Simplifying the omni-channel experience

Simplifying the Omni-channel Connection

Part three of our five part series exploring trends that are shaping brick-and-mortar retail experience. You can read all of the trends in The Store Is Back eBook, courtesy of RBM Technologies.

Since shoppers are always connected, retailers have recognized the need for digital presence in addition to brick-and-mortar. However in 2016, it is no longer about merely offering these additional touch-points.

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Shoppers now research products before walking into a store, and they look to other customers to give them a true picture of the experience.

Customers expect to get product information, consider their options, and make their purchases with ease. They bounce between channels throughout their shopping journey, so they want an experience that is complete, seamless, convenient, engaging and consistent. It’s a tall order, but one that should be filled this year. Otherwise, customers will find another retailer that will deliver exactly what they need.

“Shoppers demand a brilliant experience more than ever from brands. They expect the brand to be connected from the physical retail store through to its online presence.”

Emma McRobert, Director Shopper Experience, Consumer Australia at Optus

Removing touch-point obstacles allows the shopper faster and broader access to the brand. This approach streamlines the path to purchase while allowing shoppers to engage with brands on their own terms. By providing access to deeper levels of store information online, shoppers can plan out and optimize their store visit, and they can streamline their checkout options based on personal payment preferences. Ultimately, a seamless, simplified and efficient retail process makes customers happy and keeps them coming back.

To read all five retail trends, download The Store Is Back today

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Facebook Mobile Ads Driving In-store Customer Traffic

Are Facebook mobile ads really driving in-store customer traffic?

According to an article posted by The Guardian research conducted by Vizeum and iProspect showed an 11% increase in store visits to ikea for those exposed to geo-targeted Facebook ads

Today consumers are more constantly connected through phones, tablets, eyewear and other devices than ever before. Retail analysts strongly predict, through these devices, customers are exposed to mobile ads, online coupons, blogs, geolocation  apps and online reviews which has influenced customer buying behavior. Retailers are quickly embracing omni-channel strategies in order to leverage online engagement to drive more sales in store.

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From the article:

An experimental campaign put together by Vizeum on behalf of Ikea has given a glimpse of the potential for accurate marketing-spend attribution through the use of social network and mobile phone data.

The test campaign, conducted over two weeks, matched Facebook usage and EE data to measure the uplift in visits to the Ikea store in Cardiff from those who had seen targeted Ikea adverts on Facebook. The results showed an 11% average increase in store visits among more than 172,000 people who were served adverts, compared with an otherwise identical same-size group that had not seen the adverts.

The research measured store traffic uplift from those who had seen Ikea ads over a two-week period. The test delivered 1.4m impressions and saw the biggest impact among 22 to 25-year-olds: there was a 31% increase in store visits among this group. The 26 to 35-year-olds were up 11% compared to the non-exposed group. These visitors gave Ikea a return on investment of 6:1 against their media spend with Facebook, which was geotargeted around Cardiff and ran for two weeks during December 2013 and January 2014.

Phillip Dyte, paid social media manager at iProspect, the agency charged with executing the campaign, explained why this methodology was unique: “Together with Facebook, Vizeum and Isobar, we worked closely to serve News Feed ads to Ikea’s Cardiff audience, ensuring we reached a statistically robust number of unique local impressions. EE then analysed device activity within a geofenced area around the Ikea store – removing staff, people who lived in the area and passers-by. The resulting figures are really clean of misleading variables.”

When asked if the results were a product of the busy marketing environment during December and January, Dyte emphasised the unique methodology which makes this a fair test.

“When people raised the point that it’s Christmas and there’s so much marketing activity going on, our argument was that it’s Christmas for the non-exposed group as well. Everyone will be exposed to the same environment, so you’re not measuring artificial uplift that is caused by the seasonality, because the non-exposed group also has the seasonability. Anything that applies as a variable applies to both groups. The only difference is that some people saw adverts and others didn’t. It’s such a strong methodology – that’s why it’s so bullet-proof.

“This was experimental technology testing an experimental hypothesis. There was no guarantee of success. In the past you would have had to make assumptions and you’ve had to incentivise it using couponing or something, but none of that is really a fair test. But this is a fair test.”

These sorts of partnerships between banks, mobile networks and social networks to combine datasets such as these are becoming more common. Partnerships between mobile data providers – such as Weve, backed by EE, and supermarkets and banks such as Tesco andMastercard – are becoming more common. “Those partnerships are mutually beneficial, but they’re driven by tech which, over the last year or so, has advanced to the level which now allows us to do this,” said Dyte. “People are saying ‘Wow, this is possible now.’ “

Chris Gobby, head of EE mData, said: “We’re delighted to be a part of this innovative advertising effectiveness study with Ikea, Facebook, Vizeum and iProspect. EE mData has unique ability to deliver exciting new insights in the mobile space – combining anonymised and aggregated mobile web and location data to provide landmark results in advertising measurement.”

Richard Morris, managing director of Vizeum, said social media now plays a vital role in the advertising strategy for brands: “This study clearly demonstrates the impact that ads on Facebook have on brick-and-mortar foot traffic for retailers. These innovative strategies that combine mobile, local and social media for our clients are the future of digital marketing. The methodology is brilliantly executed, and the results show clearly, empirically, that Facebook adverts have driven real-world footfall.”

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In-store technology: top tips for high street retailers

The exponential growth of digital has created a retail environment that 10 years ago did not exist. The retail environment is now a blend of the online and physical world. It has long been thought, online shopping would be the demise of brick & mortar and shoppers would be shopping and browsing solely online. We’ve now learned the online experience can’t reproduce the physical interaction between consumers and products. Instead retailers are embracing technology to engage with customers in unique and personalized ways. 

An independent agency, based in the U.K, Life recently carried out an audit of 16 stores on the high street, focusing on the central London area, looking at how each retailer was using technology in-store. Here are some of the things they discovered:

From the article posted by The Guardian:

The latest technology isn’t always best

Start with the shopper need and then implement the most effective solution. Italian design factory Alessi used a simple QR code shopping wall on the window of its store in London’s West End to grab the interest of passing people by linking to arresting content. Technology in this case was the enabler, not the end result.

User experience matters

If shoppers can’t easily get to the point of transaction, they’ll be frustrated and lose interest. Topshop’s design-your-own T-shirt concession from printing pioneers Yr showed the importance of a slick and intuitive user interface that makes it easy to create personalized products. It was engaging and offered instant gratification.

Make use of a shopper’s own devices

Our personal technology develops quicker than comparable hardware in-store. Leveraging social media to encourage us to share physical experiences with one another is a good way of getting around that fact. Topshop offered a great example of this when it linked up with Pinterest for a Christmas gift guide that encouraged shoppers to pick and share their inspirational gift ideas. Physical “Most pinned item” tags were hung on popular Pinterest picks in-store.

Not everybody wants a sales person in their face

Technology can also engage customers by selling to them. Clinique’s fixture in John Lewis features a self-service skin diagnostic terminal promising “90 seconds to great skin” – shoppers are presented with a printout of the results with a list of personal product recommendations. The consumer gets a valuable service with immediate results, while the retailer gets a chance to sell its product. It’s a great technological solution for those who prefer not to speak to a consultant.

Don’t neglect training

Technology is often only as good as the staff present. Audi City is a multi-sensory experience that allows car buyers to create and interact with virtual vehicles. Serious prospects are ushered downstairs where an experienced sales person takes them through all of the finishing trim options to spec their car. It’s a smart combination and as a result sales at the virtual showroom are now among the highest of any Audi dealership.

Consider all five senses

When creating an immersive experience in-store, consider extra sensory elements to communicate with shoppers. Plenty of cosmetics brands are using iPads, but Bobbi Brown’s concession in Selfridges offers headphones to browse its online beauty tutorials, making the display more engaging. Extra screens or related sound effects in the environment can increase dwell time and engagement.

Striking a balance

Digital and retail can appear separate, but bringing them together can be hugely effective. Burberry has done just that with a new retail space on Regent Street. Digital features include products that trigger video screens, audio-visual experiences and digital mirrors. Staff use iPads to check stock availability and make orders and fashion shows are streamed live to the store.

It’s now all about the omni-channel experience

Omni-channel retailing – joining up the customer experience across all channels, not separating it across individual ones – has to be seamless. Smart brands are looking to re-engineer the experience in a way that puts the shopper at the centre of the equation. Argos for example is ditching its laminated catalogues in new stores for iPads, easy navigation, fast-track collection and free Wi-Fi. But stores remain important, in particular making it easier for shoppers to collect purchases within a few hours of buying online.

Far from hastening the death of the high street, canny retailers are using technology to breathe new life into their offering. Boots recently teamed with Facebook for a 90-minute streamed event featuring style, hair and beauty tips from its Nottingham store. Shoppers could ask beauty experts questions and benefit from related deals in Boots stores.

The warning, however, is that technology is only a great experience when it works, but when it does the opportunities abound. The winners in the future will be those who can build an experience that takes the best from both digital and physical retailing.

 

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Fashioning A Solution

Retailers for the past two years have been striving to optimize omni-channel strategies. However, too many companies still run their physical stores and online experience as separate entities. Notoriously, the fashion industry is the retail vertical that always lags behind. The issues retailers have in delivering a seamless customer experience is due to rapidly changing inventory, short seasons and abundant amounts of new and existing SKUs.

These issues are prompting fashion companies to re-evaluate their operating platforms. Siloed data between channels need to merge together in-order to support operations and real-time analytics. At the core of this endeavor is an ERP solution — an integrated set of business applications that can be used to store and manage data across the enterprise.

In a post by Stores.orgArne Tjalma, vice president of information technology with Tommy Hilfiger; Marc Van der Heijden, senior vice president of global IT and head of competency center sales and global development for adidas Group; Dario Scagliotti, group CIO of Luxottica; and Michael Braine, CIO of retail and optical services of Luxottica spoke about their company’s visions in adopting the next generation of ERP platforms. 

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From the article:

Retail companies must be ready, willing and able to sell merchandise and fulfill orders, regardless of the channel or business model customers use to make a purchase.

As omni-channel retailing evolves, however, many companies continue to face inhibitors. For example, too many companies still run their physical stores and online experience as separate entities.

To address these challenges, retailers need reliable enterprise resource planning platforms that can manage operations and support real-time analytics across integrated business channels. SAP plans to deliver this platform with the help of key fashion industry partners.

“A successful omni-channel strategy is not about running e-commerce as a separate channel,” Thomas Vetter, senior vice president and head of retail and multi-channel for SAP, said at a January press event announcing plans for the platform. Vetter was accompanied by Arne Tjalma, vice president of information technology with Tommy Hilfiger; Marc Van der Heijden, senior vice president of global IT and head of competency center sales and global development for adidas Group; Dario Scagliotti, group CIO of Luxottica; and Michael Braine, CIO of retail and optical services of Luxottica.

“Brands need integration across channels so that consumers have a seamless, consistent experience across the brand,” Vetter said.

In the fashion industry, the issues are intensified due to rapidly changing inventory, short seasons and abundant amounts of new and existing SKUs.

“Each factor makes data more complex to manage,” Vetter said. “The speed of change is increasing, so it is imperative to maintain correct product information — especially as business models evolve.”

These issues are prompting companies to re-evaluate their operating platforms to ensure they can facilitate data access and maintain one version of the truth — two factors that can simplify business and deliver the flexibility needed to adapt to new market changes. At the core of this endeavor is an ERP solution — an integrated set of business applications that can be used to store and manage data across the enterprise.

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ERP platforms gained popularity at the turn of the century when some companies considered them to be a solution for the widely anticipated (and ultimately over-hyped) Y2K bug, as well as the introduction of the Euro — two business issues that rigid legacy systems were not designed to support.

These early versions mainly focused on back-end operations; it took almost another decade for next-generation systems to address customer-facing and transaction processing functions. Retail’s evolving omni-channel business model is changing the game once again, and requiring even more flexibility from current companies.

“ERP is a solid backbone that takes complexity out of systems,” Tjalma said. Using a common data set “provides a single version of the truth for the whole business.”

A reliable and flexible ERP solution is also the foundation needed to support growth. “Companies need global inventory, allocation and marketing processes … that span across the enterprise,” said Vetter. “A solid platform also helps companies treat business models as they evolve.”

A variety of fashion brands are collaborating with SAP on development of a platform that will allow fashion companies to merge wholesale, manufacturing and retail data into one all-encompassing business suite.

This next-generation ERP platform will enable brands to manage big data and support an omni-channel experience. Ideally, the solution is expected to deliver a unified view of product information. By integrating its HANA analytics solution, SAP’s platform will enable users to process these volumes of information and use analysis to understand product demand, availability, movement and fulfillment of merchandise enterprise-wide.

Plotting their course
While the fashion partners are all on the same journey, each is at a different stage. Luxottica operates retail and wholesale channels and struggled to merge these software platforms when required. Due to a fast-growing global business that was accelerated by the acquisition of other global companies, Luxottica currently operates four interconnected, but independent, SAP platforms.

“You cannot predict how business opportunities, and consequently, the business will evolve, and it is daunting to think an operating system can be a roadblock to any new business model,” said Scagliotti.

“Ideally, we want the ability to run all of our businesses on one software platform that uses a single set of information for all enterprise operations. Integrated software platforms will also lower IT operating costs overall.”

Luxottica is currently co-developing the solution to foster integration between SAP’s IS-Retail and AFS platforms. The company hopes to go live in 2015.

Tommy Hilfiger, which operates some 400 retail stores as well as a wholesale business, currently uses SAP’s AFS solution. As the company plans its move to an all-encompassing ERP solution, it will co-develop a next-generation platform with SAP. The company will begin the project this spring, “with a complete migration by 2015,” Tjalma said.

With more than 2,500 stores worldwide, adidas’s retail division accounts for 25 percent of its revenue. In the late 1990s, the footwear brand began migrating to SAP’s AFS solution. AFS is live in most of the company’s major markets, yet its growing global presence continues to increase the complexity of an integrated retail operation.

Besides integrating its wholesale and retail operations, adidas Group envisions a platform that will deliver more speed, reduce operating costs and support one view of real-time data. “We will include preparation activities for the new SAP platform in our next planning cycle,” Van der Heijden said.

All three partners have high expectations for the solution, which Braine described as “game changing.”

“This will change the paradigm of complexity,” he said. “Operations will be simplified, processing speed will increase and operating costs will decrease. It will also free up the IT department to work on solutions that will help produce revenue for the company. It will change the way we think about business enablement and support.”

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Macy’s promotions and omni-channel strategy paying off

Macy’s third quarter report saw over a 30% rise in profits, which is good news considering the holiday shopping season will be shortened this year with a late Thanksgiving. This is owed in part to their positive execution of their omni-channel strategy and localized promotion tactics.

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According to the Los Angeles Times, CEO Terry Lundgren said they were entering Q4 “with confidence.”

From the article:

It’s a telling statement, considering that the holidays — which account for as much as 40% of a retailer’s annual sales — can cushion some companies for months afterward or render others investor pariahs.

This year the pressure is even heavier because retailers have only four weekends between the two holidays to push their merchandise, compared to five last year.

Macy’s, which also owns the Bloomingdale’s brand, said it intensified its marketing strategies in the third quarter and boosted its omnichannel efforts, helping shoppers move seamlessly from digital to brick-and-mortar consumption.

Same-store sales at units open at least a year rose 3.5%. Overall revenue jumped 3.3% to $6.3 billion.

The company maintained its projections from August, predicting that same-store sales would be up 2.5% to 4% in the second half of the year.

In afternoon trading in New York, Macy’s stock was up 9.6%, or $4.42, to $50.76 a share.

NRF's Big Show 2013

3 Themes from NRF’s Big Show that will Shape the Retail Landscape in 2013

The Merchandising Matters team traveled to the 102nd annual National Retail Federation’s Big Show in New York City earlier this week. This being our second year in attendance, we were excited to see what key trends evolved over the past year, what the new buzz words are in retail, and where the retail industry is headed in the next year.

NRF's Big Show 2013

With a record attendance of nearly 27,000 attendees, we had to work hard to get to all of the booths we planned to visit, let alone find a seat at the sixteen breakout sessions we had on our agenda.

All in all, the future of retail seems bright in the coming year. Despite somewhat lackluster holiday numbers (only up 3%) and ever-present economic concerns, retail is seeing a breadth of innovative approaches to providing exceptional buying experiences.

Below are three overarching themes we identified from NRF that were a common thread through much of this year’s Big Show.

  1. Omni-channel experiences
    Arguably the biggest buzz word from NRF this year was once again “omni-channel.” We heard countless exhibitors, speakers, and attendees speak about omni-channel marketing, creating omni-channel experiences, and understanding the omni-channel shopper.

    Paul Mangiamele, CEO of Bennigan’s, spoke about the importance of flawless execution across all channels in the massive redesign of the Bennigan’s restaurant chain. Retailers must create a valuable retail experience that is consistent across their in-store, online, social and mobile channels.

  2. Brick-and-mortar stores are not going anywhere
    If one thing will always remain constant, it is the importance of the brick-and-mortar retail store. This point was emphasized with vigor at NRF. This does not mean that retailers should not ignore their digital channels, as they can be just as important to driving store visits and sales.

    Wendy Liebmann, CEO and founder of WSL Strategic Retail, noted in her breakout session that 41% of shoppers use a mobile device while in a brick-and-mortar store. Retailers that truly understand their shoppers will employ an omni-channel approach to turn them into loyal customers, outspending casual shoppers 13 to 1 in the physical store.

  3. The globalization of retail
    International attendees were a major focus this year, with translators in each breakout session and entire sessions focused on international and globalized retail strategies.

    The upcoming World Cup and Summer Olympics in Brazil are driving a boom in retail infrastructure in South America. Tesco CIO Mike McNamara spoke at length on how they leveraged consumer technologies to grow Tesco into a global brand without losing grasp on their supply chain.

Experience is at the forefront of every retail interaction. Whether it is in the brick-and-mortar store, online, overseas, or on a mobile device, brands that take the time to understand their core consumer and create a consistent positive experience across all channels will thrive in the coming year.

Over the next few days, we will focus our posts on specific breakout sessions and events that highlight one or all of the aforementioned themes.