The evolving role of the store
Date: February 24, 2015
Category: Industry news, Opinion piece
Author: David Smith
Driving profit through refocusing store around the omnichannel customer
First and foremost, let me begin by thanking all those of you that were able to make the panel I hosted at the recent Omnichannel Summit, organised by The Retail Bulletin. For those of you that were not able to make it, I would like to share with you the highlights from the panel and my own key takeaways.
Our panel discussed the evolving role of the store and how we can drive profit through refocusing stores around the omnichannel customer. To discuss this topic, I was joined by:
- Rupert Thorpe, Senior Manager, Stock Management Development – John Lewis
- Richard Savage, Co-Founder- Retail in Action
- Gareth Thomas, Business Consultancy Manager - Zetes
As we were fortunate enough to have one of the declared winners of Black Friday on the panel, we begun on the topic of fulfilment and, of course, Black Friday. Rupert pointed to preparation and planning being key to John Lewis’ success for the promotional peak. “We planned and engaged with our partners to meet capacities and respond to customers’ expectations.” Driving “a high proportion of on line fulfilment through click and collect (over half on the run up to Christmas), using in store click and collect, Waitrose click and collect and Collect, among others.” He stated “everything was about matching customers’ expectations on the date and meeting their multiple choices. We dispatched orders from the most convenient Distribution Centres for us, to the most convenient stores for them.”
Whatever the channel, the supply chain remains the foundation of delivering a good customer experience. With the use of legacy systems and even the use of manual paper based approaches still rife. This became even more evident as our panel discussed the advancements of in store technology. Richard noted that “Customers go to stores to be inspired and have a brand experience” and whilst there are “great opportunities for stores and technology has a fantastic role to play… nothing is more frustrating than a technology that doesn’t work.” Without real time stock visibility, stores will not be able to assure stock availability everywhere and at any time. Unless this can be done, both arming staff with mobile devices to look up product information and check inventory (as 69% of consumers would expect in the modern store), or, providing in store inventories online (which 71% of consumers also expect) is inaccurate and ineffectual. And even perhaps counter productive!
To meet this challenge, Rupert was able to highlight John Lewis’ implementation of RFID technology as being “essential” to improving accuracy of stock visibility. The use of this technology has the additional benefit of increasing stock levels on the shop floor. With the RFID platform expected to help them increase sales on the shop floor, fulfil online sales in store and be able to meet customer expectations for the best price to the company. As he surmised “The fundamental reason to look at RFID is to give us that base to grow from”.
A digitally enhanced store, really offers the chance for consumers to receive a personalised shopping experience. But with the ever increasing number of marketing messages projected towards the consumer, in reality, a lot of the time it’s failing. The ability of a retailer to offer their customers a personalised in store experience is really linked to the previous point on stock visibility, and the underlying data systems that are supplying this picture.
A mishmash of systems, papering over the cracks is causing consumers to receive different level of experiences from different retailers. Ultimately this is leading to confusion on the part of the consumer as to what and what not to expect. Consistency must be created through the supply chain, as the cost to retailers and brands of a bad experience goes beyond lost sales, as the impact on reputation has an ever greater weight in the buying process.
The different levels of experiences consumers have with different retailers, furthers the distance between a consumers expectation and what a retailer or brand can provide. However, by over promising some retailers would appear to be making a rod for their own back. Black Friday was a great example of a lot of retailers promising a lot but delivering poorly. Why offer next day and free delivery when you know your system will not be able to handle the volume?
Over promising is only part of the challenge in meeting customer expectations. Stores must incorporate the same technology that consumers are using to better serve them. Building on the ability to look up stock on mobile devices, store staff should be able to help consumers along their purchasing journey using an array of technology and information. Technology, consumers and staff need to journey together. As Rupert Thorpe pointed out “Innovation is key to meet consumers’ expectations. There is an opportunity to work with start-ups who may have something to offer to the customer’s experience. For John Lewis this is JLab (John Lewis’s first ever technology business incubator). On the back of this initiative we have a poc in place testing iBeacon technology to support click and collect and give customers more options and flexibility.
David Smith is GS1 UK's Head of Digital, developing services to help our members succeed in a retail environment where physical and digital have converged. Consumers now demand to switch seamlessly between high street, online and mobile shopping – and technology is making this possible. We can help our members deliver this service to their customers, by using standards to create continuity and consistency, regardless of the channel the shopper is using.