Understanding how customers want toshop gives retailers powerful insights that help lay the foundations for a seamless cross-channel experience. Those who have already done the research often find that most shoppers want to buy from them, take delivery of their purchase and if need be return that item to them, through whichever channel best suits them at any moment in time. Consumers move between sales channels at speed – and retailers are expected to be ahead of them.
When John Lewis analysed its customer behaviour to produce The John Lewis Retail Report 2013, How we Live, Look and Shop earlier this year, the department store group found that 64 percent of its customers were omnichannel shoppers,buying both online and in stores. Of the rest, 20 per cent shopped only in store and 16 per cent only online. “There’s no set path to purchase from JohnLewis,” concluded the retailer. In theory that sounds developed an approach that ”allows the purchasing mobile and shops.” The longest customer journey is likely, it says, to be for furniture, taking a typical 19 days. That journey could include inspiration froma catalogue, price comparisons via tablet, visiting a shop to touch and feel products and ask staff for advice, before going home and buying online from johnlewis.com. John Lewis has learnt by testing innovations that give customers the features they asked for, and measuring the results. That’s paid dividends. The success of Click & Collect was “a revelation”: 40 per cent of its online purchases were collected in John Lewis or Waitrose stores as of October 2013. That’s 27 per cent up on same time the year before.
THE MULTIPLICATION EFFECT
Like other retailers, John Lewis has found that shoppers who buy with it through more than one channel spend more: Martin Gill, VP and principal analyst at Forrester , puts the difference at 3.5 times as much. "It is highly profitable engagement," he told Demandware Xchange European Summit 2013. “The more people convert to your brand the more likely they are to come back and buy again.” Gill cited figures from Forrester's North American Technographic Online Benchmark Survey Part 1 2013, showing that US shoppers spend $2,807 a year when shopping through a range of devices. Those who shop online only spend $1,836 a year. It’s a multiplication effect likely to appeal also in the UK, whose residents, Ofcom’s 2013 International Communications Market Report recently showed, shop more frequently online, and spend more when they do so, than those of any other major economy. But to have that impact, cross-channel links mustbe customer-focused. The customer must recognise a consistent brand at every touchpoint – and the retailer must do the same for the customer. Goods placed in a shopping basket via PC should be there when the same customer logs in on a mobile phone; a call centre should be able to advise on an order placed in the store or via a tablet computer.
TWO CROSS-CHANNEL EXPERIENCES
There's no one-size-fits-all solution that enables retailers to slot cross-channel retail straight into place. But forward-thinking retailers are building their models around their customers, producing solutions that link their shopping channels where they are required, and working to ensure they function, and are used. When, for example, Argos recently unveiled its digital concept store, currently being trialled in six locations, the general merchandiser made it clear these were places to test digital services before putting them into place across its store estate, which currently numbers around 730 stores. “The new digital concept stores,” said John Walden, managing director of Argos, as he announced them, “enable us to trial with customers several important features of what we believe a store should offer in a digital future, such as a modern and universally-appealing environment, a fast and digitally-enabled shopping journey, market-leading products and friendly colleagues that provide a human touch in an otherwise impersonal digital transaction.” Those features put the emphasis on the digital customer experience, which Argos now considers the primary way in which customers deal with the brand. But stores remain important, for while more than 40 per cent of transactions are made via the retailer’s digital channels, and 16 per cent over mobile devices, customers still come into stores during the course of more than 90 per cent of those transactions. The experience is designed to reflect that customer data, and positions the store as a collection point as much as a place to shop. Shoppers are promised 60 second Fast Track collection from a dedicated podium, while in-store shoppers will be able to buy at separate Pay and Collect positions. The way that shoppers browse the range is also changing: in-store self-service iPads loaded with product videos and customer reviews replace the traditional laminated catalogue and stockchecker machine, while customers can also use their own devices, connecting to the internet through free in-store wi-fi. While Argos has concentrated on its customers’ desire to shop online and through mobile devices, using the store as a convenience rather than a destination, TUI Travel has come up with a very different idea of the customer experience. The focus in its new generation Thomson stores, the inspiring customers to realize their holiday dreams. “Central to the concept,” says Kathryn Ward, director of retail for TUI UK & Ireland, speaking at the launch of the service, “is the designing of unique holiday experiences customers cannot find elsewhere". Again, the Thomson digital store is being used totest ideas that could then become the foundation forits 700 outlets across the UK. The Holiday Design Stores are places where customers can explore the world through an 84-inch touchscreen interactive map or browse top ten lists and other content through self-service computers They can continue their journey through their own device, connected thoughts at an advice bar, or take over a booth where holiday images and video content can be projected onto the walls. Thomson parent company TUI Travel has recognised in the design that mulling over a holiday purchase starts long before it’s booked and continues beyond the confirmation, whether online or in the store. The most recent figures show TUI Travel now takes 35 per cent of its bookings in its mainstream business over the internet. Holidays built in next-generation stores, therefore, become part of a holiday planner tool that customers can access from their digital devices at home or on the move. Mobile apps also enable customers to revisit aspects of their holiday on the move, helping them to plan transport, timings and other details as they get closer to departure.
SPEAKING FROM EXPERIENCE
OUTSIDE THE BOX
“The customer doesn’t think
about categories – think about the experience.”
Martin Gill, VP and principal analyst, Forrester
SMOOTHING THE WAY “Consumers are really expecting a consistent experience
across multiple channels. What we mean by that is that they can have an
array of options to fulﬁl their demand.”
Michael Turcsanyi, president, OrderDynamics
CLOUD FUTURES EXPERIENCE
“The only way to realise the future of retail is to take the power of
the cloud and put it in the store.”
Lawrence Grodzicki, director, store initiatives, Demandware
DELIVERING ON EXPECTATIONS
For many traders the journey towards cross-channel starts with delivery systems that connect the store and the online. Click and collect services have grown significantly over the last year: IMRG figures suggest that almost one in five (19 per cent) of multichannel retailer sales were through this channel in the third quarter of 2013. Tina Spooner, chief information officier at IMRG, says she expects the rate of growth to continue. “Based on the level of growth seen account for at least a quarter of multichannel online sales by the end of the next year," she says. Also linking the channels are returns services that enable shoppers to take back to the store items that were ordered online.
But cross-channel logistics can be even more inventive, says Michael Turcsanyi, president of eCommera company OrderDynamics, for those retailers who have fully achieved a single view of their inventory, whether it's in shop or the warehouse, through an order management system (OMS). "Order management system can offer the customer at the time of ordering, whether they're on the phone, a tablet or whatever device they are using, a profit-optimised offer for that product," he says. "they might offer same-day delivery with a 10 per cent discount if the retailer knows the item is right across the street from the customer and can get it there at a lower cost." Meanwhile, for those returning an item of clothing because it's the wrong size, says Nick McLean, director of products and marketing at eCommera, the OMS can tell the customer which store to return the items to in order to replace it with the size they want. For most traders such a seamless delivery options are still an aspiration, but that could change fast. A recent Forrester study, The retail Order Management Imperative, carried out for OrderDynamics, found that 33 per cent of e-businesses questioned already offered buy online and ship from store services, a figure set to rise to 91 per cent within two years. Only 21 per cent already had a single view of their customers' profiles and order histories across channels, but 88 per cent expected to be there within two years. That will mean, for example, that customers can log into an ecommerce site and see their purcheases and delivery status, while sales asisstants can look individuals up in store to see their complete history and serve them accordingly.
Forrester's Gill also detects a large gap between the cross-channel aspiration and the siloed reality for most retailers. Citing Forrester's eBusiness and Channel Strategy online survey of the fourth quarter of 2012, he says that while 56 per cent of retailers say they have a cross-channel focus, only 12 per cent have tourned that focus or strategy into a real capability. Bridging the gulf between strategy and capability, he says, starts with having a vision. "The challenge here is becouse journey are different, how do you optimise for that?" he asks. The answer? "Follow the money." That means, he says, looking at and testing at different customer wants, while enabling technology to find out what works. All of this, he says, should be built on a single commerce platform, with customer experience architected on top. At all times, he advices, it's important to be able to fail quickly, and then move on. More cross-channel sophistication is to came. Lawrence grodzicki, director, store initiatives, at Demandwware points to a next wave of retail innovations that will link the store and the web. In store web orders that help save otherwise lost sales when an item is out of stock in the store, segmented customer promotions that automatically apply to the customer whichever channel they shop in, and the ability to scan a QR code in store and then place an order for delivery are among them.
If testing is always important, then so too is devising effective strategies to measure results. Linking cross-channel metrics to reward, argues Forrester's Gill, can have a powerful effect. For example, when store staff are rewarded for sales made online but in their geographical area, they are proactive in helping shoppers to make digital purchases, and make accepting online returns easier. Linking pay to an organisation's net promoter scores, has the effects of improving good customer experiences, and eliminating poor ones. Effectively, says Gill, retailers are measuring the customer experience. There's no denying that achieving a cross-channel experience that works is a time-consuming and investment-hungry business. But putting in the resources now is likely to boost sales and profits in the future. That evidence is the best gathered through effective metrics.
While many retailers are yet to link up the store, web and mobile to offer the
much-vaunted seamless customer experience across channels, plenty are already
on the journey to doing so, and know how they will achieve that. Expect to see
further progress along the way until in two years time, or less, many of these once
theoretical steps become commonplace.