Special report: Mobile should be embraced for maximum multi-channel impact
Multi-channel retailers must embrace mobile technology and look to utilise its capabilities to improve the experience in stores they give customers rather than being scared of activities such as show-rooming. By Glynn Davis
Speaking at the recent British Retail Consortium Omni-Channel Retailing conference in London Andy Harding, executive director of multi-channel at House of Fraser, told delegates that he did not see mobile use in-store as a problem and that it was positive to have engagement with customers in-store provided this dialogue was used to add value to their experience.
Encourage mobile usage
“Getting somebody to use their phone is a good thing and we want to use this to demonstrate value. We can present content to the customer and give them a reason to not buy elsewhere,” he says.
The amount of price comparisons actually being undertaken in-store using House of Fraser’s Wi-Fi was proven by research that showed the websites of its rivals did not even feature in the top 10 sites viewed in-store. Its own site was top followed by the likes of Facebook and the BBC.
Jon Rudoe, digital and technology director at Sainsbury’s, agrees: “You can’t be scared of technology and customer behaviour. You’ve got to embrace it and show customers the value [of your offer]. You can’t trick them. There has been a massive democratisation of information.”
Such is the embrace of mobile in Sainsbury’s stores that it is trialling a mobile ‘scan & go’ service in five stores where customers scan the goods on their own phones. Such initiatives – along with Click & Collect, which is available in 1,000 locations - are increasingly impacting on the way Sainsbury’s designs its stores, according to Rudoe.
Flexing store space
It is the same story at House of Fraser where Harding revealed that the upstairs of its Frasers Edinburgh store had been converted into a Click & Collect boutique space where goods not available in the store can be viewed and ordered online.
This has some similarities with its Aberdeen Click & Collect store of which another 12 such outlets could soon be open as the company is currently in negotiations on various sites.
Such discussions about stores is not an issue for Gareth Jones, group retail & strategy director at Shop Direct, who confirmed that the pure play retailer still has no plans to open physical stores.
Test and fail
But there is no doubting its commitment to mobile devices, which are at the heart of its strategy. What has helped it continue to grow sales is its willingness to experiment and trial new ideas and technologies.
Jones revealed that the company typically has something like 35 different tests on the go at any one time “including crazy things from [companies in] Israel and Silicon Valley”. “Our business was fearful of change...but now we have a fail-fast mentality. A third of our tests will fail but we’re happy to get it wrong,” he admits.
This experimentation is pushing the company further down the path of developing greater personalisation, which Jones believes will in three-to-five years’ time make the company “uniquely different”.
Personalisation is the future
“The secret sauce is personalisation and we’ve more data than most retailers. We’ll use it to power real-time decision-making. We’re personalising [the experience] to customers’ preferences. It’s about finding triggers that will create lifetime value,” he explains.
Tesco is also looking to personalise the customers experience – in its stores – through its mobile ‘scan as you shop’ facility that is available in some outlets. Luke Vinogradov, mobile experience director at Tesco, told delegates that it was trialling the use of historical shopper data to recommend products in-store, which he believes is a “less interruptive” way of pushing communications to customers’ mobile phones.
Another possible future innovation could be with Click & Collect as Vinogradov reckons that with mobile device’s geo-location capabilities it should be possible to ensure customers do not have to queue when they visit the store to collect their orders. “If we know they are there then why not help the customer. We’re not doing this yet,” he says.
Where are your customers?
Knowing where your customers are is increasingly important in the multi-channel world and the likes of Tesco and Sainsbury’s have the ability to use their loyalty cards to link their customers to their activities across the various channels.
But for other multi-channel operators this can be a real problem. Jonathon Brown, chief executive at MandM Direct, suggests that it could well be that 90% of customers in a John Lewis store are “invisible” to the company.
“It’s hard for them to know who the customers are in-store,” he says, adding that it therefore makes justifying stores’ square footage a tough challenge because there is not the hard customer data to utilise – unlike for online-only businesses.
Developing stores for the future
Utilising its significant amount of high street square footage to maximum benefit is something that Argos has been committing a lot of brainpower. Bertrand Bodson, digital director at Argos, says the company created six digital concept stores – and two new formats are planned – that opened before Christmas with the aim of bringing technology to the fore.
Customers order via iPads and after paying for their goods they are brought to them at the counter in only 90 seconds. Pre-payment can also be made online and goods collected from specific counters. The stores also feature Click & Collect, which Argos pioneered, and have been extended whereby goods ordered on eBay can also be collected.
For goods not available in smaller stores the company has developed a hub and spoke solution involving 50 outlets at present whereby items can be shipped the next day for collection at the store of the customer’s choice.
To ensure it continues pushing out new developments Argos has created an innovation hub that includes the mobile team as Bodson says this type of environment suits “fast-paced developments”. This is indicative of the desire of the company to push the boundaries in creating a physical store that has value in the multi-channel world.
“What’s surprised me is the speed with which things are happening at the company such as the concept stores, hub and spoke, innovation labs and the partnerships with eBay,” he says.
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