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What your local newsagent can teach you about multichannel retail

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20th Aug 2014
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Ernst & Young’s executive director, Ray Fowler has played a pivotal role in the evolution of the retail sector, having spent over 15 years working on a number of multichannel projects with international retailers including Tesco, TK Maxx and ASOS.

He is currently based in Russia having previously assisted with multichannel strategy for M.video, the country’s largest provider of consumer electronics, and the world’s twelfth fastest-growing retailer.

During his time in the sector, he has seen first-hand the increasing importance retailers have placed on trying to become ‘multichannel’, yet believes many are failing to recognise some fundamental characteristics about their customers and the experience they are having, as a result.    

“The customer hasn’t changed,” he says. “It’s still the same customer as it was in the 1950s and onwards. When they go into a retailer they are going in to shop. When they go online they are going online to shop. They are looking for the same experience irrespective of the channel; be that when they go online, when they go in store and or when they are on mobile.

“Allowing the customer to be able to flit across any of the channels at their convenience, irrespective of where they are is key to developing and engaging with the customer. For example, they may surf at night on a tablet and then walk into the physical store the next day and when in-store they may want to be able to re-evaluate the product content on their mobile phone. That’s omnichannel - having that one experience with the brand. Yet, from a customer perspective the associated buzzwords don’t and shouldn’t exist.”

Local understanding

According to IDC’s 2014 Retail Insights published in January 2014, 'omnichannel consumers' spend between 15%-30% more than their counterparts, which has led to 70% of the top EMEA retailers making multichannel solutions their number one priority in 2014.

This drive towards understanding the multichannel customer is leading to a plethora of new tech tools that retailers can use to aid the way they target and retain. Yet, in Fowler’s opinion, opportunities are often missed because organisations fail to make their understanding of customers count: 

“Thinking about the local store experience, when I was in the UK my newsagent knew everything about me. That is what I call a 'single view'. I’m reminded of the TV show Open All Hours and the character of Arkwright, the shop keeper. Yes, it was a fictional portrayal, but he knew everything about his customers - their likes, their dislikes and the customers were all addressed individually by name.  

“If you think about the biggest loyalty card, which is Tesco, no one has ever said to me when my card is scanned at the beginning of the checkout - hello Mr. Fowler, how are you? I think we have to bring back the emphasis to the organisation knowing who their customers are at any point whether that is nationally or locally.”   

Digital transformation

Part of the problem is getting retailers to rethink how they interact with customers right through the business. The concept of being ‘customer-centric’ can only work if every employee and every department is joined up to give customers what they want.  

“I think it’s an area where businesses will begin to fail if they do not [address the issue],” Fowler adds. “Retailers in the past have always thought about getting the right product, in the right place for the right customer. Now it’s about the customer accessing the product and accessing the price and therefore organisations have to think about the customer.” 

“It’s time for the internal functions within businesses to become more digitally connected. People in finance, in HR and in procurement need to understand the end customer. They are all part of the offering and service to the customer. For example, finance might say we are not going to offer a particular payment type because we don’t think it’s right for us or we don’t like the margin that is being taken. It’s not a business decision any longer. If they are not making it convenient for the customer to shop with you the chances are you will lose that customer.”

Fowler, like many other experts in the field, believes that the role of the marketer is key in these situations, and that the role will evolve to become more technology-minded and data-driven as a result. Far from being forced into extinction as some other experts have suggested, he argues that marketers will need to take on more responsibility, in order for a business to become truly connected.

“Marketing has always been a function within an organisation that has been designed to promote the product and the brand. 

“But it’s now no longer about the CIO determining which solutions should be fitted into the organisation. Now the marketers are saying - I don’t want a solution which might take 20 months to implement, I want a solution in 20 days because I need to be able to offer this to my customers.”

The utopian single view

A connected, multichannel-focused retailer is far more capable of attaining a ‘single customer view’ than one that has stores nationwide, has developed websites and an ecommerce platform but has historically failed to bring together all of the information ascertained about each customer at each point during that journey.

Fowler states far too many big retailers have focused on expansion without considering the importance of continuing to cater for their 'local' customer. He believes the concept of achieving a single view of the customer will eventually help pull this back, but only through the continuing proliferation of bigger and better data analytics tools.

“We will see fundamental changes in the next few years where organisations will invest heavily in how they understand their analytics. Retailers talk about Big Data and they talk about how they analyse that Big Data. In Russia, we are now seeing retailers who are investing in people with mathematics and science degrees to undertake scientific analysis of this data. Likewise I assume this is taking place globally.

“In the future, I think the growth and change in terms of technology will be even greater. If we think about the traditional retailer, which has buying and merchandising teams, I think this will erode as well. 

“Marketers will be taking the responsibility of product management, so it will be marketing which will say 'our customers are looking at these products and so why are we buying these other products?' We have the power of analytics and can predict what our customers are buying. Once we’re able to successfully do this, then we’ll be able to truly connect our channels together and start focusing on providing that local experience again.”  

For the full interview with Ray Fowler, visit MyCustomer's sister organisation Sift Talent

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