How can retailers drive store sales in this climate of uncertainty?

The retail industry is not keeping pace with the growth of the rest of the economy, as consumers prioritise entertainment and leisure spending. Exacerbating this, the BRC’s recent Retail 2020 report forecasts the combined cost of the Living Wage, apprenticeships and rising business rates will as £14 billion in costs over the next 4 years – approximately 20% of industry profits.

It is clear the industry faces many challenges ahead, and that’s not even taking into account the repercussions of the UK leaving the European Union, the full impact of which we are yet to discover.

However, while the forecast may seem gloomy, we’re seeing a quiet revolution which is repositioning the physical store at the heart of the retail experience. As Helen Dickinson, BRC CEO, describes, ‘what customers are looking for is experience, excitement and theatre, and often the physical environment is a better place to do that’.

So how can retailers optimise the in-store experience to drive sales in this current climate of uncertainty? Here are three strategies being used to great effect on the UK High Street right now:

Create social experiences

James Daunt, MD at Waterstones, has refocused the once troubled bookstore’s efforts on creating a more social retail experience. The retailer’s new Tottenham Court Road flagship store features a bar and a popup cinema in the basements, and many of its shops feature cafés. Daunt calls it an ‘old-fashioned approach to customer interactions’. However, other initiatives such as book clubs and a reservation app show that Waterstones is clearly reinventing the bookstore for the modern age.

With Amazon launching 400 bricks-and-mortar venues in the US, it seems that the store is still central to the future of the bookshop, and Waterstones are taking the physical buying of books to new levels.

Rethink the role of the store

O2’s latest flagships in Manchester and London offer complimentary coffee and working spaces, similar to a model Apple developed for its larger format stores, which included WiFi and seating.

Both O2 and Apple encourage shoppers to spend time in their stores, irrelevant of whether they make purchases. Bridget Lea, head of stores O2, claims that the technology company has ‘ripped up the rule book of a traditional mobile phone shop and set out to create inspiring and creative spaces where people can experience and learn about the possibilities of technology’. O2 want people to spend time in these stores and come back regularly, whatever network they are on.

For technology and telecoms retailers, fostering a community and creating brand awareness is a significant part of the sales strategy.

Tackle the limits of physical space

There has been a lot of noise around bringing technology in-store, and sport retailer Adidas provides a brilliant example of how cutting edge tech can provide an outstanding customer experience and solve the very real retailer problem of limited stock room space.

Adidas’ shops have large digital displays, which add endless aisle capabilities, allowing them brand to display every shoe it offers, beyond what is available in that specific location. By using this technology, Adidas has found it can combine the online and in-store experience for the shopper, answering a real demand from customers to try on the products while having the choice from the full range of stock.

Speak to Vodat’s experts to find out how to increase revenue through technology-enabled customer experiences.

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.

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.

 

 

 

4 stores that are ripping up the rule book of bricks-and-mortar retail

Consumer patience with outdated stores is fading.  As discussed in our previous blog – make better communication your store’s New Year’s resolution – 43% of shoppers have voiced their frustrations with in-store service, and it’s fair to say that now’s the time to invest in new ways to impress and delight.

Of course, there are some retailers that are already staying ahead of the curve, innovating their traditional store formats to reinvent what physical retail means to shoppers. The future of the store relies on its ability to wow the customer every time they visit – here we list four stores that enhanced their experience to do just that:

McDonalds – build your own burger

There are countless fast-food outlets out there; couple this with the expectation of speedy service, and you’re in an environment where it’s especially tricky to stand out. However, McDonald’s has found a way to tick both of these boxes with its latest piece of technology.

The fast-food giant has added a ‘build your own burger’ kiosk to one of its New York restaurants, allowing diners to choose from dozens of ingredient combinations to create their ideal order. Founded with an easy-to-serve menu, it was certainly a risky move for the retailer, yet one that answered their customers’ cry for variety.

Cranleigh Bridal – virtual bridal party

Back here in the UK, a bridal shop in Surrey has found its own way to offer a unique experience to customers. Cranleigh Bridal is the first store in Britain to be fitted with a mirror that has integrated Skype capabilities, enabling brides to call friends and family to show them their dress choice. This really plays to the emotional investment in planning a wedding, significantly enhancing customer satisfaction.

House of Fraser – scan the glass

Black Friday is now an integral part of the UK’s retail calendar, and shoppers are taking notice. In 2015, House of Fraser used the event to pilot a new way to entice passers by.

The department store created shoppable windows, integrated with augmented reality technology in its flagship London store. Consumers passing the store were able to use the House of Fraser app to scan the glass for a full list of Black Friday deals, reserve items and pick them up from a collection point. It was a launch that was perfectly timed, appealing to busy festive shoppers when the queues were likely at their longest.

Tommy Hilfiger – straight from the runway

New York Fashion Week is a designers’ chance to showcase their latest creations to the world. A lot of time and budget is spent to ensure that the runway show not only highlights the clothes in the best way, but is a memorable performance. But while it’s easy for those in the audience to be blown away, what about the brand’s wider customer base?

Tommy Hilfiger has managed to include brand fans in its Fashion Week experience, with the help of virtual reality. Some its stores are kitted with Samsung GearVR headsets, allowing shoppers to watch a 360-degrees 3D version of the runway show, as if they were sat in the front row. This way, the iconic catwalk is brought to life instead of relying on press images to do the talking.

Have you seen any innovative stores of the future? Share your stories and images with us @Vodat_Int.

Make better communication your store’s New Year’s resolution

There’s no doubt that online retail has had its fair share of flattering headlines this year. Hailed as the speediest, most convenient way to shop, it’s getting harder for bricks-and-mortar to compete.

However, there is something that the store can triumph in – and that’s personal service. While it may be easy to drop a few products into an online basket, the advice and expertise of knowledgeable in-store staff is something that can’t be matched.

Yet, it seems that 2015 may not have been the store’s finest hour. Our own research showed that there’s still much work to do to perfect the in-store experience:

  • 37% of shoppers hate receiving inconsistent answers from staff
  • 30% of consumers have abandoned a purchase because staff couldn’t answer their question
  • 5 minutes is the maximum time customers will wait for a query to be answered before leaving the store

That leaves retailers with a very short window of time to wow the shopper. If they don’t do just that, they risk losing a once loyal customer – one who will no doubt share their negative experience with family and friends.

However, with a New Year comes a new chance to change bad habits. So why not make 2016 the year to perfect your in-store service? It all starts with giving your staff the tools to succeed:

Invest in training

60% of customers believe knowledgeable staff deliver better customer service. Yet, with changing layouts, new products and time-sensitive offers to contend with, it’s no wonder that your workforce may be left confused. Communication is key here; ensure each member of staff is briefed at the start of their shift, alerting them to anything that may have changed since they were last there.

Implement tablets

21% of shoppers want sales associates to be given point of sale technology. And, it’s a request that will make life a lot easier for your staff. Allowing them to walk the floor with a tablet in hand, ensures they will always be ready for that tricky customer question. They’ll be able to check things such as product information and stock availability at the touch of a button, before finalising the purchase with a speedy payment.

Empower customers

22% of consumers would like to see more digital information points in store. There are a number of reasons why your staff might be unavailable for customer queries – whether the queue is too long or they’re locating an order, for example. The point is, sometimes a shortage of sales associates to give a helping hand is out of your control. Therefore, it’s important to ensure that shoppers can help themselves if need be. In-store kiosks are idea, as it presents shoppers with an alternative information source when a staff member isn’t free.

Competing with the fast-growing world of ecommerce is no easy job for stores, certainly if they don’t have the right toolkit to support them. And, of course, implementing the above suggestions will help get 2016 off to a promising start – but without a reliable WiFi connection, your New Year’s resolution for a better store experience will soon be broken.

For more information about successful in-store communication, read our report – ‘Why retailers and customers are becoming disconnected by the store network.’

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.

 

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.

Argos’ Fast Track delivery is a real traffic driver – if it works in-store

An eyebrow or two was likely raised in the retail industry this week, when Argos announced its new Fast Track delivery service – same-day service any day of the week, provided the order is placed before 10pm.

While it might seem like a reaction to the UK launch of Amazon Prime Now to some, it makes a lot of sense. We’re about to hit the busiest trading period of the year, so taking its delivery services in-house gives Argos the opportunity to scale up workforce and logistics to cope with spikes in activity, such as Black Friday.

And as a multichannel retailer, naturally Argos is also rolling out the service into stores, offering free delivery to the customer’s local outlet – as opposed to the £3.95 charge for home delivery. Again, this is logical, as the cost to fulfil into store is going to be lower than home delivery (if the product isn’t sitting there already), and it takes some of the pressure off fulfilment networks.

Argos’ big money promise for store collectors is that they can collect the item within 60-seconds of being served, as the retailer’s stock management is able show estate-wide location and availability of products.

60 seconds is a big gauntlet to throw down – especially when you consider we’re about to career into the Christmas trading period. Its investment may give Argos greater control over fulfilment of Black Friday orders, but we can see the ‘quick click-and-collect’ promise really catching on as we move through December, and this could cause serious headaches.

Although Argos is taking on 1,000 extra staff for the Christmas period, those personnel are going to need to get up to speed quickly to cope with a potentially even bigger than usual late rush.

Its retail park locations and extended opening hours are a natural magnet for consumers fitting their festive shopping around a busy schedule, especially if they can secure speedy service at no extra charge.

But what seems to the customer like a simple act of picking something up, is reliant on a well-oiled machine at the back end. Argos has the inventory visibility, but it needs to perfect the chain of events between order and collection to deliver on time – and to expectation – in the store environment.

Argos will also need to upskill these temporary staff very quickly on how to work the technology required to complete transactions – and of course they will need a robust network to cope with the increase in order volumes. Customers are going to be twice as grumpy if they have to wait due to technical problems AND they are in a hurry.

As we mentioned in a blog post earlier this year, Argos is doing some really savvy things around technology, which reinforces its credentials as a cutting-edge, customer focused retailer. During this highly pressured trading period, let’s hope its new scheme is optimised for the tidal wave of store pick-ups as well as home deliveries.

Is retail ready for the mobile-obsessed shopper’s rise to power?

123: that’s the number of times the average 17-25 year-old checks their iPhone every single day. To put this into context, that’s 30 times more than 26-35 year-olds, and a whopping 86 times more than those aged 55+, according to the latest Kantar data.

This information is not surprising – we all know the younger generations are glued to their phones most of the time – but it does beg the question as to whether retailers are listening to such statistics?

Right now, it doesn’t matter too much on the whole, because older shoppers are those with the greatest disposable income. Last year, the average 30-49 year-old could enjoy up to £1,400 to spend on goods and services each month, compared to around £100 for the 18-30s.

However, today’s tech-obsessed shoppers are tomorrow’s young professionals, and today’s young professionals are tomorrow’s high flyers. And when their disposable income starts to grow, they’re going to be just as (if not even more) affiliated to their mobile device.

To capture this audience when they reach their most profitable, retailers need to be creating a mobile-first strategy today, which puts in place the foundations for effectively reaching customers via this ever-growing channel.

Some companies already are; Walmart recently announced the launch of an SMS service, which sends shoppers verbal directions through their smartphone to the item they’re trying to find. They can then text the word ‘chat’ to receive one-to-one customer service.

Others are beginning to incorporate mobile into their outbound marketing strategy. Just this week, Pizza Hut launched a number of ‘smart restaurants’ in mainland China, which uses iBeacon technology to beam coupons, special offers and competitions to patrons’ devices.

But there is one absolutely fundamental component to any mobile-based retail and hospitality strategy, and that’s the network. To connect with customers, customers first must be able to connect – and this means having a robust, secure public Wi-Fi connection.

Free Wi-Fi is still not a universal concept in UK retail, so a huge step forward must be taken by the industry if we want to truly engage with shoppers across the devices that have come to dominate their lives.

Until consumers are able to get online in-store in a frictionless manner, retailers are missing an opportunity to build and strengthen relationships with them. This needs to be addressed as a priority, before Millennials grow up to become the country’s biggest spending group, or the chance to drive mobile revenue could slip through companies’ fingers.