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Four highly practical approaches to strategy and innovation

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The detail of international expansion always has to be worked on, for every one of the European Economic Area’s leading retailers (plus Switzerland). Offers and approaches that work in one country can be transplanted to another – but will need refining to be effective. Real innovation is also constantly coming through, and effective roll-out is challenging. Here Christian Annesley picks out four more approaches that impressed us this year – some offering pointers to the future and some that are having an impact now.

1. Look again at digital labelling

After plenty of false starts down the years, there’ s evidence that electronic shelf labelling could soon go mainstream. The big four UK grocers are trialling ESL (electronic shelf labels) in a variety of pilots, prompted in part by improved technology. Morrisons is testing a colour LCD video shelf-edge system, for example, which is a lot more sophisticated that previous trialled displays. 

The ESL devices of today are full colour that have a much higher quality image than previously, allowing them to display more information than price alone. Battery life has improved significantly, alongside the ability to communicate and integrate with a retailer’s inventory and pricing systems. The change in use case for ESL is being driven in part by regulations in the UK around pricing, and EU-wide requirements for the display of food information at the shelf.

2. Take steps to nurture innovation

Retail tech innovation doesn’t have to take place beyond retailers in start-ups, as department John Lewis shows by expanding its JLAB retail technology programme. Up till now the programme, which was started in 2014 and sees technology teams develop relevant software within the John Lewis environment, has run for 12 weeks at a time. Now the programme is ramping up:  it is to run for a year, offering three chances for established businesses, as well as start-ups, to prove their technology, with opportunities both at Waitrose and at John Lewis.

“As more and more businesses face digital disruption, it’s increasingly important for the Partnership to stay committed to the ideals of our founder, John Spedan Lewis, by experimenting and nurturing innovation both inside and outside our business,” John Lewis Partnership resident futurologist John Vary has noted. “This is exactly why we have created a completely new JLAB for 2018. We wanted to take the programme to the next level by launching more events but with a focus on themes we feel are most significant to our customers as well as the future of retail.”

3. Be local for every customer

For retailers selling across Europe and the world, delivering the right mix of country- and language-specific sites is key. That means a site that intuitively takes the visitor to the right homepage, and in the most likely language. 

Many use flags with drop-down picking to swap between languages or between country sites – and global players like H&M offer more than 60 site options. But delivering a local experience extends beyond those site choices, because it’s inevitable that not all country offers are created equal. Is the retailer offering a full online shopping experience for a particular market or providing some other offer – showcasing products that can be bought in a local store, for example? 

Delivering on local also extends to the return options available to customers. In Europe, typical terms for return are 14 days from receipt of goods, but many retailers offer 30, 60 or even 90 days to return. Out in front here we have the furniture and homewares giant IKEA, which boasts a “365 days to change your mind” policy on most products, even including assembled furniture if it’s re-saleable.

4. Aim to get personal 

Every customer likes to feel special, and personalisation holds the key. What was once just an aspiration for retailers has shifted mainstream, with sellers using “predictive intelligence” and deploying experience management tools to deliver experiences that are a fit for each individual customer. The tools also allows merchandisers to observe customer behaviour and, with every action taken, to build a profile of customer preferences against which to get personal – usually by offering customer-specific content and products in real time. Today the tools are often fully automated, which saves a lot of manual work, while the personalised approach can also be applied across the different channels – so email, SMS campaigns and more, as well as a personalised website experience.

Automated personalised merchandising tasks include the configuration of site elements, cross-selling and upselling to customers plus the set-up of discounts and promotions. The offers are usually based on basic available data like the customer’s age, gender and postcode, plus search behaviours and completed transactions. 

This feature first appeared in the latest IREU Strategy and Innovation Performance Dimension Report. Click here to read this report and explore the Top500 series of reports further

Image courtesy of John Lewis/JLAB.

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