The Drum Network does retail: The long and winding road
Three million people working within the retail sector in the UK are indeed facing some bleak times ahead, a stagnant economy and an uncertain Brexit laced future. While as a society we have perhaps never had so much ability to engage with our favourite retail brands, recent research figures put out by the British Retail Consortium show that the UK retail sector is to shed 900,000 jobs in the next decade.
That same bleak report also suggested that of the 270,000 physical retail stores that currently exist on High Streets and in malls across the land, around 74,000 of those could be set to disappear by the year 2025. Good news perhaps for the flyposters out there, not so good for everyone else. Much of this anticipated retail shrinkage is being laid at the door of the government’s recent hike in the minimum wage – which itself is estimated will add an additional £3bn to the retail sector’s annual wage bill – and also the apprenticeship levy.
But these are by no means the only challenges facing the UK retail sector. Perhaps the biggest challenge that retailers have been facing in recent years has been that of becoming fully integrated multi-channel retailers, as comfortable and adept at transacting quickly and efficiently with their customers in one of their bricks and mortar stores as they are via their e-commerce website or their mobile app. Indeed, while the government is set to start squeezing retail and brand owners at one end, their consumers have been squeezing them at the other for the best part of a decade as they have pushed retailers relentlessly to allow them to shop when they want and how they want.
The latest marketing news and insights straight to your inbox.
Get the best of The Drum by choosing from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creativity.Sign up
The long and winding road
A panel of experts was brought together around the boardroom table of partnerships marketing agency Mediator by The Drum Network to discuss some of the current trends and challenges facing retailers. Joining the panel were Katy Howell of Immediate Future, Carla Heath of Whippet, Matthias Kandel of Hugo & Cat, Steve Swann of Mando, Rick Lamb of Latitude, Alex Venner of BWP Group, Jon Quinton of Builtvisible, David Jolly of Else London and Craig Brown of NMPi.
“Competition in retail is fiercer than it’s ever been before and there has been a shift in power from 20 years’ ago,” says Lamb from digital marketing agency Latitude. “Back then, as a retailer, you would build your shop, put something in your window, open the doors and people would come in to buy. It doesn’t happen like that anymore. The power is now very much in the hands of the consumer. They have huge choice at their fingertips and they are being bombarded by retail information all the time.”
Indeed, the customer journey has changed significantly during the last decade. Just try and think of the last time you purchased anything from a retailer of any value without grabbing your phone to check reviews and prices elsewhere. You only have to do a quick Google search to read a review of the new golf irons you want to buy and sure enough, every time you are online the rest of that week, those very clubs will appear to entice you to make your purchase.
If it was easy to spend money ten years ago, it is almost impossible not to spend today as new technologies evolve to hit us when we are perhaps most vulnerable and likely to make a purchase decision.
Matthias Kandel of international branding consultancy Hugo & Cat said: “There are two interesting things connected with the customer journey. Obviously, the customer journey is longer than it was previously, which presents a massive opportunity for retailers in terms of them having more opportunity to engage customers much earlier with many different types of communication.Secondly, with digital and the multitude of devices consumers access today, it is a lot easier to create new touchpoints to re-engage consumers who have perhaps become lost along the way. The consumer journey is not linear anymore.”
David Jolly of Else London expands on these touchpoints, stating that they must "attract, engage and evolve the customer’s retail experience. You need to have certain touchpoints which reflect the attraction and engagement between brand and consumer. This could be a text as soon as the customer enters an event or a store.”
With that enhanced customer journey obviously comes enhanced customer expectations. Potential customers are very easily lost if a journey breaks down half way through due to a technological glitch as Immediate Future’s Katy Howell highlights: “We see a huge amount of frustration on social media where customers click on ads and links and don’t get through to the right product pages. They just eject that straight out. You need to line everything up and your UX has to fit together. Speaking from a social media point of view, that user experience has to line up not only from a usability point of view, but also in terms of tone of voice and behavioural point of view. A lot of the brands we work with struggle to connect all the dots along the customer journey.”
As well as new customer journeys, new technology provides a whole new bank of customer data that allows brands to limitlessly tap into customer behaviour. Big brands have the ability to completely tailor make their campaigns to their target audience on such a personalised level, leading to a whole new set of problems arises for retailers. Does the abundance of data lead to negative segmentation and stalker like tendencies?
“I think that data is a big headache at the moment, for a lot of online and offline brands, because there’s so much data,” says Howell. “There are so many data assets to join up; social, e-commerce and search data, it’s difficult for marketers at the top of the tree to spot the trends.”
Craig Brown, of NMPi says: “Retailers need to be careful of being stalkerish, we ultimately need to be telling stories during the customer journey rather than selling constantly.”
Despite the danger of being too stalkerish, retailers have to provide a personalised service, online and offline. Physical stores must align their in-store customer experience to their online customer experience. Waitrose, for example, provides excellent product match, diet and recipe recommendations in their online shop, as well as in store aligning products to make the perfect Italian date night dinner. And they give you a free coffee. What more could you need from any kind of shop?
Brown commented: “Customer service is more important than ever. But we have to stop talking about online versus store, because it’s not a competition internally between the store and the digital teams.”
BWP’s Venner states that retail should be seen as a genuine career filled with expertise. “There is a skillset in retail that has been neglected for the past 15 to 20 years, the minimum wage has taken over and retail is seen as an in-between job for most people, most likely to be replaced by iBeacons in the next few years. The stores with the real people and the real interaction between brand and customer are thriving and the bad stores are dying.”
Clarity and continuity of brand language is essential to maintain customer loyalty in an age where you can walk into a store and buy the product in front of you on our phone on another brand’s app in seconds. Venner continues, “A retailer can have a great social channel, however, they can have rubbish stores. Social channels should be a driver for making bricks and mortar stores better. The better retailers are listening to what they’re hearing through their digital channels and reacting to it, in an ideal world.”
Steve Swann from Mando explains that it’s all about stickiness and slipperiness. “To me, everyone says they are digital, as if it is separate to the physical. However to me, it’s the same. At Mando we talk about slippiness not stickyness. Years ago, it was about getting people online and sticking around the site, having a good look around. Now it’s about slippiness. It’s about taking something complex and making it simple, i.e. getting someone on a website, getting them to interact and then off the site. Simple interaction without confusion.”
Retailers need to go back to telling stories to get customers to stick to their brand again. As loyalty is fleeting, the brand story and ethos must be stronger than ever and the pressure of sales targets clouds the need for clear brand storytelling. Hugo & Cat’s Kandel stated: “The retail industry needs to get [storytelling] now. It’s too quarterly focused and sales orientated. The retail industry needs to think ahead, tell the story of the brand and this will sell more itself. The retailers now are too trade driven because very often they are driven by commercial teams, rather than marketers.”
Retailers have begun to put a lot of editorial content onto their commercial pages, further engaging audience loyalty with this ‘conversational commerce’. But where does social fit into the mix? Howell comments that social fits into the customer journey at various touchpoints, using the natural language people use to converse with each other. “This is the conversation at the beginning of the journey, this is the conversation in the middle, this is where there is conversation about the product and this is the conversation when I am just about to buy it. Social can run through all these conversations at different pressure points, and post purchase and can target people to become advocates.”
Social provides two sides to the customer journey. On Twitter you can shout out about the new Topshop dress you just bought and how Ivy Park is taking fitness fashion to a new level, or you can complain about that awful M&S tuna sandwich that had one slice of cucumber in it. Howell continues: “The current retail approach is foolish. It’s just reactive and brands must think about the long term, by hiring people with experience and truly investing in social media.” At the end of the day, the customer can always tap into their phone and shop elsewhere.
The challenges retailers are facing today are complex, so how can the marketing industry help tackle the competition, the multi-channel silos and the tone of brand voice to engage and retain customer loyalty?
Howell says: “It’s all about the journey, and this journey will start at the end, the end being the senior director. Then you work back in order to integrate different departments, and eventually you train the customer services team from a social point of view.”
Matthias of Hugo & Cat states that the key is “multichannel transformation, transformation being the key word. It’s about bringing different stakeholders from different functions and business units together to develop the bigger vision. The key is to get people together, to get people aligned on their vision and let agencies be very close to organisations, a little bit like consultancies, where you work on the inside to make the change.”
The key to saving the retail industry is transparency. Agencies need to become open and honest with brands on what they should be doing and how they should be communicating, especially in this rocky socio-economic climate. Lamb finally states: “From where we were, in the Mad Men days, all the way through till now, the client-agency relationship has become a lot more dynamic. Agencies should be providing business solutions, as that is the business we are in.”
This was originally published in 'The Drum Network does retail' supplement on 17 August 2016.