Partnerships, ethical ecommerce, data and the changing relationship between ecommerce and in-store were on all on the agenda for leading retailers at IRC 2019 this week. Here we focus on key takeaways from the event.
Store and online: are different sales channels still important?
Andy Lightfoot, chief executive of SpaceNK, told the conference how the multichannel beauty retailer had moved away from the model of running the business through separate sales channels after a digital team brainstorming meeting that came up with the idea of ‘hubs’ where customers could match their skin to foundation colours. “They said, yes, that’s great – we have 70 of them, they’re called stores,” said Lightfoot. “The mindset was quite separate. Now we’ve abolished channels and we don’t have a separate team. Marketing goes across stores, social and ecommerce. This has changed the mindset of the company to working much more collaboratively.” The role of its in-store staff is now to help customers which of the 3,500 items that it stocks is the best choice. If it doesn’t work out, that’s fine. Lightfoot says SpaceNK is the first beauty retailer to allow customers to return a beauty product they have already started to use – but found was not for them.
Sienne Veit, director, digital at John Lewis, speaking in a panel on the channel switch between off-line and online, said the important thing was to understand how to use each channel to make the best offers, or to offer the best service. “For us it’s about understanding the need of the customer in each channel and across channels and designing for those, rather than replicating in each channel,” she said. That means using rich online content to improve the in-store experience, or making it easy for shoppers to get information about where the stock is most easily available.
The importance of partnerships
Partnerships help businesses to grow, Zia Zareem-Slade, customer experience director at Fortnum & Mason, told the conference. Speaking in a panel discussion, she said that its partnerships with organisations as diverse as the Port Eliot Festival, Somerset House and contemporary artists had helped to change customer perceptions of it as a brand – and helped it to understand its customers better. “In the six years we’ve been doing it we have more than doubled the size of the business,” she said. “It’s not about whether individual things work – it helps us access an audience that we may not otherwise reach.” When the retailer ran a successful click and collect service in its pre-Christmas Somerset House pop-up, it showed, she said, that there was “an audience that didn’t want to come to Piccadilly when they were really busy.”
Fellow panellist Stephen Dowling, global VP, digital growth, at Adidas said that it will works with partners of any size that fit its brand. It works with influencers who want to make real achievements beyond social media – one runs coding classes for young children, while another aims to introduce climbing to more people in the New York area.
But David Lloyd, managing director, UK and Nordics at Alibaba Group, says that the group will push retailer partners that have potential to ensure that they sell in a way that suits the Chinese market that its Tmall marketplace serves. “We want to work with everyone but we’re very direct as well,” he said. “We’re very forthright, assertive when partnering with brands. We know the Chinese market really well, able to help brands learn about consumers, change the way they market engage with consumers. We want a dialogue and to design something for China.”
Space NK chief executive Andy Lightfoot said in its keynote interview that the partnership between multi-brand retailer brands is becoming a priority – especially now that many brands in sectors including consumer electronics have closed their shops after finding that “retailing is hard”. “Now there’s a realisation that it’s a partnership and that’s very healthy,” he told IRC 2019.
How retailers are using data
Lego Group is using machine learning to offer personalised recommendations to shoppers as well as to ensure that marketing is effective and for media spend. Lucy Shamdasani, VP head of engagement technology and analytics at Lego Group, says it’s important to have the capability to manage such systems in-house. “I think you need to build it in house because of the value of the data – it’s your data and a core capability that should be built on. But you can absolutely use partners – we do to do data ingestion, and then we get our data engineers and AI experts to do the AI on that.”
Jarno Vahatapiao, founder and chief executive of NA-KD – who previously founded Nelly.com – says his business is now as much a data-driven online retailer as it is a fashion brand. When targeting his customers – who have an average age of 23 – he says it’s important to be relevant to gain their attention. Personalisation and segmentation are key. “Generation Y are the hardest consumers, with an eight second attention span,” he said. “You need to be to be super relevant and use personalisation, segmentation. You need to ace that this time around.” The retailer also uses data to analyse which of its thousands of partnerships with influencers are most likely to generate sales and invests in those.
Who’s pushing the sustainability agenda?
It’s not just consumers who are interested in making both products and they way that they are produced and delivered more sustainable. Jo Jackson, chief creative officer of Made, said, in a panel discussion on ethical e-commerce that the retailer is not just responding to customer demand in its efforts to boost sustainability – its current drive to improve its packaging is driven by the millennials who work throughout its business.
They’re among the 77% of millennials, referenced by NA-KD’s Vahatapiao, who prefer to buy from eco-friendly brands, while he says, 40% of 18 to 24-year-olds bought second hand fashion last year. “If you look at it as a market,” he said, “it will surpass fast fashion in 2018.”
Ocado’s Suzanne Westlake, head of corporate responsibility and corporate affairs at the online grocer, says that when shoppers are buying the goods they and their children are going to eat, they expect that it will be produced sustainably. Last year, for example, it collected 89.4% of the bags its goods were delivered in, thanks to its policy of refunding the price of bags that are returned and then recycling them for future use. “Being an online business we make ourselves very open to writing in and telling us what is wrong,” she said. “People want to engage with a brand or the place they buy things from.”
Meanwhile, Dr Kieren Mayers, director, environment and technical compliance at Sony Interactive Entertainment Europe, says it’s important for brands such as his to do the right thing. It offers an after service warranty so that it will mend old consoles. “The best model is durability,” he suggests. “If it has longevity then it will last for longer.” Sony, he said, is currently looking at how it can use its games to raise awareness around climate change.
Image courtesy of InternetRetailing Events