Every time we think we understand our customers, they change - retail's digital dilemma

Madeline Bennett Profile picture for user Madeline Bennett May 30, 2018
Two exemplars of how to deal with the changing face of the retail sector.

As noted last week, Marks & Spencer is one prime example of retailers struggling the most to turn around its fortunes. The department store chain has announced plans to close 100 shops – accounting for one in every three branches – in a bid to stem the tide of falling sales and profits.

Just ahead of that announcement, Marks & Spencer’s head of Digital Product (International), Sam Sibbert, was speaking as part of a Unified Retail panel at Salesforce World Tour in London, where he shed some light on the firm’s future plans.

While physical stores are the biggest current M&S channel, the retailer has aspirations that a third of sales will come from online in future. The firm currently operates 23 websites running on Salesforce Commerce Cloud, and Sibbert said he can see digital taking an even bigger share of overall sales by 2025.

Stores are starting to evolve to support this digital shift, for example when M&S customers buy online, items can be shipped from shops, a model copied from retailers like Argos. Sibbert is also looking across the pond for new retail models, where you can make an online purchase in New York and have it delivered within the hour anywhere in Manhattan. He added:

We’ve got people like Amazon to thank for that ‘now’ mentality, but you wouldn’t see them acquire things like Wholefoods if they didn’t see a future in retail.

Stores are here to stay but they need to adapt and be more flexible in what they offer, they need to be much more experimental, they need to add something to that customer journey and become a rich touch point. Make the customer feel special in that moment.

Sibbert said that making the customer feel special has been a core priority for M&S, which has tried to be synonymous with the highest of standards over its 134 years of trading, now across 50 different countries. However, trying to retain that mantra is a challenge:

We’re almost our own worst enemy. There’s an expectation from our customers that they get the royal treatment all the time. The customer experience is changing all the time. They’re looking to the best of every part of their digital experience - banking, transport - and they’re expecting all of that to be in a single place. Whether coming in for a bra fitting, personal tailoring or to book food for a dinner party, they want to feel like the only customer you’ve served today. They expect to be center of your universe.

Part of being able to offer that level of customer service is being able to use data in a more intelligent and integrated way to get the 360-degree customer view so many organizations crave. M&S has made inroads here, and has managed to get all its data into one place, with a team of data scientists working to get meaningful insights from it. But the retailer still doesn’t have that coveted 360-degree view. Sibbert explained:

That’s a journey we’ve started and one that we’ll never finish. What’s the really difficult thing is getting that data and something meaningful from it in an actionable time frame. How do you use all of that rich data you’ve got to enhance the experience at one of those touch points the customer’s at right now.

Every time we think we’ve almost got there, that we’ve understood what that data touch point means and how customers are interacting with us, actually they do that in combination with something else and it completely changes it.

I don’t ever think we’ll feel like we’ve got there. We’ll just have to continue talking to customers to understand what they’re doing and why they’re doing it.

Ritual thinking

Another of the panellists, Martijn Van der Zee, Digital Director at cosmetics firm Rituals, said the secret to success in getting a 360-degree view of the customer was managing all your data yourself. He explained:

The key is to have your own pain, to see the data, to see your failures, to see some channels really not succeeding, to see videos that don’t work or are too long. If you have it in-house - we do some work with agencies, but we run our own show - that is really key to having 360.

Rituals has all its data in once place, and has brought back all its marketing channels in-house, focusing on “very simple stuff” like frequency gaps and excluding customers who have just bought items; all media spend is also managed by the firm’s own staff.

The efforts are clearly working. It took Rituals five years after it was founded in 2000 to grow beyond three stores; it now has 650 stores across 25 countries. Growth has also come through a focus on providing the best products for staff to work with. Van der Zee noted that firms will always want to attract the best talent in their workforce, but what is sometimes underestimated is these experts will expect to work with premium tools. He said:

The effectiveness of your digital machine is dependent on tools and people. I always put a full product team with the marketing stack to ensure it looks good, that the user interface which they’re working in is great. I always insist that the team has as much design UX/UI power when you’re a marketing tech team as you would on a customer-facing team.

Van der Zee and Sibbert both agreed that Artificial Intelligence (AI) is also a hugely useful weapon in retailers’ arsenal. Rituals is currently using Salesforce Einstein in Commerce Cloud to offer product recommendations and support customer service agents, and Van der Zee sees huge further potential in both areas.

The first AI use case at M&S was its ‘Just for you’ marketing emails, letting the firm target each customer with a completely unique set of product recommendations. Sibbert said the campaign was hugely successful - the retailer saved time as it didn’t need to curate those emails, and the customer got a better experience – and led to a double-digit increase in return per email.

M&S is now using AI more widely across the site, for product recommendations, for sort-order personalizing, and to support the different search functions.

But while AI offers great opportunities for retailers, Van der Zee believes it’s something outside the technology world that will have the biggest impact, which he terms the “extreme last mile”. He explained:

This is driven especially in Europe by the drive for sustainability. I expect that we’re moving in European cities to bike couriers who come on the minute, and that the DHL van with a running engine on diesel is going to be very quickly phased out. In Sweden, in Denmark, in Germany this is a real thing and I think it’s going very quickly that way. That will have a huge impact on what we’ve got to do as e-commerce providers.

My take

As ever, the customer perspective is always the most powerful - and the most informative. Two excellent examples here of diginomica's mantra - show, don't tell!

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