Review: Digital Transformation Strategy (Part 2)
Retailers must keep their operations as simple as possible for customers while also being responsive to changes in the marketplace and embracing technology along with new ways of interacting with shoppers.
This was the overriding message conveyed at the second part of The Retail Bulletin Digital Transformation Strategy 2022 webinar where Nick King, director of Auto Trader, suggested: “It’s about making things easy for the customer. We’ve all been through mass technology adoption during Covid-19 and if anything is difficult then we won’t do it especially in this world of having everything instantaneous. Digital retail should make things easier for us all.”
He also suggests negative impressions hit consumers much harder than positive ones, which can be very damaging for brands. Lee Jones, CEO of Worldline Merchant Services UK Limited, says that as many as one in three customer who have had a bad experience abandon that brand. To address this, he says companies “need to focus on making the experience better and technology can help with this”.
Retention versus acquisition
This includes the adoption of loyalty programmes, which he says can help with delivering a more targeted and tailored experience for shoppers. This can then drive greater retention of shoppers, which Jones says is of great value because the cost of acquisition of new customers can be four to 10-times more expensive, according to research from Bain & Co.
Again, there is a need to keep things simple and easy, according to Aaron Chatterley, founder & president of Indu and founder of Feelunique, who says that setting up a loyalty scheme at Feelunique involved going for the easy option, which largely translated into copying the basic model of its rival Boots with its Advantage card.
“We tried various things like referrals but the one thing that stuck was spend X pounds and get X pence back. It keeps the scheme front and centre [in customers’ minds]. It needs to be easy to use and it is a question of keeping it simple. People don’t want to have to learn how to use it, they want it to be intuitive and simple. Don’t try and complicate it,” recommends Chatterley.
Simplicity is key
Simplicity is also a key factor in the recently launched ‘Dayforce Wallet’ solution from Ceridian, which is an on-demand payment tool that enables people to be paid immediately after they have done the work rather than having to wait a month for payment.
Sarah Poynter, account executive at Ceridian, says: “It only takes hours to set up and requires no additional work by the payroll team. It’s all automated with the on-demand payments all reflected in the month-end salary statement. And with this you get lots of happy employees.”
This is increasingly important during these times of chronic shortages of staff across all sectors. “It’s very difficult to attract talent into retail. How do you stop people moving if both the roles pay the same money? On-demand payment is a good tool to attract and retain talent. It makes companies sticky. People now want more rewards and not have to wait a month to be paid,” she says.
Embracing change is healthy
Embracing such solutions and different ways of working are inevitable in today’s dynamic market and should not be feared, according to Jones, who says: “Companies have got to be receptive to it. Many organisations have stagnated and gone out of business. We always have to challenge the team as we can always improve. If we embrace change then our staff have more opportunities to thrive.”
He cites the mistakes retailers have made by attempting to adopt multi-channel strategies but who have been hampered by having their various channels in silos. “They were missing the point of everybody being part of the same team. You have to break down the silos, which is very exciting,” says Jones.
In contrast, he suggests John Lewis has built a good, blended business with its Partners giving a good experience in-store and the online channel easy to use. Chatterley is very much of the opinion that the future involves multi-channel businesses whereas when he created Feelunique it was possible to build a viable online-only retailer.
Multi-channel is the only way
“The landscape in 2005 was very different. It was cost-effective to build a DTC (direct to consumer) brand. It was pay-to-play on social media channels and the price comparison sites were all reasonable cost. Now the cost per acquisition of customers is extortionate. The only winners are the ad platforms. It’s only possible to build a DTC brand by spending big or having a celebrity endorsement to enable you to build it quickly,” he explains.
Chatterley points to Sephora, which bought Feelunique, and is building out a bricks and mortar strategy in the UK: “With Covid-19 the high street was supposedly dead, but people actually want the human touch. I’m very nervous about any retail strategy that’s just online or just bricks and mortar.”
Despite the changes in the dynamics of the marketplace he remains an advocate for the use of data within businesses dating back to the early days of Feelunique and into his new business Indu – but he is not wedded to it: “Our business was digital-first so every commercial decision was based on some insights from the data. But I’m still cynical about the obsession with data. Some people often lose the ‘why?’ They get the data but don’t know what questions to ask of it. The obsession is with the amount of data they have rather than the questions.”
Jones suggests companies need to understand what data can bring to their organisations and that the opportunities it delivers them can be enhanced by bringing in data from a variety of sources. “With payments data we can tokenise card payments to track down behaviour across channels to see how much time is spent online and in-store. When retailers combine this with other data then they can create insights,” he says.
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