Customer Engagement Summit 2017
As difficult as it is, the reality for retailers is that they have to adapt to the changes in the way their customers are shopping otherwise serious problems lie ahead. Speaking at The Retail Bulletin Customer Engagement Summit 2017 in London recently Mark Spicer, CRM & loyalty manager at Lightspeed, told a packed room of delegates that retailers need to change their operations.
"Retailers have to deal with lots of shop windows - also known as channels - and if it feels hard that's because it is hard. Keeping track of what [devices] customers are using and what they are doing is the challenge. But doing nothing is not an option," he says.
ROI not necessarily obvious
It is sometimes not even obvious that there is a direct return on investment from developing a business that involves various channels. This was certainly the case at garden centre retailer Dobbies that closed down its transactional website in 2011 because the level of sales generated did not justify the ongoing costs.
Tim Curtis, former multi-channel director at Dobbies, says: "It lost too much money and garden furniture was the only one [category] that had as much as 10% of its sales online. But we knew 69% of sales were influenced by the web in some way. Customers going from online into stores was particularly important. The question was how to generate increased profit to fund investment in customer experience and content online?"
Having product information online was clearly critical as only 14% of visitors to the website were intending to order a product. "Most of it was research and finding store information. It's difficult to do the ROI on this," says Curtis.
Online visibility of products essential
He brought in a content management system that ensured all the 40,000 SKUs could be represented online. On top of this Curtis used a very modest budget to introduce in-store web ordering that helped quadruple furniture sales (worth £4 million of extra sales), and also added a drop-ship platform for certain products online that helped grow e-commerce sales by 40%.
In addition he built-out the site's capabilities to include a loyalty programme and event booking system to boost engagement. To ensure the maximum benefit is derived from such activity it is essential that the communications with individual customers is absolutely relevant.
For an increasing amount of retailers this involves taking into account the customers' previous searches as well as purchases. This is the case with Emma Fouracre, senior marketing manager at Evans Cycles, who says: "When a customer has searched for a bike then the product code can be sucked into an email communication in order to personalise the engagement."
Don't forget old school media
The company also sends out a physical catalogue of relevant items based on what the customer has recently bought, which ties in with emails it sends out. Richie Jones, head of digital & marketing at Saltrock, says he also mixes email activity with direct mail marketing, which involves sending customers a postcard. "If we tailor this to what the customer has bought then it's very effective. It's great to use data in this old school way," he says.
Recognising what is a relevant way to engage with customers is clearly just as important in retailers' physical stores as it is with communications undertaken externally. Matt Lyon, former head of 3D design development at Boots, says: "When you engage with customers you need to present something that is relevant. It's dangerous to just sell, sell, sell. Watching videos showing how to apply cosmetics is powerful to women but you can soon clutter stores with too many images and movement. It can get in the way of the customer journey."
Value of technology in-store
Steve Webster, head of e-commerce at Steinhoff UK, says he is working hard at introducing technology into stores that enables the experience and engagement to be more valuable and meaningful.
"Utilising our online store and a digital presence in-store customers can self-serve to narrow down their choice. There was some pushback from store employees but they then realised that a customer who has narrowed down their choice means they are a hot prospect," he explains, adding that when this capability was combined with an appointments booking system then the conversion rate multiplied by five-times.
Using technology to narrow down choice has been equally valuable at Dixons Carphone where the myriad handsets and tariffs confused customers. Saurabh Bahadur, senior insight manager at Dixons Carphone, says: "We brought in iPads with our Pinpoint solution that asks the customer lots of questions and then gives them relevant choices of handsets and data plans. The conversion rate is high and so we're translating it into Curry's/PC World sites."
Experimenting with AI and AR
The cutting edge of in-store engagement undoubtedly involves Artificial Intelligence (AI) and Augmented Reality (AR), which a growing number of retailers are investigating. Max Dawes, partnerships director at Zappar, says the technology very much plays to the desire by retailers to introduce 'retailtainment' into their physical stores.
He cites Asda, Toys R Us, Woolworths in Australia and Carrefour in Belgium as having embedded AR technology into their apps to enable stickers to be scanned in-store that enables characters to appear on the mobile screens of customers and then unlocks other content including games and competitions. Dawes says each of these retailers enjoyed significant uplifts in app downloads during the course of their specific AR initiatives.
Life events massively important
As interesting as these technology implementations are Danny Crowe, planning director of TwentyCi, gave an enlightening presentation at the Summit highlighting how massively valuable to retailers are the key life events that people inevitably experience. These are: moving house, having a baby, buying a car, starting retirement, and getting married.
"They are an opportunity and a threat. When customers move house they'll need lots of things but the threat is they are moving away from your store. Life events are a key attribute of customers. Life events affect people for long periods, it's not just for one day. And ahead of these events people are researching and looking for inspiration," he explains.
Crowe suggests more retailers need to take into account these changes affecting their customers because the potential purchases they drive are enormous. "Home movers are the most important customers. Excluding the cost of the houses, £12 billion is spent on the 1.2 million homes that change hands per year.
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