retail • eTailing Summit | Forum Events Ltd
  • Covid-19 – click here for the latest updates from Forum Events & Media Group Ltd

Posts Tagged :

retail

How subscription boxes can help retailers bounce back post-pandemic

960 640 Guest Contributor

Retailing is one of the largest sectors of the UK economy, with 306,000 shops employing 2.9 million people and with a (pre-Covid-19) annual sales volume of £394 billion. However, there’s no doubt that last year brought significant challenges.

Whilst supermarkets were deemed essential and saw demand increase, many non-food retailers were forced to close at various points in order to comply with government guidelines and keep customers safe. For those without an online presence, this proved costly. Even the biggest household names felt the impact, with Primark going from making £650m in sales each month to nothing.

However, this time of hardship was also one of resilience. Many retailers adapted to the ongoing situation and refocused their efforts to meet new demands in consumer behaviour. As such, the entire industry witnessed a rise in the popularity of subscription boxes.

Despite restrictions easing, consumer buying behaviours and, therefore, the retail industry have changed forever. But a more resilient future is within our reach.

We sat down with John Phillips, General Manager, EMEA at Zuora, to discuss how and why subscription boxes have boomed in popularity over the last year…

Why do you think subscription models within retail are so popular?

Against our current backdrop of change and uncertainty, subscription-based models have emerged as a key for businesses across a range of different sectors to ensure a stable revenue stream and for consumers to get the products they want in a convenient, low-cost way.

From groceries and meal-planning boxes to coffee delivery services, the number of people signing up to subscription-based models is steadily increasing and COVID-19 has only highlighted their resilience. In fact, Zuora’s Subscription Impact Report – which took data from March – May last year – found that more than half of subscription businesses had not been impacted by the pandemic, while one quarter actually saw subscriber acquisition rates accelerate. Meanwhile, the latest edition of the Subscription Economy Index revealed that subscription companies continue to outperform their peers by wide margins. Last year alone, subscription revenues grew 11.6%, while the S&P 500 sales declined -1.6%.

There are several key players who are already reaping the rewards of this shift. For example, whilst many businesses have struggled to survive the pandemic, Gousto – the subscription-based recipe box provider – announced plans to create 1,000 new jobs as part of an expansion following a 115% spike in sales during the first half of 2020. Several other major retailers including Hotel Chocolat, Nespresso and Majestic Wine – have taken note of this success and now offer subscription boxes themselves. Morrisons, the UK’s fourth largest grocer, also recently joined the movement, launching a new weekly, fortnightly and monthly food box service.

Subscription-based models are proving to be a lifeline for many retailers battling the current period of uncertainty, with recent research revealing that 39% of UK shoppers have signed up for at least one. This demand is only likely to increase moving forward, with Zuora’s latest CPG Subscription Report finding that consumers who have a subscription already are 2x more likely to get another in the next 3 years.

How are changing consumer attitudes creating a more popular market for subscription boxes? 

During the peak of the pandemic, with supermarkets and shopping centres closing their doors and millions of households asked to stay at home, many consumers took to ordering products online. Signing up to subscription-based models became a way of ensuring that they were able to access the goods and services that they wanted and needed. From groceries and meal-planning boxes to coffee delivery services, the businesses already implementing subscription-based models saw an increased demand for what they had to offer.

Despite vaccinations and the government’s new timeline for recovery bringing hope, there is no doubt that the last year has shifted consumer buying behaviour permanently. Earlier this year, Zuora’s End of Ownership survey revealed the pandemic has accelerated a trend we’d already been witnessing; an increasing consumer preference for the use of subscription services over the ownership of physical products. In fact, 77% of U.K. adults have subscriptions services today. This is up from the 58% that had subscriptions 5 years ago.

While they are rising in popularity now, how can we make sure subscription boxes will be here to stay?

While signing up new subscribers will always be important, it costs much less to retain an existing customer than to acquire a new one. Therefore, the success of a business model which incorporates subscription boxes will ultimately rely upon reducing churn. Customers need to feel like they receive ongoing value, a significant shift away from the traditional single-transaction model. Their definition of value is much more than simply a price point. Whilst saving money is important, it will often not be enough to make them stay long term. Instead, the key to long-term success is to establish strong connections through unparalleled subscriber experience.

Today’s consumer wants to be put in the driving seat – therefore businesses who ensure both flexibility and convenience are likely to come out on top. For example, the ability to opt-out or even just temporarily suspend a service is seen as a really important factor. Moreover, the delivery mechanism for the subscription must be more convenient than traditional purchasing. It must take the pain out of tackling the high-street but still provide the experience at home for customers. There is a common thread that the most popular subscriptions will save time, deliver to the home or be something that the customer would struggle to get hold of under normal circumstances.

Customisation is also crucial when it comes to improving the customer experience.  Consumers have higher expectations for a subscription model than they do with a single purchase. Taking unique preferences into account is likely to enable businesses to build a better relationship with their customers, encouraging a longer commitment and lessening churn.

Half of retailers ‘failing to capitalise on eCommerce’

960 640 Stuart O'Brien

Research from Hitachi Solutions and K3 Technologies has found that many retailers didn’t have the technology foundation in place to capitalise on the eCommerce boom over the last year.

In fact, over half (57%) of retailers reported that they weren’t agile enough. However, the retailers that made early investments in digital ERP reported fewer issues around agility and were quicker to deploy efficient digital sales strategies. This is because they had access to better data insights, generated through ERP.

Significantly, early adopters of digital ERP were a third more likely to capitalise on the shift to online shopping. This suggests that pouring money into an eCommerce strategy alone isn’t enough to win over shoppers. Instead, fashion retailers need to build their digital strategies from the ground up, starting with a single source of data for operations and inventory.

It’s been estimated that acquiring new customers costs anywhere between 5 to 50 times as much as retaining existing customers. Inconveniences caused by a lack of visibility like out-of-stock products, or the absence of cross channel returns threaten a smooth customer journey and could result in the loss of loyal customers.

The report asserts that having a seamless supply chain is critical because any issues will reflect negatively on the customer journey. The research found that the number one cause of internal bottlenecks, and therefore one of the biggest barriers to meeting customer demands, is lack of visibility (86%).

This is often due to outdated systems throughout the supply chain. Respondents made it clear that ERP is a critical tool to gaining this visibility, and being able to scale up, citing that the greatest benefits of digitalising ERP are enabling growth (28%) and visibility (20%).

Fashion retailers don’t need to totally overhaul their systems to see results, but by updating parts of the ERP systems and updating existing technology, they will be able to better understand and respond to customers.

The research shows that having a strong digital strategy depends on having a strong digital foundation. Yet, around 1 in 5 fashion brands have yet to digitalise their ERP, with France being the slowest adopters in Europe. This highlights a significant opportunity for retailers to improve their technology to boost business agility and meet customer demands.

There is a clear case for digitalising from the ground up, but many issues are getting in the way. The biggest challenge is making the business case for updating (28%), which has always been a challenge for fashion – before and during Covid-19. Updating ERP systems can be a long and arduous task, especially if your organisation is resistant to change – so it’s critical that potential solutions integrate easily, and build on your existing strategy.

In fact, when it comes to implementing ERP, easy integration is the most important factor for retailers (58%) with usability a close second (56%).

All respondents see the value in digitalising ERP, yet this year ERP has seen a decrease in digital investment of up to a third, while eCommerce funding has absorbed this budget with a 61% increase. Covid-19 likely influenced this as retailers had to invest heavily in digital; for many, it was the only way to reach customers. However, if fashion brands want to deliver a great experience and retain customers long term, they have to move their focus to updating the ERP systems that are fundamental to the health of their digital channels.

Tony Bryant, Director Global Business Development and K3 Technologies, said: “2020 provided a reset moment for retail and fashion, with many brands completely pivoting to meet customers through digital channels. But customers’ demands are becoming more complex, and the fashion brand landscape is in adapt or die mode. For many fashion retailers, a lack of visibility into operations and inventory has been a spanner in the works for meeting customer demands. This is why laying the foundations for a single source of real-time data through ERP is critical. It delivers competitive advantage for fashion brands in a world that increasingly values convenience, personalisation, and flexibility. Fashion brands need to meet customers where they are, and a strong digital foundation plays a critical role here.”

Retailers ‘missing out’ on the growing gift card market

960 640 Stuart O'Brien
Most top retailers have gift cards available but according to new research from NAPCO, in conjunction with Blackhawk Network, there is still a huge opportunity for brands to capitalise on the gift card market.
The research evaluated the state of key merchants’ gift card offerings, including TKMaxx, H&M and Apple, and has highlighted how retailers can reap the benefits of this growing market. Of course, Amazon topped the list, cementing itself as king of yet another sector, but even the retail giant has some room for improvement.
Essentially, the report found that across the board, top retailers are missing out on significant revenue streams by not giving customers what they want when it comes to gift cards. It asserts that even the most basic innovations seen across other areas of retail are yet to be implemented for gift cards.
The gift card market in the United Kingdom is seeing significant growth. According to recent research from the Gift Card and Voucher Association (GCVA) supported by Blackhawk Network, the market is now worth £6.9 billion, up almost £1 billion from its previous evaluation in 2019.

A gift card strategy is critical for brands. It can be beneficial for driving sales, customer loyalty and brand awareness, as well as engaging new markets. Blackhawk Network’s analysis showed that brands failing to run gift card promotions miss out on an average of 37 percent of annual gift card revenue.

Online giant Amazon is leading the way when it comes to optimising it’s gift card strategy to generate revenue and customer loyalty. However, all retailers and brands can benefit from this increased interest in gift cards.

But to do so, they need agile and targeted gift card programmes, says the report. They also need to stay up to date with the state of the industry, as well as the performance of their own gift card programmes

To help them, NAPCO Research, in conjunction with Blackhawk Network, conducted an evaluation of the state of merchants’ gift card offerings to highlight how retailers can reap the benefits of this growing market.

Key Findings

Digitally native players lead the pack:

  • The NAPCO research scored merchants on how they promote the online sale of gift cards to consumers. Merchants were measured against a range of criteria, including discoverability, innovation and customer experience.

  • The research identified the brands with the most effective gift card strategy as:

Brand

Score

Amazon.com

85%

TK Maxx

72%

ODEON

66%

H&M

65%

Apple

64%

B&Q

64%

Marks and

Spencer

New Look

64%

59%

Mitchells &

Butlers

Asda

58%

56%

  • Amazon.co.uk took the top spot by a significant margin, scoring above average in seven of the nine criteria categories, often significantly higher. The e-tail giant earned the maximum points available in discoverability, illustrating that its physical and digital gift card programme is easy to find across its desktop website, mobile website, and mobile app.

  • This is likely because, as a tech-first platform, Amazon understands the importance of synergy between online and offline and the importance of giving customers a seamless experience across all areas of the business.

The missed opportunity within mobile apps

  • Retailers routinely provided a weaker gift card purchase and recipient experience within their mobile apps. In fact, many do not offer gift cards within their apps at all.

  • Fashion retailers performed better than other verticals in the area of mobile app payment options. ASOS, Zara, Superdry, and Ted Baker offer standard Visa, MasterCard, Amex, and Maestro, with additional options including PayPal, Apple Pay, Google Pay, Afterpay, Klarna, Clearpay and Switch.

  • However, attention to the gift card purchase experience within apps is clearly lacking. This is a missed opportunity to drive loyalty and build a long-term relationship with customers, particularly when it comes to younger audiences – research from Comscore finds that smartphone users between the ages of 13 and 24 are the heaviest mobile app users.

  • Perhaps the most significant takeaway of this report is that retailers must improve performance when it comes to the ease and experience of purchasing gift cards within their apps. Especially because consumers that have downloaded a retailer’s app are more likely to be loyal and regular customers.

A personalised experience is not optional

  • In 2021, customers have come to expect a personalised experience in almost every aspect of the consumer journey – and gift card purchases are no different.

  • A recent report from Accenture found that 91 percent of consumers are more willing to make purchases from retailers that ‘remember them’ and provide relevant offers.

  • But the NAPCO research  found that personalisation within the gift card purchasing process could be vastly improved. Advanced personalisation options that should be considered include specialised faceplates, personal photographs or video content. For example, one brand lets buyers upload a personal video alongside their digital gift card to make the experience extra special.

B2B will drive sales

  • GlobalData forecasts that the gift card market is set to grow 24.7% over 2019–2025, and this will be primarily driven by growth in B2B sales.

  • Apple successfully highlights its B2B offering by providing 50 card packs for businesses, as well displaying a nice visual promoting its gifts for business on the gift card landing page.

  • Looking at the bigger picture, retailers need to do more to capitalise on the B2B opportunity. The majority are leaving a significant amount of money on the table by not investing in activities to grow the number of customers who could purchase gift cards in bulk.

In Summary

  • The retail landscape is evolving rapidly and e-commerce is booming, accelerated by the impact of the COVID-19 pandemic, as consumers increasingly move online for their shopping needs.

  • With this in mind, retailers that put in the effort to optimise their online gift card programmes stand to reap the benefits of this growing market.

  • With a few exceptions, innovation among the retailers assessed in this report was generally low, even among brands that are known for being inventive outside of gift cards.

  • To capitalise on the gift card market, brands should be extending the creativity that is apparent in other aspects of their business to gift cards. Doing so will help them to stand out from the competition, form a deeper and more personal relationship with customers, and drive revenue.

What comes next for retail? How the sector can use customer-centric business models to bounce back and ensure long-term success

960 640 Stuart O'Brien

By John Phillips, General Manager, EMEA at Zuora 

Retailing has long been one of the largest sectors in the UK economy. Pre-pandemic, the industry consisted of 306,000 shops – employing 2.9 million people – and boasted an annual sales volume of £394 billion. However, there’s no doubt that the last year has brought significant challenges to all businesses, and retailers are no exception, with 2020 being labeled the worst year in sales since.

Whilst supermarkets were deemed essential and saw demand increase, many non-food retailers were forced to close for various time periods in order to comply with government guidelines and keep customers and staff safe. For those without a digital presence, this proved costly. Even the biggest household names felt the pinch financially, with Primark going from making £650m in sales each month to nothing.

Despite vaccinations and the government’s new timeline for recovery bringing hope, there is no doubt that the last year has shifted consumer buying behaviour permanently. Earlier this month, our End of Ownership survey revealed the pandemic has accelerated a trend we’d already been witnessing; an increasing consumer preference for the use of subscription services over the ownership of physical products. In fact, 77% of U.K. adults have subscriptions services today. This is up from the 58% that had subscriptions 5 years ago.

A time of opportunity

Against our backdrop of change and uncertainty, retailers need to find new methods and strategies to remain profitable long term. As the last year has evidenced, those that fail to adapt won’t survive. However, this time of hardship has also been one of resilience. Many retailers responded to the ongoing situation and refocused their efforts to meet new demands in consumer behaviour. For example, Pret a Manger was one of many to launch a new subscription service to account for the fall in foot traffic on the high street.

In fact, during this time, subscription-based models have emerged as a key for businesses across a range of different sectors to ensure a stable revenue stream and for consumers to get the products they want in a convenient, low-cost way. From groceries and meal-planning boxes to coffee delivery services, the number of people signing up to subscription-based models is steadily increasing and COVID-19 has only highlighted their resilience. In fact, our Subscription Impact Report – which took data from March – May last year – found that more than half of subscription businesses had not been impacted by the pandemic, while one quarter actually saw subscriber acquisition rates accelerate. Meanwhile, the latest edition of the Subscription Economy Index revealed that subscription companies continue to outperform their product-based peers by wide margins. Last year alone, subscription revenues grew 11.6%, while the S&P 500 sales declined -1.6%.

There are several key players who are already reaping the rewards. For example, whilst many businesses have struggled to survive the pandemic, Gousto – the subscription-based recipe box provider – announced plans to create 1,000 new jobs as part of an expansion following a 115% spike in sales during the first half of 2020. Several many major retailers including Hotel Chocolat, Nespresso and Majestic Wine – have taken note of this success and now offer subscription boxes themselves. Morrisons, the UK’s fourth largest grocer, also recently joined the movement, launching a new weekly, fortnightly and monthly food box service.

Subscription-based models are proving to be a lifeline for many retailers battling the current period of uncertainty, with recent research revealing that 39% of UK shoppers have signed up for at least one. This demand is only likely to increase moving forward, with our latest CPG Subscription Report finding that consumers who have a subscription already are 2x more likely to get another in the next 3 years. But, in order to make subscription-based models a long-term success, retailers must focus on reducing churn and delivering true value to their customers.

Boosting the subscriber experience

While signing up new subscribers will always be important, it costs much less to retain an existing customer than to acquire a new one. Therefore, the success of subscription-based models ultimately relies upon reducing churn. Customers need to feel like they receive ongoing value, a significant shift away from the traditional single-transaction model. Their definition of value is much more than simply a price point. Whilst saving money is important, it will often not be enough to make them stay long term. Instead, the key to long-term success is to establish strong connections through unparalleled subscriber experience.

Today’s consumer wants to be put in the driving seat – therefore retailers that ensure both flexibility and convenience are likely to come out on top. For example, the ability to opt-out or even just temporarily suspend a service is seen as a really important factor. Moreover, the fear of being bound to a company or service is enough to put 42% of consumersoff signing up in the first place. This is because consumers want the freedom to consume on their terms. They want to escape the burdens associated with ownership, whether that’s obsolescence or time and location barriers. In order to offer this, businesses need to reinvent and build flexibility into their offerings, giving customers the ability to upgrade, downgrade, pause, cancel and renew at any time.

The delivery mechanism for subscription services must also be more convenient than traditional purchasing. It must take the pain out of tackling the high-street but still provide the experience at home for customers. There is a common thread that the most popular subscriptions will save time, deliver to the home or be something that the customer would struggle to get hold of under normal circumstances.

Customisation is also crucial when it comes to improving the customer experience.  Consumers have higher expectations for a subscription model than they do with a single purchase as they are buying into a brand. Therefore, retailers taking unique preferences into account and using subscription data to personalise product offerings and pricing models are likely to build a better relationship with their customers, encouraging a longer commitment and lessening churn.

Consumer-centric subscription models allow retailers to re-imagine their businesses as a recurring service, as opposed to an accumulation of transactions. They can act as an enabler for more personalised, convenient and flexible shopping experiences than ever before – whether online or in store. If retailers are able to capitalise on this movement and deliver true value to their customers, subscriptions could prove to be a sustainable solution helping them to both survive this current time of uncertainty and thrive in the future.

Third of UK consumers have ‘stopped purchasing EU goods’

960 640 Stuart O'Brien

A survey has found that 34% of UK consumers have stopped purchasing goods and services from the European Union since the UK officially left the world’s largest trading block.

Eskenzi PR & Marketing, which carried out the research, highlights that since Brexit’s historic change in the relationship between Europe and the UK, stories have circulated – anecdotally and in the media – about the changing relationship between EU retailers and British consumers, with Mastercard reportedly hiking fees on UK consumers purchasing goods from the EU, and the Guardian reporting in January about £100 custom bills for UK consumers.

However, these it says the survey results indicate that the mass exodus of UK consumers from Europe appears to be moving at a slower rate than many experts predicted.

“Following all the bad publicity around buying products from the EU post Brexit, it is clearly having an impact on consumer buying habits”, said Yvonne Eskenzi, co-founder, and Director at Eskenzi PR. “It is evident to see that UK consumers are being put off buying goods from the EU due to the various complications Brexit has created. We can only hope that this is a temporary measure: Post-Brexit Britain is still in its embryonic stage, and the true nature of our new relationship will have to be measured across the course of the following months – and indeed, years.”

The survey also revealed the following trends:

  • Costs and delays were the biggest concern for younger consumers, with 24% of 16–24-year-olds suggesting an increase in cost had put them off, and 26% suggesting increased delays were behind the decision to stop shopping with Europe.
  • Men appeared to take a more ‘combative’ stance to EU relations than women, with nearly double the men indicating they would not buy EU goods for ‘ideological reasons’ as opposed to their female counterparts.

The survey was conducted online by Censuswide with a representative sample of 1,000 UK consumers, between February 1st 2021 and February 3rd 2021.

Resilience in Retail: How European businesses are adapting with payments

960 640 Guest Contributor

By Nick Noyer, Head of EMEA Marketing, Stripe

Consumer spending has been moving online at a growing pace over the past 20 years. When COVID-19 hit, it further accelerated the ongoing trend, causing retailers and other businesses to evaluate and adapt to new consumer spending patterns. The most adaptive firms not only saw this as a challenge to survive, but an opportunity to flourish.

Stripe commissioned Forrester Consulting to research the payment technologies, strategies, and future capabilities firms are investing in to become more adaptive during the challenges of the pandemic and beyond. Forrester conducted an online survey of nearly 500 online retail leaders around the globe, with 221 respondents coming from Europe.

Here are three key findings of the study: 

  • Retailers plan to expand, rather than contract, their businesses during the pandemic. Instead of seeing the pandemic as a moment to retreat, the majority of retailers plan to expand their businesses in thenext 12 months by creating new revenue streams or increasing their global reach in an attempt to respond to evolving consumer behaviors.
  • Retailers face resource and expertise blockers as they pursue new business models andinternational expansion. Expanding into new markets and launching new business models requires significant domain expertise and often extensive internal resources. Meeting local requirements such as adding relevant payment methods and ensuring compliance creates massive overhead when handled in an ad hoc fashion. Additionally, as businesses grow and expand internationally, they can be exposed to new fraud
  • Businesses that invest in the right payments technology are able to quickly execute growthstrategies. Partnering with a tech-forward payments provider unlocks functionality beyond just payments. By arming retailers with powerful tools to manage fraud, more choice to offer consumers in how they pay, and the ability to make data-driven decisions, payments providers can enable businesses to expand into new global markets and layer new business models on top of their existing ones more quickly than their competitors.

To find out more about the respondents’ priorities and top initiatives, download the full Forrester Study Resilience In Retail: How European Businesses Are Adapting with Payments.

About Stripe:

Millions of businesses of all sizes — from startups to large enterprises — use Stripe’s software and APIs to accept payments, send payouts, and manage their businesses online.

Stripe provides payment solutions to some of the largest retailers in the world, including ASOS, Missguided, and Waitrose.

To find out more contact us at https://stripe.com/gb/contact/sales.

Why the IoT is key to the UK retail sector’s post-Covid recovery

960 640 Stuart O'Brien

By James Bristow, SVP EMEA, Cradlepoint

According to the latest ONS figures, the impact of Covid-19 restrictions on the physical retail sector has been mixed. Stores selling hardware, paints and glass, for example, saw a 13% increase in the value of retail sales compared to last year. Others have been hit particularly hard – with clothes store sales down by more than a quarter (26%) in the same time frame.

The forthcoming wave of vaccinations promises to restore the UK’s economy to a more stable position. Nonetheless, we must consider the possibility that changes in consumer behaviour may linger even when lockdowns and social distancing are a thing of the past, as well as how different sub-sectors within the industry will be affected.

Let’s therefore look at two opposing, but equally possible scenarios on the road ahead.

Scenario A – Opening the floodgates

After months of being cooped up at home, customers flock to town centres, industrial parks and shopping centres to exercise their freedom to purchase goods in-person. Sales volumes increase, but supply chains become stretched due to spikes in product demand and store inventories become more difficult to effectively manage.

In addition, disruption to both the need and availability of workers in the months prior leaves stores understaffed, leading to long queues and disgruntled customers. Finally, customers who for months have been encouraged to go cashless are now making far more card and contactless payments, leaving some POS systems struggling with the uptick in data traffic and leading to more frustration for staff and customers alike.

Scenario B – The high street ghost town

For many, shopping online during the pandemic switched from something people wanted to do to something people needed to do. As a result, those who were previously sceptical or unfamiliar with technology (or who simply preferred shopping in-person) had to familiarise themselves with the process. Of course, although many within this group may still be averse to e-commerce today, we must assume that at least some will use their newfound familiarity to continue shopping online in the post-Covid era.

In this scenario, customers new to e-commerce have been swayed by the user-friendliness, low prices and fast delivery on offer online. As a result, footfall on the high street struggles to recover to pre-pandemic levels, creating a tough environment for the small independent retailers who compete with the online giants.

Preparing for every outcome

While these two scenarios are diametrically opposed, the Internet of Things (IoT) could help address some of the issues described in both situations. Comprising a dynamic network of sensors, devices and equipment, the IoT makes it possible to view and interact with physical objects as easily as files and folders on a computer. In other words, the IoT creates a digital overlay that sits across the physical infrastructure of retail stores, effectively facilitating the agility of online shopping in a physical space.

It will require investment, but securing the future is a goal that pays dividends. Here we look at the solutions the IoT has to offer in these two scenarios.

Solution A – Unlocking efficiency at every stage of the supply chain

Preparing to mitigate the negative outcomes in this scenario requires retailers to take a hard look at the systems they have in place, identify areas in urgent need of greater efficiency, and implement new IoT tools to address them:

  • Real-time supply chain – inventory sensors and POS data are integrated into a direct communication system with supply chain partners, triggering automated manufacturing and production systems and adjusting stock delivery schedules accordingly.
  • Data-driven decisioning – capacity sensors linked to data analytics platforms not only track the number of customers in-store, but analyse seasonally-adjusted data relating to the length of time customers spend in the aisles and predict where and when staff will be needed.
  • Robotic process automation (RPA) – from processing supplier deliveries to quarterly stock counts, RPA systems automate time-consuming tasks that happen behind the scenes, freeing up staff time for better workforce scheduling and more focus on customers.

Solution B – In-store customer experience unmatched by online retailers

Innovations such as live product tracking and same day delivery have recently tipped the customer experience race in online retailers’ favour. To attract new customers and retain their business, brick-and-mortar stores must emulate the dynamic, digital and personalised experience offered by their online counterparts:

  • Interactive digital displays & kiosks – positioned at the store entry, customers can benefit from an optimised in-store journey and a highly personalised experience by viewing commonly bought items, their location within the store and in-the-moment marketing offers based on purchase history.
  • Roaming POS – queuing is eliminated as tablets carried by staff process customer payments anywhere in the store. In addition, RFID scanners built into trolleys and baskets can total large volume purchases in real-time, without needing to take a single item out to scan.
  • Customer application integration – in-store geotargeting systems can link via Bluetooth to customer-facing smartphone applications to help locate specific items and provide other useful pieces of information, such as stock levels, current offers and the location of staff.

LTE & SD-WAN branch networking: laying the foundations for the future of physical retail

Regardless of which scenario becomes a reality, any subsequent IoT strategy must begin with a reliable, secure and agile network. The first step is cutting the cord with fixed broadband connectivity and setting up a private in-store network running on LTE. Also known as wireless WAN (WWAN), this solution offers retailers greater levels of flexibility thanks to out-of-the-box connectivity and unparalleled reliability through multiple network channel management.

The second foundational requirement for retail IoT is SD-WAN. With the sheer quantity of network applications running in most branches, cloud monitoring and troubleshooting features – including automated alerts – SD-WAN enables retailers to cost-effectively manage WAN conditions at widespread locations. Crucially, SD-WAN also allows secure VPNs to be established in a matter of minutes, providing robust protection for devices and sensitive information, such as customer payment data.

Survive and thrive in the future of retail

The past year has been an uphill struggle, not least for retailers contending with limited footfall in their physical stores. Investing in new technology may not be top of mind for all retail businesses in the immediate future. But for those who are able and willing to make small adjustments to innovate may find they are able to unlock efficiencies in their supply chain, improve their in-store experience and attract and retain new customers once lockdown restrictions start to ease.

INTERVIEW: Retailers will be left behind if they don’t increase their digital presence

960 640 Stuart O'Brien

As the UK entered into a second lockdown, traditional brick-and-mortar retailers are facing difficulties in conquering the e-commerce space. Pete Reis-Campbell, CEO and Founder of Kaizen, a performance marketing agency based in London, warns that traditional retailers who haven’t shifted their focus to e-commerce platforms face being left behind if they don’t begin to make drastic changes to their approach…

Why do traditional retailers have to invest more in digital? 

As we’ve seen with the nature of the pandemic, we can’t be sure how long it will take for brick-and-mortar businesses to return to “normal” and if we do what will that be like? In the US, Google’s latest report showed searches for “online shopping stores” increased by 100% compared to last year. It is clear that customers are shifting their attention to shopping online, and whilst it has been a steady increase over the past few years or so, the pandemic has definitely increased this demand.

During the first lockdown, we noticed some businesses made the effort to shift their budgets on digital strategies and implemented changes in case we would go back into another lockdown. Whilst other businesses, justifiably, wanted to protect their revenue and didn’t invest in their e-commerce strategy, meaning they’ve now impacted their growth. For instance, familiar brands of the UK high street such as Woolworths, Debenhams, and Littlewoods have all been forced to close down over the years due to their negligence to e-commerce and thinking about innovation.

What do you think the biggest issue is when it comes to retail stores and online stores?

Customers often remember the experiences retail stores give them and this isn’t often translated online. Whilst brands should make an effort to separate their in-store experience from their online stores, they should also remember what consumers are looking for when using these mediums. For example, Apple has a great in-store experience that is focused on allowing customers to test out their products, attend training sessions, and receive hands-on customer support. However, their online experience translates this in a different way – as they know they cannot replicate everything they do in-store and it needs to be tailored differently.

The high street has become more focused on these types of experiences, for example, growth in independent cafes, grooming salons, and restaurants, as going in-store is the only way you can actually experience them. Whilst with e-commerce, there is an opportunity to create an online space to generate sales. In my experience, I’ve found the most difficult e-commerce websites to navigate are ones trying to replicate their entire in-store experience, and haven’t thought about a digital strategy, which can make their UX confusing and frustrating for users.

What are some of the areas retailers should be turning their attention to during this time?

  1. SEO – Retailers should be looking at the way their customer searches for their products via Google and optimising their website accordingly. From an agency perspective, we often notice that retailers can get caught up in the importance of ‘brand tone of voice’ and this can compromise on SEO as this isn’t the common sense way consumers search for products – meaning they miss out on thousands of opportunities each month just because they aren’t thinking about optimising product descriptions or landing pages.
  2. Create better online experiences with integration and visibility – Most online retailers have great user experiences, however many are missing out on the trick of integrating payment solutions such as Amazon and Apple Pay. By creating one-click experiences you can increase conversions and expect returning customers.
  3. Swoop in on SEO opportunities that affiliate content marketing is profiting from – In theory, affiliate content marketing shouldn’t even exist, but thousands of brands miss out on SEO traffic because of this and essentially lose out on sales too. Ecommerce brands should look at the search terms their affiliates rank for and try to fill in those content gaps themselves instead – your own ‘discount codes’ page for example.
  4. Create evergreen seasonal occasion pages – Retailers have a tendency to create new pages for an event each year, i.e Valentine’s Day 2019, Christmas 2020, or Black Friday 2021. However, these pages should just be a singular URL that’s updated each year in order to retain its SEO value and visibility – otherwise, you’re just resetting your efforts each time. Google recently published an article on best practices for this.
  5. Review your product description pages – Of course, shopping online will never be the same as shopping in-store, but there are some ways you can include features to help create that experience. A favourite of mine is 360 video, which allows potential customers to view the product in 3D. This might be a tedious and time-consuming project, but if you even did it for your top ten products, you might see a difference in conversion rates. Ensuring customer reviews are displayed is a huge bonus too – no matter how bad or good they are!
  6. Explore shopper personalisation and influencer marketing – Most traditional retailers are beginning to implement this into their e-commerce strategies, but many are missing out on the trick. Ensuring you’re trying different methods to engage with your audience is crucial, so exploring Instagram and influencer marketing is also a viable option for many larger brands.

Kaizen is a creative-focused performance marketing agency based in London that provides digital PR, social and search marketing services across the UK, EMEA, and the US. Other clients in Kaizen’s portfolio include Adidas, Lastminute.com, and TUI.

Contactless payments – Added value or an economic recovery mechanism?

960 640 Stuart O'Brien

By Limontek

Because of government imposed lockdowns, the popularity of transactions through digital payment systems has increased steeply, heralding the emergence of QR code and NFC technologies. Given the health restrictions imposed on physical stores, retailers should take advantage of this opportunity to go digital and push for the contactless customer experience…

During the current worldwide health and economic crisis, banks have raised the buying limit on contactless transactions (France, for instance, raised it from EUR 30 to 50 on 11 May, and ABN AMRO announced on 24 March that it is raising the contactless payments to EUR 50). This policy may appear insignificant considering today’s situation; but it nevertheless marks the beginning of a new era: the widespread use of contactless payment.

While the technology was often available for credit and debit cards issued by major retail banks, smartphone-toting consumers are resorting to this new kind of transaction in ever greater numbers. Though new to some, contactless payment has been totally second nature to other consumers for some time now.

Contactless payment through a personal mobile device may be commonplace in many countries such as China and a myriad of Asian and African countries, but consumers elsewhere still favour credit card payment, cash, transfer, or cheques. However, with sanitary measures deterring the use of PIN pads, contactless transactions using NFC and QR code technologies are enjoying unprecedented popularity.

www.limonetik.com

Surviving post-pandemic retail challenges with subscription models

960 640 Guest Contributor

By John Phillips, General Manager, EMEA at Zuora

Whilst many organisations are feeling the economic effects of the global pandemic, subscription-based businesses are proving to be resilient. In fact, a recent report found that more than half of subscription businesses have not been impacted by the pandemic, while one quarter are actually seeing subscriber acquisition rates accelerate.

So, what can the traditional retail industry, especially those in Consumer-Packaged Goods (CPG), learn from the strength shown by subscription services?

During the pandemic, in order to follow government guidelines and ‘stay at home’, many consumers took to ordering a variety of products – including groceries and home staples – online, signing up to subscription models they potentially hadn’t thought about before. But, as things return to some semblance of normality, in order to continue to drive this growth and build loyalty within their customer-base, CPG  businesses need to focus on forming direct relationships with their customers.

The strength of subscriptions in 2020 has proven that forming direct relationships with customers and focusing on adding long-term value over short-term revenue is going to be key for retails in surviving the impending recession.

COVID-19: The catalyst for shifting consumer attitudes

Subscription box retailers have enjoyed steady growth in recent years, with 27.4% of Brits signed up to subscription box services as of February 2019, according to Royal Mail Group research. At the time, the UK subscription box market was forecast to reach £1 billion in value by 2022, a 72% increase from its value in 2017. Many early entrance to the retail subscription market are reaping the rewards, including Hello Fresh, Graze and Nespresso.

While the COVID-19 pandemic affected brick and mortar sales, subscriptions enjoyed a fruitful period as millions were stuck at home. In July, new Royal Mail research showed 15% of adults had ordered a paid subscription box online since lockdown began.

Some subscription services were able to turn adversity into opportunity by listening to customers and their changing needs during the pandemic. This compassionate approach is in turn leading to increased loyalty and overall growth. A good example of this can be seen from the restaurant reservation platform Resy. During COVID-19, Resy was committed to providing 100% relief on all fees and billing until the end of June. Since then, they’ve seen customer subscriptions spike. The adaptability offered by subscription-based models is proving to be a lifeline for many retail organisations battling the current period of uncertainty.

The future of CPG is in subscriptions

According to our CPG Subscription Report, 61% of UK consumers who have a CPG subscription have one with a food and beverage organisation, followed by electronics (33%), pharma and beauty (33%) and fashion (31%). This demand is only set to increase as time goes by, with consumers who have a CPG subscription being 2x more likely to get another in the next 3 years.

COVID-19 has provided all industries with an opportunity to re-think the norm, and the same goes for retail. Shifting to a service model via subscriptions will not only help organisations to bounce back following the global pandemic, but it could boost the profitability further down the line.

In the past, CPG brands could let retailers worry about the customer experience; they only had to provide the products. Now, in a direct-to-consumer reality, brands need to forge relationships based on customer experiences they themselves have created if they want to succeed. Creating a seamless and positive experience has never been more important to ensure stability moving forward.

The three C‘s for success – convenience, customisation and customer satisfaction

In an uncertain economy, many consumers re-evaluating where they spend their hard-earned money.  This makes it more important than ever for brands to prioritise customer satisfaction to drive loyalty and reduce churn rates. So, what makes customers stay?

According to the same CPG report, customers value flexibility, convenience and customisation above all, citing saving time (51%) and ease of opting out (48%) as key factors in making a decision about subscribing to a CPG brand.

In terms of delivering this overall customer experience, flexibility is high on the agenda for those signing up to a subscription-based service.  Fear of being bound to a company or service is enough to put 42% of consumers off signing up in the first place. Therefore, companies that enable changes to their subscriptions are likely to see a positive impact on the bottom line. In fact, research from the Subscribed Institute recently discovered for companies where one in 10 subscriptions has a change after the initial sign-up, for example, this could be an upgrade, downgrade or add-on, the growth rate more than doubles to 20% YoY revenue growth.

Another key pillar for success is convenience. In order to meet consumer demands, the delivery mechanism for the subscription must be more convenient than traditional purchasing. It must take the pain out of tackling the high-street but still provide the retail experience at home for customers. There is a common thread that the most popular subscriptions will save time, deliver to the home or be something that the customer would struggle to get hold of under normal circumstances.

Customisation is the third piece of the customer satisfaction puzzle and is likely to be the defining factor which enables a subscription service to stand out from its competitors. Consumers have higher expectations for the relationship in a subscription model than they do with a single purchase and it’s important to meet these. Taking unique preferences into account is likely to enable businesses to build a better relationship with their customers, encouraging a longer commitment and lessening churn.

For CPG brands looking to fortify themselves long-term, adopting a subscription-based model is an avenue worth exploring. For those that do, focusing on adding value and improving the overall experience for customers will prove critical in building and retaining loyalty long term. If businesses are able to deliver the right blend of flexibility, convenience and customisation, subscriptions could prove to be a sustainable solution helping businesses to both survive this current time of uncertainty and thrive beyond the pandemic.

  • 1
  • 2