I think the marriage of digital and stores in Canada is particularly unique.
The idea of gradations of uniqueness makes me cringe at the best of times, but when Helena Foulkes, CEO of beleagured Canadian retailer Hudson Bay, makes this claim and then fails to back up this highly-questionable worldview, it’s double cringe time.
The fortunes of this venerable Canadian retail institution as it tries to carve out an omni-channel future for itself has been a case of ‘theory fine, execution flawed’ as Foulkes herself admitted earlier this year. With the firm just handing in a year-on-year increased loss - C$124 million compared to C$116 million - it’s justifiable to ask if things are getting any better?
Foulkes insists that 2018 has been a necessary, if belated, ‘sort out the basics’ year:
A couple areas I would highlight first is overall technology. We brought in a new leader earlier in the spring and he’s had a tremendous impact already in terms of just making sure that our systems are running every day in a way that serves our associates and customers at store level and online. That sounds very basic, but that was not in place before. It’s really not only delivering results, but it’s giving the organization a sense of confidence in terms of what we can do in the future, so I’m very pleased with the progress we’re making from a technology perspective.
The bulk of what we’ve done this year is back to fixing the fundamentals and the basics of digital. It really started with the basics of getting the organization structure right. It was very diffused across the business so when we wanted to create change, it quite frankly took too long. We’ve got a team together that’s 100% focused on all things digital, end-to-end experience. We’ve started with what are the metrics that matter to our customers and how are we delivering against them? So everything from the basics of site speed and navigation, to time to delivery. Each of those areas has had opportunity. We’re making progress, but we still have more to do, and we’re measuring performance of those fundamentals every single day.
There has been progress, she insists, pointing to digital sales growth of 8% year-on-year in the latest quarter and claims to see “additional upside potential” for the digital roadmap in 2019:
We migrated thebay.com to a new digital platform and re-launched our mobile site, both of which are key milestones in the Bay’s omni-channel strategy. We’re pleased with how the platforms performed over Black Friday and Cyber Monday and excited by the capabilities they provide to better serve our Canadian customers.
With the most recent migration of thebay.com, all of our businesses are now on one common platform which enables us to deploy new features and enhancements efficiently across all e-commerce sites to create best-in-class omni-channel experiences for all of our customers.
In the next 12 months, we’ll focus on fundamental areas that matter most to the customer, such as site speed, product find-ability, delivery times, and post-purchase communication. We will also continue to prioritize the mobile shopping experience, improve personalization, and better leverage data and analytics to identify and solve customer pain points.
That has been the thrust of what we’ve been doing, and what I’m excited about as well is it’s coming in all areas. It’s not just e-commerce, it’s not just mobile growth - which obviously has potential - but it’s also the connection of those elements to our in-store associates. So, if you look at Saks, part of its success is giving our associates tools that really enable them to serve customers in better ways and find products for them and get them to them as quickly as possible. It’s the marriage of digital tools with stores that, I think, is the key enabler for us, as well as the obvious work that we need to do around improving mobile as that portion of the business grows.
That customer focus is something that Foulkes pitches hards:
This is an organization that we’re really trying to focus on the customer. It sounds so obvious, but bringing the customer into every decision we’re making is having an impact. We now measure our Voice of the Customer every single day in-store. I’m watching store teams huddle and talk about yesterday’s scorecard and what the key detractors were and what they can do to act upon that, and that gives me a great sense of confidence that with this new insight about the customer, we’re enabling our store teams to create a better experience.
Overall this is a familiar story of the search for that omni-channel balance that proves so elusive to so many retailers. Digital improvement is essential, but so is fixing up the ageing store network. Foulkes says:
The place that I would say that’s getting more attention from the consumer is digital, and so the re-platforming of our business went very well. We were really pleased with Black Friday - we had a record day online for Hudson’s Bay, and I think that speaks to the investments we’ve been making in digital and the opportunity for us to seize both this digital and store experience that customers are looking for.
This can be seen at Saks 5th Avenue where the real estate is getting a major refurbishment at the flagship store, she argues:
We think the power of the Saks model is the combination of stores and digital together, so we have to have stores that are compelling. Saks’ digital experience is a key priority and we’ve made significant enhancements to our platform, including the adoption of unique tools that enable our in-store sales associates to better serve customers with a best-in-class omni-channel experience.
All of this makes sense as a basic plan, but then something is said that just jars, such as :
We are in a unique position because we can also offer Buy Online, Pick-up In Store (BOPIS). The vast majority of any returns we get from digital also come to our stores, which presents an opportunity to up-sell customers.
Again that curious claim to uniqueness? Why being able to offer BOPIS is deemed a Hudson’s Bay competitive differentiator rather than a catch-up retail essential is unclear.
I find myself thinking of Douglas Adams and human beings reaction to digital watches - "an utterly insignificant little blue-green planet whose ape-descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea" - but seriously this is omni-channel retail 101 stuff.
While wishing Hudson’s Bay well as a retail institution, I’m troubled by the pace of change and the steep climb there is just to get to the omni-channel basics. Foulkes says:
With a proud Canadian heritage and nationwide footprint, we believe Hudson’s Bay has a real right to win in the market.
Sadly for the CEO, it doesn’t.