From John Lewis, Ocado and Next to Google and mGage we heard from an array of leading retailers, technology providers and industry experts at IRX 2017 this week. There was too much for just one newsletter – but here are some of the key themes that stood out. We’ll be returning to some of these in more detail in coming weeks, and exploring other areas we didn’t have space to touch on here.
Chatbots were the upcoming technology of the show for many. Neil Ellul, customer journey manager at Next ??, speaking in a customer experience panel discussion, said the fashion retailer was looking at the technology, while fellow panellist Stuart McMillan, deputy head of ecommerce (ch) at Schuh [IRDX RSCH], predicted these would be common currency within two years. mGage says that chatbots work for customers because they enable customers to do their digital chores more easily after hours, enabling them to answer up to 90% of questions. One solution on show at IRX was iAdvize’s conversational commerce platform, which includes the option to have chatbots answer customer questions.
Nick Wilsdon, group SEO lead and channel optimisation, Vodafone [IRDX RVOD], said that the mobile phone business had seen voice searches go “through the roof in the last year or so”. Doing well on voice search, he said, is about having a better mobile experience and is helped by appearing in Google’s featured snippets – so optimising for that feature will improve visibility both in SEO and for voice search. The company reached the tipping point for mobile traffic from SEO in December. “Everyone is on their phone all the time,” he said. “This is where we’re spending our time and why the mobile search query is increasing all the time.” Rowan Merewood, senior developer advocate at Google [IRDX VGOO], explained how the use of AMP (Accelerated Mobile Pages) improves mobile retail results on Google.
Black Friday has been all about online in the last couple of years as shoppers decided to avoid the sometimes heated competition for stock in stores. But Terry Murphy, John Lewis [IRDX RJLW] national distribution centre director, expects the store to become more central in the Black Friday experience in years to come, even though he also expects ecommerce to account for 50% of John Lewis sales by 2020 at the latest – he suggests that could happen a year early. He says the rise of click and collect, already the most popular way for its customers to take delivery of ecommerce orders, will bring people back to the store. “We know a significant proportion of transactions involve a shop,” he said, “and we know a lot of people buy something to match or an accessory in shop, while others try it on in shop and order online. Black Friday has been less impactful in shops in the last two years but I think that will come back as people want to test and try things.”
Game’s [IRDX RGME] data team is now self-sufficient, Fred Prego,director of loyalty and marketing at the retailer of gaming hardware and software told IRX. It makes enough money by sharing customer insights with game publishers to support a 10-strong team. Those insights come from its customers’ loyalty: the 20m who have bought from it over the last year and are members of its Rewards Account scheme give the retailer enough information to inform its strategy and help publishers to sell their games to Game customers. When one newly-released game wasn’t selling well, the retailer helped the publisher to target relevant customers: by sharing reviews with active game buyers, and offering a discount to more casual customers, it helped to lift sales of the game by more than £0.25m. “Data is the foundation of everything you are doing,” said Prego. He added: “Data is transforming Game the retailer.”
The challenges of taking the store experience to the web – and vice versa
The Lego Group’s [IRDX RLEG] global ecommerce director Shehnaaz Chenia says that when the brand started to look at how customers will buy from the brand in the future it found that shoppers felt a disconnect between the online and offline channels. When it redeveloped the site it looked to improve its convenience, value, relevance and playfulness. “We took the very best of physical stores and moved that online,” she told an IRX 2017 audience. “The architecture and design resonates with the perception and feelings that you get as you enter the store itself.” Other focus areas included improving navigation to make products easy to find, while emphasising the value of a product to child development. Store features that may be taken online in future range from animations of the model to working out what in-store pick and build would look like online. Game, meanwhile, has brought online into the store through an app that enables them to play games that are signposted in-store on their phones, and through in-store gaming arenas that are open only to Game Rewards Account holders.
Ocado [IRDX ROCA] has branched beyond its core online grocery business in recent years, launching its own specialist websites Fetch.co.uk and Sizzle.co.uk, and striking partnerships with Marie Claire to operate Fabled.com, and with Morrisons to use its in-house developed technology and customer fulfillment centres for the supermarket’s online grocery business. Ocado’s James Matthews, managing director, general merchandise relationships, said the retailer’s next partnership was likely to be with a UK general merchandise business. “There’s a network of distribution centres here that you can switch on and off,” he explained. Spreadshirt’s global director of product Anushka Jayawardana told the IRX audience that while it was a marketplace for creative businesses designing their own T-shirts for print on demand, it also used Amazon to sell its goods – indeed, some 10% of its business comes from this example of working in partnership.
Ocado has gone from writing its own software to fit around off the shelf fulfillment solutions to using its own physical robot fetch solution in its newest distribution centre. Automation has been vital to Ocado’s success in online grocery, said Matthews. “There’s no way we could have made a profitable business with a manual picking system,” he told an audience at IRX 2017, adding: “The problem with automation is it’s difficult to procure and to maintain – we have it in house so for us it’s efficient to buy as well. John Lewis’ Terry Murphy said peak trading 2016 was the first real test for its newly automated distribution centres.