by Francis Wallinger
Retailers – with the noted exception of Primark – are, and have been for a good while, striving to make online work for them. But the constantly shifting landscape of the online world means that the vast majority are behind the curve. Mobile optimisation is still far from being universal, user experiences range from the exceptional to the dire and in all of this the customer is caught in the crossfire. Yet one has consistently stood out from the crowd in terms of profits and customer satisfaction: John Lewis. Much has been made in the business pages up and down the country about its Christmas successes since the eponymous adverts of 2011 and 2012, as well as its downturn-defying sales and profits. It is the envy of the retail world, with many trying to emulate its success. Mark Lewis, the shop’s new online director, recently revealed to the Daily Telegraph one of the main reasons for the retailer’s current status – local store managers having responsibility for online sales in their region. It’s interesting to consider why this use of data works so well, and how other retailers can look to adopt similar tactics to maximise their offering.
The John Lewis success story has been achieved through providing linked up data access for everyone involved in sales; not just those at head office but those on the ground running the store. Giving on-the-ground managers control over the online sales strategy combines the best of both worlds: local customer understanding and data-driven insight. This ties in perfectly with the click and collect drive of late – tying the in-store experience with that of the online – but it also represents a strategy rarely (if at all) seen amongst other retailers.
Such a system requires a robust and effective data management and analysis approach. Customer behaviour on a regional level needs to be collated effectively and be available to all who need it. This delivers an overarching unifying view into customer demand and requirements, available to all in the organisation. John Lewis has clearly made fantastic use of such a system.
Yet one can be sure that it wasn’t just access to this data that has led to John Lewis’s successful online/offline integration. This complete view of all customers reveals trends on a national and local level that all areas of the business can use: C-suite for overarching strategic plans, marketing for campaign engagement and, as mentioned, managerial for local sales pushes.
These managers can separate out their local shoppers by demographic, product preferences, spending power; any number of variables to allow targeting by each outlet. This means that there isn’t one central marketing strategy where location is just one of a number of variables – it means the marketing strategies differ based upon locations – a far more targeted state of affairs.
Putting store managers in control of regional sales is just one way in which retailers are looking to emulate John Lewis’ online successes. The company has found its own method of combating the associated difficulties of managing multiple facets of data to provide a localised, or in other words, customer-centric, experience. As we move towards the realities of big data, retailers can look to invest in new systems that can help them achieve an overarching view of each individual customer; from what they buy, how they like to be contacted and what drives purchase decisions. M&S is one such retailer currently in flux, attempting to adapt its business to these 21st century necessities. It is not just its customer data management that needs overhauling but its stock data systems also. The Guardian recently extensively examined the failings in M&S’s distribution network thanks to its outdated data systems. Stock is still being counted by hand, meaning that stores simply don’t know fast enough what is selling and the current trends. This drastically limits the speed with which discounts can be offered to customers and effectively rules out any chance of personalised experiences for loyal shoppers. M&S has acknowledged these failings, so the industry will be watching with a very close eye to see how such a large retailer will embrace data.
This story is a perfect example of how the retail industry is starting to see a large volume of data requiring quick collation and analysis if it’s to offer the company any real value. This is why regional data becomes such a priority when evaluating the day-to-day changes in customer behaviour and the interactions customers have with personnel in store. M&S stock was held all over the country, meaning that it took days, if not weeks, to understand trends nationwide and get stock to where it needed to be, a state of affairs simply not tenable anymore. Data needs to be a priority for retailers with real-time data in particular holding the key to sales strategies at regional and national levels.
In building a strategy around its shops instead of neglecting them for the online world, John Lewis achieved something no other retailer has, yet all are trying to replicate. It has successfully bridged the divide between channels, so one could argue they have gone beyond multichannel. They are not simply using various platforms to push sales, they create an experience that is seamless across them – one of the few businesses today who can actually lay claim to being omnichannel. This is all due to effectively leveraging data. Whether it’s big or small, one can’t refute the power of it. Today, retailers need to consider where data is heading and what strategies they can incorporate to ensure they are utilising even the smallest bit of data to improve customer experience. Retailers can learn a lot from John Lewis and how putting data at the heart of a business model can drive success.
Francis Wallinger is chairman of Alchemetrics