The 'test-and-learn' approach to digital transformation at "heritage brand" Lands End

Profile picture for user slauchlan By Stuart Lauchlan April 5, 2018
Summary:
Lands End CEO Jerome Griffith sees the 'test-and-learn' approach to digital transformation as driving a healthy omni-channel mix.

LANDS END STORE

It’s been a busy old week, so only now getting round to updating the digital transformation progress of U.S. retail institution Lands End.

It’s just over a year now since incoming CEO Jerome Griffith took on the top job with a declaration that this “heritage brand” would be opening more bricks-and-mortar stores, while simultaneously pushing to become more digital.

The need for more stores is in large part down to the collapse of Sears, in whose real estate Lands End had outlets. The number of such shops within Sears stores has been shrinking, ending 2017 at 174, down 42 from a year ago. Meanwhile Lands End has only 11 stores of its own, but Griffith wants this to grow to as many as 60 within five years.

Griffith says analytics of customer data is being used to drive distribution strategy:

We continue to test and implement our strategy for standalone Lands' End stores. We know that we have a customer that likes to be able to shop in stores, to see and touch the merchandise before buying. They also like to return or exchange product in store and we want to make sure that we can continue to serve them in this way.

As that strategy rolls out, Lands End is also increasingly embarking on more digital experiments with a clear goal in mind, as Griffith explains:

We're focused on being a digitally-driven company to enhance the customer experience and drive sales. We have instilled a test-and-learn culture, ensuring that we are effectively and efficiently using our customer data to constantly improve the user experience every time they interact with our brand.

We were extremely pleased with our record performance during the Cyber-week period, where we outperformed the U.S. online retail industry from a year-over-year sales increase perspective and recorded record high sales volume for Lands' End.

The ‘test’ approach has been delivering some interesting initial findings, he adds:

We continued to test personalized promotional offers and marketing strategies in both off and online channels, both of which translated into improved conversion, particularly in our mobile business where we experienced double-digit conversion growth.

Mobile platforms

That level of growth results in a doubling-down on mobile platforms. Griffith says:

The Lands' End customer is adapting to shopping on their smart phone. Mobile sales demand grew three times faster than our desktop business. We're pleased to see the average order value on mobile increase, leading to a much more profitable transaction from these devices.

As we look ahead, we will elevate our smart phone shopping experience as we continue to optimize LandsEnd.com for both on-site and external search as we know this is the preferred shopping path on that device. As product remains our number one focus, we must also focus on enhancing the home of these products, the product detail pages, to ensure we provide excellent relevant content and a superior shopping experience.

We know our customer is increasingly viewing our product on their smart phones and they get there by search. The tight integration of product, smart phone and search gives the team clear focus on what to improve in 2018 because it's what the data, the Lands' End customers, tell us they want.

The test-and-learn approach is having a particular impact on digital marketing priorities, says Griffith:

As we expand our audience, we will continue to increase the use of personalization. Digital testing has quickly become a means to improve our personalization efforts and began to pay off in the fourth quarter. We have leaned into digital testing and are implementing easy experience improvements to better time our holiday promotions and clearly articulate our price value equation to our shoppers.

As well as bolstering its own digital brand and footprint, Lands End is looking to forge agreements with third party online marketplaces, adds Griffith:

We're now up and running on Amazon and we plan to reallocate some of our marketing spend as we test this third-party channel. While it's still very early, we're pleased with the initial response and we'll focus on learning and making necessary adjustments, invest in strategic marketing and maximize Amazon and other third-party opportunities.

And behind the scenes, there’s a renewed internal focus on business process improvements and infrastructure. This work includes the implementation of a single order management system this, followed by the completion of an Oracle ERP rollout in 2019. Griffith explains:

We're working to drive efficiency across the business. This includes making enhancements to our foundational systems as well as to our enterprise IT, digital and analytics organizations. This will enable us to further enhance speed, efficiency, decision-making and customer personalization.

My take

We’ve kept a close eye on Lands End over the past couple of years, initially perhaps as an offshoot of the Sears collapse and an ambulance-chasing instinct to see the knock-on effect on what Griffith rightly calls “this heritage brand”. Lands End began life back in 1963 as a mail order yachting supply company. It now finds itself 55 years later effectively in the role of a ‘new born’ retail firm with only 11 stores of its own to its name.

But freed from the Sears shadow, there’s a clear opportunity to grow again in its second half-century. Lands End was one of the first retail brands to ‘get’ e-commerce, a legacy of its mail order catalog roots perhaps? This is one digital transformation use case that we’ll be keeping an eye on in 2018 and beyond.