Two strikes and you’re out

The store no longer operates in isolation. Walk down any aisle and you’re likely to see shoppers browsing their smartphone to check they’re getting the best deal, receiving consultative selling from a sales associate with a tablet computer, or paying for goods independently through a self-service checkout. But how efficiently do these technologies work in the bricks-and-mortar environment – and what’s the cost of a poor digital experience to retail stores?

Vodat recently commissioned research among 1,000 consumers for our latest report, Battle of the Bandwidths: Why customers are won and lost on the strength of retail networks, which reveals that many shoppers are feeling let down by the quality of digital services they receive. We found that more than a three quarters of consumers (78% of men and 76% of women) have encountered problems with slow running store technology in the past 12 months.

But even more alarming for retailers is the knock on impact on customer loyalty. Our research shows that while 30% of shoppers will give a brand the benefit of the doubt after experiencing slow running technology issues in-store, they won’t return if it happens a second time.
So how can retailers create a digital-ready store? Their number one priority should be to invest in a network that is business strength. Many organisations are falling into the trap of investing in software and hardware to bridge the online/offline divide, but failing to support this new technology with a robust network, capable of managing the increasing number of customer and staff devices logging on.

Our research has found that slow running networks are impacting the service shoppers are receiving within the store. Nearly all (95%) of the shoppers we surveyed have experienced network issues that forced them to wait up to 30 minutes for the problem to be resolved.

The strain of more technology being added to the bricks-and-mortar environment is already beginning to show. It is not only a matter of providing enough bandwidth capacity to ensure speed and performance; networks must be able to effectively connect all stores and other sites.

It’s clear that technical problems can dramatically affect consumer experiences. But for many organisations their biggest worry is that they don’t have adequately specialised staff to problem solve, either at a network level, or in-store. They know they need to invest in a resilient network and ensure failover systems are in place, but they want a solution that is crisis ready.

Alongside providing training to empower their staff with all the information they need, retail businesses should consider investing in managed data networks to address this problem. It is important to consider what level of support is on offer in the event of a technical problem.  By using a third party provider, retailers can tap in to their telecommunications experience and technological insight, rather than needing experts in-house. This provides access to support to resolve issues quickly and efficiently, as and when it is needed.

As retailers start experimenting with connectivity, both behind the scenes and to power customer engagement, it is vital they invest in solutions that are future-proof. Taking into account bandwidth capacity and management services will help create a network which is able to scale and flex as businesses and estates grow.

To find out more download our report Battle of the Bandwidths: why customers are won and lost on the strength of retail networks

What must BHS do to survive its CVA revival?

BHS’ owners breathed a sigh of relief this week when creditors voted in favour of a Company Voluntary Arrangement (CVA) that will see rents cut on many of its stores, but this is just one small victory on the road to recovery.

The department store chain’s past has been somewhat chequered in recent history. Loss making for 7 years, BHS was bought by invesment group Retail Acquisitions for just £1 in March 2015, when retail Tycoon Sir Philip Green failed to revive its fortunes.

BHS’ chief executive, Darren Topp, has placed the blame for its latest poor performance squarely at the door of retail property prices, claiming the retailer’s problems are down to cost rather than sales.

The CVA will certainly ease some of this pressure, as 47 stores will have rents slashed by either 50% or 75%, while negotiations will take place to reduce rental on the remaining 40 stores (excluding those held separately by BHS Properties Limited) by 25%.

What’s more important, though, is that Retail Acquisitions use this lifeline to raise the capital needed to reinvigorate the BHS brand, as its lacklustre results are down to much more than rising costs. “The shops are tatty and the clothing lines dowdy,” remarked the Financial Times’ Jonathan Guthrie in his analysis of the situation.

However, Guthrie’s conclusion that “department stores have themselves fallen from fashion with shoppers” couldn’t be further from the truth. BHS has to look no further than John Lewis and House of Fraser – both of which pre-date the 88-year-old chain – to see two examples of similar businesses that have evolved much more successfully.

So, where did BHS go wrong – and what does it need to do in order to put it right? Certainly within omnichannel retail, the business has been caught napping. John Lewis and House of Fraser have put significant investment into their digital strategies, both in terms of online offering and promoting technology-led engagement in the store. House of Fraser has gone mobile-first with its website, while John Lewis’ retail app was recently voted third best in the UK. Both companies have invested heavily in click-and-collect.

In contrast, BHS has been driving down its margins even further with seemingly permanent discount promotions, and trying to diversify into new areas such as foods rather than reinventing its core clothing and homeware range.

Recently, though, there has been light at the end of the tunnel. The convenience food initiative is still in play, but BHS seems to have turned a corner with regards to prioritising what needs to change. 23 stores have already undergone a rebrand, and Topp has vowed to streamline its product range and focus on the brands which resonate with its customers. It’s also implementing an aggressive ecommerce strategy, to increase online shopping’s share of sales from 12% to 20%.

Interestingly, BHS has hired ex-House of Fraser brand marketing director, Tony Holdway, as marketing and creative director. He has already vowed to overturn the company’s lack of brand appeal and investment.

The fact that Holdway has jumped ship from House of Fraser is almost a bigger coup for BHS than the CVA. Having someone who knows how to run department store marketing, 2016 style, will help the retailer to shake off its outdated image and start embracing the omnichannel, multi-touchpoint journey to purchase that hallmarks modern retail.

One thing is for sure; if BHS doesn’t aspire to the relevance and agility of John Lewis and House of Fraser, it’s going to find itself back in the danger zone pretty quickly. And it would be a huge shame to lose one of the High Street’s most recognisable heritage brands.

The secret to successful store expansion

Online retail is no stranger to positive headlines. In fact, it sometimes seems that all we hear about in the industry is the strength of ecommerce.

And it’s these types of stories that have put stores in the spotlight for the wrong reasons. Although 90% of all sales still happen in physical shops, there seems to be far more of a focus on the aspects of bricks-and-mortar that aren’t doing quite so well. For example, in the last few weeks alone, BHS, Greggs and Dixons Carphone have been making headlines regarding store closures.

One of the key reasons that stores close is because they don’t resonate with shoppers; in the interactive, instant world of digital commerce, store layouts and processes can appear outdated. However, this is something that can be amended – and there’s a huge appetite amongst retailers for getting the store right and growing its presence. New research by CBRE has revealed that retail estate expansion still remains high on the agenda, with 83% of retailers adamant that store growth will not be influenced by the rise of ecommerce this year. After all, there is no online substitute for seeing, touching and trying items before purchase.

The benefits of bricks-and-mortar haven’t gone unnoticed by e-tailers. Already this year, we’ve seen their eyes move towards the high streets, with the likes of Missguided announcing its first offline stores. Yes, the business is doing very well trading as it is, but if they want to grow even further, it makes sense to offer a physical experience as an alternative too.

So how can retailers optimise their stores for profit growth – and potential expansion if they get their formula right? For starters, today’s connected consumer is all about convenience and, as we well know, that doesn’t necessarily mean choosing between online or offline retail. Instead, shoppers want to switch between the two at different stages of their journey, and they need to know that retailers will allow them to be flexible in this respect.

Achieving this level of agility means incorporating some of the elements that shoppers love about digital platforms into the store experience. Some retailers are already way ahead of the game, launching concepts that aim to convey the ‘store of the future.’

House of Fraser, for example, recently experimented with shoppable windows, whilst Tommy Hilfiger has brought the runway to the store using virtual reality headsets. These are pretty ambitious of course; the store must focus on perfecting the basics before taking this kind of leap. Investing in more mainstream technology such as mobile POS is one good example of connecting the bricks-and-mortar experience through online functionality.

Another key consideration is the interaction between ecommerce and store activity through click-and-collect. Even though many retailers already offer the service, there are still elements of the process that frustrate customers. Perfecting the ‘collect’ part should now be a major focus for stores, making it a pleasant experience for those finalising their purchase. Enabling speedy payments technology, such as contactless, will be handy here, as well as ensuring the right amount of staff are there to keep the queues running smoothly. Streamlining the click-and-collect element will increase the opportunity to encourage further impulse purchases.

Of course, not all online browsing will take place at home. In an era of smartphone addicts, it’s now habit for consumers to rely on their devices whilst in a store too. Vodat International recently commissioned some research that revealed 54% of shoppers use their smartphones to compare prices in the aisles, 46% look up product information and 44% for personal reasons, such as checking social media. The bottom line is that consumers expect to be able to connect to the web whenever suits them – and that includes within the bricks-and-mortar shopping journey.

It may seem obvious, but there are still retailers that do not invest properly in strong WiFi to encourage this behaviour in controlled circumstances. In fact, 3 in 10 shoppers don’t find the current standard of WiFi unreliable. Retailers with sub-par WiFi are not only at risk of frustrating their customers, they are also losing a valuable opportunity to understand (and react to) their behaviour patterns. Provided they select the right provider, retailers will be able to interact with, influence and capture insight on consumers when they log on to the network.

It’s great to hear that retailers are feeling optimistic about the potential of stores, especially at a time when ecommerce is threatening share of sales channel. Gone is the time where stores and online were two separate things; the future of the store is very much intertwined with digital interaction. If they go about it in the right way, retailers can now harness the power of ecommerce in the physical environment, and use it to boost profitability.

Stay tuned for our new report – Battle of the bandwidths: why customers are won and lost on the strength of retail networks – which will provide even more insights into the connected consumer.

Is fashion a step too far for Amazon?

For many retailers, Amazon can feel like an undefeatable giant. As if its achievements to date aren’t sufficient, the e-tailer has announced its first foray into private-label fashion brands – but is this a step too far?

Undoubtedly, Amazon has a loyal customer base. The site has 244 million active users and is widely praised for its convenience, prices and extensive choice of products. Jeff Bezos and colleagues also have deep pockets when it comes to fulfilment, which will ensure fashion followers get their purchases as quickly as possible, regardless of cost.

However, Amazon’s widespread appeal may also be its Achilles Heel. If their audience is everyone, how are they going to segment that vision for the highly targeted world of fashion?

To be successful, Amazon is going to have to compete with online upstarts like ASOS and internationally-established retailers like Topshop, which both have a strong following from style-savvy shoppers.

Equally, because they are focused on fashion and fashion only, the likes of ASOS and Topshop have had time to really get to know their customers – not just what clothes they like, but how they shop, what their interests are, what media channels they use. This has enabled them to craft a brand based around a clear picture of their target market.

So, is Amazon trying to conquer too much with a foray into fashion?

If anyone is going to make a new venture yield returns, it’s going to be Amazon. After all, the e-tailer has good knowledge of fashion already, having sold clothes since 2008. It added a series of high-profile names to its repertoire last year, including Hugo Boss and Gucci, and opened Europe’s largest fashion photography studio in London last summer.

Amazon is also investing in a knowledgeable leader to increase its chances of private-label success; the former womenswear boss of Marks and Spencer will be heading up the launch. With a background in how fashion and consumer behaviour, she may have what it takes to ensure Amazon’s new foray is completely customer focussed.

There are two things that will ultimately determine its success. The first is how well it can use the wealth of data it generates to map its fashion offering to potential customers.

The second is a problem that faces all online retailers: how well it can promote its private-label range without potential customers being able to feel and try garments.

While online is ideal for items such as electronics and entertainment, clothes are very visual, and many consumers still treasure the act of going into a store. Fashion shopping is a leisure activity, and asking a sales assistant to bring you a different size is always going to be easier than buying something in two sizes and sending one back – no matter how quick and simple the returns service.

Only time will tell whether Amazon lives up to its self-described vision of ‘the ultimate fashion destination’, but it needs to apply the innovative thinking for which it’s renowned to triumph in a world which values style AND substance.

Do you think Amazon will succeed in the fashion market? Tweet us your thoughts.  

 

Inside the mind of the modern consumer

Understanding customers is no easy job for retailers today. What consumers want is changing all the time, as is the technology that they rely on as part of their shopping trip. It’s no wonder that many businesses are struggling to keep up!

It doesn’t help that retailers are inundated with headlines that profess the latest insights into consumer habits; which ones can they actually trust? Here, we’ve detailed the most recent retail research that retailers – online and off – should factor into their customer experience strategy.

“They are impatient” – Vodat International

5 minutes; that’s how long a customer will wait for their query to be answered in-store. That doesn’t leave much time for a staff member to gather the information they’re unsure of, before that shopper abandons their journey completely.

How to respond

Ensure that your workforce receives regular training regarding your product offering – especially if new items are added. For an extra helping hand, why not implement tablets in stores so that answers are always at staff’s fingertips?

“They expect personalisation” – iVend Retail

A third of shoppers think they get personalised offers online, but not in-store. Perhaps this is one of the key reasons why ecommerce seems to gaining its sales share of channel.

How to respond

Yes, online has automated capabilities that allow loyal customers to receive information that is specific to them – but there is something the store can do better.  The ability to see, touch and try products cannot be replicated online, and even better, the presence of staff means that shoppers can get even more insight into the products they’re interested in. There’s nothing more personable than face-to-face interaction, so encourage conversation to give staff the opportunity to upsell products that might compliment a customer’s purchase.

“They tap-to-pay” – Visa

The number of contactless transactions made in the UK last year increased by 250%, according to the payments specialist. It’s suggested that this is largely due to the spending limit rise in September, which saw consumers able to pay for goods of up to £30, as opposed to just £20.

How to respond

The speed of the payment method fits the profile of today’s busy, impatient shopper. Therefore, now is definitely the time to ensure that your store not only accepts contactless, but encourages its usage.

You’ll also find that the same NFC technology in contactless terminals works with some mobile payments services, e.g. Apple Pay. As availability widens, consumers will come to expect all retailers to offer the method to them in-store. Those that don’t are likely to be viewed as outdated pretty soon, while those that do will see queue times accelerate and customer satisfaction soar.

Of course, if you’re planning on implementing such technology, you’ll want to make sure that your card payment network security is up-to-scratch. You can find out how to ensure this here.

“They go mobile” – Episerver

Mobile shopping is already playing a huge part in how people are shopping this year; 59% of Brits used their device to purchase items in the January sales.

How to respond

Shopping on a mobile device is meant to provide the ultimate convenience for consumers, allowing them to browse retailers wherever they go. With this in mind, it’s essential that you make your own mobile experience easy – ensure that you’re website is properly optimised, and that the payment process is neither lengthy nor fiddly.

“They click-and-collect” – Atomik

Shoppers might love mobile, but not quite as much as click-and-collect. A recent survey saw it beat mobile as the method that impacted their 2015 shopping experience the most.

How to respond

The role of the store has evolved from being just a sales channel, it now has to deal with a constant flow of click-and-collect orders. As most retailers now offer the service, they need to make sure that it’s the best it can be to stand out from so many others that offer the same. Training staff, implementing dedicated click-and-collect personnel, or adding an interactive kiosk are all ways to better optimise the store for click-and-collect. Of course, with all this extra technology, retailers must invest in a network that’s robust enough to support it.

Have you seen any recent retail statistics that you think offer real value to retailers? Then share them with us on Twitter via @Vodat_Int.

 

Are fashion e-tailer’s attempts to venture offline Missguided?

It’s a great time for online retail. Hailed as the most convenient means of shopping, ecommerce is in the midst of one of its most successful seasons yet – December alone saw a sales increase by 15.1% compared to the previous year.

However, it seems that this level of success isn’t quite enough for some retailers; in a bid to grow even further, they’re looking offline too. Fashion e-tailer Missguided recently announced plans to open its first store in the UK, and it’s not the only one – the likes of Boohoo and Fabletics have also taken their first steps into bricks-and-mortar.

And who can blame them? News headlines about the death of the high street are fast becoming replaced with success stories. Services such as click-and-collect are providing stores with a new lease of life, with John Lewis being the latest retailer to praise the shopping method’s contribution to its strong festive trading figures. Meanwhile, some are even calling out for store opening hours to be extended, with 64% of retail workers in London supporting longer trading on Sundays.

So yes, heading to the High Street offers great potential for an online retailer. But there some things to factor in if they wish to replicate the great customer experience they create on the web.

Unlike ecommerce, the store has a helping hand in converting sales: staff. Personal service is something that gives bricks-and-mortar an edge over online shopping, so it’s essential that retailers make the most of this opportunity.

Offering great bricks-and-mortar customer service relies on the retailer’s ability to give consumers the same informative experience as their digital platforms provide. Yet, we recently found that 43% of shoppers voiced frustrations with inconsistent answers from staff. In order to address these communication challenges in-store, some leading retailers are equipping staff with tablets. This way they’ll have access to product information and stock availability at the swipe of a finger, making it far more likely that they can address customer queries.

This is especially important at a time when most shoppers enter the store with some level of product knowledge. Recent research from omnichannel retail specialist iVend Retail revealed that 68% of European consumers will research online before visiting a store – and clued up customers expect far more from retailers. These shoppers have already done their research, and just want to touch or try the item before committing to a purchase. In this case, staff members are far more likely to be faced with technical queries regarding the item, rather than general product information. In this case, a tablet device will prove even more valuable to your staff – they can’t be expected to understand the ins and outs of every store product on their own after all.

And not all shoppers restrict their online research to the comfort of their own homes. Instead, many are relying on their mobile devices to have a quick browse in-store, either for more product knowledge or to compare it with those available from other retailers. During the festive period alone, 41% of shoppers ‘showroomed’ when buying gifts in-store.

This shopper desire to use mobile in-store, combined with staff usage of tablets, means more devices devices than ever are connecting to store networks. Retailers that have not invested well enough in their network may be faced with a whole host of issues; slow running technology, intermittent connections and, in the worst case, complete connectivity blackouts. Not only will this be extremely frustrating to those working at the business, but most importantly, customers will be left disappointed too. Then, all the good work that retailers have done to blend their store and online experiences will be completely undone.

The battle for consistency between online and bricks-and-mortar shopping has been raging for years, and retailers like Missguided must tread carefully to ensure their in-person experience lives up to the digital hype. Much attention will have been paid to the marketing, store layout and such like, but it’s the network underpinning their store that will define their ability to deliver what customers want.

 

 

 

15 stories that defined retail in 2015

It hardly seems like five minutes since the January sales were underway, yet already we’ve reached the end of the year – and what a year it’s been!

Following on from our 6 stories that redefined retail in the first six months of 2015, here are 15 unpredictable tales that have shaken the industry across the entire year.

In no particular order…

  1. House of Fraser undergoes a customer-centric restructure

It’s already been predicted that 2016 will be the year in which omnichannel evolution results in infrastructural change, and House of Fraser is leading the way. In July, the department store chain announced a customer-centric revamp of its business model, in which its CRM, product and multichannel functions work together around shopper needs.

  1. Amazon goes Prime-tastic in the UK

If Black Friday and Cyber Monday weren’t enough, Amazon launched its own flash sale – Prime Day – in the summer. The inaugural event was hailed a global success, generating a 93% increase in Year-on-Year sales.

Read our blog: Amazon’s Prime Day highlights the gap between online and in-store promotions

  1. Argos ups its delivery game

Fulfilment has been a hotly contest battleground throughout 2015, and Argos put its stake in the ground during October with the launch of a UK same day delivery service, 7 days a week.

This went hand-in-hand with a reinvigorated click-and-collect offering, promising in store collection in less than 60 seconds.

  1. Marks & Spencer puts the Spark back into its loyalty scheme

It’s been a turbulent couple of years for Marks & Spencer, but its revamped loyalty scheme – released in October – may engender greater customer advocacy, by incentivising shoppers for non-transactional activities.

Read our blog: Has Marks & Spencer sparked a smarter way to increase loyalty?

  1. Littlewoods waves goodbye to its catalogue

For many consumers, the Littlewoods catalogue has been a retail institution throughout their lives. However, after 80 years – and earlier promises that it would remain a trading channel – the retailer decided to scrap its catalogue and focus on its online offering.

  1. HMV rises from the ashes

If you’d been asked two years ago to predict which retailer would be the biggest physical retailer of music in the UK in 2015, the administration-bound HMV would have been a rank outsider.

However, a renewed customer-focus strategy, better processes for dealing with peak trading promotions than its rivals, and a resurgence in the appeal of vinyl have all contributed to HMV’s fortunes flourishing once more.

  1. Lush inhales the sweet smell of success

Cosmetics brand Lush deposed insurance firm First Direct as the UK’s best brand for customer experience in 2015, according to KPMG Nunwood rankings. KMPG remarked that the brand’s imparting of product knowledge has been essential to its success, with several other top 10 retailers combining content and commerce to enhance the customer experience.

  1. Wet weather dampens summer sales

The UK experienced its worst retail sales since November 2008 in August this year, with unseasonably damp weather contributing to poor performance on the high street. Online sales did increase during the summer, but at some of the slowest rates on record.

  1. John Lewis starts charging for click-and-collect

Given that most of the retail industry is incentivising customers to collect in store with a free despatch service, an eyebrow or two was raised when John Lewis decided to start charging for click-and-collect orders under £30.

The retailer reasoned that fewer than 1 in 5 shoppers currently make click-and-collect purchases under £30, and it needs a more sustainable model for managing store-based fulfilment costs.

  1. River Island lets customers click and not collect

Continuing the click-and-collect theme, River Island evolved its offering in a different direction during November, pioneering a ‘click and don’t collect’ theme in partnership with Shutl.

The service uses Shutl’s on demand delivery platform to re-route in-store collection orders for home delivery, in order to give customers greater control over their last mile experience.

  1. John Lewis breaks the internet…but Sainsbury’s wins the Christmas ad war

When John Lewis released its Man on the Moon festive advert in November it was viewed so many times that YouTube’s counter froze for several hours. However, the department store chain was trumped by Sainsbury’s, which was voted best Christmas ad by Opinium Research for its tale of Mog the Cat.

  1. Black Friday falls flat on the High Street

The scrums in the aisles that were synonymous with Black Friday 2014 were not repeated this year, as the post-thanksgiving promotion was heavily weighted online. Retail footfall in stores and shopping centres was down 4.05% on Black Friday itself, while ecommerce saw a huge spike in activity that continued right through to Cyber Monday.

  1. The Kurt Geiger shoe fits another foot

They say a change is as good as rest, but when Kurt Geiger was acquired by private equity group Cinven in December, it marked the shoe designer’s third owner in just four years.

Cinven acquired Kurt Geiger for £245million. The company is known for longer-term investments – five years or more – so this could be the start of a new, consistent chapter for the brand.

  1. Customers get cross about connectivity

Poor in-store communications were revealed as a significant cost to customer relationships in a Vodat study published in August. Our survey found that a third of consumers have abandoned a purchase because they couldn’t get the information they needed prior to purchase, while 4 in 10 have left a store and sought the item elsewhere.

Download our report: why retailers and customers are becoming disconnected by the store network

  1. Despite tribulations, retailers end 2015 cautiously confident

It’s not been an easy journey for the retail industry over the past 12 months, but many are hopeful of a strong showing in 2016.

Improving economic sentiment and steady Christmas sales point to positive growth in the New Year, with major cultural events such as the Rio Olympic Games and European Football Championships set to keep shoppers happy – and spending – into the summer months.

 

5 ecommerce websites to watch on Black Friday

Retailers with a transactional website are about to face their biggest test of the year: Black Friday, which takes place on November 27th. Spending is predicted to reach £1.9 billion – a 17% increase on last year – in the UK, with a third of sales taking place online, according to Visa Europe.

Already we’ve seen one casualty of a surge in online trading, as Argos’ website tripped over when it launched its ’12 days of Black Friday’ promotion. However, the good news for the brand is that it has a few days to learn lessons and put contingency plans in place before ecommerce activity peaks.

For other businesses, though, the litmus test is yet to come – so what should we expect from the digital retail community on the big day?

It’s definitely worth keeping an eye on Amazon, ASOS, Debenhams, Marks & Spencer and Next this Black Friday. A recent study by Aimia crowned these retailers the best five UK ecommerce sites for customer experience.

The survey identified personalisation as pivotal to the online journey, as although these sites are rising to the challenge, more than half of consumers feel they are still being targeted with irrelevant product suggestions.

However, tailoring promotions based on previous buying behaviour is the tip of the ecommerce iceberg – some retailers are still struggling to get their basic offering right, particularly under pressure.

During peak trading events like Black Friday, the number one priority is being present and capable of delivering on customer expectations, and the resources needed to achieve this should not be underestimated. As Schuh’s head of ecommerce, Sean McKee, remarked in a recent Black Friday video interview, “be available for the customer, because the customer is absolutely wanting to buy products from you”.

Too many retailers experienced issues with their website last Black Friday, resulting in slow loading times, long waits and costly periods of downtime. In order to avoid this in 2015, concerned businesses need to ask themselves the following questions:

  • Is your hosting environment flexible enough to accommodate surges in demand?
  • Do you need to increase your server capacity to cope with Black Friday traffic?
  • Does your hosting company know it is Black Friday, and what the impact could be on digital activity?
  • Have you got the infrastructure in place to monitor Black Friday traffic in real-time, and respond to emerging issues?

At the end of the day, come Black Friday, price trumps everything else. So while personalisation might be the long game, on 27th November ecommerce retailers need to focus on availability and efficiency to maximise market share.

The #manonthemoon isn’t just a test for John Lewis’ ad team

When does the festive season begin? For retailers it was months ago, but for much of the public, the Christmas klaxon has been sounded in recent years by the debut of John Lewis’ Christmas advert.

This year is no exception, with the launch of its #manonthemoon commercial, a poignant piece highlighting the loneliness and isolation that this time of year can be filled with for many (John Lewis has partnered with Age UK for the campaign).

I’ll leave any critiques of the advert to the marketing experts; what I want to focus on are the consequences of yet another hugely successful initiative for John Lewis.

Ultimately, however they tell the story, retailers release big budget ads because they want to sell more in the run-up to Christmas. All being well, they should see a fairly swift uplift in online traffic, which will filter through to the store as well.

The challenge for these businesses is to make sure the beautifully crafted brand image showcased in their Yuletide commercials is upheld when customers reach the shelf edge – otherwise their overriding emotion is going to turn from awe to disappointment.

Christmas shopping is a stressful activity at the best of times, let alone when shoppers can’t get the item they’re looking for, they’re forced to queue for a long period of time, or they struggle to get questions answered by overstretched members of staff.

Now, I’m not saying John Lewis is guilty of any of the above, but generally speaking, customer experience in the store is an ongoing challenge for the retail industry. In our recent report: why retailers and customers are becoming disconnected by the store network – and how to fix it,  we discovered that almost half of shoppers have experienced frustrations trying to get queries solved in-store, and looked into the significant impact this has on long-term relationships.

What makes depth of service even more critical at Christmas is the fact that many consumers aren’t buying for themselves this time of year. As a result, they’re far more likely to be asking questions about the products they potentially want to buy.

Christmas isn’t a particularly loyal time of year – events such as Black Friday and Cyber Monday encourage people to shop around for the best price – but a good store experience can make a retailer stand out from the crowd, and inspire a newfound advocacy into the New Year.

Equally, a worse-than-expected encounter can dampen the reputation that marketing departments and agencies have spent thousands (in some cases, millions) of pounds creating.

With click-and-collect purchases expected to soar to record levels this festive season, store associates are going to be under enormous pressure to serve time-poor customers in a satisfactory and timely manner.

So as the nation passes its verdict on Christmas ad season, let’s hope the retailers putting out these yuletide offerings have the network infrastructure to follow through on the brand promise their stories portray.

 

Has Marks & Spencer sparked a smarter way to increase loyalty?

Unless you’ve been hiding under a rock, you’ll know that Marks & Spencer has just unveiled its new loyalty scheme, Sparks, to rapturous applause across the retail industry.

Hailed as ‘groundbreaking’ by the retailer, Sparks differentiates itself from traditional applications by rewarding both purchases and non-transactional activities, such as product reviews.

Accumulating large volumes of points will open up access to money-can’t-buy experiences, such as exclusive events and collection previews – which Marks & Spencer believes will foster a two-way relationship with their most loyal customers, tailoring the brand experience.

The retail industry has been quick to praise this new approach to customer retention, and not without reason. Our discount-driven culture has devalued promotional and price based loyalty; consumers now expect a good deal as standard. In fact, many are tired of having to make a purchase altogether to pledge their allegiance.

Instead, loyal customers are building a new role for themselves, in which their brand advocacy becomes part of the retailer’s marketing strategy. Today’s consumers don’t just feel satisfied when they’ve had a good experience – they blog about it, tweet about it, Instagram their new purchase, review the experience online, and so forth (something we discussed in our recent report about how social media can make or break customer relationships).

Smart retailers realise this and are finding ways to reward it.

However, Marks & Spencer isn’t the first. This type of non-transactional incentivisation is already being pushed hard in the hospitality industry. Starbucks, for example, has experienced tremendous success with its mobile app, which gives users custom offers, early access to new products, even enables them to pay at the same time as collecting points.

Even other retailers have forged ahead with experiential offerings for its most loyal customers. Harvey Nichols springs to mind here – the premium department store has made its entire programme mobile-based, using an app to fast track high value customers through to exclusive events and personalised privileges.

What’s seminal about Marks & Spencer’s Sparks, though, is its sphere of influence.

Regardless of the ups and downs it has weathered in recent years, M&S is a stalwart British brand, reflecting British people. Families have shopped there for generations, and trust the retailer to deliver to a certain level of quality. Therefore if Marks & Spencer are offering it, they’ll start expecting other household names to follow suit.

The battle isn’t won yet for M&S, though. Now it needs to integrate Sparks within its offering, to recognise true customer value across all channels. This is easy to do online, but it’s harder work in the store – and customers cannot feel they are being treated as a second class citizen when they choose the bricks-and-mortar route to purchase.

So in conclusion, Marks & Spencer’s loyalty scheme has the potential to ripple across the High Street, redefining how retailers value and reward their customers. But it will only truly hit the nail on the head if it’s part of a joined up omnichannel experience.