Part 2 – Top 10 Lessons From Australia’s Largest Retail Forum
The Retail Leaders Forum was held in Sydney 2nd to 3rd of March 2015 and covered a plethora of leading edge information regarding the retail industry and our future direction. The event was attended by senior executives from some of the largest retailers in Australia and around the world such as Aldi, Apple, Freedom, Google, Country Road, Myer, Super Amart, Tiffany & Co, Toys R Us, Woolworths and Walmart covering the most important topics facing retail today. Most importantly, intriguing case studies were broken down to bring light to some very important areas we can learn and grow from.
From the information shared at this event, these are the ten most pertinent topics facing the retail industry today and if understood and applied in businesses within Australia, we can ensure we remain on par with some of the most successful retail giants in the world.
Part 1 of this article can be found here which covers numbers 1-5. This article will cover numbers 6 to 10.
- Big Data – data scientists are the sexiest retail jobs for the 20th century!
- Steady Growth – Australia will have steady growth of 2.5% in the coming years. The most important factor in this growth will be our ability to embrace the change hitting our doorstep in the next 5 years.
- Change is Inevitable – the next five years will see the most amount of change in retail compared to. the last fifty years. This is being driven by both consumer behaviour changes and technology innovation.
- Your Network is Key – Your list, your customer base, it’s the living, breathing heart of your business.
- Customer Intimacy – the customer experience is the number one priority in retail right now.
- Targeted Marketing More Important Than Ever – Using data and technology to effectively upsell.
- In-store vs. Online – Blending in-store and online strategies is key.
- Click and Collect – The epitome of combined in-store and online success.
- Going Mobile – Beautiful, functional e-commerce is no longer optional.
- Future of Technology – Mobility, In-store Displays and Connectivity.
6. Targeting More Important Than Ever
The information age has morphed into the network age and connecting with your customer base and providing them with the timely information they need is key. You can do this by segmenting your customer database and tailoring messages direct to the sections of your audience who are wanting that information. For example, send specials to all the people in your database who purchased a black dress in the last month and promote all the matching items. Or send specials to all the people in your database who purchased a new bike in the last month and promote all the additional items that could make their life easier.
The information is all out there but why are they coming to you? Because you can provide them with what they need (or want) right now. You are present, at front of mind, convenient.
Here are two examples in action:
They have assessed their data and know they have two minutes at the counter with each customer. During that time, they have software that allows the salesperson to make relevant cross sells which has drastically increased their sales.
The rarely promote irrelevant offers to customers if they can help it. They are aiming for an authentic relationship. So, they assess and use their customer data like email open rates. The more you open their offers, the higher frequency of their offers and vice-versa. Just the tip of the iceberg for cross selling.
7. In-store vs Online
Embracing technology and e-commerce is now unarguably one of the best ways to grow your business both nationally and internationally. The key in all the examples below is the seamless integration between in-store and online purchasing. These success stories are not treating the two as separate entities – it’s impossible to do this as they are delivering the same products but to a savvy audience.
Blending in-store and online presence is key.
According to Michael Burgess, President of Hudson Bay Company Digital in the USA, more people visit saks.com than actually visit the store. Over 80% of store visitors were online before even visiting the store resulting in a 40% increase for in-store conversions. For Saks, the omni channel shopper is three times more profitable than just a regular in-store customer – and this is before a heavy focus on digital in-store strategies. Why? Because the customer has been exposed to their product or service for a longer period of time, they’ve done their research, looked up colours, checked pricing and even checked if the product is available before tackling traffic to come in store. Saks are now analysing what a customer has browsed online and the salesperson uses that data to make recommendations to the same person in-store using a portable tablet.
Saks are also now trialing iBeacons. If a customer is in proximity of an in-store beacon (using their mobile phones for location accuracy), the mobile app tells you about products in that area and provides coupons to be redeemed in-store. Therefore increasing sell-through on particular brands.
They are also offering ‘extended aisles’ by having additional products available for dropship from the supplier direct to the customer. These products are offered only via the sales staff using tablets allowing the retailer to reduce their inventories whilst not missing out on sales.
In Burberry stores, products have RFID tags that when scanned at stations in-store, the associated video from a recent runway shoot is shown. This allows the customer to see, in-store, the models wearing the clothes thereby improving the store experience and sales conversions. Again, with returning customers to their online store, products showcased are not at random and based on their previous visits to the site.
Shoes of Prey
Most sales for Shoes of Prey are now online. Customers can still come in-store to their physical kiosks (in Nordstrom stores in the USA) to touch the materials and leathers used, try on different concepts. The shoes are then manufactured on demand and delivered to the retailer. Technology is now opening doors for unique business models such as this to emerge.
One area where many retailers have not focused little attention is online returns, especially with larger retailers. This is a key logistics and cost issue resulting in profit loss for retailers if inventory does not factor in customer returns. A point to bear in mind when going or growing online.
8. Click and Collect
Click and collect is taking off in the United States in a big way and Australia is not far behind. Here are 3 examples of click and collect working for both Australia and the US.
Image courtesy of news.yahoo.com.au
The two entities have launched a partnership whereby buyers can collect their eBay purchase from Woolworths. Very practical for consumers given the sheer number of stores.
They are trialing online orders to be picked up in the carpark of Walmart stores making the purchase so much more convenient.
If you buy at Saks.com, you can collect from any Saks store across America – simplicity at it’s best.
9. Who needs mobile sales, really?
You may think that with all this talk of ‘big data’ and getting to know your customers, then there are very few sole bricks-and-mortar businesses left. Wrong. Many retail entities are still operating purely from bricks-and-mortar and these are the entities who will need to up their game if they’re to stay in this changing industry. Not in 5 years – as it will be far too late – but today.
Simon Banks, Director of Enterprise from Paypal shared some fascinating facts about the e-commerce industry. Given their 51% share of all online commerce in Australia, I think these 3 insights are worth your attention:
- Paypal call the mobile phone ‘mission control’.
- 1 in 3 of all online transactions are done on a phone – the fashion industry are the biggest players here.
- 18-34 year old’s are the highest mobile users.
So, we as retailers must focus on our mobile strategies. Rather than discouraging mobile use in-store, you can set up wifi in-store (as Westfield has) to encourage price checking. Rather than ignore the fact that savvy customers these days are checking prices online whilst experiencing the product in-store, we should communicate with our customers, price match, embrace the change. Most of the time, the customer will still buy from you, so deliver to them what the online experience can not.
Do we need to be in the e-commerce industry. Absolutely. Do we need to have clear mobile friendly, responsive designs that are beautiful and functional? The answer is no longer optional. We need to be delivering direct to the customer, exactly what they want in a frictionless way as Banks says. He used the example of Uber, a brilliant business concept where the the checkout is literally invisible, a truly frictionless experience where the payment happens automatically.
And all this is absolutely possible with the myriad of tools and technology available to us online. And with the growth of our field of customers, this will be even easier to achieve. In 2013, there was a reported $16 billion in online revenue for Australian sites. In just 3 years (by 2018), there are expected to be over 40 million Americans buying from Australian websites – double Australia’s population.
The customers are coming, Australia is well on it’s way to being ready.
10. The future of technology
Computing devices have been getting smaller and smaller over time with the smart phone now weighing 135 grams. A stark difference to just 30 years ago where only a few had access to the huge and cumbersome 10kg machines. We are now moving far past smart phones at an exponential rate.
I had the pleasure of seeing Dr Babak Parviz speak at the event who has been named one of the 50 most creative people of 2012, Time Magazine’s best invention of 2012 and Best Mobile Product of 2013 to name just a few of his 20+ accolades. He enlightened us on the Google Glass – wearable computing which lets you access information so quickly, it feels like you already know it in your mind! Glass lets you collect environmental information via video, see information via visual and hear information via the speaker. It has memory, wifi, bluetooth, dual processors and is as light as normal glasses – immediately accessible computer.
Computing power in 2015 is 10 thousand times faster than it was in 1985 – this means that we’re all absorbing and moving faster. What we once had to wait several weeks for, can be delivered within a few hours. For the purposes of the retail industry, I’m not sharing this information with you to scare you but to show that technology is moving forward fast and even though some may not be ready or prepared, we can use it to our utmost advantage.
What do YOU think? Did you attend the forum? What do you think are the biggest topics hitting the retail industry over the next 5 years? Please share in the comments below.
Part 1 of this article can be found here which covers numbers 1-5. This article will cover numbers 6 to 10.