Omnichannel Futures review 2021
Massive disruption over the past year has led retailers to increasingly focus on the role of their stores and how they fit within their overall strategies that now involve greater sales and richer customer experiences online.
Speaking at The Retail Bulletin Omnichannel Futures 2021 webinar Richard Willis, RVP solution consulting for EMEA & APAC at Aptos, says stores still have a strong future in retail but they have to adapt to a dual-role.
Dual-role of stores
“Stores are now being used as mini distribution centres because warehouses do not have enough capacity for online orders. When stores reopen they will be used as click & collect and ship-from-store locations. Retailers will need to balance the goods that are for sale in the store and those that are for distribution,” he explains.
This has been the situation for Sally Price, digital campaign manager at Matalan, who says stores were 80/85% of sales pre-Covid-19 and then it migrated online: “We weren’t prepared for the sudden shift. We had fulfil-from-stores on our plans but we accelerated it and it has massively increased our capabilities,” she says.
This fulfilment capability must be aligned with improved experiences in physical outlets. Simon Irwin, director of EU general retail at Credit Suisse, highlights JD Sports as having only around 20% of its sales generated online because it wants to attract people into its stores. ”It uses its stores well and features regular ‘drops’ [of limited edition products]. People like to go with friends and feel the product,” he says.
Store experience moves online
There has also been an appraisal of the role of store employees in the mix as a result of Covid-19. Connie Nam, founder & CEO of Astrid & Miyu, says: “Our store managers started speaking to customers on Zoom and we’ll continue this service when our stores reopen. These ‘digital styling sessions’ have increased our sales. The average order value online was £68 and with the styling sessions it’s around £100. You can’t ignore the value of that human interaction.”
It is a similar story with Kristina Smith, founder of Bird & Blend Tea Co., who says: “Our stores are experience-led and when they closed people missed the interaction. We grew the service team and delivered tea-breaks on Zoom as well as tea matching on Facebook Messenger. We replicated the stores experience online.”
These moves to bring the store experience to the online channel have been beneficial for various retailers including Bunty Stokes, managing director of Asquith London, who says: “When lockdown happened we streamed yoga lessons online. This had a massive impact on our demographics. We were mainly the 35+ years-old market but last year our 18-24-year-old customers went from 6% to 12% overnight.”
For Claire Burrows, founder of Air & Grace, there has been an increased focus on using social media and a reframing of its loyalty app to convey the brand’s experience virtually: “We’ve used the social channels much more and we’ve become much closer to our customers. They engage and have a conversation with us. They feel part of the brand.”
Richer media enhances experience
Rich media such as videos and photos can be used to enhance this conversation, according to Alan Porter, director of product marketing at Nuxeo, who says: “It has replaced in-store activity. Companies have moved away from content as broadcast and it’s now more of a conversation. It’s a two-way street.”
In order to help their customers find photos and videos he says retailers are excited about using artificial intelligence and machine learning. “It makes things much easier and they can then link them to product information, allow them to buy the products [directly off the image] and also propose recommendations of other products. There is an awful lot of interest in this area,” says Porter.
Ian Scarr, head of UK sales at Klevu, says there is a lot that can be automated using AI and machine learning, which has the advantage of enabling analysis to be done at great speed. “Speed is the key as often retailers need to react quickly, especially when they are leveraging data from social media.”
Where AI sits well is with personalising the communications between retailers and their customers. However, care must be taken, according to Christopher Bull, CTO at Stitched, who says there is “a lot of seduction” with AI but it might not be the best technology for the average retailer. “Those that use it best are technically very good already. We keep away from it as we don’t need it right now. It can lead you into strange places,” he suggests.
Trevor Gordon, former director at Sodexo, agrees: “Nobody wants creepy communications. There is nothing worse than dumb chatbots. If people have a bad interaction then they won’t come back.”
Understand the customer journey
Fundamental to ensuring relevant personalised interactions with customers is an understanding of all parts of their journey. Graham Wilson, head of business development at Sofology, says this is helped by the fact that at Sofology 90% of people who buy from the retailer start the process online.
“This allows us to understand where they have been. We can then tailor their journey to that of similar customers,” he explains, adding that they are able to ensure the journey online is not prescriptive through the use of rich content and the likes of a video call service that helps remove friction and build trust. Sofology takes into account various key factors to help it understand each customer on their journey, including their room, budget, colour and durability.
Budgets are clearly an important factor and one of the recent trends in payments is the move towards using Buy Now Pay Later (BNPL) services by large numbers of millennial customers who have been shunning credit cards when buying online, according to Anthony Drury, managing director for UK at BNPL provider Zip.
He says the BNPL proposition had been typically used for low value items such as fast fashion goods but usage has been extended out to encompass purchases of higher ticket things like sofas, furniture and garden products. The other trend in BNPL is its move into the in-store space where app-based technology is being used in the same way as it would be used for online purchases, says Drury.
BNPL very much fits into the dynamic of what Callum Campbell, CEO of Linnworks, calls “effortless commerce”. This involves commerce moving closer to the customer across all environments and including the ability for shoppers to buy brands directly through Facebook, Pinterest, Instagram and other social media platforms. He also cites the build-out of click & collect by many retailers as helping remove friction.
David Robinson, COO of Pets at Home, has made various moves to ease the journey of shoppers on the back of Covid-19 including the accelerated introduction of one-hour click & collect, shipping-from-store, and a trial of contactless click & collect involving delivery to a customer’s car. “Fulfilment has become so important. It’s advanced three years in the past 12 months,” he suggests.
Helping home delivery at the moment is the fact more people are actually at home to receive deliveries. Ken Daly, CEO of JML Group, has seen this drive up online sales massively and he suggests the level of such sales in the future will be determined to some extent by the work from home phenomenon: “When normality returns it will be a hybrid model with two or three days per week spent at the office and the rest of the time at home.”
This session can be viewed here
Words by Glynn Davis
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