Review: THE Retail Conference
After initially struggling in the UK, the affordable luxury brand Rituals engaged in a focus on improving the customer experience that led to a turnaround in the fortunes of the business and helped fuel growth into an 80-store retailer in the UK & Ireland.
Speaking at The Retail Conference 2023, organised by The Retail Bulletin, Penny Grivea, managing director of Rituals UK & Ireland, told a packed room of delegates gathered in Central London that cutting the company’s early discounting approach and instead providing a richer experience to its customers was paramount to its survival in the UK.
Building out the experience
“We were doing lots of promotions at the point when we had reached nine stores and I cut all of that. [Developing] the customer experience is what I’m most proud of because in the early days when it was very important to engage with customers. We did lots of activations outside of the stores like serving tea, which we still do, and once we brought them into the stores then we could convert them. Now the brand is much bigger, but we should not be complacent,” she says.
The Rituals in-store experience has been extended to include the likes of spas, treatment areas as well as massages and meditations in certain outlets along with a growing loyalty programme, MyRituals, which conveys many benefits.
Dedicated to boosting the user/customer experience at the maker of the Swiss army knife is Desi Reuben-Sealey, senior manager of UX at Victorinox, who says that when he joined the business: “We needed to understand the customers – their expectations and needs. Then we looked at the technology that could provide this.”
Delivering on promises
Helping provide the relevant technology to retailers is Alison Brown, marketing director of Xpedition – that works with the likes of Wasabi and Bradshaw Taylor, and suggests companies know they need to connect better with customers and this is often about data – but it is not necessarily easy: “We help them address the issues where there is no visibility of who’s coming into stores and around the supply chain. We help retailers deliver on their promises to customers”
Matt Dine, head of sales at Experian, agrees that data is fundamental to retailers deciding on the strategic journey they need to take and he recalls Dave Lewis, former CEO of Tesco, spending heavily on data from Experian ahead of his turnaround at the grocery retailer. Not every retailer follows this path: “We’ve seen retailers shy away from investing in data.”
Armed with the relevant data retailers can better determine what they stand for, according to Kelly Whitwick, head of retail market insights at GfK, who says: “Brands need to focus on who they are. This determines which brands customers choose to shop with – whether it is fast delivery, free delivery or extended warranties. If you are not known for anything then the brand will not stand out when the pricing is the same as at other brands.”
Trevor Gordon, founder & director of Redshank, suggests many retailers are not there yet: “They need to know their customers and what they are about. Think about the whole customer experience and constantly invest in this.” For Amelia Macdonald, head of retail experience at Colart, this involves taking a “social listening stance” whereby the company monitors key customers and influencers on social media. “Through listening to shoppers it drives our experience in-store. We know what people like and so we create experiences around these learnings,” she says.
The social channels are very much part of the marketing toolkit for Emma Thackray, co-founder & managing director of Hip Pop, who says social media and social commerce allows for brand storytelling and improving the customer experience.
“We’re moving away from gut instinct and using the data on the 20,000 customers in our database. The way you segment and use customer groups across social media channels is key. Our brand looks young but many of our older customers, who are on Facebook, are the most proactive at promoting us,” she explains.
Using these channels to direct different messages to varied demographics is vital, according to Whitwick, who says research shows 57% of 16-24-year-olds use Tik Tok, 47% of 25-34-year-olds use Instagram, and 58% of 45-plus-year-olds use Facebook. Thomas Vosper, co-founder & CEO of aisle 3, finds Tik Tok especially productive for enabling businesses to engage rapidly with large numbers of younger customers: “Anyone who is not doing something on Tik Tok is asleep at the wheel.”
For many retailers the challenge is linking such activity to their various trading channels and luxury has been slower than many categories to embrace a multi-channel approach. Gianfranco Cuzziol, former CRM & personalisation lead at Natura & Co. – previous owner of Aesop, says: “It took a long time to convince employees [in-store] that sending customers online was the right thing to do. We got away with the store not being connected to the online shop pre-Covid-19
but then when stores reopened after the lockdowns then people wanted their online profiles to be linked to their in-store activity. You have to move to where the customer is going.”
Lucy Nicholls, VP of marketing & design at Intelligence Node, says: “A lot of luxury brands were later at online adoption as their focus was on high-touch so it took a while for them to get on-board. Web3 opens up the online space for better interaction and customisation. There are many ways for brands to interact with consumers.”
This has certainly been a learning for Aesop as Cuzziol says the company has been using more tools to interact across channels, which has helped it drive greater DTC sales. “To compete with Amazon you have to differentiate from price and convenience. When we sent out Aesop gift packs to our Amazon customers it included a QR code that took them to our own website and incentivised them to register with Aesop [and buy direct from it for future purchases],” he says.
Recognising the power of stores
DTC was all the rage during Covid-19 when it was associated with the online channel but for many online-only brands it is company-owned stores that have become increasingly recognised as a massively valuable DTC channel. Rob Savin, former marketing director at Alpkit, says: “The DTC outdoor clothing brand was online-only but stores are hands-down the best way to get the Alpkit brand across to customers. In-store they can get the real essence of the brand.”
For Alpkit sustainability is “desperately important” and in-store shoppers can see its repairs section. The company also enables old unwanted items to be returned to its stores for potential resale and these are also visible in its outlets.
Anna Woods, founder of Positive Retail, has also found its three stores in Kent are the best way to convey her sustainability messaging to customers: “People felt relief that there was somewhere local they could shop for surplus and pre-loved. People are grateful the stores are there. The most pleasure I get is explaining the concept to shoppers. It’s exciting that they don’t have to go online to eBay.”
For Tim Nash, Curator of Shop Drop Daily, the advice to online retailers considering stores is to recognise that they do not need to be LVMH or do a full immersive experience in the physical space. “They need to understand that physical retail is just another touch-point. It’s about inspiring consumers to be part of the brand. You need to work out the reason for the space,” he suggests.
What is important across these channels is having one source of truth, or a single customer view. Cuzziol says: “Every organisation needs it but it does not have to be perfect. Start by building-out the customer journey and the MVP (minimum viable product) that fulfils the customers’ needs. Think about what the customer needs and then build the view from there.”
Will Lockie, digital director of Noble Panacea, agrees: “Retailers often think they need to digitise everything for the single customer view. They need to understand that channels should play to their strengths.”
One of the channels that has been enjoying great traction over recent years is the marketplace – whether that is retailers using them as a route to sell down or to host their own platform from which to sell third-party brands.
Glen Stocco, co-founder & managing director of Plane & Simple – a builders’ merchant marketplace, says the key considerations for retailers looking at selling down such channels are: the fees they charge; whether the brand is exposed to customers before the transaction is completed; if the customer base is the target audience or is a broad audience; how easy is it to get started; the ease of managing products on the platform; and is there control over where the products will be delivered?
He suggests there will be a growing number of specialist marketplaces like Plane & Simple tempting shoppers away from Amazon. He questions how much inventory should be added because there is always the risk of becoming too broad a marketplace. Just Eat is broadening its offer beyond take-away food to encompass other categories. These have initially involved groceries but Ellie Starr, head of strategic partnerships at Just Eat, says there is much more planned.
“We’re known for food delivery but we we’re a marketplace and we’re now looking to move into retail with the recent launch of Lego. Hopefully there will be some [other] new verticals added by the end of the year. Over time our strategy has changed. You’ve got to evolve, you can’t do the same thing,” she says.
While Just Eat handles the delivery aspect, Plane & Simple places this in the hands of the brands on its marketplace. It is the same with Fruugo, which is very much about cross-border trading. Håkan Thyr, chief revenue officer at Fruugo, says: “Ninety per cent of our transactions are cross-border so we leave delivery up to the seller. We help with translations and currency conversion and remove the barriers of cross-border but there’s no 30-minute delivery!”
Another question retailers should ask of marketplaces is what can they provide beyond the transaction? “What insights can retailers learn from them? What intelligence do they get back from the marketplace?” asks Thyr.
Intelligence has certainly leapt up the agenda of all retailers with the ongoing advances in Artificial Intelligence (AI). Emma Siveyer, head of digital & experience at Three UK, says: “AI is huge for us – for marketing and sales. The focus is on predictive AI. How does the customer get to our website, what pages do they view, the dwell time and what’s their next action? We use a huge amount of data to do predictive AI to determine new sales journeys.”
Chris McCullough, co-founder of Rotageek, agrees there is a massive opportunity: “It’s very exciting for the customer journey – with the ability to predict upsell opportunities and predictive analysis on inventory. There is lots of investment in the front-of-house but the back-of-house has not kept up.”
Determining where to direct their AI investments will be particularly important for retailers as the technology is undoubtedly going to have an increasingly big impact on the sector and much of this should be positive. But retailers should not lose sight of the fact that people will remain the vital aspect of the industry – especially the youngsters coming into sector.
Rowland Gee, CEO of The Shoklite Company & director at AromaChimie, says: “The future is bright for retail [in the UK]. We spend more online and in-store per capita than any other country in the world. But we need to supply support and knowledge to the young cohort.”
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