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The true value of the customer: Rakuten's Play.com marketing director on why understanding customer value could save the high street

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By Jennifer Faull, Deputy Editor

July 22, 2013 | 6 min read

Adam Stewart, marketing director at Rakuten's Play.com, explains that understanding the true value of the customers, both online and in-store, is critical to the survival of the high street.

How to revive our struggling town centres is certainly not a new discussion, and in the past retailers haven't been slow to point out just how dire the situation is. Between Mary Portas’ failed efforts and recent research suggesting that online shopping will account for a third of all retail commerce within the next 10 years, things continue to look bleak. However, Adam Stewart, marketing director at Rakuten’s Play.com, one of the largest online marketplaces, has an unusually optimistic outlook for our traditional high street stores. Speaking at The Drum Live, he says you'd be forgiven for thinking that the marketing director of a purely e-commerce company would want to “Cannibalise” the high streets, but that’s not the case. “Our view from the marketplace is that there is going to be a form of humanity, and consumers are still going to be interacting with the high street,” he said, explaining that consumers will always prefer to look and feel products and connect with retailers on a face-to-face basis. “What Rakuten’s Play.com is trying to do is be able to offer the services so that high street retailers can have the services without the massive costs and infrastructure to build a digital proposition within a marketplace. So our position is very much not about Cannibalisation, but more about working together with the high street and being able to offer a digital proposition that works in collaboration with a tangible, physical, high street environment.”For Stewart, brands like Burberry, M&S and Apple are getting it right when it comes to aligning their online and high street offerings.“The Burberry flagship store is doing a brilliant job and taking it to the next level and M&S is doing very well, with some of their store advisers now walking around with iPads. And then you’ve got Apple. Brilliant products and they are very open; you walk out of the store really happy and everything is working and it’s not just because of the products but because of the entire experience.”As well as the retail giants like Apple, small, boutique retailers, like the traditional sweet shop for example, are also managing to survive and thrive with their unique product offerings and strong base of loyal customers, explains Stewart. But they cannot ignore the importance of being online.“When you walk down those high streets, and go into the boutiques the person behind the counter has been sitting there for the past 25 years. I think they offer an element that provides something additional to just a commoditised experience,” he says. “But, even though there is going to be a place for those boutiques, they do need to look at digital as another channel or they’ll have challenges in the future.”So we know the high street retailers managing to get it right, but what about those needing to quickly address their place in our town centres? Stewart, who worked with RBS for five years in an online development role before joining Rakuten’s Play.com, says that while some of the high street banks and branch networks have obviously evolved, many of them haven’t.“Some of them are bloody awful,” says Stewart. “But I think they’ve got to be challenged around trying to segment their customer base and be able to facilitate conversations with those face-to-face as well as those who want to interact online.”Essentially, the basic principles for high street retailers and banks are the same – know your consumer and know how they want to interact.“A very good, corporate, customer, with a high lifetime, probably wants to go in to see a bank manager, and banks need to be able to facilitate that conversation and offer a good service,” Stewart explains. “But a customer who is churning on zero per cent credit cards, banks want them to interact digitally."As well as a solid consumer understanding, social media is playing a vital role for retailers, as peer-to-peer interactions and fan recommendations become all the more critical for brands, both on and offline. However, Stewart is quick to remind retailers that the key to success is activating that fan base rather than simply seeing fan ‘likes’ or ‘follows’ as a key performance indicator. Instead, brands should be asking themselves how many people are engaging in campaigns and social media posts, and off the back of that, how many are actually sharing.Stewart is happy to divulge that out of Rakuten’s Play.com’s half a million fans, over 425,000 of them are engaged with its Facebook campaigns and 179,000 of those fans are seeding the brand’s message out to the wider world.“As a marketing director I see those 179,000 people as an extended marketing team as they spread our name and brand promise out to their friends and family. We’ve seen an 80 per cent increase year-on-year in direct sales from Facebook, and took over three million pounds direct from Facebook.”Therefore, being able to understand the true value of your customer, wither the come to you online or in-store, is critical. “In lifetime value, customer who is a Facebook fan is worth 24 per cent more than a customer who is a non-Facebook fan, while a new customer that has been referred via another Facebook fan is worth 30 per cent more than a new customer from any other channel,” reveals Stewart. Whatever the future holds for our town centres, a digital offering alongside a bricks and mortar store will be essential. Through consideration of this along with a strong grasp of your consumer and understanding of how social media can drive sales, and high street stores stand every chance of success. Stewart ends his session at The Drum Live by saying, for retailers who are going to survive, whatever their platform, “a differentiated experience is absolutely key, so that a consumer is walking out pleased with that service and, importantly, that product across the whole product lifecycle.”Stewart was interviewed by Richard Draycott at The Drum Live. The Drum Live issue, published on 19 July, is available for purchase at The Drum store.
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