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Retail Bulletin Multi-channel Summit 2012

For many years the internet has been regarded as the greatest threat to the high street but the emergence of mobile as an effective way to link the online channel with stores is leading to a positive reappraisal of the role of physical outlets. By Glynn Davis

GENERAL MERCHANDISE

Retail Bulletin Multi-channel Summit 2012

For many years the internet has been regarded as the greatest threat to the high street but the emergence of mobile as an effective way to link the online channel with stores is leading to a positive reappraisal of the role of physical outlets. By Glynn Davis

This was the message delivered by a number of speakers at the recent Retail Bulletin Multi-channel Summit 2012 which was sponsored by eDigital Research, and included Neil Lewis, head of new channel development at Marks & Spencer, who told delegates: “Mobile is very important as customers can go into stores and read reviews, scan barcodes, receive and send SMS and read emails. It will therefore help join the channels in the future so it will be a key.”

Mobile increasingly important to multi-channel

Nicholas Maguire, business development for mobile loyalty at 2ergo, agrees: “Mobile is the saviour of the high street. E-commerce was all about buying online whereas mobile has been the evolution of this – with the ability to do price comparisons and look at reviews [on mobile devices] -  and this has brought the online journey back into retailers’ stores.”   

He believes mobile devices linked to loyalty programmes will bring back personalisation for the retail industry: “We’ve lost humanity in retail and mobile will enable retailers to know their customers not as a mass but personally.”

For Jon Asbury, head of digital at Halfords, as a multi-channel retailer he believes the “correlation between mobile and stores is closer than that between online and stores” with clear links being seen between mobile traffic and in-store footfall.  

Although he suggests apps like Red Laser (for barcode scanning and price comparisons) can be “quite scary” retailers should embrace the transparency that mobile devices bring and try to provide better service that will offset customers’ desire to price compare.

This is why Asbury is very positive about the use of QR codes: “If you can work out the routes for customers to use them then they can bring customers into the store. When we change the range we use them to give customers a better understanding of the products. Twelve months ago people had not heard of QR codes but they are easy to use and they are the most exciting thing out there.”

Click & Collect grows in importance

Highlighting the importance of stores to Halfords is the fact that 80% of non-store transactions are fulfilled in-store – through its Click & Collect initiative that has proved extremely popular. Mark Lewis, chief executive at Collect+, says the use of such services has “gone through the roof” and that it will be a defining theme for multi-channel retail in 2012. 

He cites a survey that shows Click & Collect has trebled in the last six months to now encompass 30% of all online orders. The reason for its popularity is that 64% of people say it is more convenient than home delivery, 44% say it helps them avoid waiting at home for deliveries, and 40% say it saves them money as they do not have to pay for premium delivery slots.

Lewis believes offering Click & Collect-type services will be increasingly important because “as e-commerce matures customers are being won and lost on the [level of their] delivery and returns service”.

The benefits of Click & Collect were quickly realised by footwear retailer Schuh as it enjoyed one of its best Christmas’s and Kenny Ball, IT director at Schuh, told delegates that offering a Check & Reserve option had contributed to this success.

It was introduced by Schuh May 2011 and over the festive period there were 50,000 such orders, with 37% becoming real orders. But Ball says the true value was higher because even when people came into store and the product was unsuitable many of them ultimately bought something else while in-store.

The company has also introduced kiosks into its stores that enable store staff to find whether goods are in-stock, find alternative products for customers, and check whether goods need to be ordered.

What is crucial to offering this type of service is the need for the rapid updating of the stock position across the various channels. “Any sale, return or stock adjustment has to be done within a maximum of three minutes,” says Ball.

Wi-fi in-stores begins to take-off

The big push in 2012 for Schuh as it further enhances its multi-channel capability is the roll out of wi-fi into stores, according to Ball, who says: “We’re installing it and buying iPads for store staff to carry around. We’re also opening it up to customers so we know where they are and we’ll be putting QR codes on all our stock.”

M&S is also trialling wi-fi in its stores, with Lewis at M&S suggesting that when it is combined with things like QR codes it will help customers move from one channel to another and allow retailers to follow them on that journey. “We can see what they have scanned, and we could bring it together in the data warehouse and analyse it,” he says. 

One of the key findings for Lewis from the wi-fi trial was the benefit of experimenting with new technologies: “Do it cheaply and hold it together with elastic bands. Do things as quickly as possible and learn. And don’t put the technology in and leave it – teach the staff, give them support and the right metrics to measure it.”

Stores in engagement role

Tony Bryant, head of business development at K3 Retail, says this mixing of technology with physical stores is giving high street outlets what he calls an “engagement” role rather than the traditional transaction-led function that they have delivered to date.

“On the multi-channel journey the store’s role will change but the majority of retail spend is in store so when you look at the engagement model then the store becomes important in the future. But store size is something that retailers will have to think about and will have to ask themselves whether they will only need 70% or even 50% of the store numbers they have today?” he asks.

Bryant believes this engagement role should involve retailers engaging much more pro-actively with in-store customers, just as they do with shoppers connecting with them through social media platforms.

“I’d call social media cold communications. Do we react as quickly in-store to issues as we do on Twitter and Facebook? There needs to be the same level of engagement in-store. It’s about balance and it currently needs more work,” he says.

Social media evolves

Whatever its benefits, Hayley Meenan-Wilkin, head of web operations at Tesco.com, says Tesco uses social media a lot as it is “very popular” with its customers. “We talk to them about new ranges, new ideas and ask them for ideas too,” she says, adding that the role of social media will undoubtedly change over the next five years.

She cites her 14-year-old daughter who thinks Facebook is passé but who will not buy anything unless it has been recommended by her friends on the social media platform. What is also difficult to achieve with social media is a clear-cut return on investment.

But although delegates at the conference agreed this was a tough ask there was broad consensus that engaging with customers through social media would continue to be vitally important to their multi-channel propositions.


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