Retailers’ multichannel strategies may have come a long way but there are still plenty of challenges. Joanna Perry joins some of the UK’s top e-tail directors to find out what their new priorities are
From fashion to electricals and cosmetics to jewellery and department stores, the businesses of the people who came along to the round table debate at the top of the BT Tower to discuss their involvement with multichannel retailing could not have been more different.
The event opened with each participant giving a quick run down of their business and the issues they face right now, and it was clear there are many different priorities.
For Burberry IT business relationship director Jill Barnes, the next big challenge is making sure that Burberry’s brand image is consistent across the company’s different channels – including different websites for the North American and European markets as well as stores. She explained that this adds a geographic dimension. “Another challenge is that it must be global, because a lot of our customers are global,” she said.
Signet IT director Alistair Fuller said that the company is fairly new to online and that there was an initial reluctance to embrace the channel initially because people felt that jewellery was a “touch and feel kind of business”. However, online has become the fastest growing part of the business and Signet must now meet the challenge of turning a first-generation e-commerce platform into a more multichannel experience for customers.
Estée Lauder’s initial e-commerce experience has also been positive, but it wants to build on what it has achieved. Estée Lauder head of IT Gerrie Thomson said that the e-commerce business is in its infancy in the UK, though more developed in the US. This expansion has broadened its customer base, with very little crossover between those who shop online and those who go into its stores.
Even for the more established online players there is still work to be done. Comet business solutions analyst Jacqueline Thomson pointed out that it has to be quite reactive to what its competitors’ websites are doing, but that because the company wants to give customers a multichannel experience, this development must be tempered by what the rest of the business, and especially stores, can support.
However, there is one issue that is common to all – ease of use of websites and multichannel services.
Arcadia group IT director Andrew Clarke said of customers: “The site has to be easy to use otherwise they will go elsewhere. They are very fickle.” In particular, he said that changes the company had made at its checkouts had massively reduced dropouts during that part of the shopping process. Fuller said that Signet had the same experience with its checkout pages.
There was much support in the room for multichannel services such as click and collect. Few retailers present seemed able to provide definitive proof of either how much crossover there is between their web and stores customers, or the sales growth that multichannel services can generate over and above that if channels are run in silos. But the anecdotal evidence was positive.
BT Expedite multichannel retail programme director Jason Shorrock said that one retailer the company works with that launched click and collect found that 80 per cent of its online orders quickly began to be fulfilled this way.
He added that another had seen a four-fold increase in traffic to its site after introducing a click and collect option where staff provide extra value-add services around the sale to customers when they come to stores.
Store returns an opportunity
House of Fraser director of e-commerce Peter Callaway said that when his company is having conversations about the impact multiple channels can have on each other, measuring the percentage of customers who buy online and return products to stores is a powerful metric to share with colleagues.
Retailers are slowly changing their view that store returns are just a hassle for staff. Barnes said that Burberry views returns to stores as an opportunity for the shop assistant to provide further service, so it accepts returns to stores even though its systems in the background are not joined up to process them.
Clarke said that Arcadia has launched an initiative to improve the exchange facility its stores provide, and tries to get customers to swap goods they bring back, rather than take a refund. He added that he thinks there is a place for kiosks in smaller stores and the company will also work towards launching a click and collect service.
BT Fresca business development director Justin Lord gave the example of Habitat, which has a transactional website in France and assigns web sales to customers’ nearest store based on their postcode. To join the two channels together more, customers who ring up for assistance are then looked after by that local store, rather than dealing with a centralised call centre.
Many of the attendees also had thoughts to share on the subject of how they can collect customer information and use multiple channels to keep in touch with customers.
John Lewis does not collect emails in stores so it only contacts customers using this medium if they shop online. It also runs direct mail campaigns. But John Lewis planning and forecasting systems manager Martin Jones said this has sometimes led to customers receiving multiple copies of a mailing, because the company holds multiple, almost identical, customer records within its different channels. He said it has now shifted back to a more cautious approach to direct mail to try and stop this happening.
However, he added that the website has started featuring roomsets and providing more inspirational content, and he thinks that this has driven sales.
Estée Lauder lets customers of its Mac Cosmetics website email a Mac make-up artist for more information on how to use its products to maximum effect. Gerrie Thomson explained that the company has spent the past few years investing in a single customer view and wants to do more there. It would also like to introduce new technology to the site such as web chat.
At Arcadia, store staff are encouraged to collect shoppers’ email addresses and customers must register on its sites to make a purchase. Arcadia’s Topshop brand in particular has dabbled with social commerce. For instance, its Kate Moss collections are highlighted online with multimedia content for customers to view before the products go on sale. It can also add video content for any product, but owing to the video production costs it tends to only create video for star items.
However, for Topshop in particular Clarke said: “They have to remember that they are a shop and not a social networking site.”
Jacqueline Thomson said that, realistically, customers might only make a purchase once a year, so it is hard for Comet to keep up high levels of engagement.
However, Comet has already introduced a click to chat feature on its site that allows a customer to have an instant message conversation with staff in its call centre. Thomson could not provide figures for the impact this service has had on conversion rates, but said that when she has visited Comet’s call centre she could see several customer service agents around the room talking to customers this way.
New channels to market also featured in the discussion. The one that everyone is watching is mobile commerce. While retailers believe it is still at an embryonic stage in the UK, they already have a feeling for how they think consumers will adopt it.
Callaway highlighted a statistic that a 3 per cent penetration level for the iPhone was equal to a 25 per cent share of the mobile browser market. It will be this type of device that drives adoption of mobile as a channel to market.
Clarke previously worked for HMV and mentioned the company’s experience in Japan when it launched an m-commerce channel three and a half years ago. Within a year it accounted for 30 per cent of its online business in Japan.
Shorrock sees mobile devices being used to visit aggregators for research by users who are tech-savvy, and also for click and collect purchases, a pattern of adoption that retailers in the room agreed with.
The view on whether the continued growth of the web as a channel could lead to less of a focus on stores was less clear. Lord sees continual investment in multichannel, and said that some customers are actually in the process of closing stores as the online channel becomes more significant. He thought that this could lead to bigger stores in bigger locations.
However, Callaway at House of Fraser did not think it was appropriate for a business like his to have bigger ranges online than in stores. And Jones added: “We have still only got 28 stores so there is a lot of growth we can go through that will support the web. There is still a lot of investment going into new stores and the refurbishment of existing stores.”
Barnes concluded that e-commerce would stay on the radar for Burberry this year, at a time when other channels are not seeing the same investment. However, her caveat was that any project has to have a better business case than this time last year.
This would seem to hold true for all at the table. Not one retailer said no further work was required to improve their multichannel proposition, and most had a list of things they would like to achieve in the coming years.
With all the doom and gloom in the retail sector right now, it was great to hear executives still so positive on the subject of multichannel and talking of new plans and growing business.
BT Expedite White Paper
According to findings published by BT’s leading customer experience futurologist, companies are driving customers away with a short-sighted approach to their multichannel strategy. To download a copy of Dr Nicola Millard’s report, The Multichannel Swap Shop please register your details on the BT Expedite website.