Connecting with customers on the ground is not dead

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Online shopping continues to disrupt the traditional retail sector. One only has to look at the decline of the British high streets to know that there is a revolution going on in the way that consumers shop – household names such as Boots, Debenhams and House of Fraser have all been affected by store closures and job losses.

Robert Lockyer, CEO of Delta Global

But there could be light at the end of the tunnel for big brands trying to reconnect with their customers on the ground, according to retail expert Robert Lockyer, CEO of luxury packaging supplier Delta Global.

He points out that while the traditional shopping experience is not completely dead in the water, it needs to diversify dramatically.

Lockyer, whose company provides packaging to the likes of Coach, Ted Baker and Radley, has witnessed many different shipping scenarios on his travels around the world, particularly in commercially progressive countries such as the US and Hong Kong.

“I’ve seen standard stores suffering due to the ease of e-commerce but I’ve also witnessed brands creating almost their own in-store eco-system as they have swiftly realised that customers are putting both experience and values first when deciding to make a purchase,” he says.

“These days in many cities, customers can expect to walk into a store and see food and drink on offer, live fashion shows and music, as well as an instant personalisation of goods. It all makes for an unforgettable experience.

“It’s about creating a combined online and offline concept and curating spaces that enhance the shopping experience and that can offer multi-sensory or interactive elements that suit a buyer’s lifestyle.”

Create a multi-sensory experience

“Brands must create hubs of interest that appeal to sight, sound, smell, taste and touch,” explains Lockyer.

Dazzling customers with an artistic interior design makes them want to capture it on their social channels, for instance, while nice scents can instantly associate brands with a feeling – think of beauty and pamper brand Lush. Burberry stopped people in their tracks with live elements such as the world’s tallest retail screen, immersive sound facilities and even revolving stages for live catwalk shows or musicians.

The feel of furniture and even the dressing rooms all add to a luxurious experience for a buyer. Cafes and taster samples also instantly make them feel welcome.

Diversify design

Do away with your ‘boring’ in-house style – customers need to be re-energised, says Lockyer.

“Transform your store into a gallery, think artistically and innovate the way you merchandise by taking your customer on a journey and tell the story of your brand through clever design and customised experiences.”

Just recently, in London St Pancras station, beauty brand Lancome installed a 36ft ‘Eiffel Tower’ made from 1,500 bottles of its La Vie Est Belle fragrance. Visitors could also have products customised with illustrations and calligraphy in the pop-up shop below.

Shops are increasingly looking to extend the time spent in store by producing multi-purpose outlets. When unveiling their largest ever store, last year Primark introduced pamper booths, cafés, barber shops and even collaborated with other brands such as Disney to theme their space and create Instagrammable areas of focus.

In-store sustainability

The more mindful shopper wants to see forward-thinking stores pairing old with new, switch and swap possibilities and eye-catching edits to the clothes they already own. With 31 % of US consumers stating that they will pay more for products that have the least negative impact on the environment, it is obvious that shoppers are looking for brands to act on the environmental crisis.

“Customers want brands to help them streamline their wardrobes and offer personalised and high-end pieces for almost every budget,” says Lockyer. “By offering facilities and incentives such as money-back offers at ‘recycling and resale’ stations and clothing care and repair hubs, stores can be one solution to loving your clothes for longer as tired clothing can find a new lease of life and even be customised while you shop.”

Some stores also give the flexibility of ‘try before you buy’, meaning there is no wasted time returning unwanted items which ultimately should reduce the buyer’s carbon footprint.

The luxury sector has seen a surge in designer resale websites such as HEWI London, ThredUp and Designer Exchange where people can purchase second-hand or unwanted goods at a lower price.

Physical stores are adapting to this notion, with Selfridges pairing with Vestiaire Collective to open a pre-owned section to its store on Oxford Street in London and John Lewis trialling money-back vouchers on returned goods in 2019.

Embrace digitalised functionality

Cashier-less checkouts, mobile grab-and-go systems and personalised machinery are big news for the future. Using technology such as quick embroidery and print devices means shops can tailor garments in a matter of minutes – faster than any online service.

While online may be the competition for in-store experiences, digital advancement will actually help improve shopping facilities and ease of purchase.
Influencers love filming fashion hauls and ‘style and accessorise’ stories on Instagram while they shop.

Noting that influencers are attracted to experiential and creative spaces to showcase on their feeds, Lockyer says: “Social media icons will create content and brand awareness for you, so take advantage of this. I’ve seen smart mirrors in dressing rooms which can share imagery and video straight to social media and even interactive store windows that feature live catwalks.”

Communication and personalisation

The more personalised the shopping experience, the more valued the customer feels. For example, Marks and Spencer has implemented a ‘human’ element to its promotional periods where a free personal stylist is gifted straight to a customer’s mobile phone in order to curate a collection of outfits to suit their style and shape.

Facial recognition technology will change the way people buy make-up – the future will see us viewing a range of eyeshadow colours directly onto an image of our face, without us having to test them onto our skin first, for example.

“Brands need to think digitally, such as implementing interactive and scannable QR codes on clothes railings which will connect the customer to an app or webpage that tells you what to pair with the item you’ve selected in order to cross-sell.”

Packaging continues the brand journey

“The bag that you carry as you exit the shop, on the bus or tube and through your front door needs to be as exciting as the item inside,” says Lockyer.
Consider how many of us show off our new purchases to friends and family. Making packaging part of that moment is the key to brand awareness and selling.

Increasingly, the use of plastic bags – which once dominated the in-store industry – is coming to an end, with paper and reusable solutions taking the retail trade by storm. But many brands still haven’t cottoned on to the idea, even though more than one-third of purchasing decisions are made by the look and feel of packaging.

Nowadays, social media influencers also use distinctive and beautifully designed packaging as props to style their Instagram photos. Brands will start to make the most of this to expose themselves to a much wider audience.

“Consumers are looking to feel exclusive, so your direction and designs need to be refocused regularly,” concludes Lockyer. “Think beyond the customer’s expectations and make it happen!”

SA trends for Brick and Mortar Stores – the present and the future

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Article by Beate Stiehler-Mulder & Mariette Frazer

It’s a new year and a blank page is ready to be filled with the retail story of 2020. As much as we would all like to have a crystal ball to see the future, the reality is, we don’t, and we cannot exactly say what the retail future for 2020 will hold. We can however propose possible trends that retailers may consider for 2020 from our research, in order to help them develop preferable futures.

Beate Stiehler-Mulder and Marëtte Frazer#BizTrends2020: SA trends for brick and mortar stores - the present and the future

Beate Stiehler-Mulder and Marëtte Frazer

The year 2020 will definitely be all about planning for a lot of future developments and changes as the world moves faster every year, but also about a reality check on what can be improved in the immediate future.

Get the basics right


You visit a retailer and a) you could not see a price on the item, b) there was no sales person in sight, c) once you found a sales person, they merely took you to the product, and there was no further engagement. Sounds familiar?

Retailers need to get the basics right before anything else in 2020, and should fall in love with service delivery all over again and embrace the fact that their customers are in the store. You can engage, build a relationship and get input to understand your customers in a store environment.

One of the reasons Amazon provided for opening up brick and mortar stores, was the fact that they wanted to create a space where customers can view and feel products and engage and ask questions. Brick and mortar has its place and it has opportunity. Appoint people-centred staff with confidence and personality and train them – not only on layout and product knowledge, but also on the soft skills of people engagement.

Data – don’t wait any longer


Retailers have access to an array of customer data. The reality is that the integration of data to create a picture for decision-making does not happen overnight. Solid systems and structures need to be in place, and for those retailers who are still just paying lip service to big data – 2020 is the year to invest in those systems, to integrate data and to proactively use the data for decision-making or risk falling behind your competitors.

Data should be shared


Customer data needs to be accessible to frontline staff in an ethical fashion, and more importantly, staff need to be upskilled in using these insights to improve the customer experience when interacting with their customers. The reality is that customers are getting used to algorithms that suggest products online and that anticipate their needs by analysing their online search and purchase behaviours, which may leave their human counter parts in store lacking.

Customers are therefore demanding flexibility from retailers showing that retailers’ considered the customers’ needs and individual circumstances – this can be achieved through access to better customer information.

Sell solutions, not products: Grow the basket in trying times


Part of embracing brick and mortar is the fact that staff have the opportunity to engage. Don’t just take customers to the product, ask them questions and sell a recommended solution. In trying economic times, South African customers are seeking value, and by providing solutions, staff are not only creating value, they are also cross-selling and thereby enlarging the basket size. Train staff to sell solutions and to embrace engagement opportunities.

Upskill staff for the future


Terms like ‘big data’, ‘artificial intelligence’ and ‘machine learning’ may instil some anxiety as the skills needed for these technologies in the SA retail industry are severely scarce. The need for these skills must to be carefully anticipated and planned for by retailers in 2020.

Technology and operations: Saving costs are always key


The international retail front suggests that robotics and automation, and blockchain technology is growing in popularity. With a high unemployment rate, technologies such as these are still met with dismay in South Africa, but retailers cannot ignore these.

Robotics and automation: From a logistics and warehousing perspective, robotics and automation systems come with a heavy investment cost, but have saved retailers in the USA as much as 80% on distribution and labour costs, and have enabled USA retailers to run warehouses that are 25% to 40% smaller.

Managing costs remain essential and retailers should make it their mission to research and do cost comparisons in 2020 to pave the way for future efficiencies, but with cognisance of its impact on its labour force – a gradual approach to implementing these technologies will be key.

Blockchain technology: Definitely worth investigating further in 2020, as blockchain technology has the ability to connect ledgers from across the supply chain to improve product accuracy and tracking of product journeys. Solutions also include tracking temperatures, quality assurance, and warranties and potential fraud. Anti-counterfeit databases can also be built and stolen products tracked to name but a few.

Again, a heavy investment cost that requires solid research, but South African retailers should not fall behind. Investigate these in 2020 – the opportunities with this technology are becoming endless and will aid in managing costs.

Technology and customers


New technologies are emerging all the time: Drone deliveries, VR and AR experiences, mobile payments, self-checkout and scanning, artificial intelligence, machine learning – these are all technologies that retailers are encouraged to explore and research in 2020, but these should be researched and considered with caution. Retailers should be careful of chasing the shiny, and be reminded to think solutions.

Rather map the customer journey and match the technology accordingly. In a market as diverse as South Africa, it is imperative that retailers invest in acquiring only those technologies that are fitting to its consumer profile in 2020 – e.g. have mobile payments available if your market has a smartphone, use USSD technology if your market does not (don’t disregard “old technology” if it’s still relevant, and can enhance an experience).

Explore and map the customer journey meticulously and incorporate supporting technology across platforms to achieve a seamless experience. If VR or AR will enhance the experience and support the purchase decision for a relevant product category, invest in it. If your market will be keen on drone deliveries in future, then explore these options in 2020 – the regulations will be in place before we know it.

Competition from small businesses


The strained economy has lead to an increase in competitors. Many consumers are searching for alternatives and therefore small businesses have started to gain support, especially in niche products and personalised goods areas. This trend has resulted in many salaried citizens and homemakers starting a small business to provide additional income based on a niche need that retailers are not satisfying. Many of these products are homemade, locally sourced and highly customised.

Sellers sell on social media such as Facebook, reaching a large audience at a relatively low cost. Due to the nature of personalisation and personal relationships these small businesses create, very few large retailers can compete as effectively in this market.

Facebook and sites like OLX have also created a platform for the growth of second-hand resales of used goods, with few retailers competing in this space, so many consumers opt to purchase second-hand products eroding the retail market even further. Retailers need to keep a close eye on this development in 2020.

#BizTrends2020: Deepen SA’s Online Retail Growth Trend

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Article by Kirsten Dewar

 

Now for the good news. There’s a huge opportunity for growth in online retail, but the path to profits is through dramatically improving customer experience.

Online retail is growing. And will continue its healthy growth.


Brick-and-mortar retail is struggling in South Africa, but e-commerce is growing faster than expected. In fact, online retail is doing so well it is outstripping the growth rate for real-world shopping by far.

The Online Retail in South Africa 2019 study, co-authored by Platinum Seed and Arthur Goldstuck of World Wide Worx, revealed that online retail in South Africa passed the R14-billion mark in 2018 as e-commerce started to go mainstream. The great news is that this 2018 figure represented growth of 25% over the figure for 2017, which came as a surprise to the research team, and confounded predictions that online retail growth would slow down.

This growth trend will deepen in 2020, in stark contrast to real-world growth retail sales which remain flat. Stats SA reports that the volume of retail trade sales “grew by 2,1% compared with 2017, down from annual growth of 3,1% in 2017 and up from 1,7% in 2016. In 2018, the annual growth rate got off to a good start of 4,7% in the first quarter, but it fell to just 1,8% in the second quarter and 1,5% in the third.”

What this means is that despite a disastrous economic climate, online retail is thriving and pushing to a key point – the psychological threshold of 2%.

“Global research shows that 2% is a tipping point for online retail, and once nations achieve this growth rate the trend is for e-commerce to go mainstream.”

Platinum Seed is confident that this will happen locally because of the huge investments that retailers are making in e-commerce infrastructure, and the amazing consumer response to retail promotions like Black Friday.

In November 2019, Takealot announced that it expected to ship one order every second during Black Friday, estimating that 10,000 boxes would leave the SA retail giant’s warehouse every hour. Takealot reports that the brand’s Black Friday gross merchandise value grew 125% from 2017 to 2018, with orders up 127%.

Lean into customer experience to drive growth


If there is only one thing you do in 2020 it should be to improve your brand’s customer experience.

Besides being a massive differentiator, research shows that investments in customer experience pay off with a bottom-line return.

A study by the Temkin Group shows that experience matters – in real financial terms. The study showed that a small increase in customer experience can realise an increase of some $823 million over three years in a business with revenues of $1 billion.

Why invest in customer experience? If you’re not convinced by the returns, consider this. Research reported by Deloitte shows “customers are likely to mention a positive customer experience to an average of nine people, while they are likely to tell 16 people about negative experiences. Conversely, customers who enjoy positive experiences are likely to spend 140% more than customers who report negative experiences.”

Finally, Deloitte reckons that delivering positive customer experiences can reduce the cost to serve customers by up to some 33%.

Despite the massive competitive incentives, according to PwC, most companies are not getting customer service right yet. In the retail sector, the gap between what customers expect in terms of experience and what they’re getting, is 20%.

Here’s how to narrow this gap, quickly.

“Lean into hyper-personalisation, which can offer a real competitive edge. Personalisation is everything.

Sixty-nine percent of consumers want an experience that is uniquely individualised and tailored to them. Despite this, only 40% of brands actually offer one today.

Complement this by engaging and empowering employees in an earnest attempt to improve your company’s culture, and you’ll realise the rewards in a return on your bottom line.

Don’t miss BizTrendsLive!2020, a showcase of the biggest trends shaping our region!