Future of Retail

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INSIDE Keil Hubert and Shane Richmond on the revolution in retail technology FEBRUARY 2015

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supplement

Future of retail

The power of

EXCLUSIVE: Joanne Frearson talks to the big names in retail about what will happen next in this rapidly changing industry

ose R t r a u Sir St cado CEO, O ne o t s n u rles D a h C r i S an Chairm hone Carp s n o x i D ahy Hugh F Porter t-Ae N , O I C DISTRIBUTED WITHIN THE SUNDAY TELEGRAPH, PRODUCED AND PUBLISHED BY LYONSDOWN WHICH TAKES SOLE RESPONSIBILITY FOR THE CONTENTS

rding a H y d An irector d e v i t Execu of Fraser House

Business Technology · February 2015

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Future of retail

Opening shots Shane Richmond

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USTOMER personas are the new trend in retail, according to Graeme Collins, of RichRelevance. “Only by serving the changing needs, preferences and behaviour of the customer will retailers and brands be able to meet today’s hyper-connected consumers on their terms, across all channels of interaction,” argued Collins in TechRadar earlier this year.

Retailers can do this by making use of the data at their disposal and some handy bits of new technology. When a shopper walks into your store, for example, you need to know their history with your website, too, so that you can offer a personalised service. Collins says new apps and technologies such as iBeacon will tell you when a customer has arrived and it’s up to the retailer then to gather and leverage their data.

It’s easy in theory but, perhaps to the delight of those who fear a growing surveillance culture, retailers have not done a great job of putting this information into practice.

I’m always hearing about what a great job Amazon does with recommendations, and that’s true to an extent, but why do I still get recommendations based on presents I’ve bought for other people? Amazon could spot some of these simply by the address to which I have them delivered. Basic oversights like these show that retailers have some way to go before they are truly dealing with smart customer data.

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Hitting your target – or why a pregnant pause could give the game away Of course, some mistakes might be intentional.

For example, some time ago US retailer Target decided it could win a whole set of loyal customers if it could identify new parents and send them vouchers to encourage them to shop at Target regularly. It started crunching through its vast database of customer purchases and found a cluster of about 25 products that reliably identified pregnant women and even predicted their due date.

Target started sending out vouchers to soonto-be parents. The high point, or perhaps the low point, was when a man complained that Target had sent vouchers to his teenage daughter who could not possibly be pregnant. As you might have guessed, it later turned out that he was wrong and Target’s algorithms were right.

But it wasn’t just that man who objected: lots of people were disturbed that Target seemed to know, without being told, that they were expecting a child. So to avoid appearing creepy, Target started Twitter: @ mixing in the pregnancy and parenting-related shanerichmond

vouchers with an assortment of more general ones, to make the whole thing seem like a coincidence.

Following that logic, perhaps Amazon’s recommendations deliberately include a few mistakes so as not to scare me about the rise of the retail machines. Who knows?

There is a more significant reason why consumers might be worried about the data accumulated by retailers and that’s the danger of data breach. Millions of Target customers had their financial information compromised in 2013 following a breach that ended up costing more than $100million, for example, and last year saw similar breaches at Home Depot, eBay and Verizon.

It’s true that customers crave a personalised service but, as retailers start to connect more data points, there is every chance they will be unsettled by the possibility of that data falling into the wrong hands. No retailer should embark on persona-based service without also working to reassure customers and build trust.

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Legacy systems posing big questions for retailers EFFECTIVE integration of legacy systems w ith modern software and hardware in the retail sector is becoming a serious concern as payment technology advances, according to an expert.

Andrew McClelland, head of insight at the Interactive Media in Retail Group (IMRG), says that because of their increasingly outdated systems, many retailers are finding it more and more difficult to employ a multi-channel approach. “You tend to see businesses looking at bolt-on solutions, to balance

the need of older systems with newer,” he says.

“If you look at something like a website, customers expect to see how many products you have in stock. It is very easy to say, but it is much harder to implement. Are your warehousing systems able to talk to your web systems?

Are you able to make that a live feed or is there a slight delay? Do you run different stock systems between the store and your online operations?”

Retailers face challenges over what to invest in to make the network

interoperable. McClelland believes retailers should use data to help them decide what the best approach to take is.

He explains retailers need to consider what type of promotions will bring in the most sales. Should they invest in technology for mobile devices or stick to a traditional online website?

McClelland says: “We’ve known for years that multi-channel customers spend more, but does it necessarily make sense to try to join that up for everyone.

I would suggest that for some brands not. It comes back to big data. There are

some brands at the forefront of joining some of this up, but I would suggest the majority of brands use that insight for specific projects or promotions.”

Contactless payments surging among consumers

By Joanne Frearson

PAYMENT systems which can provide convenience to customers, such as contactless, are seeing adoption rates rocket, according to recent figures.

Richard Koch, head of pol ic y at t he UK Ca rds Association, says: “With contactless payments you have seen a growth of 255 per cent from last year. Effectively that means just under 3 per cent of transactions that take place in the UK are contactless.

It is a phenomenal growth area.

“We are at the very early stages of mobile payment. A lot of the work is going on in the background to develop this. Various people have launched products, but they are not ver y established yet. At the moment people are st i l l qu ite wedded to the plastic.

“Ou r fea r for consumers is they will not adopt this, unless the protocols used by each of the retailers involved are relatively similar. It will

Retailers must work towards a seamless transition if the popularity of contactless is to be harnessed

not be convenient if the process is disjointed and it has different costs. We have been trying to get people together to work out a good consumer journey proposition that is fairly similar and that people can understand.

“Once that is done it will provide the bedrock for people

moving forward. What we do see from contactless is where you can deliver convenience to the card holder. [When you are] giving them something fast, they are much more likely to adopt it than in other environments where time is not saved.

“The smartphone will be a matter of time. There are six billion phones out there in the world so it has to be something that does develop.

VIDEO STARS! Join us as we expand our future of retail campaign online AS PART of Business Reporter’s ongoing coverage of the future of retail we are continuing to host a series of lively business video interviews at the Daily Telegraph and Sunday Telegraph studios.

We will tackle the big challenges facing the industry and help retailers understand how to be relevant in this ever-changing market. The driving message is that, with a focus on innovation and through industry partnerships, businesses can boost their bottom line and thrive in this highly competitive environment.

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Encou rag i ng consu mer adoption is the key.”

Wearables will be another trend that will take off in the future, Koch believes.

“What is interesting is that one or two players – Barclays in particular – have moved towards wearables,” he says.

“Barclays has done a lot of work in providing people with wristbands that they can use at concerts rather than scanning their cards.”

Future of retail

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Supply chains strained by Black Friday BLACK FRIDAY and Cyber Monday might be a joy for customers wanting to get big discounts before Christmas, but it is not turning out to be so profitable for the retailers.

Tony Matthews, head of E-commerce, at business process outsourcing provider arvato UK, says: “While Black Friday and Cyber Monday have been huge online shopping sales events in the US for many years, 2014 was the first year they really hit the UK with many retailers offering special discounts only on those days.

“This meant many consumers squeezed their Christmas shopping, traditionally spread across November and December, into a single weekend, thus putting participating retailers’ supply chains under intense pressure.

“If retailers are going to embrace these sales peaks moving forward, they will have to rethink how they manage their product storage, fulfilment and distribution to cope with the new spikes in demand.

“Companies need to focus on having a more flexible supply chain. Entering an outsourcing partnership, rather than owning and operating their own warehouse, allows companies to scale their storage space up and down effectively to manage changing demand.”

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As shopping behaviour evolves, we are ready…

Case study two: MasterCard and DriveNow

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or the past few years, retailers selling through their brick-and-mortar estate haven’t really had a level playing field to compete with the personalisation, convenience and in many cases lower prices provided by online challengers. By taking advantage of rich customer data and often a significantly lower cost-base, retailing online has had the upper hand.

Retailers know that reacting with speed to their customers’ demands and changes to shopping habits or choices is what will ultimately determine their success or failure. What is increasingly clear is that consumer behaviour is changing faster than ever. In 2014 growth in online sales hit 14 per cent, with e-retailing for the first time generating more than £100billion of expenditure and 24 per cent of the total retail market. The IMRG Capgemini e-retail sales index suggests that this looks set to

continue at 12 per cent growth in 2015.

We’re in the midst of a global transformation as more and more people are moving from the offline and disconnected world to being constantly connected. Consumers all around the world are adopting smart devices at an astounding pace, and for retailers this opens up more and more opportunities to engage shoppers in new ways – changing the way we interact, browse and shop. This pace of change is expected to continue, with 50 billion connected phones, tablets and other devices projected by 2020, many times more than the world’s population.

Black Friday 2014 was the year when Black Friday truly embedded itself into the British shopping calendar. Good or bad, it looks like it’s here to stay; the opportunity cost for major retailers not engaging could be ruinous at such a critical point in the year. Estimates suggest

Case study one: Qkr! with MasterPass at Wagamama QKR! WITH MasterPass is an innovation coming to Wagamama restaurants soon, and is designed to bring customers a more convenient, quicker and fuss-free way to pay for their meals. The smartphone app will allow customers to pay bills as and when they are ready, and split bills with friends or colleagues if they wish.

Wagamama will be the first restaurant or retailer to offer this innovation in payments and Richard Tallboy, director of business development at Wagamama, sees it as a significant

step forward in improving his customers’ payment experience. He says: “We know customers come to Wagamama

with friends and family to enjoy dining in an informal environment. Qkr! offers our customers the ability to dine together but pay when they want to, and separately if that’s their preference, all via the app, which simplifies the experience. We’re delighted to be leading the way in finding a solution to a common issue for both customers and the restaurant industry.”

The Qkr! app will be available for customers to use in 112 Wagamama restaurants in the UK, and free to download from the App Store or Google Play later in February.

MasterCard is working with BMW on a contactless credit card that can be used to hire, unlock and operate a BMW or Mini vehicle from the DriveNow car-sharing fleet.

With a Near Field Communication (NFC) chip fitted to it, the card becomes not just a means of cashless payment but also a remote key. As soon as the card is held near to the sensor in the windscreen, the system identifies the user and unlocks the vehicle.

Joseph Seal-Driver, director of Drive Now UK, is excited about the further possibilities of linking payment capability to his cars: “We see a more connected world where customers can seamlessly move between devices and pay for goods and services. The BMW MasterCard is an exciting development which shows how mobility can be connected to the individual. We want to offer customers the ability to pay for services via our cars’ interactive screens, whether it is hotels for their journey’s end, or tickets for a fun day out. Linking our cars with our customers’ BMW credit cards will make this happen effortlessly.”

DriveNow carsharing in the UK is operating in north-east London with a fleet of 210 BMW and Mini cars ready to be picked up 24/7. Visit: http://uk.drive-now.com for further details.

that almost a fifth of all Christmas shopping took place over the Black Friday period in November. However, this shopping event brings with it challenges for retailers.

It’s clear a significant amount of spending was brought forward from December, meaning the key Christmas shopping period is becoming ever more condensed.

The significant volume of sales taking place in such a short window leaves retailers with the challenge of ensuring both in-store and online payment options are welcomed by customers, and facilitate, not hinder the sale.

With the growth in m-commerce and in the face of higher “basket abandonment”, a common issue retailers are looking to solve is how to simplify the checkout process and find a way around requiring customers to complete their card details, expiry date, delivery address and any other secure information multiple times and on a small smartphone screen. MasterCard has developed MasterPass with this modern puzzle in mind. Now accepted at more than 30,000 UK retailers online, it stores customers’

card details and delivery addresses within a secure tool powered by MasterCard. Payment can be made and delivery confirmed with just one password and conducted across the MasterPass global acceptance network.

As the ground shifts in retailing and shoppers increasingly divide their purchases towards the most convenient option, payments need to stay aligned. Our focus at MasterCard is to continually improve shopping experiences for consumers, whether in-store via contactless payments, or simplifying payments online through MasterPass. We know the future landscape for retailing will continue to evolve. To stay one step ahead, MasterCard is investing in the latest technology so that we are ready with simpler, smarter, faster and more secure solutions for customers and retailers alike.

Scott Abrahams (left) is head of acceptance and emerging payments at MasterCard UK & Ireland 020 7557 5000 www.mastercard. co.uk

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The inner geek

Moz & Bradders

Putting the personal touch to modern e-tail

By Joanne Frearson

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HOPPING is rarely easier than when it involves sitting in a plush leather chair browsing the latest fashions on an online store, while chatting with a friend and enjoying the finest Italian coffee.

When you see something you want to buy, there’s no need to fight your way through crowds at the store – just press the buy button to click and collect. That is House of Fraser’s new multi-channel concept store, currently trialling at Caffè Nero in Cambridge.

“We were one of the first to do click and collect in the UK,” Andy Harding, executive director of Multi-Channel at House of Fraser, tells me. “We have the best click-and-collect service, in the sense that you can order later than everyone else for early delivery. It is nationwide and seven days a week.

“We have the fastest service. We are constantly looking to innovate. We will be pushing backthe cut-off time to order and collect the next day. It is 10 o’clock at the moment, but we will be pushing it out to midnight at some point.

“We see collection as a really important part of the delivery proposition. Driving people into our stores really benefits us as then we can have more of a relationship with the customer. It is such an important part of our strategy because it delivers such a great service and it benefits the customer because there is this myth that delivery is convenient, but it isn’t. You still have to be at home and most people have a job.”

The multi-channel approach at House of Fraser is about being able to deliver a consistent brand experience in all the different channels, from online to in store, says Harding. To help give customers this consistency and create a multi-channel experience in store, iBeacon technology is used to deliver content to people’s mobiles.

“The mobile is the glue between online and offline,” Harding says.

“The more you can make the mobile experience contextually relevant in the retail environment, the more you will connect customers with the brand in a better way. You can use Wi-Fi, you can

House of Fraser’s Andy Harding is pushing nextday collection as a more appealing alternative to delivery

Portrait courtesy of RetailWeek

use NFC. You get somebody to connect to an iBeacon and you can deliver content to them and enrich their experience when they are in store. If you can get customers to get their phone out of their pocket that is a success.”

House of Fraser’s multi-channel strategy certainly seems to be paying off – in 2014 it won multi-channel retailer of the year at the Drapers and RetailWeek Paypal Etail Awards.

Harding believes good leadership is the key to implementing a successful click-andcollect and multi-channel strategy. “You need business leadership backing,” Harding says.

“You need the CEO and the board behind you.

You will not make the necessary changes within the necessary time frames that you need to make them without that wholebusiness support.

“You need multi-channel board-level representation – and once you have that you need particular retail support. You need communication education. You need to get the retail colleagues, the guys in store, to understand the value of what we are doing and why we are doing it from a customer perspective.

“We are very much customer-centric. It is a part of our DNA. You have to demonstrate how the customers use the technology.

How it helps them and how these strategies benefit the wider House of Fraser strategy.

“If they do not see how important it is and do not understand the process, then invariably that means you will let the customer down.

We demonstrate to stores what happens when things go wrong if they don’t follow the process.”

Harding believes we are only at the beginning of the curve when it comes to retail technology, and that there will be more innovation to come.

He says: “There is massive growth in this area, because technology is driving consumer behaviour. Our lives are becoming increasingly digital, the internet of things and our homes are becoming much more connected with different devices.”

Creating a consistent experience for consumers, where technology can help connect them to their favourite brands while maintaining the personal touch, looks like it could be a shrewd multi-channel strategy to take.

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Net-A-Porter’s CIO talks to Joanne Frearson about retailing in style

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AM GREETED by rows of beautiful chandeliers as I walk into the Net-A-Porter offices. The pathway to the meeting room could just as well double as the backdrop of a catwalk. To the side, I see exquisite rooms, with elaborately decorated interiors – it’s the perfect setting for any glamorous fashion shoot.

Net-A-Porter has become a global e-commerce sensation since its launch in 2000. Its website attracts more than eight million monthly visitors and has worldwide shipping to 172 countries, employing 2,500 people across London, New York, Hong Kong and Shanghai.

In 2010, international luxury retail group Richemont bought a majority stake at a valuation of £350million.

It has a social community in the millions, with fans across Facebook, Twitter, Instag ra m , YouTube, Vine and Pinterest. Each week original content is produced, accessible on sleek, easy-to-use sites and apps across iPad, iPhone and Android devices.

Its fashion pr int magazine Porter, which has starred the likes of Cate Blanchett, Gisele Bündchen, Victoria Bec k ha m , Uma Thurman, Penélope Cruz and Claudia Schiffer also has a technological edge, using augmented reality to help customers shop for clothes.

Hugh Fahy, the firm’s CIO, is waiting for me in the meeting room, wearing a stylish, tie-less suit. He is the man behind the 300-strong technology team who drive the e-commerce site. Fahy tells me the way the customer is interacting with traditional online shops is changing quickly, thanks to the integration of social media and mobile. To succeed he believes you need control of the “touch points” of the customer: from customer care

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The big interview Hugh Fahy

Every single time a customer interacts with us, we want to catch that data and utilise it, but also give that customer a brilliant experience experience, to personal shoppers down to the delivery guy.

Big data plays a big part of that, says Fahy.

“Every single time a customer interacts with us, we want to

catch that data and utilise it, but also give that customer a brilliant experience,” he explains.

“That means a really rich set of data about a customer. We want to maximise the number of customer interactions and the richness of those interactions. We have our customer data about what they bought, when they bought it, and how they click through a site.”

The 30-year gap: What retail can learn from ’s S BizTech C-Ssupoitt e INCE STARTING his first internet service provider company at the age of 19 while studying computer science and economics at university, Philipp Nieland, co-founder and CEO of electronic payment firm PPRO, has been involved in plenty of entrepreneurial adventures.

Prior to founding PPRO in 2006 with Tobias Schreyer, he started up Nieland Technologies in 2003, where he ran the company as CEO. At PPRO his passion is retail technology. Nieland believes the majority of retailers are stuck in

the past and should look towards the airline industry to help them deliver a seamless experience.

Nieland says: “If you look at the airline industry 30 years ago, when you went into the counter hall, there were thousands of people trying to check in. It was really crowded.

Thirty years later if you go into a counter hall there is nobody – everybody is checked in by mobile phones or other devices. They only

have to wait at the security check and everything else is fully automated online.

“If you look at the classical retail store 30 years ago, there were lots of people in the shop, grabbing their stuff then going to the cashier and waiting there for 20 minutes or longer. Today it is the same. There is no difference from 30 years ago.

What the airline industry has done

PPRO chief executive Philipp Nieland

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Why experts with no brand bias are more likely to seal the deal

Porter magazine is seen by Fahy as a consumer gateway to Net-A-Porter’s products – potential customers can use its augmented reality apps to buy products in the magazine by simply hovering their phone’s camera over the page

Net-A-Porter has a history of being an early adopter of technology: Porter was one of the first print magazines to employ augmented reality.

“It makes for a beautiful carry-over from our digital heritage – the fact that you can do augmented reality with what is a traditional print magazine,” Fahy says. “It is super-cool. You get your iPhone, you load up the Net-A-Porter app, and hover over any page of the magazine on the Concierge icon, or just buy it straight away.

“We want our customers to look at an amazing outfit, click the button, and either be able to buy it – which takes you through to the shop – or find out more about it, which takes you through to the concierge, where someone will pick up the phone after a couple of rings and tell you all about it.”

At Net-A-Porter, it is about using technology to enrich the customer experience. Instagram and social media channels are used to connect their customers to their favourite brands, while The Netbook social shopping app can be used by shoppers to interact with each other.

Net-A-Porter is seeing customers shopping more on mobile devices. But Fahy believes it still has a way to go until it takes over traditional online shopping methods. Actual mobile sales, although increasing, only account for 20 per cent, with most still using mobiles to browse.

Fahy explains this is due to payment technology and people’s trust of the authentication process. He says: “There is clearly a drop-off in mobile

when it comes to the ability of payment providers to make use of the smaller form-factor. You have more keystrokes. There is also a trust factor.”

However, he expects this will be transformed as more technology companies build authentication mechanisms such as fingerprint recognition into mobile devices and banks adopt phones as a secondary authentication tool.

But Fahy is not a fan of all retail technologies.

He is circumspect about implementing virtual changing room software, for example, which he doesn’t see as reflective of Net-A-Porter’s brand.

“Ours are aspirational purchases,” he says. “What should we adopt there? We have not really seen the technology that is luxurious enough for us.

We have not adopted one yet.”

What is important for Fahy is to build a platform which can support all the customer touch points, such as customer service and personal shopping, and build rich interactions between people.

“You are not going to get very far unless you have a great platform,” Fahy says. “You do need to invest. You need to control the touch points.

We have organised ourselves around the start-up mentality to make sure we do not lose our lead.”

For example, Fahy would like Net-A-Porter to have such a perfect delivery system that customers can have their parcels transported to the door of an airplane to pick up.

Net-A-Porter certainly has ambitious plans to keep expanding without compromising its brand – and as I walk under the chandeliers on my way out there is a lively buzz in the air.

the airline industry over the past 30 years retail has now to do.”

At the moment, Nieland thinks it is difficult for retailers to understand what technology is needed for the shopping area.

He says: “They definitely need more knowledge about technology, mobile, tracking of users, tracking of phones and tracking of customers. It is a huge industry – it is very difficult to track customers on the internet. It is more difficult to track them when they come through your store.

“But this is what you want to

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know as a retailer. You want to know if a guy goes into your online shop and then walks through your door.

“This is a very complex issue.

You need partners to deal with customer tracking, to deal with purchasing of goods, all the technology for the shopping basket, also payment.”

According to Nieland, the retailers that can differentiate themselves by offering better technological services to their customers will be the winners. If retailers look to technology it gives

them a chance to merge the offline store with the online.

He says: “In the end the shopper wants to look at the stuff and feel it and that is the reason why they go to the store. On the other side, they want to have the features of the online shop, the convenience.”

If retailers look to the lessons learned from the airline industry on how to adopt a seamless approach it could open up many more opportunities for them to win customers. Forming partnerships or looking to entrepreneurs for advice may be one way to do this.

Keil Hubert

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VERY November for the last 20 or so years, the US business press will run the same scary stories about how consumers are buying more goods online at the expense of retail stores. “In the future”, they say, all so-called brickand-mortar stores will go extinct, and we’ll make all of our holiday purchases via Amazon.com. It’s like a ghost story told round the autumn campfire that everyone knows by heart, but enjoys hearing again strictly for the joy of the telling.

Last year was no exception.

On Thanksgiving night, our local news anchor stared gravely into the camera to warn us that we consumers were now “showrooming”– a dastardly new practice in which we (all of us, supposedly) would examine goods at a local retailer, only to then go outside to the car park and purchase the same object online for a lower price. Our fickleness was going to doom the American economy (or something like that; I got bored and muted it).

In actuality, December’s analysis of our November consumer spending showed that we were only off of 2013’s numbers by… half a per cent. Nothing of significance.

I don’t buy into the annual doomand-gloom predictions. Never have.

That said, I have noticed a trend that affects both online and retail sales this year: I’m seeing a lot more interest in expert interaction before a sale gets made. It’s odd; the more that we have access to consumer reviews and product use data, the more that we distrust what we see online, and desire a live expert’s analysis.

Case in point: rather than buy my whisky online for Thanksgiving dinner, I drove out to my favourite spirits retailer and had a long chat with our local expert at Spec’s.

Understand, I’ve visited the

distilleries on Islay and have fairly strong opinions about what whiskies I like. I’ve cut peat, turned barley, and sampled spirits right from the barrel. I probably know more about Scotch varietals than 90 per cent of my fellows. Rather than buy based on my experience alone, I spent half an hour chatting with our store’s resident scholar about new offerings from India and Japan, and how they compared with brands and varietals that we’d both tried. I valued his insight, and I bought from his shop rather than from an online seller.

While the gentleman and I went down the aisle discussing different options, a half dozen other shoppers joined in with their own questions. People were hungry for well-formed opinions, and wanted the opportunity to ask probing questions. The gentleman graciously answered all of us as best he could.

Since he works on salary (instead of on a sales weasel’s commission), he had no vested interest in a particular product – and didn’t feel pressured to make a sale. He was paid for his expertise and willingness to engage with customers.

It doesn’t matter if you’re buying something as small as a meal or as large as a yacht – unless you’re an expert on the product, you value the insight of someone who has more experience of what you’re buying than you do, and who is willing to give you the unfiltered truth about the products under consideration.

I suspect that we’ll see a great deal more of this: product experts with no brand bias that are funded by retail locations to educate on purchases that may just as well be conducted online as in the store.

Over the long haul, both the store and the manufacturer will see increased sales and much stronger customer loyalty and satisfaction. keil.hubert@gmail.com

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Joanne Frearson

S

IR STUART Rose, chairman of Ocado and former CEO of Marks & Spencer, is sitting in his cottage in Suffolk on a Saturday morning. It is snowing outside and he has the coffee percolator on. He is waiting for his order from Ocado, which is due between 9 and 10am.

The delivery guy is early and texts Sir Stuart to see if he can come at two minutes to nine. Well dressed with a tie and clean shoes, he drops off several shopping bags in the kitchen and wishes Sir Stuart a nice day before driving off to make some more deliveries.

“I have my coffee on,” Sir Rose says. “I am looking out the window and I am thinking: ‘Why on earth do I want to go to a shop’?”

Unfortunately, we’re not sitting in the cosy surrounds of Sir Stuart’s cottage drinking his coffee. Instead we’re at the Metapack Delivery Conference about how to drive growth in a customercentric world.

Sir Charles Dunstone, chairman of Dixons Carphone, is also here. Both perched on a cream leather couch, the conversation between these two business heavyweights turns to how technology is playing an increasing role in retail.

Although it is hard to predict what is going to happen in the future, Sir Stuart is upbeat.

“What we do have to recognise is technology isn’t going to slow down, the rate of pace of change is accelerating,” he says. “It is absolutely amazing. As a consequence to that, consumers are aware and their behaviour is changing at a pretty exponential rate.

“What we have to learn as suppliers, whether we are primary or secondary, is to be very nimble… be fleet-of-foot, be flexible. If you are running a business these days you have to have antennae everywhere. You have got to have them twitching all the time.

“Remember, it is only in the last four to five years that if David Beckham came out of a bar in Los Angeles wearing a white tie, you would see people suddenly coming into Marks & Spencer the next day asking, have you got any white

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Sir Stuart Rose a Dunstone on how the retail re

ties? I don’t think that would have happened 15 years ago.”

As consumers demand more from retailers due to these changes in technology, companies are finding they have to change their business models and the way they interact with customers to stay ahead.

Sir Charles says: “Business is becoming so

much more complex in the way you talk to a customer, and the way your customer finds out. Things are changing so fast that it is almost impossible to keep up.

“All of the rules that used to make large and mid-size institutions feel safe about the power of scale and the organisation of the world have disappeared.”

Technology has turned the balance of power onto the consumer. People can now surf the internet to find out the cheapest deals, or visit a different shop if they like the experience better.

The onus is now on the retailer to put in place the technologies to make the customer want to shop with their brand.

Sir Stuart adds: “There is so much choice

CK ND RRY

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Your coffee’s ready!

How putting a face to a name helps

and Sir Charles w to keep up with evolution

out there. There is so much capacity out there.

Consumers do not care if your business model is unprofitable. That is your problem – go and sort it out. They can go and get their goods from someone else.

“You can plan as much as you like, but 50 per cent of what happened to you is not what you plan, but is what some other person does to you.

“You think when you get up in the morning you have got this great plan, you are going to implement it, this is what you are going to do, but if someone else does not want to use it you are stuffed. If someone else has got a better idea they you got to move very quickly to catch up with them.”

One area in particular which is causing turmoil among retailers is that of payment technologies. As customers demand faster payment methods to make their shopping easier, companies are struggling to know which systems to adopt.

“T here is a war going on between different ecosystems, and people perhaps do not want to cooperate as they should,” Sir Charles says. “Fundamentally, people have being trying to protect their environment as much as possible, which has prevented cooperation and that leaves us where we are now.”

Sir Charles sees the smart phone platforms as the winners in the end. He says: “Apple Pay, given its reach, given the way Apple provides this kind of curated environment where you can buy lots of things and have

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Above: Ocado chairman Sir Stuart Rose (left) and Sir Charles Dunstone, chairman of Dixons Carphone

complete security and trust in them… I put them in pole position as the people who may well win in this space.”

Although Sir Stuart is reluctant to predict the future, mobiles are also one area which he believes could be a trend to stay and is what the consumer wants.

He says: “There is already a lot of mobilisation going on and you will suddenly find it is that point of inflection where there will be a huge demand, and it will happen as a norm.

“The mobile device has changed our lives in different ways. Look at the Ocado business – 50 per cent of orders go on tablet, half of those come off a mobile phone. We were the first retailer to have a mobile app a few years ago.”

Technology is changing the retail experience.

The fate of the retailer is now in the hands of the demands of the consumers, and whether or not they can deliver what they want. To keep ahead retailers will have to be flexible and be able to adapt quickly to change.

“If you run a business these days you have to have antennae everywhere. You have to have them twitching all the time” – Sir Stuart Rose

NEW PAYMENT systems are helping to make buying products more efficient for both consumer and retailer.

Janet Garcia, co-founder of delicatessen Cook & Garcia, says: “We are a traditional family shop and you would think there would not be a place for technology. We are just doing sandwiches, coffees and salads, but we really embrace the technology and it makes a massive difference.

“Our online ordering, that we only launched in May last year, now constitutes nearly 20 per cent of our turnover every month – 20 per cent of our sales come via the internet.”

Cook & Garcia, based in Richmond, south-west London, was approached by PayPal, which has a head office down the road, to trial a mobile facial recognition payment app.

She says: “We thought the payment by mobile phone app would appeal to a big section of our audience and speed up queues.”

The app works by the customer clicking on the retailer logo. The customer’s name and photo then appears on the shop’s payment system and the retailer charges them by

clicking on their image.

She says: “It is a bit more of a personal interaction in what would otherwise be a impersonal arm’s length transaction. It somehow personalises it. If you want to have a bit of interaction with the person, nothing comes close to the facial recognition payment. ” Cook & Garcia is looking into other apps which can enhance the customer experience.

“I was at The Lunch Show, which is a big exhibition for food retailers,” she says. “I have some apps that I am quite interested in, which people can use to preorder their sandwiches. That is the next technology we will invest in to give more choice to customers.

“We are opening our second shop in the City, at the base of the Monument.

In the City the turnaround time has to be even sharper, even quicker.”

Even though it’s just a small sandwich chain, Cook & Garcia is aiming to become an adopter of technology, rather than a laggard. Retail technology is not only making paying faster, but also providing a personal, interactive approach for the customer.

Business Technology · February 2015

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Customers are researching more, both in stores and online, as they seek to deal with overwhelming choice

Retailers need to push the boundaries to find an edge I

f the good news was that retail sales increased by 4.2 per cent in 2014 then the not-so-good news was that the level of competition increased as well – more retail space was added to the market, more products were added to ranges and more was bought online. Yet the consumer clearly has the upper hand, with the ability to compare products, prices and services from any retailer, at any time of day and from any place.

In contrast, retailers have lost control of some of their ways of differentiating themselves from the competition – range, price and location. To gain a competitive edge they have to focus on what makes them stand out from the crowd – they have to push the boundaries. The place to start is with the customer. What do they want and how do they want to buy it – what is the product and what is the experience?

Products that customers want to buy are still the foundation of all great retailers. Welldesigned private labels certainly help and there are two options: a better product and service for the same price or a similar product and service for a lower price. There is room for both in the marketplace as the market has polarised – witness the continuing growth of Aldi, Lidl and Waitrose in the grocery sector.

But differentiation will come from creating a better product, as examples – ones which taste better, have more style/design, fit better, have more (useful) functionality, or are easier to use. Just copying similar designs to ones that the competition stocks is a route to competing on price alone, and that is one

that only one retailer can win. If there is a trend then the retailer must interpret that trend with their own, uniquely recognisable style or handwriting. Lakeland is an example of a retailer which creates its own unique products, often based on ideas from its customers, but Designer tie-ups in the fashion and home sectors are a route which has proven very successful for retailers such as Topshop, Debenhams and H&M. If the product route is not available then the retailer has to differentiate itself on the experience the customer has when they shop at that retailer.

That experience encompasses the whole path to purchase – which has become much longer and involves many more points of contact between the retailer and the customer. Customers are researching more, both in stores and online, as they seek to deal with overwhelming choice and the need to validate their choice with help from family and friends. The path also includes delivery and any feedback that a customer may give after a purchase. Gone are the days when the customer walked into the shop empty handed and walked out with a bag full of purchases.

The role of the sales associate has become more complex. Instead of just helping the customer articulate their needs,

suggesting the best product to meet those needs and closing the sale, the role has to be transformed into helping the customer move along their path to purchase – it may be helping with the research in store before the customer buys online or validating research done online before completing the purchase in store, but the critical aspect is keeping the customer within the retailer’s channels and not completing the purchase with a competitor. To do this, sales associates are going to need more detailed information than they have at present.

Equally, the customer experience provided by the other channels has to be designed with the same goal in mind – completing the sale within the boundaries of the retailer. Thus, the experience that the customer has as they navigate across the channels along the path to purchase has to be easy and seamless, consistent and connected and ultimately it has to be better, faster and more memorable than the customer experience offered by the competition.

Personalisation is increasingly likely to be part of the retailer approach.

Thus, every retailer has to work out which parts of the customer experience need improvement and which will serve to differentiate them the most. Of course, the customer expectations of the experience are not static. As one retailer makes an improvement which resonates strongly with consumers, they will expect this as the norm from all other retailers – witness Amazon’s work on reducing free

delivery times. Therefore retailers need to be continuously measuring the user experience of each touch point, and the overall customer experience of the whole journey, just as they need to measure the conversion rate of complete paths to purchase as well as at individual touch points. Only by continuous measurement of customer expectations, the current customer experience and competitor actions, can a retailer stay one step ahead.

Currently retailers are investing heavily in delivery options, and click & collect which offers both increased convenience for customers and reduced costs for the retailer. But our research indicates that retailers neglect the store at their peril. More respondents want improvements to the store experience than improvements in the seamless integration across channels. Once these are made we expect the customer to want more from the online channels.

Currently the customer has to do all the hard work; searching, filtering and evaluating.

The next generation of apps and websites will understand what the customer is trying to do, have insight into what the consumer is likely to want and will deliver a different experience according to the customer’s intentions.

And then there will be another turn of the wheel – this the retailer’s path to purchase.

Today’s customers want it all, tomorrow’s retailers will have to deliver it all and this will only be achieved by an extraordinary understanding of their customers, their competition and their own business, just like Mr Greber who owed the local grocery store in the village where I grew up.

Fiona O’Hara is managing director, UK & Ireland Retail and Julian Allen is global retail research lead at Accenture www.accenture.com/retail @Accenture Retail

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Inspector Dogberry Over Christmas Dogberry went to visit online retailer Etsy House’s pop-up store in Covent Garden to look for handmade or vintage items for his kennel, and was impressed with how they used iPads as mobile cash registers.

Jonathan Zatland, international multichannel manager at Etsy House, says: “As a pop-up shop we needed a platform that could scale up incredibly quickly and impress from

the off. We had complicated inventory management requirements, having to track sales for 121 different suppliers, and instantly know which of the 3,000-plus products needed to be restocked at any time.”

Etsy House used both Vend and iZettle technology to introduce this iPad credit card payment system.

“It was very customerfriendly, helped avoid queues

or bottlenecks and the sales assistants were able to provide a very personal service,” he says.

“As the store was only open for three days we also needed an intuitive system that was easy to train temporary staff and provided a fluid customer experience.

We wanted to be able to offer a mobile payments system as a simple and fast way to process card payments. It was very customer friendly and helped avoid queues or bottlenecks.”

Catalogue giant Argos has teamed up with Sainsbury’s to open 10 new Argos digital stores within existing Sainsbury’s supermarkets.

The new digital stores will provide customers with a choice of more than 20,000 non-grocery products which they can either buy instantly in-store via a tablet or mobile device, or reserve online for easy collection within hours, the same or the following day. An extended range of around 40,000 products can also be ordered in store for home delivery.

The Argos digital stores in Sainsbury’s will range in size from around 1,000 to more than 5,000 square feet in area.

By Matt Smith, web editor

E-Commerce Marketing Blog www.shopify.co.uk/blog Run by the people behind popular e-commerce platform Shopify, this blog provides tips and guides to help you make the most of your business’s digital offering.

Recent posts include advice on tools that can help with logo design and pointers on how to create a memorable unboxing experience for your customers.

The Retail Doctor Blog www.retaildoc.com/blog

Burberry and LINE have launched a global partnership to stream the luxury British retailers London Prorsum womenswear show live to Japanese fans of the brand.

Users of Burberry’s LINE Official Account will be able to watch the Burberry Prorsum Autumn/Winter 2015 Womenswear runway show, live from London Fashion Week on February 23. Using the mobile live cast functionality LINE LIVE CAST, viewers in Japan will be able to experience the show in real time. Christopher Bailey, chief creative and chief executive officer at Burberry, says: “This exciting collaboration will help us share our rich heritage and culture of design by building a very personal relationship with audiences in Japan.”

Twitter: @dogberryTweets

Tesco has launched a Google Glassenabled service which works alongside customers’ Tesco.com grocery accounts, letting shoppers browse goods, view nutritional information and add products to their online basket.

Pablo Coberly, innovation engineer at Tesco Labs, says: “At Tesco we want to ensure we have the means to allow customers to shop whenever, however they want, which is why we’re testing the possibilities of customers topping up their online basket with Glass.

“We don’t envisage Glass becoming the new platform for shopping as its functionality is different, and more immediate.

Instead, it complements other devices and integrates shopping into everyday life – products can be ordered or added as and when customers realise they need them.”

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How do you tell if it is time to close your store? How should you counter common lies told by customers? And how can you close your retail sales more quickly? Find the answers to these questions and more on the blog of business strategist and customer service expert Bob Phibbs.

Retail Customer Experience www.retailcustomerexperience. com/blogs Find out why you might be losing customers, how to reach mobile consumers more effectively and why most loyalty programmes are failing on this blog, which specialises in posts that help retailers and other businesses to provide high-quality customer experiences.

Forrester Retail http://blogs.forrester.com/ category/retail

ShopSavvy Scanner (FREE, Android, iOS)

Check your competitors’ online prices with this app, which allows you to scan product barcodes to compare different websites’ deals.

Google Analytics (FREE, Android, iOS)

An essential to keep track of how customers are using your website. Use the data to optimise your digital offering and increase sales.

Forrester Research’s retail section is worth following for expert insights into the sector. Recent posts explore how consumer sentiment changed over Christmas, why mobile is the next big step for Indian retailers and top examples of mobile commerce done right.

How retailers will deliver the omni-channel experience

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he future of retail is all about delivering the optimum omni-channel experience. It is the natural evolution of multi-channel retailing, from just in-store and online, that will enable retailers to deliver

a seamless and consistent customer experience through all available shopping channels, from internet devices, including mobiles and tablets to bricks-and-mortar stores.

What’s driving today’s approach is the emergence of big data analytics. A treasure trove of information can now be captured through technology-enabled tools including social media. The ability for retailers to analyse data provides an unprecedented level of detail around the manner in which customers engage with them, rather than just a transactional view.

Indeed, the latest analytics technology will be key in enabling forward-looking retailers to finally achieve the service levels and omni-channel support they need to out-perform the competition and create barriers to entry for future would-be competitors.

Systems, procedures and structures will need to be put in place that will enable retailers to assemble information from multiple sources and present it in an accessible way to decision-makers across the business. The insight this

data provides will be critical in terms of prioritising future investment. Retailers need to know the typical buying sequences different kinds of customers undertake, what tasks they conduct online through mobile devices or instore, and how long each stage of the transaction takes.

This data will provide options to accelerate the process, thus reducing costs while enhancing the customer experience.

The potential of this development is huge. Many leading retailers are already taking advantage of the Esri Retail Platform to visualise, analyse and respond to cross-channel data, and gain insight into where to prioritise their investment: in bricks-and-mortar stores, online or in a combination of both. This will be crucial in building future business advantage in a crowded and highly competitive market.

David Sheldon is an independent retail consultant at Esri UK www.esriuk.com/retail

12 · Business Technology · February 2015

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INSIDE TRACK

Slow is the new down time Improve your bottom line through improving internet performance

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RBTE and Retail Design Expo: The face of the consumer in 2015 R etail is now what it should have always been – totally customer focused. Customers have the money; they have the power of online, smartphones and the transparency this gives them; they like to shop where, when and how they choose to across all the channels – physical and digital.

They are fickle and impatient – don’t like to wait; don’t like to queue; want the best deals and can price-compare; want it now; don’t want to pay for delivery; like to click and collect goods and return goods to the store; still

like trips to the shop but want better service and entertainment; have a voice as they praise and complain on social media and other channels.

Retail is undergoing the greatest change and challenge it has ever faced.

It has never been so competitive.

Retailers need to listen to customers and get smart. They need to invest in the total range of solutions that will win and retain customers. Some 80 per cent of sales still take place in store, so make them nicer – easier to navigate, better looking, with fewer queues,

more smiling and more knowledgeable staff. All this is good news for the better retailers and those that are well funded. More good news is that the suppliers of technology and design solutions are innovating like never before to come up with clever products and services to help the retailer win.

No retailer can stand still for a moment in this dynamic environment and has to keep abreast of developments – particularly how prospective customers will be shopping tomorrow and what their demands will be. That’s why RBTE (technology) and Retail Design Expo (design) are essential for retailers. In one place for two days they will find out what’s new and what is around the corner: 450 exhibitors, more than 125 education sessions, bootcamps, workshops, networking and more.

The RBTE and Retail Design Expo is on March 10 and 11 at Olympia, London +44 (0)20 8874 2728 www.rbtexpo.com www.retaildesignexpo.com

hile the financial impact of outages on retail sites is well-known (downtime costs can exceed £1million an hour), the cost of slow performance is equally dramatic. 40 per cent of shoppers will abandon a page taking more than three seconds to load. A majority of UK shoppers rank site slowness as their top reason for abandoning a purchase.

Website slowdowns occur ten times more frequently than outages and can have double their financial impact.

If your site’s revenue is £100,000 a day, you could be losing £2.5million in annual sales with just a one-second delay. Retailers need to dig deeply into their web infrastructure to learn where their internet performance may be falling down.

The term “internet performance” includes everything from your DNS connection to email delivery and inbox placement, through to the internet intelligence required to ensure an excellent customer experience.

A key concern for online retailers is how quickly traffic can be routed without a noticeable drop in performance.

During peak periods and traffic spikes consider cloud load balancing to prevent performance slowdowns for your customers.

Online retailers selling

worldwide need to deliver a consistent experience no matter the customer’s location. In a survey recently conducted by Dyn, nearly 70 per cent of 1,400 consumers noted they had bought from online retailers in other countries within the past year, but most also noted that they had found the shopping experience less than ideal.

Insight into performance data across your entire internet infrastructure, including data centres and cloud-based services, can help you deliver the exceptional experience your customers expect.

Drop by Dyn’s booth (#168) at the RBTE on March 10-11 to continue the conversation with Mark Lewis (left), a Dyn retail internet performance expert, or follow Mark @MrMarkLewis on Twitter 01273 257286 dyn.com

Business Technology · February 2015 · 13

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Be interactive, be engaging, be on top of your game

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etailers can increase their ROI through applications that provide a more interactive experience for customers.

Damon Crowhurst (right), European VP at Scala, says: “Historically, digital signage in the retail space has been large-format displays showing videos. Those can be effective to a degree and a general ROI case study would definitely present a case for digital in store. But what we find now through iBeacon interaction is

we have made it a more engaging experience, which means the ROI level will be significantly more tangible.”

Feedback from customers, he explains, also shows it creates a positive connection to the brand. Scala has been repositioning itself in this area and created a platform, Scala EXP, to deliver rich media experiences to consumers.

The EXP platform, which will be showcased at RBTE, uses iBeacons and NFC technology that

can interact with tablets and mobiles to give personal recommendations to consumers.

Part of Scala’s showcase at RBTE will include an application developed for Adidas for its trainer displays. Using iBeacons, it can give customers a personal recommendation, such as what tracksuit looks good with that when they pick up the shoe. www.scala.com

increasingly will select retailers that offer this. At the same time, consumers are returning goods in higher volumes than ever before, which adds further complexity and cost to retailers’ operations. The challenge for retailers is to achieve fulfilment excellence without losing money.

Ensuring retail excellence To ensure this, retailers need to manage their supply chains in a holistic fashion, maximising value and minimising cost at every step.

1. Know your customers Ensure you plan to have the right products and offers in the right place, based on how customers want to shop and have their orders fulfilled.

2. Maximise the sales opportunity

Profitably fulfilling the online customer promise T he UK online retail market shows no sign of slowing down, with online retail sales predicted to reach £52.25billion this year, according to the Centre for Retail Research. This presents a great revenue opportunity for retailers, but also a considerable supply chain challenge.

Today’s retail supply chain is a far cry from the simple networks of 10 years ago, where the job of the supply chain was to move goods from a supplier, through DCs, and to stores in the most efficient way. Modern consumers want “anywhere, anytime” fulfilment that is fast, convenient and reliable.

No longer are they prepared to wait at home for hours for a courier to deliver a parcel, or wait days before they can visit a store to collect their goods.

This requirement has dramatically changed the complexity of the retail supply chain. It must now handle more fulfilment locations, increasing singles-picking for customer orders and real-time operations to fulfil orders within hours or even minutes. It must also operate flawlessly through the peaks and troughs of Christmas, Black Friday and the New Year sales. For many retailers, this fulfilment nirvana is very much a work in progress. Recent JDA/ YouGov research revealed that over the festive period, nearly one in three British online Christmas shoppers experienced problems with their orders.

Fulfilment excellence is now an important factor in today’s shopping experience. Consumers value fast, convenient fulfilment services and

During the customer’s shopping journey, take every opportunity to maximise the overall profitability of the transaction – eg, upselling/ cross-selling, intelligent delivery or incentivising “click & collect”.

3. Intelligent fulfilment Make profitable sourcing or fulfilment decisions – ie, what is the most efficient method to fulfil a customer’s online order? Is it from the DC or a nearby store? Can a supplier deliver directly at a lower cost?

4. Treat returns as an opportunity Encourage customers to return items in-store and use it as an opportunity to save the sale, or upsell. When items are returned, it is vital that robust processing at the store or DC efficiently recycles useable goods back into inventory.

The technology is available to make this a reality, it is simply a case of breaking down operational silos and joining the dots. The winners will be those that make their supply chain and fulfilment operation a competitive, profitable advantage.

Jason Shorrock is senior director, retail strategy EMEA at JDA www.jda.com/retail

When vintage hardware meets social media

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lose to 90 per cent of retail transactions in the UK still take place offline. Whether it’s buying a coffee or a fresh meal, there are plenty of transactions that will always be largely processed in person.

But that doesn’t mean digital media has no place on the high street. The best way to maximise customer engagement, build awareness and grow sales is to combine bricks and clicks.

When we at Flapit surveyed smartphone users last autumn, we asked if they are more likely to trust a business, hotel or restaurant with a social fan base over a business without one.

Nearly two-thirds confirmed that they are indeed more likely to trust a business with a social following.

Bringing social media into the physical world goes a long way to help build that trust. And it works both ways – by interacting with an IoT (internet of things) device like the Flapit in a retail environment, the offline experience is transferred back online.

There is also the opportunity of converting

typical in-store behaviour.

For example, 92 per cent of customers check their smartphones while waiting in line. Capitalising on this is helped by introducing a new type of touchpoint – something attentiongrabbing to contrast everpresent digital signage to increase the likelihood of an engagement, which fades fast once your customer has left the premises.

In other words, seize the opportunity to convert a captive customer into an online expression, each of which could seed a dozen more real-world visitors next week.

What happens when you use the incentive of a half-price second item to anyone who posts a photo of it? You not only turn your existing customers into solid repeat buyers, you also convert your in-store crowd into your online marketing squad, that’s what.

Flapit was selected as part of the RBTE 2015 Eye on Innovation Trail +44 20 7193 9030 www.flapit.com

Business Zone

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The future

Connecting online strategy with in-store style I n a highly competitive environment where customer expectations are ever-increasing and the success of e-commerce has forced a shift in traditional retail activity, retailers need to take steps to ensure what they can offer in-store matches their online presence.

Mobile-enabled in-store activity Mobile is the ultimate connecting device for today’s always-on customers – according to Google’s “Our mobile planet”, 98 per cent of smartphone owners carry them at all times, and 70 per cent use them while shopping.

So it’s vital to have a retail strategy which complements existing customer behaviour to give them a superior experience. There are a wealth of mobile-enabled activities which can help with this, including:

• T ransactional, event- and location-

• • •

based interactivity/special offers, optimised catalogues, stock/ inventory management Barcode scanning, beacons and NFC M obile payments, e-point of sale/interactive displays C ustomising the in-store environment (such as voting on in-store music)

Sales staff empowerment Key to the delivery of a seamless, superior customer experience enabled by mobile is strategic recognition that sales staff should be at least as wellinformed as their customers. Equipping them with mobile app-based customer information, real-time updates

and integrated communications gives businesses the opportunity to implement mobile technology for instore staff swiftly and cost-effectively.

connecting all of these devices to each other in real time via cloud platforms as well as to back-end systems such as e-commerce and CRM, retailers can:

Personalisation and customer-centric user journeys

• Identify customers • Offer personalised service • Enable seamless checkouts • I mprove their operational

The difference between good and great customer experience comes down to “clienteling”, where instore staff and e-commerce sites have access to customers’ wishlists, previous orders, product reviews and preferences, allowing them to act as a personal shopper. Sales staff with all-round knowledge of customers’ wants and needs, stock availability and product information can provide exactly the right level of service, from online ordering in-store to upselling appropriate products.

The level of technology inside high-street stores is increasing, from consumer phones to staff tablets, fixeddisplay screens and even wearables. By

performance Plus, by mixing and matching device types depending on the exact situation, staff and customers can always have the experience that best suits the sale.

In the eyes of the customer, the lines have blurred between digital and physical retail to such a degree that divisions are non-existent. Now it’s down to retailers to up their mobile game and close the gaps in their own operations to offer customers the joined -up experience they’ve come to expect.

0845 459 3333 www.redant.com

In focus: Get the right results Video special

In an interview filmed exclusively for Business Reporter, Shadow Business Secretary Chuka Umunna discusses how the future is bright for UK SMEs http://bit.ly/brsmallbiz

With thanks to

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eather and climate impacts not only on our day-to-day lives but also on commercial businesses, and the Met Office provides tailored products and services offering forecasts designed to aid operational planning and decision-making across a range of industries. One such industry is the retail sector, where the Met Office DemandMet suite of products can help retailers minimise the impact of weather on their business and maximise the opportunities it presents.

For this sector, on-shelf product availability is crucial as unavailable products cost the UK retail market billions in lost sales every year.

Changing weather influences

footfall, and fluctuations in sales and product availability.

It has an impact on the costs and efficiencies of the whole supply chain, particularly for fresh, chilled and seasonal products. Weather conditions have a big impact on sales of seasonal products. Both the start and peak of unit sales can vary by six weeks from one year to the next, resulting in missed sales opportunities or overstocking. This is especially

important in the run-up to key trading periods, when cash-flow and stock rotations are tight. Changes to the expected seasonal weather pattern can have a significant effect on sales.

Extreme weather conditions can also have a profound impact on shopping patterns, especially when getting to the shops is made difficult. At the height of the 2013 winter snowstorms, for example,

22 per cent fewer shopping trips were made in the four days between November 29 and December 3, compared with the previous year. This resulted in lost sales that retailers never fully recouped in the run-up to Christmas.

The situation continues to be challenging, with retail margins coming under intense pressure compounded by weak consumer spending levels, growing business costs and increasing competition.

Despite these challenging circumstances, the British food retail market is the fourth largest in Europe, after Russia, France and Germany. www.metoffice.gov.uk/ retail

Turning customers into brand lovers

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he universe of fashion is being transformed.

Spending power, demand and the variety of selling channels have risen. The high streets, magazines and the media are full with brands fighting for the spotlight.

This is shifting the way businesses describe and approach their end customers.

Selling has become a lot harder. Not only does the product have to be flawless, innovative, high-quality, attainable and fashionable, but also the customer wishes to buy anything, in the right size and colour, in authentic condition, from a multitude of channels, at any time of the day, in a personalised and efficient environment and with no infringements whatsoever. These are a lot of requirements to fulfil.

One of the main reasons customers give for becoming “brand lovers” is how special they were made to feel during interaction time. Giving time to customers is what will make them long for more products and turn them into a dedicated long-term client. Time cannot be bought, it can only be made.

This is the moment the term business intelligence makes all the difference.

Harnessing business data and transforming it into meaningful insights can drive the organisation to gaining a competitive edge.

Maria Stumpfl is head of marketing at Enso Detego GmbH. Find more information about intelligent article management for the fashion industry at www.detego.com

Business Technology · February 2015 · 15

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The debate How can retailers gain an edge in today’s tough marketplace?

Fiona O’Hara

Mark Bergdahl

Managing director, retail, UK & Ireland Accenture

Jason Shorrock

Scott Abrahams

Managing director Loyalty Consulting UK Limited

Senior director, retail strategy EMEA JDA

Head of acceptance and emerging payments MasterCard UK and Ireland

With the vast majority of retailers working towards seamlessly joining up their different channels and copying each other on the variety of delivery options, there is limited ability to differentiate. Range, price, location and accessibility also no longer do it. Instead retailers have to emphasise the uniqueness of their products and the quality of the customer experience.

Retailers need to have their own, uniquely recognisable style or handwriting in their products with a view to providing a better product for the same price or a similar product for a lower price. The customer experience has to give the customer more reasons to shop with you than with your competitor. The path to purchase has to be easy, seamless and the customer has to get more out of that journey than just the product. The lasting impression has to be one great customer service – connected up across the channels, personalised and better, faster and more memorable than that experienced at the competition.

To gain an edge, local and independent retailers on the high street are fighting back, with a major change coming soon. They are working together and alongside town centre managers to take on the big chains by offering a joined-up Local Loyalty Scheme, allowing their customers to earn rewards across the majority of their high-street purchases and receive targeted offers and promotions.

Once the domain of the big guys, small retailers will use the latest technology that was once only affordable by the likes of Tesco and Sainsbury, allowing their customers to consolidate their loyalty potential.

Many of the big retailers have attempted to get to know their customers using loyalty schemes, trying to mimic the cosy relationship that was once the domain of the butcher, the baker and the local grocer. Local retailers will now be using the same tools to enhance their own services. Read more at www.telegraph.co.uk/sponsored/business/ business-reporter/11415297/independentretailers-local-loyalty.html

As discussed in our article on page 13, one of the biggest opportunities for retailers is to invest in excellent customer order fulfilment capabilities. For customers, the reliability, convenience and speed of their order fulfilment has become one of the most important factors in their loyalty to a brand and the retailer will reap the rewards of this loyalty through increased sales.

The retailer that is able to both fulfil flawlessly for the customer and in the most profitable way for the retailer will gain real and significant competitive advantage.

To achieve this, they must plan, execute and optimise their end-to-end supply chain based on a robust understanding of customer demand – what, how and when they are going to shop – making intelligent decisions on where to hold inventory, where to source inventory from and how to execute the fulfilment in the most costeffective way. JDA has the technology available today to make this a reality.

In a hierarchy of priorities, understanding customers and their shopping habits is perhaps first, second and third. Collecting and disseminating rich data is absolutely key. It provides strategic clarity for any retailer to deliver an optimal shopping experience. Ultimately, only by offering customers what they want and when they want it, can retailers drive loyalty and create a profitable relationship.

However, to gain an edge, retailers need to lead and offer more. They need to continue to invest in ways to improve the customer experience. Technology is driving everwidening choice for consumers, both in the sense of the number of competitors, but also the channels available. At MasterCard we know that investing in point-of-sale technology, such as contactless, mobile payments, or digital wallets, drives customer preference.

Retailers who can exceed their customers’ expectations will truly gain the edge – offering them a more convenient, slick, safe and simple way to pay is a clear route to achieving this.

fiona.ohara@accenture.com

www.loyaltyconsulting.co.uk

Jason.Shorrock@jda.com www.jda.com/retail

www.mastercard.co.uk

Spotlight: Five ways to address the new face of retail

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early every adult in the UK is now a digital shopper, according to a UK country report by the Cross-Border Ecommerce Community (CBEC), with many using two or more devices to create their own unique shopping journey [multi-device study by Facebook and GfK]. This new reality is having a profound impact on technology and the e-commerce experience.

Today’s new target consumer, millennials (those born between 1980-2000), have grown up using the internet for everything, and so providing the right content at the right time and on the right platform is vital to inform and influence their purchasing decisions.

Here we will outline five ways to help address this new face of retail by implementing a seamless channel experience, offering a mobile-optimised site, delivering an easy-to-use checkout, building a trusted and secure infrastructure, and leveraging customer data to offer a more personalised experience.

Improving the customer’s online shopping experience starts with a seamless journey across every interaction with the retailer. Around a third of UK consumers already use multiple channels when they shop [Omni channel Consumer Survey 2013 by Deloitte]. Screen size, touchscreen, or other future features that impact the customer’s multichannel journey need seamless integration to deliver one consistent shopping experience.

An easier-to-use checkout and a feeling that the payment is going to be secure contribute to a happy, satisfied customer [Online Retail Challenges 2014 by Dynamic Markets/Chase Paymentech]. It is

convenience that drives customer loyalty – and while m-commerce continues to grow, retailers who ignore an easy-to-use mobile checkout do so at their peril.

Many consumers are unwilling to register before they buy on a mobile device – and would prefer to login as a guest or, alternatively, use their social media profile.

Security is possibly the most important aspect of a customer experience regardless of what channel they use. Merchants can deploy end-to-end tokenisation that encrypts card data online and helps protect against breaches or hackers. Additionally, the use of a hosted payment page that adopts the design of your m-commerce site in combination with encryption tools from within mobile-enabled websites and native apps, can offer customers additional protection.

From the merchant’s perspective, using payment data to identify any issues within your payment process can help to better understand your customers’ payment behaviour and allow you to continually enhance the checkout experience in response to your discerning customers’ needs.

Retailers who get all five of these elements right can be rewarded with repeat business and customer loyalty, which will ultimately boost their bottom line. Payment solutions providers such as Chase Paymentech can help retailers to address these challenges and implement scalable solutions that will help support future growth plans.

At Chase Paymentech we help more than 267,460 merchants from top e-commerce brands with bespoke payment processing. Our technology solutions offer a

streamlined and efficient way to manage your payment processing and acquiring needs, while enhancing your financial reporting and business intelligence.

For more information contact Chase Paymentech Europe 0845 399 1120 www.chasepaymentech.co.uk Chase Paymentech Europe Limited, trading as Chase Paymentech, is a subsidiary of JPMorgan Chase Bank, N.A. (JPMC) and is regulated by the Central Bank of Ireland. © 2015, Chase Paymentech Europe Limited. All rights reserved