Transformation in retail is no luxury

SUMMARY:

Jamie Merrick shops around for exemplars of digital transformation in action across high profile retail brands.

Jamie Merrick

This summer we packed up the family and made our way to France for our annual summer holiday. Turns out it was warmer and sunnier back in the UK, which is still a sore point. That aside, I do love visiting their beautiful country and in particular, I love a good French supermarket.

French supermarkets fascinate me due, in part, to their sheer size. I’m amazed by the range of products they hold: food, electronics and the ancillary businesses that group around them like pilot fish to a big whale.

Visiting the local supermarket, it struck me that, where most retailers I come across are adapting and adopting trends to meet customer expectations, supermarkets still have many opportunities to improve. Take the check-out process: it still has some way to evolve before it catches up with where the customer is. Putting shopping in trolleys and queuing at a check-out seems a long way off the goal of a seamless, convenient experience.

But, all is not lost when you consider all the options that a modern European supermarket currently offers. From home delivery to click and collect – it is clear that these businesses are on a journey. I recently spoke to a retailer from one of the UK’s largest supermarket groups and he shared that their business strategy was focused on being flexible. A typical shopper is not either an in-store or home delivery customer, rather they use all methods at different times for different purposes. So the supermarket needs to deliver that flexibility to prosper.

Luxurious thinking

Another sector that is rapidly evolving to keep up with customer demand is luxury. While many businesses in this category have been slow to adopt digital transformation, that shift has accelerated in recent years and for a number of reasons.

Today’s customer has become particularly mobile-first when it comes to accessing and buying products online: mobile accounts for two-thirds of all traffic and 92% of e-commerce order growth. More than 60% of customers begin their shopping journey on a mobile device and nearly three quarters (71%) even use their mobile phones while in store. Innovative brands are seeing this opportunity around mobile. Net-A-Porter, for example, has adapted their e-commerce to make it mobile-first and with that has grown considerable market share in a relatively short period of time. In 2017 half of all Net-A-Porter sales came through mobile.

Luxury brands are responding by using technology to aid creativity. It is no longer enough to list products with beautiful imagery. Instead, personalisation of products and the execution of the process online is critical for many brands. One brand doing this well is veryexclusive.co.uk they personalise the main landing page of their website to an individual customer’s age, interests and even the weather.  They also successfully target specific customers with customised promotions and products. As a consumer, this is what you want and inevitably will come to expect.

However, the next big thing is always on the horizon so standing still is not an option. We have all seen some very well-established retailers struggling as they have failed to adapt to the four market disruptors: competition, economics, technology and, of course, customers. It’s more important than ever for brands to rethink their approach and revolutionise their organisations from within.

Another business which has identified and responded to customers is the Ask Perry Ellis Skill on Amazon Alexa. It has been billed as a “first-of-its-kind personal stylist”. A brand who has been nimble enough to respond to an admittedly immature yet fast-growing traffic source. It may not be generating huge returns right now but it is likely to be a channel that will develop over time. What they are doing here, and doing well is tapping into the opportunities that artificial intelligence offers. This is critical in responding to customer desire for personalisation, whilst still allowing retailers to deliver at scale.

It’s exciting to see new technologies and trends emerge and imagine what the future may hold for the sector. But, for many putting the basics in place is still vitally important in setting brands up for success and positioning them to be ready to innovate quickly in the future. Most recently we saw British department store Fenwick engage Salesforce to help deliver a more modern retail proposition, including the upcoming launch of their first e-commerce site. Fenwick responded to the needs of their loyal customers, who had become expectant of having the option to purchase online. Most importantly for the customer, they now can access the same Fenwick experience both online and offline. In such a competitive and challenging time in the retail industry, it’s investments like this that have the ability to drive the sector forward.

Transformation comes in many forms. Being reactive to trends, using smart and intuitive technology,  and harnessing data are all critical to servicing and keeping pace with the customer.

As for those French supermarkets, all I need now is some of their incredible cheese.

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