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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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IRUK 500 - Kurt Salmon comment (IRM51 - March 2015)

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Siobhán Géhin, Partner at Kurt Salmon , reflects upon the Top500 and in particular the relative advantages of pureplay and multichannel retailers. Kurt Salmon is a Knowledge Partner in the IRUK 500.



Traditional store-based retailers might be forgiven for feeling that pureplay retailers have an intrinsic advantage. The online experience lends itself to being   personal and unique through the introduction of simple cookie tracking and data caching. With the growth of mobile websites and applications, this personalised experience can be accessible anywhere. The success of online businesses is not solely attributable to their ease of use, their ability to leverage cross selling and up selling opportunities is critically important.



Amazon have previously declared that 35% of their sales come from their cross selling algorithm. Studies performed into upselling by Predictive Intent have revealed that 4.25% of customers are influenced at point of purchase to ‘trade up’, when shown a more expensive alternative. This may seem like a low percentage but it represents a highly profitable potential. Given the right conditions, certain customer groups can be influenced by an appropriate uptrade marketing message. American clothing retailer Nordstrom does this effectively by presenting trade up options to customers whilst browsing with reviews and offers clearly displayed to sway these customers; while research by Cisco shows that 52% of customers are influenced by online reviews and ratings.  Store-based retailers face the challenge of matching the relevance, personalisation and service of the online environment.



However, “Bricks and mortar” operators have a distinct advantage Internet retailers cannot replicate; the face-to-face customer interaction. After all, sales associates have delivered personalised service and upselling for hundreds of years but it has always been dependent on the quality of the person serving. Integrating technology into the store environment provides the potential to level the playing field with the ecommerce environment and maybe even tilt the balance in favour of stores. Sebastian James, Dixons CEO  has claimed “We are seven to 10 times more effective than Amazon at doing that [upselling]”.



Cross channel leader Argos demonstrates how to merge the online, mobile and in-store experiences. Like Nordstrom and Amazon, they have used customer reviews and cross selling algorithms with their ecommerce platform to drive sales, but they go further with their omnichannel journey. Both the mobile app and online website have addressed one of the key requirements of general merchandise retailing - availability. Product availability within stores in an area and reservation of stock for pick up is made possible via the app or website. This has the potential to directly compete with the click and collect offers of rival competitors by offering instant same day collection for free.



The fashion industry in the US has also looked at omnichannel as more than just providing flexibility in fulfilment but flexibility of data. Macy’s have utilized their digital assets through the customer’s mobile - realising that customers will ‘showroom’ in competitors stores, they have developed an ‘Image  Search’ application that will allow customers to photograph a competitor’s product to find examples of similar products within the Macy’s website. Macy’s core application, however, seeks opportunities to directly interact with customers inside the Macy’s stores, introducing elements such as QR codes that link to promotion videos and a built in barcode scanner to link any product to its website listing.



Luxury retailers have gone a different route and looked at introducing clienteling to target and serve their core customer groups more effectively. Brands such as Burberry have led the way, invested in solutions to empower the sales assistant with customer data during their shopping trip. Using tablet based applications sales assistants or personal shoppers can gain access to a wealth of customer sales history, style preferences, and communication history and customer lifetime value data. This information will help to customise every customer’s sale experience within the store and provide the best opportunities to upsell with a continuing dialogue and feedback that is not possible online.



The new omnichannel challenge will be to be collective and distributive with data. To be truly omnichannel, a company must put customers’ interests at its heart and seek to better understand their customers and create a seamless experience for them. This is achievable only if all customer and product data is fully transparent to all business channels so that all interactions are between one customer and one business.

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