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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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GUEST COMMENT Is retail drinking in the last-chance saloon when it should be focusing on digital change?

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GUEST COMMENT Is retail drinking in the last-chance saloon when it should be focusing on digital ch
GUEST COMMENT Is retail drinking in the last-chance saloon when it should be focusing on digital ch
Let me take you back to the year 2012. Following two years of renovations, Burberry finally opened its flagship store on Regent Street in London.

At the time, this store was technologically ground-breaking. Full-length screens were everywhere, transitioning between audio-visual content displays, live-streaming hubs and mirrors.

Certain clothes and accessories contained RFID tags so that when a customer approached one of the screens in the common areas or in a fitting room, specific content - say, information about a bag's stitching and craftsmanship, or a video showing how a skirt was worn on the catwalk - would appear.

All retail assistants were armed with iPads containing a log of customers’ purchase history and preferences to enable a more personalised shopping experience.

Plus, customers no longer had to queue-up to pay as the iPads doubled as portable checkout systems, in a move no doubt inspired by Apple.

The future of high-street retail had arrived, driven by a 156-year-old brand in a 192-year-old build-ing. If Burberry could evolve the retail experience for a digital age, then any single one of the long established high-street brands could follow suit and retail would surely be saved.

So what happened?

In the run-up to Christmas that year, electrical retailer Comet collapsed and 2013 began with HMV and Jessops both going into administration. Then Blockbuster went, crushed under the weight of digital competition from TV streaming services such as Netflix.

Maybe the dawn of experiential retail arrived too late for these brands – after all, it had taken Bur-berry two years to plan the customer engagement and personalisation elements of its Regent Street store.

So now, here we are in 2016 and major retailers have had over three years to instil cultural and technological change that would improve efficiencies and evolve the in-store consumer experience in order to better compete with disruptive start-ups and digital evolution.

The most recent high-street casualties - BHS and Austin Reed - have proven that for some, no amount of warning would ensure their survival.

Some ships just don’t turn fast enough. Certain retailers’ inability to harness and adapt to new developments in digital technology, in order to create a competitive advantage and return their business to growth, means that for them, the writing will always be on the wall.

However, there are signs that high-street retail has changed and is slowly becoming better placed to compete in a digital age.

Argos for example, ploughed millions into a same-day delivery service, to compete against Amazon’s Prime Same Day. Its digital ‘coming of age’ made it a more attractive proposition for a Sainsbury’s takeover.

If Sainsbury’s can now instil further digital change into the Argos shopping model with new combined stores in out-of-town retail parks, it can use technology to power a shared distribution network that would improve efficiencies and completely re-write the delivery rules of online ordering.

For today’s consumer, the introduction of mobile payment systems has quickened the queuing process, while high-street brands such as Starbucks have focused on a mobile-first approach and taken in-app loyalty to the next level.

At the end of last year, Starbucks announced the roll-out of its Mobile Order & Pay. This allows Starbucks’ customers to order in advance via the app and then pick-up their drinks from a chosen location, thus eliminating waiting time.

Payments are made through the Starbucks loyalty card, which creates operational efficiency as it reduces card transaction costs. As a result, queue times are reduced, operational efficiency is im-proved and the overall customer experience is enhanced.

Other coffee retailers to have taken a lead from Starbucks include Harris + Hoole.

This chain of artisan coffee shops has put mobile at the forefront of the customer experience. They've invested in a complete overhaul so that staff are properly trained in how the brand’s app adds to the customer experience, how to talk differently to customers as a result and what benefits this mobile-first approach brings to the business.

App functionality includes mobile payments and digital loyalty rewards but it also allows the customer to build their perfect tea, coffee or hot chocolate remotely (size, temperature, shots, milk type, flavourings etc). This means no more repeating your name and the same order day-in-day-out. Customers just check-in to a local Harris + Hoole, ask for their usual and the barista calls them when it’s ready.

Every retail brand now needs to understand how these kinds of mobile-first or digital innovations can help them better understand their customer, and how technology can be used to improve business efficiencies.

Once this knowledge has been obtained, there is an ever-pressing need to invest and adapt quickly to consumer-driven trends, taking advantage of capabilities such as fast prototyping, big data and continuous insights to truly anticipate customer goals and position services around their needs.

If retail brands are not currently fostering a top-down culture of innovation, they’re no doubt fail-ing to take controlled risks that would otherwise allow them to test and learn, generate insights and learnings, whilst structuring themselves in a way that would enable them to fail fast and minimise financial exposure

Only by truly understanding and delivering against customer goals can the UK high-street engage its audience and use every digital and technological opportunity to leverage value, increase revenues in this competitive market, and ultimately drive increases in shareholder value.

Digital technology is changing the world around us at an astonishing pace. Disruptive start-ups aren’t bound by years of legacy investment and culture. The way retail reacts now will determine whether, in another three years, our high-streets will appear more like Burberry’s flagship London store or a much bleaker place than they are today.

Matt Wills is client partner at Syzygy
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