New Look: Existing for the customer
New Look has recently announced a management restructure, online growth of over 50% and is part way through a three-point turnaround strategy. Emma Herrod spoke to Shivani Tejuja , the company’s Multi-channel Director, about balancing daily trading with change and innovation.
Last month, New Look announced a 2.5% increase in sales across the group in its full-year results to 30 March 2013 with like-for-likes during the second half of the year returning to positive figures. Group adjusted EBITDA was up 29% to £189.2m, an encouraging sign for Chairman Alistair McGeorge that his three- point turnaround plan of cost savings, profit margin improvement and revenue growth is delivering real results.
Those cost savings are being invested back into the business; improvements to the online channel resulted in a 50.1% increase in online sales during the year with online sales amounting to £94.1m and the new Concept store format, designed to complement cross- channel services such as Click & Collect and Order-In-Store. In some of the stores, New Look also features QR codes and in-store tablets that extend the range. In general, the concept store format has been extended to 145 stores with ambitions to have all stores refurbished over the next three years.The company currently has 586 stores in the UK, down by 11 on the previous year following moves to optimise the store estate.
New Look is also looking at potentially investing in apps for mobiles and tablets with social media being one of the focuses. By the end of the financial year the retailer had over two million Facebook ‘likes’ and more than 93,000 Twitter followers. Its blog, NL Daily, saw 4.9m visits over the course of the full year. The increase in online sales has been brought on“by continual improvements to the website and operations,” says Shivani Tejuja, Multi-channel Director, New Look, who comments: “we are continually testing and learning.”
The company is expecting to see the same growth trajectory for online sales in the next financial year – online sales accounted for 8.5% of sales at the end of the financial year. “All of us [from the board down] are aligned on the journey and cross-channel is one of the key components,” says Tejuja. “It’s critical we get it right,” she says outlining how her role is to help champion and deliver customer experience across all the mediums she has “to play with” including investing in talent as well as the website, customer experience, listening to customers, mobile web and apps.
But, while the business is investing in cross- channel it doesn’t see the customer in that way since customers are interacting with the business in all areas. Looking at percentage of sales by channel or cross-channel is purely a question of “attribution model,” she says.That’s not to say that New Look doesn’t have the data on how and where its customers interact with the brand on their journey but that “we fundamentally believe in cross-channel because it’s successful,” says Tejuja, although at New Look cross-channel is referred to as “customer experience,” a term meaning channel agnostic.
“Cross-channel starts with a mindset and everyone has bought into the idea,”she says. Some products are online exclusives with online feeding back to Buying and Merchandising ensuring that product is available to customers when and where they want it and everyone aligned with the customer.“The reason we exist is for the customer,” she comments.
And what’s right for New Look’s customers is“to help them look good, feel great and have fun. It's about having social, mobile and in store technology”and is exemplified by running events across channels such as pop band Little Mix singing in their Westfield store to launch their own nail collection. The ‘meet and greet’ opportunity was run across Twitter and Instagram “because our customers are multichannel,” explains Tejuja. “It’s a two-way street.” She emphasises how the business is listening to customers as well as engaging with them and interacting, showcasing product online for preview before it’s released and getting early customer reactions and feeding that back to the buyers to support order levels.
As other retailers are finding so too is New Look realising that its customers’ behaviour is changing.Yes, there are things that they expect in terms of great product, a certain price point, free delivery, a simple returns procedure but “customers may not know what they want yet with regards to technology in store,” says Tejuja - but what is apparent is that they are “becoming more hungry for new”. But what works for one retailer’s customers may not be suitable for New Look’s customers – such as costly one hour delivery on a small basket value – but “you have to test and learn and see what resonates with your customers.”
The business doesn’t have single view of its customers yet nor of stock. On the operational side, fulfilment for online orders was brought in house during this past financial year with the company’s Lymedale distribution centre fulfilling online and Click & Collect orders and store replenishment.The stock is still held in separate pools but it is within the plan to combine them.
On the customer side,“we’re on a journey to achieve single view,” says Tejuja, explaining how they are trialling enhancing the customer experience in store with upselling when a customer picks up a Click & Collect order in store. Rather than just handing the shopper their package, store staff will undo the package and use it as an opportunity to personalise the experience, for example to suggest an accessory and put the item in a New Look bag. Going so far as to look up the customer’s past purchasing behaviour may be right for some customers but may be a step too far for others, she believes, “Our goal is how to enable our stores to meet different customers’ needs,” she says.
Tejuja, while keen on testing and learning to see what resonates with customer appreciates that it’s easy to run A/B testing online but it’s harder to test things in the physical world. She’s happy with building things in the “simplest, scrappiest way possible” in order to be agile and if it works it can be rolled out to the full store estate and if it doesn’t work “I can pull it,” she says. The customer may not know what they want yet in terms of in store technology she explains so the business has to find out what resonates with them. She believes that it’s better to get something in front of the customer and find out if works for them or not than to spend time and effort on testing behind closed doors. QR coding in New Look’s flagship Marble Arch store is one example of something that hasn’t been picked up as strongly by customers.
IN STORE TECHNOLOGY
The Marble Arch store has tablets attached to the walls for customers and staff to use as well as large screens displaying product,‘padequins’ - mannequins with iPad heads showing different faces to grab shoppers’ attention - and tablet- wielding staff. However, customers “come into a store to be social and shop, not look at a tablet on a wall,” believes Tejuja.
The tablets for staff to use when interacting with customers is one concept that will continue for now with Windows 8 tablets being rolled out to a further 23 stores to test.Through these, staff will eventually have access to the employee network, as well as being able to help customers and communicate with support staff.“The aim is to make it part of the staff’s daily life.”
Staff in the stores will be supported by Tejuja’s multichannel team so that expertise can be shared, where appropriate. For example, some stores operate their own Facebook page and they will be given additional support by the social experts in the multichannel team who can use the main New Look Facebook page and geotargeting to test and support the individual stores. The extended trial will also discover how staff want to interact with customers socially - one possibility is that staff can use the tablets' camera to post pictures of themselves wearing New Look clothes. "It's learning," says Tejuja but that works both ways since "store staff are the people talking to customers day in day out."
Tejuja has a three-year plan for innovation including A/B testing as much as possible on the newlook.com site, which receives some 2.5 million visits per week. Currently she's testing content with product displayed on mannequins versus models versus 'unrecognisable' models. New Look is also looking at its mobile offering and multiscreening and whether responsive design is enough to cover all screens and then asking how apps fit into that.
Tejuja comments: “Mobile is really important and mobile in cross-channel even more so since there is so much bleed.The question is whether you need to deliver the technology or enable what the customer brings to the store”.
So how do you balance all this innovation with daily trading at the fast pace required by faster fashion?
“My head of ops and planning is like a COO running daily trading,” says Tejuja, who is swift to mention that that doesn’t mean she’s not involved. “Everyone is impacted by daily trading,” she says, with some roles spending more time on testing, learning and the future with others organised and focused more on daily trading. “You have to give as much time as the daily trading needs since that’s what the customer requires,”she says.
And what of the future for New Look?
Chairman Alistair McGeorge , recently commented that the company's long-term goal remains the same: to cut debt through profit growth and strong cash flow. “The strength of our financial turnaround has also enabled us to address our capital structure, with the successful refinancing of our debt, extending maturities to 2018. This gives the business a five year runway for Anders [CEO Anders Kristiansen who joined the business earlier this year] and his team to continue to improve performance, drive forward our international expansion and develop further our online and store development," he comments.
Kristiansen believes that "New Look is now well positioned to explore exciting development opportunities of new markets in Eastern Europe and south-east Asia - specifically Russia and China.As our future expansion strategy is for depth rather than breadth, we aim to concentrate on markets where we can develop a significant presence”.
It is early days for New Look’s expansion into China. A management team has been appointed and plans are being developed for the company’s first Chinese store to open in March 2014. As far as international multichannel is concerned “It is early days yet,” says Tejuja. The company will have a multichannel offering in China, “albeit phased” and she also hinted that there is potential for further country-specific sites.