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Mobile continues to revolutionise retail

Mobile devices are increasingly impacting people’s lives and this is continuing to affect the way they engage with retailers. Merchants are recognising this as a driver to transforming their business models in order to satisfy the more complex demands of customers.

GENERAL MERCHANDISE

Mobile continues to revolutionise retail

Mobile technology has clearly been around for some years but it is becoming increasingly enmeshed in the lives of consumers, which will likely be reinforced with the advance of machine learning and Artificial Intelligence (AI) that makes mobile devices even smarter.

Speaking at The Retail Bulletin Omnichannel Summit in London recently Ruth Ballett, industry manager for retail at Google, told a packed room of delegates that searches undertaken on mobile devices were up 34% in December 2016 compared with the previous year and that retail related searches on mobile are now greater in number than those coming from desktop.

More intelligent analytics

This trend will likely become more prevalent with the advent of more intelligent analytics, according to Ballett, who says: “At Google we placed our bets on there being an inflexion point after a decade of mobile. It will now be driven by machine learning and AI. We’re moving onto a decade of these systems.”

This will ensure mobile will be even more woven into people’s lives, she says, adding that it means search will be more “two-way, conversational”. This will have a profound impact on retailers’ activities as it will further contribute to the blurring of the lines between online and offline.

“Omnichannel journeys change the value of the store visit. The value goes up. It doubles because the visit is more efficient and customers are more likely to buy. They are less inclined to browse,” says Ballett.

Improve the customer experience

She cites research from McKinsey that shows 74% of luxury goods sold in-store had some digital influence, which is increasingly via mobile. Ballett says this is a “wake up call to many retailers we work with” and should prompt a greater focus on improving the channel including obvious things like reducing website loading times.

Will Prosser, senior mobile commercial manager at Tui Group, recognises this situation and recalls the recent Black Friday trading period when 55% of retail website traffic was from mobile but only 36% of sales came from such devices. He also stated that as many as 46% of people who researched on mobile made the final booking on a different device.

“Customers are not comfortable, which could be because: they have limited experience online; they are anxious about security; or it is difficult to purchase on the mobile site. Less than half of customers say retailers are delivering a seamless experience across all their channels,” explains Prosser.

Differentiate the channels

Part of the solution is to ensure the mobile experience is differentiated from other interactions and that it is at the heart of the overall proposition: “We need to identify the needs of customers and place mobile at the core of the customer experience as it’s so pervasive. It’s the gateway to new interactions.”

Such differentiation on experience is proving increasingly vital because Simon Evans, CTO at Amido, believes Amazon has effectively got the market sewn up on price so all other online retailers need to focus on the customer experience.

Amido worked with Asos to help it deliver a better experience that involved a radical overhaul of its technology infrastructure, which has enabled it to better scale its business to meet surges in demand. For this Asos took a cloud-first approach and a careful selection of what solutions it needed to own, which would be the elements that would differentiate it from the rest of the market. It did not take the route of purchasing a big underlying enterprise solution.

Evans recommends such a course for other retailers: “To avoid being disrupted retailers need to own the technology that differentiates them but to then commoditise everything else that is a hygiene factor. Deciding what is commoditised is down to the individual business.”

Focus on key strengths

Michael Koch, chief marketing officer at Time Inc UK, agrees that retailers must take a fresh look at their businesses and position themselves around what makes them unique and differentiated. “If you think you could be disrupted then do something about it. Retailers should look for what makes then unique and ask themselves: ‘If you were to disrupt yourself then what would you do?’” he says.

Asos has also taken the approach of treating each of its digital channels differently, akin to being a multichannel retailer with online and physical stores. This enables a more relevant experience and tailored level of engagement across each channel.

Carol Savage, former chief customer officer at Conviviality Retail, recommends retailers look outside the sector at other industries for inspiration including leisure. “They have got great examples of how to engage with customers. Don’t just look at your own sector. And also watch what future customers are doing – see how children are interacting with technology.”

Upping the engagement game

One of the considerations for Asos within its transformed business, with its new agile infrastructure, is the use of AI. This is already present, says Evans, for things like product recommendations and it will be used even more often in the future: “It will be increasingly important to intervene [using AI] at the points when it will help the customer [in their journey].”

Lisa Kelly, VP of business development at Teleperformance, says such interactions have to be very carefully managed and cites Webchat as initially seen as a positive development but then it started having a negative effect as customers found it too intrusive within their shopping journeys.

“You need to understand what the customer is doing and [the interaction] has to be positioned at the right point in the journey,” she says, adding that this same sensitivity applies equally to automated interactions that are now being brought into play with the likes of Chatbots.

Visibility across channels

Maximum value from such interactions – automated or not - can only be leveraged when retailers have a single view of their customers across all channels. Uwe Hennig, CEO of Detego, says the reality is that visibility of customers is typically lost when they are in-store: “Customers who are well known online become invisible in-store.” Solutions need to be adopted that identify customers regardless of the channel they are in and remove the existence of silos in retailers’ businesses.

It is the same story with inventory where single views are required across the whole business. Only then, says Hennig, is it possible for retailers to efficiently operate Click & Collect, in-store ordering (endless aisle), and next or same day delivery. “Retailers need [consistent] information across all sales locations including stores, online, franchise stores and concessions,” he says.

One solution to inventory visibility is RFID technology, whereby products can be tracked across businesses. Marks & Spencer is among the merchants to use this technology and it is a major purchaser of RFID tags that perform a valuable function – especially across its clothing division.

Despite the complexity of the transformational strategies that retailers are initiating the end result should be about ensuring the business still operates with simplicity, according to Will Lockie, former head of e-commerce at Evans Cycles, who acknowledges this is not an easy task by any means. He says success can only be delivered by sound leadership, strong cultures, and effective change management.

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