To turn your omnichannel shopper into a buyer, you need to change. We’ve spoken to retailers around the world to find out what the best are doing.
I’m a reformed retailer – I’ve been around retail for 16 years in a variety of verticals and a variety of industries. I’m very lucky to work with some amazing brands at the moment, locally, regionally and internationally, and I’m seeing them doing some very innovative things in response to their customers’ changing expectations.
They’re reimagining retail in the age of the shopper. I’m seeing both bricks and mortar as well as digital brands turn store associates into brand evangelists, personalising contact across every touchpoint, and connecting to their shopper in whole new ways. They’re not just driving customer experience – they’re driving customer excitement. They’re putting the customer at the centre of everything they do. And all retailers and brands need to be doing the same.
At Salesforce, via our Shopping Index we’re able to analyse the activity of more than 500 million shoppers worldwide to identify trends and changes in shopping activity.
We’re seeing that more than 50% of traffic to ecommerce sites, in aggregate, now comes from mobile. In Q4 2015-16, mobile visits grew 32%, and mobile transactions increased 43%.
We’re also seeing social commerce growing at a faster rate than mobile did at the same stage of its maturity – commerce through social media channels is growing 100% per year.
And, while more than 90% of consumer commerce still happens in physical stores, more than half of that is influenced by digital touchpoints with brands – and those are multi-channel and multi-device.
It’s not a new idea that the shopper funnel is dead, replaced with the customer journey. There are many points of interaction and many ways customers collect information, and they can buy at almost every moment. The new omnichannel shopper demands a unified experience.
So, let’s talk disruption. The best retailers are moving away from simply driving to their store or site. This is still important, but it just isn’t enough any more. We need to go where consumers are, interact with them on their terms, while still making every experience relevant for the brand or product.
Going where consumers are means looking at emerging destinations – social shopping and conversational commerce via messaging applications. Interacting with consumers on their terms means providing the personal service expected in bricks and mortar – look at Mon Purse and Shoes of Prey, at Bonobos and Warby Parker. Or at new business models that leave behind assumptions to deliver just what consumers want, whether that’s the shared economy approach of Rent the Runway or Stitch Fix, or to do with the interface used to shop – well hello, Alexa.
I can purchase and interact with a brand without having a screen in front of me at all. I can walk through my home and say ‘Alexa, order me some toilet paper’, and the toilet paper I prefer arrives. At the moment, this is the bleeding edge for low-consideration purchases. Over the coming years, that will connect into more high-consideration products as well, but companies will need to know a lot about their customers and will need to use that data to personalise shopping. Shoppers need to know that when they ask for pants, they will receive pants in their style and size.
As this evolves as an interface, we need to evolve as retailers to meet changing customer needs. So, a little more buzzword bingo – let’s talk the next stage of transformation.
We know that customer-centricity is a big deal. It is imperative for retailers and brands to look beyond their own four walls and orchestrate an adaptive network of business partners to offer a personalised blend of products, services and experiences to customers, wherever and whenever those customers demand. This next phase in organisational transformation is based upon an open, interconnected and collaborative ecosystem. These network-centric organisations exist for one purpose – to serve the customer.
For our latest piece of research, we've spoken to 200-odd C-suite retailers about how they need to operationalise and structure themselves organisationally to survive in this changing landscape.
We saw that more than 70% of retailers and brands identified a material or significant change was needed to adapt to the change in paradigm. Of note, brands that sell direct to consumer, who may not have the legacy that many retailers do in terms of understanding the customers, typically thought there was less change required to meet their customer objectives. Possibly, they’re slightly optimistic in terms of the level of change required.
“Organisations will look and act a lot differently in the near future. They must transform to open and adaptive networks that orchestrate the experience from myriad partners on behalf of their customers,” Mark West, CEO of LLX Global Business Services told us in response to our research. “Retailers and brands will become stewards of customers, and deliver personalised and relevant experiences whenever they choose to engage.”
We’ve identified characteristics that the leading organisations demonstrate to effectively serve the customer, and which support transformation. We looked at maturity levels for individual companies as they sit on a continuum based on these characteristics:
Vision: whether everyone understands and applies the vision, there is a clear and differentiated customer value proposition, there is an emotional connection, and management requirements are understood
Culture: whether the culture is geared towards optimising customer experience, testing and learning are being used to improve continuously, decisions are made with customer experience in mind, metrics and incentives are organised around value to the customer, and collaboration is facilitated
Market insight: to what extent relevant market facts and trends continuously influence business strategy; formal processes are in place for gathering information; the organisation is learning from customers, employees and the market, and learning about customers, competitors and disruptors; and whether knowledge is shared.
Data intelligence: whether a single view of data is accessible and intelligence is operationalised, whether all business decisions are based on data, and routine operational decisions are automated.
Innovation: whether new ideas are continually encouraged, nurtured, executed and measured; everyone is asked for ideas, including associates, customers and suppliers; products are continually innovated; new ideas are launched and tested iteratively; and longer-term payback is allowed.
Agility: to what extent process and systems facilitate quick response to change, people at all levels are empowered to make decisions, the organisation has flexible systems and infrastructure, the company structure is adaptable, and whether it has effective change management processes.
We also found that market insight and innovation are the most important of these characteristics for brands and retailers.
"It's everyone's responsibility to be aware of trends,” one senior executive at an apparel retailer told us. “There's no central think tank to come up with ideas and research.”
The star performers are listening and engaging constantly – they listen and engage on a variety of social channels, but they also do that in-store, which leads to different bricks and mortar as well as digital interactions.
For one such retailer, Suitsupply, the fundamental point is taking insight from what their customers are doing and then presenting different experiences relevant to the customers and brands.
Their engaging web sites include a size advisor and suit designer; their world-class service includes video stylist chat sessions (using our SOS mobile video chat – a Service Cloud snap-in); they listen, engage and convert their social leads entirely in-channel; and they use their social listening to populate real-time ‘inspiration feeds’ of trending products to digital in-store signage.
“Our mission at Suitsupply is to deliver a personal experience to suit every individual customer,” says Martijn van der Zee, Suitsupply’s Marketing Director. “Since shoppers are increasingly turning to digital and social channels in the overall customer journeys, our business needed a way to completely understand the customer and infuse the digital experience with the personal touch provided by our in-store professional stylists.”
Cole Haan innovates to solve customer problems – they innovate for customer benefit. So, the first step here for them is identifying what that customer need is and then meeting that particular need. As a brand of significant heritage, they continually make good products, and now they are rethinking how they deliver their customer experience.
They were one of the first fashion brands to launch Apple Pay, both within their app and also on their website, to remove friction from the purchase process. They’ve been a very early adopter of things like Google shopping. Again, they’re understanding where their customers are, spending time where their customers are and allowing their customers to transact at where they want to.
They also invest in partnerships that will help them provide the service their customers want – for example with UberRUSH in the New York market, for rapid delivery of products. They also use a relatively simply execution of the Uber API, that allows a visitor to a store locator page to order an Uber from wherever they are to that store.
They’re wearing the customer lens – thinking about what a customer needs and how can they meet those needs to really perform and provide a better experience overall.
We saw from the research that leaders have provided us with blueprints of ways to approach this. Using them isn’t easy – change never really is.
“There are too many layers and reporting lines that do not make decisions easy,” one executive at a mass merchant retailer told us. “New people, new mindsets, new processes and new structures are essential to make decisions more quickly.”
So think about all of this in your own organisation – how are you poised to meet and exceed your customers’ changing expectations? What are some the challenges to that? How can you think differently from operational and organisational perspectives to meet some of those challenges?
To find out more about what leading retailers are doing to ensure they set the pace for change, rather than scramble to keep up, download the full report Retail organisations: The next stage of transformation.