ‘funnel’ and provide real time insights usually reserved for online stores.

Is this the return of retail theatre? See the store in action below.



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ADMA Australian Creativity & Effectiveness Awards

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ADMA Australian Creativity & Effectiveness Awards

The ADMA Australian Creativity & Effectiveness Awards were held in Sydney last night with around 700 marketing and advertising representatives in attendance.

Previously, the ADMA Awards celebrated work that demonstrated either creativity or effectiveness. This year, the winner had to exhibit both qualities in equal proportion which resulted in controversy when some award categories did not have winners due to entries did not meeting the required standard. 

This year’s awards encompassed 38 categories in total covering diverse areas such as apps, branded content, data strategy, social commerce, mobile marketing and innovation. The Award icon, the Cuboctahedron, symbolises the union of creativity and effectiveness and the design is based on Leonardo Da Vinci's drawings which represent both creative flair (creativity) and intellectual rigour (effectiveness).

Michael Hill and our partner Amblique were nominated in the eCommerce Website & Marketing category and were fortunate to take out the award. The win compliments recognition as the 2014 ORIA Best Multichannel Retailer and Demandware Pacesetter Award for Innovation. 2014 has been a great year!

You can see the full list of trophy winners on the ADMA site.

 The Michael Hill and Amblique teams

The Michael Hill and Amblique teams


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Online Buying Intentions

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Online Buying Intentions

Do consumers use the web to research products with the intention of purchasing online or to research online and purchase offline (ROPO)? Unsurprisingly, the answers depends on the type of product that they are purchasing, with online purchase intentions around the world doubling since 2011 for many durable and entertainment related categories such as books, tickets and sporting goods. The good news is that these growth categories still have room to expand digitally.

In early 2014, Nielsen surveyed 30,000 online consumers in 60 countries to identify the most popular product categories for buying online versus browsing online and the areas where purchase propensity is leading and lagging. The report helps to identify barriers to online purchasing and strategies to overcome for online sellers.

Online consumers in categories like clothing, event tickets, books or travel reservations typically have a one-to-one correlation between online searching and shopping - that is, those who browse online also buy online. Consumable products have lower online browse/ buy intention rates than non-consumable products.

The report also quantified the trend towards consumers completing mobile transactions with 52% of respondents in Asia Pacific using mobile devices for online purchases, second only to mobile device usage in the Middle East.

The research highlights opportunities for businesses to cater to shoppers that need to research and need reassurance before completing an online purchase. One of those opportunities is to actively engage consumers using both digital and physical experiences throughout their purchase lifecycle.

View the full report from Nielsen - Global Online Purchase Intentions 


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