Reviewing online functionality for a selection of key European online only retailers, I am struck by a shift. With the basics of purchasing and navigation nailed down, the devil is now in the detail of implementing online functionality for apparel retailers – particularly those that are online only. Now we are seeing both subtle and overt efforts to improve merchandising and remote clienteling online proactive live chat, 2D size guides, personal shopping style guides and ‘compete the outfit’ suggestions on product pages.
To get to the next level of best practice and differentiation online apparel retailers need to keep refining their website functionality in order to succeed in a competitive and increasingly crowded category. Empowered customers are using multiple devices to shop online helping to drive forecasted online retail sales growth of 12% in Europe (2013 to 2018). To secure their chunk of this growth, online apparel retailers need to constantly evaluate, test and implement new and improved functionality to support merchandising and drive consumers through the path to purchase.
I get just as excited as the next analyst about the latest and greatest startup. But you know what? There’s something extra cool about a brand that’s been around since 1864, and yet runs neck-and-neck with Amazon in our UK customer experience rankings.
As we near the event, Andrew graciously answered some of our most pressing questions about the why and how of John Lewis’ famous service experience — which is all the more impressive given its brand promise: “Never Knowingly Undersold.” (Translation: Great customer experience doesn’t have to mean high prices.)
I hope you enjoy his responses, and I look forward to seeing some of you in London!
Q: When did John Lewis first begin focusing on customer experience? Why?
A: John Lewis has had a long-term focus on what we would previously have termed “customer service,” dating back to our founding principles from 1864. More recently, the advent of omnichannel retailing with all of its inherent demands has caused us to revisit these principles and redouble our efforts to provide a truly world-class customer experience.
This morning when I woke up, one of the first things I did was pick up my iPhone. It’s increasingly part of my morning ritual – whether its checking the weather app for the day’s forecast or using the Starbucks app to pay for my morning coffee on the way to work. And I am not the only one. Forrester forecasts that European online retail sales will increasingly come from sales completed on mobile devices like smartphones and tablets.
The prospect of remote collection lockers and click & collect points replacing London Underground ticket offices sparked a round of strikes last week, creating havoc for commuters. The second round of planned strikes was only narrowly averted this week.
Transport for London’s (TFL) proposal to close 240 underground ticket offices and replace them with automatic ticket machines will result in a proportion of job losses for station staff but present an opportunity for TFL and UK retailers alike, by:
Responding to the popularity of click and collect in the UK. Forrester’s Consumer Technographics® Retail Survey data shows that UK shoppers are responding to retailers’ omnichannel fulfillment capabilities, readily adopting click & collect services. UK grocery stores Asda, Waitrose and Tesco are not waiting for the closure of ticket offices. They are already setting up trials for click & collect services at selected stations across the London Underground network. The click and collect service will allow shoppers to order their food online before a cut-off point during the day, for collection at their local station on their way home in the evening.
2013 is going to be a fascinating year for retail in Europe.
When I look at what’s to come this year, I can paint a picture of what Forrester predicts by looking at a tale of two brands. Both are iconic, heritage British brands that have responded to their increasingly digitally enabled consumers in two very different ways. Naturally, this has resulted in two very different levels of success.
...but I’ve spoken to a number of eBusiness executives in luxury retail companies over the last 12 months or so, and by and large they share a similar frustration. For the most part, their senior management remain resolutely defiant in the face of the opportunity that digital brings.
Which is arrogantly short-sighted, when you consider that luxury shoppers are:
Young. Shoppers who buy luxury products online in the US are almost ten years younger on average than regular online shoppers. Globally, online luxury shoppers are more likely to be tech-savvy thirty-somethings rather than brandy-swilling boardroom bumblers.
Here at Forrester, we’ve been evangelizing the concept of agile commerce for a while now, and we are working on a stream of research building on the concept and digging into exactly how leading organizations are transforming themselves to embrace the era of agile commerce. One of the questions I personally get asked is what exactly does an agile business look like? How do you recognize one?
In speaking to a number of leading practitioners in this space, I have found that there are four things that agile businesses have in common. They:
Architect the experience. Agile organizations don’t allow touchpoints to emerge randomly or operate independently from one another. They design compelling cross-touchpoint experiences that are meaningful to their customers and add value to the brand, like “Click and Collect” for a retailer or mobile-driven online check-in for an airline.
Are customer-obsessed. Agile commerce means putting the customer at the heart of every decision, bringing quantitative and qualitative customer insight to every decision, and even reorganizing around the customer life cycle to focus teams on what the customer needs, not what the channel thinks.
Enable with technology. Agility demands some key underpinning enterprise technology components, such as a commerce platform that can serve the Web, mobile, and stores. But it also requires that touchpoints are unshackled from back-end systems by a common set of commerce APIs.
Consumers are now in control, especially when it comes time to buy. Ubiquitous connectivity allows consumers to easily check prices and buy on the go, which should worry (not terrify) traditional retailers in competitive categories. This “showrooming effect,” which has been encouraged by Amazon, would enable web retailers to snatch some sales from the hands of their brick-and-mortar competition. A majority of sales are still happening offline, so the fear of showrooming — that most people are finding screaming deals online — is largely exaggerated. In fact, the majority of transactions still happen in stores, even when shoppers research online (yes, even when they’ve got their mobile devices in hand in a store). Forrester’s US Cross-Channel Retail Forecast, 2011 To 2016, which launches today makes it clear just how influential and critical the web channel will be to eBusiness professionals in retail. By 2016 Forrester predicts that more than half of the dollars spent in US retail will be influenced by the Web. Already in 2011, $1.3 billion dollars in the US fall into this category.
It is imperative for eBusiness professionals in retail to adopt cross-channel best practices, including:
Pricing more consistently to reduce vulnerability to showrooming. The ability of shoppers to comparison-price shop and demand price matches requires retailers (and manufacturers) to reduce price discrepancies across all channels. With comparable pricing in place, this forecast suggests that many consumers may in fact nonetheless choose to purchase products in stores because of the immediate availability, service levels, or simply because products online do not have significant benefit over those in stores.