Retail Ecom Connect review – managing the speed of technology
Change is inevitable within the world of retail but as new technologies and digital tools continue to hit the market at an ever faster pace this is bringing both challenges and opportunities for the industry.
Setting the scene at The Retail Bulletin’s Retail Ecom Connect conference in London recently Giles Smith, Independent Digital Product & Technology Advisor and Consultant, suggested: “What is different today is speed. It’s bewildering, challenging and exciting with new technology now coming along weekly. But there’s a mismatch between the pace of change and how to manage it.”
Overcoming legacy systems
This is certainly recognised by Lalit Suryawanshi, Head of Architecture at N Brown Group, who says: “You can’t stand still at the moment. For search younger people are now using ChatGPT. Everybody is saying AI is the new model and all are joining the bandwagon. CEO’s are requesting you use AI but there is lots of fear from it and they are unsure how to progress.”
Subscribe to TRBHe says the board wants AI to be used at N Brown but there is the challenge of it being a legacy retailer with lots of heritage and historical systems still in place. Rupert Cross, CEO, Lead Consultant & Founder at 5874 Commerce, can certainly sympathise that there is a world of difference between new brands and legacy brands.
“New ones would never put in a mainframe architecture but legacy is something many people inherit. How do you map a way out of it? In 20 years I’ve only had one ‘greenfield’ job and it was straightforward. It gets complicated with most others systems,” he says.
Cross adds that he will often hear CEO’s stating their company is to migrate onto the Shopify platform because it will solve all their problems but he suggests this is a mistake: “They need to refocus and find the steps to do beforehand, which could involve sorting out the data. Businesses want quick transformations and not be spending millions of pounds.”
Liam Hewitt, Digital, eCommerce, Social & Technology Consultant at VML, agrees and suggests that while the likes of Shopify might solve 60-70% of problems there will “never be a perfect fit for large, complex businesses”.
Leveraging AI
Sorting out the data is something Scott Taylor, Executive Director of Marketing at American Golf, has been focused on ahead of using AI. “The investors and CEO said, ‘what are we doing with AI?’ My job is to balance the buzzword with the business.”
This has involved pulling together the likes of customer data, preferences, behavioural data, weather and economic data and adding in emotive data such as reviews. This helps build a profile of the customers and helps explain why they got into golf, which then enables one-on-one conversations to be done at scale.
“We’re using AI on this unstructured data. We’ve previously been able to look at structured data but what we’ve really needed to know is what customers are thinking. Then we can be more relevant,” he says.
Unlike such use-cases for AI Hewitt says he can relate to stories of retailers considering using AI for fixing problems whereas it should be seen as a tool for driving efficiencies. Such misunderstandings can contribute to companies holding back from embracing AI. He recommends: “Using the tech you already have in your business. I was surprised by how much AI is in Shopify. It’s about prioritising and getting quick wins. It’s all very different than 15 years ago with speed, execution and barriers to entry having completely changed.”
Trevor Gordon, Chief Digital & Technology Officer at Save the Children UK, agrees and suggests retailers don’t need to spend £500,000 on a proof-of-concept. They should be built around legacy technologies, which will have some AI tools. And look at other companies like suppliers who could be partners [in AI] and work beyond being just suppliers.”
Avoiding silos
He also suggests retailers need to “demystify and simplify” AI through taking simple use-cases and getting teams comfortable with using it. The recommendation from Paul McDermott, Web Transformation Delivery Lead at Diageo, is to avoid the temptation to build silos with AI.
“With anything new people separate it into its own department and do not integrate it into the business. It was years before email [communications] and SEO was in the marketing department. Retailers have to be careful not to place AI in just the IT department. It’s got great capabilities but it should not be in silos. It’s important to bring the outside in,” he says.
Although Martin Newman, Founder & CX Guru at The Customer First Group, has no quibble with silos in terms of them being departments he believes the issue is that they do not drive collaboration and people working together efficiently: “People only measure their part of the business. I’d recommend looking across the whole business and see what AI can do.”
A concern for McDermott with AI is safety around the use of data. Using internal data provides some comfort. “The first obligation is to have fair and accurate data. Are they good decisions being made? I’ve seen Walmart, Dell and Meta publish their AI policies online. It will be like CSR. The sooner we do it voluntarily the better.
Gordon agrees having transparency and AI usage guidelines will be advantageous for colleagues and customers. “Agentic AI is doing all sorts of things but if you’ve not got agency and trust then it’s a problem. Use GDPR to your advantage. This is the key to bringing customers along with you,” he suggests.
Safety should be strategic
Trust is aligned with safety and at the moment in retail there are growing issues around this as cyber-security becomes an increasing problem across the whole retail landscape. Charlotte Fraissé, Senior Program Manager – Regulatory at eBay, says that for tech companies such as eBay it has been a concern for some time.
“These are exciting times but you need a lot of safeguards or there will be consequences, especially with the regulatory environment. Everything used to be built in-house but with AI we recognise there is lots of legacy [in the company]. We realise there’s a lot of work to do to refresh the tech stack. We now need to do things better, faster and with less friction. Speed versus safety is the hardest part. There is a need to have conversations [around safety] at the strategic level.”
Teresa Long, Industry Leader – Retail, Leisure & Hospitality for GB Risk & Broking at WTW, says there are greater risks of cyber-attacks with technology and how it has spread throughout organisations. “Retail will not be the same in 10 years’ time and people in the tech space need to engage with the risk teams and the insurance teams. It’s about looking at risk holistically and not just in the technology area.”
Charlotte Taylor, Senior Associate – FINEX Cyber & TMT at WTW, says the engagement with insurance companies can encompass: instant response to attacks and being able to call on ransomware negotiators; the handling of cyber liability that involves data braches; and helping with business interruption that covers loss of revenue that can also extend to third-parties that have suffered losses as a result of attacks on a retailer.
One area that has inherent risk from cyber-attack is media and communications with customers that has become increasingly personalised and diversified across myriad channels. But whatever the risks and challenges there is a need by retailers to use all the communicational channels available.
Selecting profitable channels
The challenge for retailers is to find the most profitable channels, according to Katie Cole, Head of Marketing at ACRE, who says: “It’s important to understand your customers. You don’t need to be on all channels Meta adverts do not work for us. Don’t be afraid to not use all the channels. There is pressure on marketing teams to see what channels work and the ROI. We use Salesforce for tracking this.”
She suggests that as retailers use a variety of campaigns across channels it becomes more important to track results of spend in order to understand LTV (Life Time Value) of customers. With subscription models Cole says LTV is a vital metric.
Tim Fairs, Senior Consultant at SG Retail, agrees there needs to be some discipline as he states that retailers get excited by driving online traffic but the reality is that the conversion rate in e-commerce is only around 3%. “Start with solid foundations, with a user experience that is bang-on and there’s no friction. Otherwise you are investing in a leaky bucket. Then look at SEO and CRM etcetera. You want a great customer experience from day one. Do this before investing in driving traffic.”
He suggests that since stores still account for the majority of retail sales there needs to be a greater blurring of bricks and mortar with e-commerce. “How do we replicate the store experience online with the likes of video chat and also replicate the in-store experience online with product content and video reviews. Retail will then grow overall. It’s not about competing channels,” explains Fairs.
For Anjuli Parmar, Digital Marketing Manager at Bayfields Opticians and Audiologists, there needs to be a consistent message across all the channels. “People see us as a brand. We reinforce our messages across channels.” Despite having private equity investors she says Bayfields is still a family business: “It’s about remaining authentic. The problem with AI is [the risk of] losing the human touch. People are still the essence of the business.”
People remain at the heart
Cole highlights the importance of people and brand storytelling: “We talk about our founders. It’s around what the business can offer in order to deliver emotional and human connections? It’s about story and heritage.”
Adam Aubrey, Managing Director of Primo, says the company’s move into social commerce is about “bringing storytelling into transactional commerce”. Although it can sometimes be difficult to directly attribute a sale to a live video on a social channel Hilary Large, Owner of Wardrobe at The Cross, is in no doubts about the value of posting on the likes of Instagram.
“We are constantly doing live events and the conversion during these is massively greater than normal sales levels. The website is a static sale but when we do ‘lives’ it’s a conversational sale and the conversion is much greater. It’s about storytelling to 60-65-year-olds who are totally uninterested in static transactions. It’s all about the story, sustainability and them asking lots of questions. It’s the social element they want,” says Large.
She suggests it is a misconception that only younger customers use social commerce as most of her customers are older. This is also the finding of Daisy Kelly, CEO/Founder at Glow for It, who says: “It’s not young, value-led customers on TikTok. The perception of TikTok is that it’s like QVC.” Whereas she cites her core customer as being 35-45-years-old who generate average order values of £45-60 with the hero SKU costing £30.
Shaun Loughlin, Digital & Technology Director at Le Mieux, recognised the value of social commerce as he brought social onto the company’s website. “Customers said the product images looked great but they wanted to see the products on people and hear what they actually thought. We pull in this user generated content when our hashtags have been used.”
Big brands embracing social commerce
He cites Sephora as the gold standard of such blending, which is an achievement as large brands can have challenges in this area. Kelly highlights L’Oreal as having a huge live strategy but the challenge has been to get sign-off from management because social commerce only generates a small percentage of its total sales. “But the halo effect could have increased sales of L’Oreal products in Boots. Social commerce is easier to do as a founder-led business but it also has value to these larger brands,” she says.
The next step on this conversational type of transaction will come from the growth of agentic AI as technology makes it possible for customers to discover products and complete purchases directly within generative AI chatbots, including ChatGPT, Gemini and Perplexity.
John Brolly, EMEA Partner Manager at Athos Commerce, says: “There are a lot of black boxes with AI. Customers can checkout in the agentic box and retailers will have to adjust to some of their spending going into agentic.”
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