Keep an Eye on Aurora...

A quick couple of interesting recent observations from the Aurora Fashion group (Oasis, Coast, Warehouse) on their vision for the future of multi-channel and the 'order anywhere, fulfil anywhere' business model that is becoming increasingly important in a world where shopping is changing and customers are expecting ever more from their shopping experience.

Rationalising the Store Portfolio

 Mike Shearwood the CEO of the group has told Retail Week that retailers need far fewer stores for credible national coverage in the brave new world, alongside a well implemented multi-channel offering.

“10 years ago, to have UK coverage you needed about 150 stores,” said Shearwood. “To have good UK coverage now, 50 to 60 stores are all that’s required.” He said Aurora was “We’re currently looking at our portfolio very carefully to ensure we have the right coverage to sit alongside multi­channel” and added that he could see scope for fewer, bigger 'more experimental' stores in the future.

I'd say this supports the theory that in order to keep people visiting bricks and mortar stores in a world where online ordering is becoming more convenient (eg more flexible delivery options, think Amazon lockers and the below...) and more embedded into our 'normal' shopping habits, retailers will need to maintain a real focus on the customer experience they are offering- sites, layouts, staff, experiences, that are exceptional and ensure the branch remains a 'destination spot'.....

Delivery Faster Than a Speeding Bullet (almost)

And finally from Drapers the news that Aurora demonstrates the sort of innovation and forward thinking that is necessary for retailers to flourish in the continued tough economic climate, by introducing further flexibility into its order fulfilment model with a new 90 minute delivery option, where, for a premium price (and in 10 key areas in the UK) your item will be despatched by courier to arrive with you within an hour and a half to solve your last-minute wardrobe/gift crisis..... Impressive....

Aurora group multichannel director Hash Ladha told delegates at the Drapers Fashion Summit that 'Offering the convenience of multiple ways to order and receive product was the future of fashion retailing.... “If we have got it anywhere, we have got it everywhere ......Retailers should open up their inventory...

And in further support of the 'customer in command' theme that I've recently touched upon, he added “there is only one brand now, and that is the consumer”.


It will be interesting to observe how many retailers will be able to compete with this sort of flexibilty of multi-channel/supply chain to keep up with the clearly defined vision of the likes of Aurora. E-Comm and M-Comm are key investment areas for retailers this year, but what impact will the economic climate have on their spending capability and keeping up with the ever evolving capabilities in this area???

The Importance of... Facebook.. and Phones...

In case you still needed convincing, a new study into consumer shopping behaviour across retail channels (including mobile phones) has revealed that social media is having increasing influence on consumer purchasing decisions.

The study commissioned by IBM found that consumers are using social networks in a sophisticated way, researching products, prices, promotions and other consumers’ views, to validate their decision making. IBM said this is then influencing sales across all procurement channels, not just online.

50% of respondents aged 16 – 64 with access to the Internet, used social networks to assist with shopping decisions and of those that said they would be likely to follow a retailer on a social network, 35% stated they use social media platforms to read reviews or rank products and services. Of this same group, 57% said that the most likely reason to ´follow´ a retailer on a social network was to receive free trials of products or discount coupons. When going on to make the purchase, around 4 in 10 of these online adults said they would still purchase the final product from within the store.

This is key because it unequivocally demonstrates to retailers (many of who are still failing to grasp the importance of social media to their business as we've discussed in previous posts) that consumers are making more considered purchases, and increasingly relying on social networks to help them research products before buying- they are looking at prices, searching out discounts, looking for reviews and rankings, yet interestingly nearly half of correspondents saying they would still buy in-store- demonstrating the cross-channel effect a successful social media strategy can have on sales.
As David Hogg, commerce solutions regional leader at IBM, adds: “Social media provides a new window through which retailers can deliver a more personal brand experience across all buying channels. By harnessing real-time customer analytics from social media, retailers can act upon what is being said, delivering a personalised marketing offer based on the customers’ shopping profile, preferences and decisions, helping retailers to maximise revenues.”

Can't escape M-Commerce either... Other findings of the survey highlighted consumers’ increasing desire to shop through the mobile phone. 51% of online adults said that they have shopped through the mobile phone, with 67% of these consumers stating that it was important that they could not only capture, but also place an order. The survey also found that mobile phones are incremental in providing additional revenue opportunities through promotions and last minute purchases with 68% agreeing that price comparison on the mobile was important or very important.

“It is clear to see that the mobile phone is no longer just a viewing screen or digital catalogue - there is a growing acceptance of shopping through the mobile. As well as connecting to these customers through their preferred channel, retailers also need to make sure they have the means of effectively managing their supplier and trading partner network to ensure they have the products at the right time and place to meet changing consumer demands.” concluded Hogg.
In a nutshell, again as I've discussed in the past, a consistent and well executed multi-channel strategy is becoming a must- customers are now expecting to be able to buy goods and have ordered fulfilled, using their phones, they want the same service they'd get from the traditional e-commerce site or of course in store. The lines are becoming well and truly blurred between using a sophisticated smart-phone, a tablet, a laptop etc to browse the web, so there should certainly no longer be a difference in the consumer experience.

Customer In Command...

Retail is changing. The original retail business models and supply chains have arguably been product-focussed, based on achieving a level of stock turn from a fixed space at a planned margin. Yet it is clear that consumers in the 21st century are forcing an evolution of the traditional paradigm, into one which is substantially more customer-centric, as we become increasingly ‘savvy shoppers’ placing higher expectations on our shopping experience than ever before.


A number of changes in consumer habits have forced this shift in focus away from product to customer experience and the ‘customer in command’ model, including these key trends:

• Considered Purchases

Purchase decisions are increasingly well-researched and thought through. As a result of factors such as the impact of prolonged economic difficulties leading to more cautious spending for consumers and relentless competition between retailers, and the increasingly tech/internet savvy nature of the average shopper; customers are typically spending more time researching their purchases (particularly larger ticket electronic items) before buying- comparing prices, specifications, deals, using sites such as Kelkoo to ensure they get the best value for money possible. In an example of ‘collaborative consumption’, the reading and writing of product reviews and sharing of information is becoming an increasingly important part of the purchase lifecycle. John Lewis have demonstrated their understanding of this concept with their recent launch of a ‘product review service’ on their website allowing customers with JL accounts to write comments and rate products. Retailers must ensure a good representation online to ensure they don’t miss out, with enriched product data, including reviews, to give the consumer as much information as possible, and of course strategic pricing and constant competitor monitoring is necessary to drive sales.

• Multi-Channel

The concept of multichannel has changed the retail fulfilment model beyond recognition. An increasing number of retailers (although not all) have transactional e-commerce (web) and m-commerce (phone) platforms in additional to traditional bricks and mortar stores. Retailers are now expected to provide a consistent customer experience regardless of which of these channels the customer has touched upon; which includes a digital customer experience that replicates the more customer-focussed store experience; and as such retailers such as Littlewoods, Asos (neither of which have branches) provide video footage of clothing in action to allow the customer a better look at items they are unable to try on; whilst other retailers provide the ability to ‘chat’ with advisors online or in the example of Dixons and Currys- provide personalised product recommendations, as an in-store advisor might.

But those with arguably the most successful multi-channel strategy are those able to provide an ‘order anywhere, fulfil anywhere’ model that provides the customer full flexibility for the most convenient purchase/fulfilment model for them, although this presents significant supply chain challenges. John Lewis popular and user-friendly ‘Click and Collect’ model is often cited as a popular example of this; as is Argos.

It is no coincidence that a recent study indicated that for the first time in nine years it is not Stores but Multi-Channel which is the investment priority for retailers in the coming year.


• The Rise Of Social Media

The swiftest impact to the retail industry in recent years has arguably come from the world of social media. It is testament to the significant of Facebook to businesses that retailers are starting to launch ‘f-commerce’ sites i.e. transactional pages on Facebook, seeing it as a viable additional sales channel. But perhaps the largest impact has come via the change in the customer relationship that social media enables. Customers increasingly use sites such as Twitter and Facebook to express their feelings about brands, purchases, shopping experiences in a very public way, and expect better engagement, a more connected relationship, and demonstrable listening and learning from retailers. Using these channels to engage directly with customers provides a valuable opportunity to enhance customer service, proactively dealing with issues, providing feedback, building loyalty and trust.

They can also serve as an important marketing tool, as Debenhams has recently demonstrated with its ‘brand advocacy’ programme, incentivising customers to use social media to relay their positive shopping experiences; but also as a rich source of customer data and insight; through analytics and listening tools (such as that provided by TCS). Tesco’ fashion brand Florence + Fred recently demonstrated the power of a well executed social media strategy (including proactively reaching out to online influencers such as bloggers) having achieved a number of objectives such as: repositioning the brand, reaching a new audience, pushing their core message of affordable fashion, creating interest and advocacy in the brand, gaining valuable customer insight, and driving over a £1m in additional sales through social media originated activity.

•  Example: Marks and Spencers
UK-based variety chain Marks & Spencer recently named TCS and SapientNitro as the new multi-channel partners it will work with to replace Amazon. The move comes as Marks & Spencer looks to increase multi-channel sales to between GBP800 million and GBP1 billion by 2014 facilitated through the building of key capabilities such as e-commerce, content management, search and analytics, as part of this development project. M&S aim to be an early adopter of the latest multi-channel technology, in recognition of how important they see this space to future growth and success for the business.

Retail on the Move: M Commerce

If you thought you were spending too much time surfing the net on your phone (and more specifically browsing and buying products) you'd be right- as a new survey (commissioned by Velti) has revealed that we are spending up to two weeks a year browsing retail sites on our mobiles!!!

The research, which was commissioned in order to examine and better understand how consumers are using their mobiles with regards to retail, has also uncovered some other significant details for retailers trying to make in-roads into M Commerce:

High Street Lagging Behind
A significant proportion of consumers surveyed (47% of all consumers and 66% of those demanding IPhone users) said that high street retailers aren't doing a good enough job with their mobile sites, and I'm sure most of us have anecdotal evidence to personally support that- the many retail m-commerce sites that fail spectacularly in terms of usability and are just a nightmare to navigate through on the phone.
Additionally, when asked what sites they had bought from over the phone in the last 12 months, Amazon and EBay dominated with 50% between them, whilst established high street retailers such as Tesco, Argos, Next, barely got a look in (7%, 4%, 1% respectively)

How to Win Us Back
But, it turns out us mobile shoppers are a pretty cheap date, as we can be easily bought back with a targeted SMS from a retailer/brand, 50% of respondants saying this has enticed thme to make a further purchase from that retailer.
And interestingly, 82% of those surveyed who use their phones whilst watching TV said that they research further details around a product or service on their mobile devices after watching an ad- demonstrating the potential synergy between media channels and the value of TV advertising in a digital age. .


PAYG vs Contract
  Finally, it's the PAYG customers who are spending a fortnight a year on mobile retail sites- the contract/IPhone users are on for a measly eight days a year in comparison. This presents a strong opportunity for retailers to better target these consumers, who Vodaphone say are typically younger consumers (those not old enough or ready for a contract) who are very technology and social media savvy, with their m-commerce offerings.
 

Some food for thought there for clicks and mortar retailers working on their m-commerce offering, who get a Bminus for effort. Look to pure play e-comm retailers for inspiration, sweet-talk us round with some targeted SMS deals, a harmonious multi-media marketing campaign, and embrace the very present younger m-commerce consumer.

Panic on The Streets Of London

As a retail blog it would be remiss of me not to mention at least briefly, the recent riots in London (and to a lesser degree elsewhere) it has predominantly been about London's High Streets- damaging and looting our local shops.

This has all been terribly depressing. Incalculable damage has been caused to local communities and local high streets.

It's the physical destruction of property- the shops and other buildings that have been vandalised, burnt out, that will be expensive and time-consuming to repair or rebuild (the sad tale of House of Reeves furniture store razed to the ground in Croydon, having previously been successfully run by five generations of Reeves, pictured above) and perhaps impossible for the unfortunate owners without appropriate insurance cover.

It's also the shameless theft of goods- in all honesty these riots seemed to quickly become about simple opportunistic looting in many towns across London. Shocking images of surprisingly young people grabbing trainers, large flat-screen TVs, and other consumer goods from the big chains ('getting their taxes back')- but also stealing from local shops, again who will struggle to afford to replace goods where insurance doesn't cover them against 'acts of terrorism' as this sort of thing is apparently defined- such as the Boots optician franchisee who isn't covered for the theft of £15k worth of frames from his store.

It's also the painful loss or limitation of livelihood for the many shopkeepers and shopworkers involved- both in terms of money having to be spent on rebuilding their business' properties and stocks (literally in some cases)  and the loss of income whilst this process is on-going. There is a large group of people who have seen their disposable cash go up in smoke over the past week, money that now can't be spent on goods and service locally, proving another blow to their local areas (and nationally) in terms of economic recovery.

But finally- it's the intangible damage that is arguably as bad as these things, at least in terms of longevity of effects. I've made the point before about the important role a thriving High Street has to play in its local community, and indeed the pysche of local residents. Conversely a High Street in which shops have been damaged, vandalised, looted from, and even burnt to the ground- this has a detrimental effect both on the local community and on its residents. It's symbolic on both sides- of anger and mistrust, failure and frustration, of hopelessness and despondency- and people get a daily depressing reminder every time they walk through the streets of their town. And fundamentally it makes these areas places we don't want to spend time in, and certainly don't want to shop in. It also makes these areas places that our retailers won't be interested in doing business in, thus the vicious cycle continues. Our local communities and town centres have been struggling enough in recent times- this entirely counter-productive destruction of them by local rioters makes it infinitely more dififcult for those places affected to get back on their feet and try to recover after the prolonged period of economic difficulty this country has been through.

I have no intention of making any political pronouncements on why this  might have happened, whether this could have been preventable, or what should happen now (although must say the efforts of @Riotcleanup on Twitter are admirable)- plenty of other people to make those cases.
All I know is- we should all feel a sense of responsibility for making the places where we live the best they can be, that's the only way we can conscienably make a difference.
Clearly not a view shared by those involved in the riots this week; more's the pity- for them and those around them.