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Four strategies to stay ahead

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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 12 approaches that impressed us this year – some offering pointers to the future and some that are having an impact now

1. Reimagine the store – part one

The in-store customer experience is more important than ever, and stores need to be more than just places to transact. So some of the most innovative and compelling stores are making digital a core part of the store experience. Where Burberry, among others, led more than five years ago with its flagship Regent Street store closing the gap between the brand’s physical and digital worlds, others are now following with a range of moves. 

The Spanish fast fashion retailer Zara’s recent use of augmented reality (AR) on its app to enable in-store shoppers to see the clothes they are examining ‘come to life’ is one example, as is its piloting of dedicated click and collect spaces, and its use of technology to help recommend items to customers with information screens embedded into mirrors triggered by RFID. 

Less dramatically but very effectively, we also see a retailer such as Halfords embracing the role of the store in omnichannel retail, with 85% of online orders still picked up in store, which drives its burgeoning services offer for customers. 

2. Reimagine the store – part two 

Smarter use of the store environment takes us, ultimately, to Amazon’s re-imagined – and now open and functioning – store, Amazon Go. There’s still just the one, after teething problems, in Seattle, where Amazon’s HQ is, but it points us in a direction that others will soon travel in more incremental ways.

The Amazon Go ‘just walk out’ technology does away with the need for checkouts and can in theory enable unstaffed stores. Shoppers download the Amazon Go app on their smartphones, scan the QR code outside the store to alert the app that they’re about to start shopping, and dive in. Clever sensors track which items customers take off shelves and put into their carts. Once shoppers are done, they just walk out the door and the sensors automatically charge their Amazon accounts.

This kind of connected retail experience is possible thanks to the power of Amazon’s online profile and consumers’ ability to pay directly from its apps, but it really isn’t far away for many retail brands with loyalty apps and loyal online audiences.

3. Embrace mobile and the app

Apps are starting to dominate retail sales in the mobile space, and retailers need to understand the power of this trend. For many retailers, mobile traffic already equals or exceeds desktop traffic – but in the final quarter of 2017 mobile sales also represented the majority of total ecommerce for those with successful apps.

How are apps taking centre stage? Try this statistic: retailers that have both mobile sites and apps are seeing, on average, two-thirds of their online sales coming from mobile devices, according to recent research. As you might expect, conversion rates on mobile apps are much higher, as well – roughly three times greater than on the mobile web. This may be because the user experience is better in apps, including the checkout process, but it will also be because those who download and use retail apps are loyal and inclined to buy in the first place. For pan-European success with apps, there other aspects to the challenge here, since customers need an app in the right language with all the right sophisticated functionality for every marketplace.

The fast-fashion retailer Asos is a good example of where the trend is taking us. It is spending a big slice of its resources on developing its mobile app for multiple country markets. Built in-house, the app has had more than 10m downloads according to the company, and is home to features like AI-driven product search, mobile payments and an analytics function. Most recently, Asos rolled out a visual search tool app users that lets shoppers take a photo of a product they like in-app, to pull in similar items from a pool of 85,000 product images. The feature launched on UK iPhones and has since been introduced to Android and international markets. 

Asos is betting among other things that visual search will help solve the problem of narrowing down its product assortment and getting customers straight to the products they’re looking for. For example, a search for “red shoes” on the Asos app generates hundreds of results, but when using visual search you get fewer and better-matched results.

4. Sell your vision on social 

Social media is entering a new phase in retail. Those retailers that are working hard on social channels, tailoring messages to local markets and engaging customers on the right platforms, are amplifying their voice and raising brand awareness. But it means looking after a lot of social channels and feeds, across many languages – so needs proper resourcing.

What’s an example of a good use of social media? IKEA’s sharing of user-generated content that shows real customers creatively using IKEA products is one nice move. It not only promotes engagement but it’s a lot less work to put together than creating your own content from scratch. Plus it shows real customers using products, which serves as social proof. The most passionate fans and customers get a chance to shine and featuring them is an opportunity to give back and say thanks all at once. The use of images is also right out of social media’s current playbook for engagement – with video even more likely to be shared.

Things are also moving in social media, creating new opportunities. Earlier this year Instagram cemented itself as a direct-to-consumer ecommerce brand with the launch of Instagram Shopping in the UK – an update on the platform that lets consumers seamlessly purchase products directly from businesses.

Marks & Spencer is one of the first three businesses to take part in the UK test phase of the Shopping function, with M&S head of digital marketing Erin Roy heralding how: “[Instagram Shopping] offers us the opportunity to realise the huge potential of our 760,000 followers.

“Instagram has always been a great platform through which to showcase our products and engage with customers. Shoppable posts take this to a whole new level. They are simple to create, easy for our customers to use and enhance the Instagram experience.”

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: Fotolia

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