Speaking as a relatively non-technical person, I have certain expectations of technology. I expect that my email client will work smoothly, my internet browser will let me do what I want, and that my media player will let me play all the music I want, when I want. I don’t expect to have to modify my behaviour to suit the applications I use – I expect them to enable me to do the things I need to do. Once I find myself spending more time on tending to the application itself than on genuine productivity, we know something’s gone awry.
This is the point at which two things happen. Firstly, technology becomes a barrier to progress. Secondly, my experience becomes defined by the tools I use, rather than those tools serving to enable me to do what I need to do.
We see this system at work at both micro and macro levels. In microcosm, it’s when I link an Excel document to a Powerpoint deck, only to discover that it renders both files fundamentally unusable, or when I find that my ‘smartphone’ actually prevents me from making or receiving calls. Macro examples of this reversal of priorities can be seen when a business is governed by its technology choices, rather than the natural order of things being followed. Whilst the former are time-consuming irritants, the latter can be a multi-million pound black hole of missed opportunities and drained resource.
Let’s look, for example, at a fictional ecommerce marketing manager. The platform they’re using is perhaps a few years old, it’s a hosted service and they’re locked into their vendor’s development roadmap. They know that their more agile, flexible competitors are returning around 8-10% of their business from their affiliate sale programs, but due to the limitations of the platform, they’re unable to provide the necessary product feeds to support such a program. Requests to the vendor for the required functionality return little in the way of committed timescales; these guys are probably running at 100% capacity just trying to support the application across numerous other instances. So the upshot is that the business in question misses an opportunity which could boost sales by as much as 10% in the first year with little or no investment.
So how do these things happen? How and when does technology cease to be a tool, and becomes a mitigating factor which defines a business’ future, for better or worse? Quite simply, it’s when a business loses sight and understanding of its over-arching strategic objectives, and ceases to properly articulate them in its requirements of technology.
Let’s break that statement down into the component parts. Firstly, losing sight of strategic objectives. By this I mean the strategic goals which need to be in place to govern every decision taken by a business at every level . If every commercial deal is done with the aim of supporting this strategy, so every technology implementation needs to do so as well. Effective communication of whatever this strategy is should ensure every business unit, including IT, is in line: if we share and understand a common goal, we can jointly come to a solution which works towards that goal.
Secondly, and perhaps more importantly: properly articulating those objectives in requirements. There are two sides to this; from the perspective of the business, it’s about ensuring that the requirements of a proposed technology solution are defined in detail, in abstraction from the technology itself. By this I mean not trying to second-guess the actual solution, but instead defining the needs of users and the business in such a way that the technology can be designed to attend to those needs. Not the other way around.
From the perspective of the IT and technology delivery functions, it’s about understanding not only the over-arching strategy both now and into the future, but how the requirements are geared to supporting it. Understanding the context of what you’re about to build will give you clarity on where the value lies on what you’re doing, and a vision of future requirements, however fuzzy, will help set your expectations of the level of flexibility which will be required.
The most crucial thing to remember throughout this process, on both sides of the fence, is that technology is a tool, something which should enable and drive business operations. Once this tool ceases to do those things in a cost-effective, productive manner, it’s time to get a new one.
We’re all doomed. According to some of the more alarmist news publications,
we in the UK are plunging headlong into a recession which will have families out
on the streets and so on and so forth. No one will be able to afford to pay
their astronomical fuel bills and spiraling mortgage costs, let alone having
cash they could call ‘disposable’. A nation is headed to the Poor House.
Granted, the general consensus seems to be that we’re in for at least two
years of relative hardship – relative, that is, to a decade of constant growth,
cheap credit and cheaper consumer goods. An entire generation has grown up
viewing saving less as a necessity, more as something you do if you can’t quite
squeeze that 42” plasma TV onto the Visa card. The expectation that the profit
on one’s house would accommodate one’s retirement plans was not uncommon amongst
a certain demographic.
Naturally, the knee-jerk reaction to this news is to expect an abrupt halt in
consumer spending, sending the retail industry into chaos and turmoil. It’s
clear to see that with credit becoming more expensive (and harder to obtain),
and the heaviest spending demographics being forced to live within their means,
less will be spent overall. More interestingly, from my perspective, will be the
trends developing within what continues to be spent. Looking for a silver
lining, if you will.
Let’s look first at some early signs from the high street. A few months ago,
Retail Week announced both Faith’s
slide into administration, and Thorntons’
20% year-on-year increase. Zavvi are also bucking the trend, showing a 10%
like for like increase, with strong performance within the DVD and games
categories. French Connection is showing signs of strain, posting an H1
operating loss £1m greater than in 2007, whereas Debenhams is outperforming the
market with a year on year drop of only 0.9%.
Across the board, the picture’s clear:
- ‘At home’ is being preferred to ‘out’, both in terms of eating,
entertaining and watching films.
- Whilst shoppers are increasingly price-conscious, they are still spending.
They are more prepared to shop around on price and deals, and will go that
little bit further than in previous years. Convenience is becoming a luxury in
- Trading down, especially in terms of the FMCG market, is a growing trend,
but importantly only within certain ranges. For example, a Tesco Finest shopper
might move down to core range, potentially to value, but relatively few of them
will actually move to Aldi or Lidl. Those who typically buy branded goods will
begin to move to own-brand.
- The home is becoming increasingly important. Partly as a place to entertain
(cheaper than going out), partly out of a need to maintain a basic sense of
security in uncertain times. A lick of paint here and some new plants there will
keep up appearances.
- Fewer holidays will be taken. There are suggestions from some parts of the
industry that we’ll be seeing a move back to the old trend for one ‘summer
holiday’ a year, rather than numerous short breaks.
- With Christmas around the corner, more creative ways are being sought to
keep the standard up to what we’ve come to expect; saving, buying in advance and
so on. This year, at least, it’s unlikely customers will skimp during this
period unless they literally have no option.
- Treats and luxuries are still on the shopping list, but they’re of lower
value than in previous years (ie chocolates, rather than new shoes).
So what do these emerging trends mean for a retailer? With the UK’s once
profligate consumers battening down the hatches, how does the retail industry
weather the storm? The truth is, there’s no silver bullet, and if I had it I wouldn’t be writing
it on an open forum like this. Some businesses will be inherently exposed to the
worst the recession has to throw at them. Others, particularly those in the
discount sector, have a significant opportunity. For the majority though,
observing a few simple points will see significant rewards:
- Manage costs and reduce wastage. It sounds obvious, but when applied
to investing to move a business forwards, it’s a little trickier. Understanding
your customer in detail will help inform genuinely ROI-focused development, so
it’s worth investing a bit in order to get accurate information in a clear and
useful form. This exercise in itself should fuel user-centred
design across the business as a whole.
- Make the most of every customer. Another obvious-sounding point, but
one which few online retailers can answer with confidence. With hundreds of
thousands of users hitting your service every day, can you be sure that you’re
selling to each one in the best way possible? See
an earlier post for more on how to achieve this.
- Stick to your knitting. Now is not the time to be radically
overhauling the brand – as consumer confidence drops, it’s more likely to
alienate existing customers than attract new ones. Focus instead on the aspects
of the brand that appeal to the concerns consumers have.
- Avoid knee-jerk reactions. Marketing and development budgets are
easy to cut in the short term, but the long-term impact of these cuts is
expensive to rectify. This in itself represents a false economy. In adverse
economic times, those businesses who slash the very budgets their future success
depends on generally end up losing market share, often for good.
The rules of engagement are no different in hard times than they are in times
of growth. The only difference is that the price of poor business management
will be much, much higher in the coming years than they have been since the
As someone who relies on the health of the online retail market to pay his rent every month, I’m probably not the first person you’d expect to welcome a forecasted slowdown in the annual growth in online sales. However, Verdict have recently announced that this growth is currently in the neighbourhood of 30% which, whilst still robust, is a marked deceleration from the 100%+ rates we were applauding a few years back.
So what’s behind this – is it the economic downturn we’re hearing so much about? And why am I so happy about it?
First things first. One of the anecdotal effects of the economic situation is that it tends on the whole to be driving consumers online. Historically, price has languished around number seven or eight in the list of reasons why people shop on as opposed to offline (after things like convenience, range and so on), but the news content of recent months will be slowly pushing this factor upwards in the list. Particularly with large, considered purchases, comparing prices online has never been easier or more of an imperative, so ecommerce is bound to mop up some of the custom leaving the high street. So the plateauing of online sales growth doesn’t seem to be entirely crunch-related.
The truth of the matter appears to be more that ecommerce is now an accepted part of the mass market’s retail experience, and the primary impact of this is that online retailers can no longer rely on developmental factors in the market at large to drive those KPIs. With a market that’s doubling year on year, it’s comparatively easy to deliver good-looking numbers to the board every April, but when this starts to slow, there’s only one place business growth can come from: good business practice.
This goes back to basic retail principles. Keep your shop clean, stock the right products at the right prices, put the right products in the window and be nice to your customers, and things will tick over nicely. Force them to stumble over boxes left on the shop floor, hide products out of sight and decline to communicate with anyone, and only the most determined shopper will actually bother. Early adopters of ecommerce mainly did so because it was something new; the mass market is much less forgiving of a sub-standard experience.
So for online retail, now more than ever is the time to get the basics right. Every stage of the user journey can stand to be optimized, from the marketing strategy which delivers the customer, to the merchandising and search tools they use to find their product, to the checkout process they use to pay for it, to the post-sale communication and the delivery of the order, careful attention paid to each link in the chain can squeeze another fraction of a percentage point onto the conversion rate. We don’t need to freak the user out with new toys to play with and new challenges to the experience – we just need to make better what they already understand.
It’s also time to look at more global factors. The mass market expects a multichannel brand to behave like an integrated organization. It expects store staff to deliver the same level of service as the website, and expects the ranging, pricing and promotions to be broadly aligned across channels. For example, if a customer takes a marketing email into a store, will they be met with blank looks, or will they be directed to a merchandised display featuring the same message as the email?
The former requires investment, it’s true, but development budget spent in these areas, whilst the results might not immediately be visible, will return on that investment. Any online retailer will know what an added 1% conversion would add to their bottom line – this and more is within reach with a program of analysis and optimization.
The latter is cultural and organisational. Encouraging a traditionally high street business to think as a multichannel organization is no small feat. Once implemented at a head office level, with global objectives clarified and business units moving out of their silos, the cultural change can be gently filtered out into the estate.
So with the market growth slowing (although by no means stopping), poor ecommerce will have few places to hide. The top UK retailers all have exacting and rigorously upheld retail standards in their stores – it’s time to apply those high standards and sound business practices to the organisation as a whole.
And this is the Reality of Retail :)
A recent blog entry by my colleague Richard got me a bit worked up recently, and as usual I'm keen to add my two cents. His experience with Empire Direct is a perfect example of a multiple channel business not working as a genuinely integrated multichannel retailer, something that’s unfortunately all too common. Whilst the business presumably considers itself ‘multichannel’, the service levels, experience and the proposition all differ from one touchpoint to the other.
I had a similar experience with UPS recently, which was pretty much the opposite of Richard’s ED tale. Shipping something from one continent to another is a reasonably complex task, and managing this through a self-service interface is something that the UPS website manifestly fails to achieve. At every step in the process, it’s unhelpful, misleading, full of unexplained jargon and every failed attempt I made resulted in a key part of the process being missed out. Quite how you can arrange a shipment from one place to another without being prompted to arrange a pickup separately is beyond me.
The natural result of this was a series of calls to UPS customer service, both in the UK and the US. Despite being a global company dealing in international shipping, their UK and US businesses do not communicate directly, so as a customer you have to deal directly with both sides, which will result in several hours of international calls at the full rate. Thank heavens for Skype.
However, once I’d got to speak with someone, their service was pretty much faultless. Helpful, informed and patient (useful with an irate and semi-incompetent customer like me), the result of every call was a step forwards in the process. The US team were particularly good, masking their sighs of despair quite well when faced with yet another customer had managed to arrange a delivery but no pickup.
Once the package was under way, it arrived far quicker than expected, and their tracking facility gave me realtime information on where the package was and what it was doing (or I suppose, what was being done to it). In the end though, what should have taken three days ended up taking over five weeks, with numerous false starts and delays whilst UPS worked out what had gone wrong.
So all in all, a very patchy performance, which could be solved by breaking down some of the territorial boundaries in the organization, and giving serious thought to the usability of UPS.com. Serious disconnects were evident internally, requiring the customer to jump through unnecessary hoops. Had I not been bloody-minded (and professionally interested) enough to see it through, I would have given up early in the process.
So why does this happen so much? In my experience, it’s a symptom or the organic nature of a business’ expansion into new channels. In the early days, a website was non-functional, and would probably fall under the remit of the marketing department (being solely a communications channel). With development and added functionality would come more involvement from IT at some point, and possibly a new business unit being spun off. This BU would comprise its own set of disciplines, from inventory to merchandising, and was most likely a completely discrete unit within the wider business.
This is where disconnects arise, not only operationally, but in terms of proposition, experience and brand. As Richard and I found out, a patchy experience leads to a vote of no confidence in the business. Whilst we both found things that worked really well, the overall experience left us cold (and motivated to tell the world about it…).
This is a tricky issue to solve, and one for which there’s no silver bullet. Change is principally required in a number areas:
Operational teams need to work across all channels. Marketing is usually ahead of the game here, with various communication channels being handled through the same team, but merchandising, commercial, operations and even occasionally finance are frequently siloed by channel. Customer services often ends up carrying the can here, with contact coming in from multiple sources and one function having to assimilate sometimes conflicting information from numerous business units.
Share one common version of the truth. Whether a customer is buying an item from a store or online, there is an expectation that it’s fundamentally the same thing. In instances where the cost price differs, or even the selling price or the promotional mechanic, trouble looms. Can they return an item bought online to a store, for example? Conventional wisdom suggests they should; practical experience shows this is rare.
Also – on the customer service note above, every customer-facing staff member should have access to the same information. Can I change my address or contact preferences at the till? Can I reserve an item by SMS and pick it up instore? Can I edit this order at a later date on the website? The experience should be consistent throughout each touchpoint.
A change that goes hand in hand with the operational side of things, but one which merits a separate mention. Do store staff see the website as competition or complement? Each channel needs to have an awareness of how the other operates, and an ability to communicate this directly to customers. Far too often, tell a member of store staff ‘I saw this on your website…’ and you’ll receive a blank look if you’re lucky. This plays into effective internal communications as well as a sound multichannel culture throughout.
In the example given above, I experienced two very distinct versions of UPS. One was friendly, helpful, informed and efficient; the other was obtuse, challenging and counter-intuitive. It could have been two entirely different businesses. Whoever has stewardship of the brand must ensure that it’s correctly represented at every touchpoint, not just in terms of look and feel, but tone of voice, service level, function and so on. Although a huge challenge, this can be achieved by addressing the points above over time, and building the entire business, from the shop floor to the Directorate, on the premise of true, integrated multichannel retail.
Naturally, if UPS would like to investigate how we could help them get their online business delivering the same excellent levels of service as their call centre, I'm always around at email@example.com.
Reading through the blogs on this site, you'll notice a good few mentions of UCD - User Centred Design - as a design practice that we're pretty hot on. Although my colleagues on the Interactive Media teams are much more qualified than I am to go into detail about it, core to the technique is ensuring that the users and their needs are clearly identified and understood, and that the design process is closely informed by this understanding throughout. In this way, an interface can be created which is 100% designed for the user, and theoretically does everything they need without unnecessary complication. My experience of working alongside this process is that it delivers spectacular results.
A recent post by Paul Dawson (which describes UCD from a more informed point of view) got me thinking about the relevance of these techniques beyond interface and application design. Specifically, one of the challenges we've noticed getting more and more significant over the past years is the increasing control the end user (or customer) has over a transaction, and that this trend shows no sign of slowing. Take, for example, the notion of buying an album - somewhat old-fashioned I know, but bear with me.
Whilst reading a review online, or perhaps browsing through my Last.FM recommendations, I might decide to actually buy some music (again, kids, bear with me. We Gen X-ers still do stuff like that). At this point, where a decision to purchase takes place, I'm presented with links to buy said album on iTunes, at Amazon, possibly even at the excellent 7Digital. It's the work of a moment or two to compare prices and formats. Should I decide not to buy it right now, but perhaps find myself passing a retail store later that evening, I can compare instore prices on my mobile with a number of online merchants, and make my decision that way. In short, from whichever point at which I decide to buy something, I'm immediately presented with multiple opportunities to buy, and (crucially) can easily compare all the options in numerous ways, through numerous channels.
So, whereas a few years ago, I'd have a default route to purchase (drop into HMV on the way home, perhaps buy from Amazon), and thus would be constrained in my choices. I'd also have to do a fair bit of legwork to make a reasonable comparison, and for the sake of a couple of quid I probably wouldn't bother. Within 5-10 years, the relationship underpinning this transaction has completely changed, from me being forced to take one of a few options, to numerous options being immediately available to me, with numerous ways of easily working out which is the best. I can do whatever I want; get the best deal for me; take the simplest route.
In today's transaction, the customer holds all the cards.
What this relationship means to a retailer presenting a customer with an offering is simple, but massively challenging. What it means is that unless all my needs as a customer are met, I will not purchase from you. It's no longer enough to set up your (online or offline) market stall and hope people hear you shouting. If you build it, their attendance is no longer guaranteed.
Google provides a perfect example of this. From the very start, every part of their business has been solely focused on attending to the customers' needs, safe in the knowledge that a sound execution along these lines would attract enough eyeballs to make advertisers jump through considerable hoops to get involved. Take search, for example: Google stringently maintain the core search results as ad-free, and frequently change their algorithm to try to outwit SEO efforts which try to second-guess it. Further to this, in increasing the number of added whistles and bells that typically appear at the top of the page, they're actually reducing the amount of results that appear on the coveted page 1. Whilst this is great for the user, providing greater relevance and more search tools, it's horrible for a business trying to get onto that page, in a number of ways. Remember all the other search engines? Arguably too focused on pandering to advertisers' needs, rather than seeing the opportunity in maintaining that laser-sharp customer focus.
When the customer holds this much power, a business model must be built on understanding and addressing their needs directly, and being able to change as they change, go where they do, and do what they do. Existing business models will need a constant process of validation, to refine and re-align them with the changing retail environment. For most, particularly the larger operations, this is a brave move, but one which will pay dividends both in the short term and over time. The results of our tried and tested UCD processes are clearly visible in the work we've done for our clients; to see what this approach can do for your business, drop me a line at firstname.lastname@example.org.
”… and suddenly, as if by magic, the shopkeeper appeared!”
Talking to an ex-colleague recently, the subject of behavioural analysis came up, provoked by an intriguing little habit Facebook’s got into recently, where it’s been advertising merchandise to me from some of the bands in my music collection. The crux of the issue had two parts. Firstly, and quite simply, what does one do with all that data? Obtaining it and storing it is enough of a challenge, but how do you go about making sense of it and using it to drive a business? Secondly, isn’t this all a bit of a black art? Don’t you need highly-skilled practitioners to make it all work?
He could clearly see the benefits from a business point of view (increased conversion, reduced cost per acquisition, improved customer experience etc), but where the difficulty lies for him is in the operational impact this would have on his (small) team. In my experience, it’s not an uncommon concern – many medium-sized retailers do not have the latitude to hire in new teams to support a data-heavy application, and so view the operational side as a massive challenge. However, perhaps the concept of behavioural analysis isn’t quite as new-fangled as the technology would have you believe.
In looking at how behavioural analysis works in principal, I’m reminded of my experience of running an Oddbins store in a medium-sized Cheshire village, quite some years ago. One of the unwritten rules of being a store manager or assistant manager at the time was that you would be expected to be able to remember at least 100 customers’ names and buying habits, and most of us could probably do more than that. So, when a customer wandered into the store, you’d recognize them, greet them, remember what their buying patterns were, and adjust your approach accordingly – even to the point where you knew who liked to be left alone and who usually wanted a chat. (I’d also like to take this opportunity to apologise to one Mrs. Talbot, who repeatedly asked me to stop selling her husband so much Burgundy, and whose entreats I steadfastly ignored. Sorry Mrs Talbot.)
This basic sales technique (less a ‘technique’, more common retail sense) could also be extended to customers you didn’t know. If someone’s scrutinizing the top shelves of the Bordeaux section, having parked the Bentley outside, you’re not going to start waxing lyrical about the new £5 Aussie Shiraz. If someone in formal dress rushed through the door in a panic, you’d be thinking ‘emergency gift’, not ‘wants to be talked through the range in excruciating detail’. This is behavioural analysis at its most basic, and like it or not, whenever you walk into a store, a good sales assistant will be going through this process.
Extrapolate this for a moment to the majority of online retailers. Whilst you’re browsing their site, they don’t know what you look like. They don’t know what you’re looking for. They don’t know what mood you’re in, and they can’t make any inferences about any of those things. They will sell to you in exactly the same way as they’ll sell to every other one of the thousands of other people browsing the site at that moment. To me, this sounds like everybody loses: the customer has a sub-optimal experience, and the retailer’s normally well-oiled sales machine is bound and gagged.
So what if certain bits of information were available to the retailer at the point at which you enter the site? Perhaps if that site knew that, as you’d clicked ‘Fine Wine’ first in each of your past four visits, now might be the time to advertise the arrival of a new and particularly good value parcel on the homepage? Or have you come from Google, where you typed in ‘wine gift’? Should that site be advertising gift sets from the off? If you’ve been researching that fridge for several weeks, is now the time when a small incentive might accelerate that purchase decision?
Granted – a blunt implementation of this can be annoying, as with the Facebook example. I’m the wrong side of 30, and stopped wearing band t-shirts about fifteen years ago – this is a good example of poor, one-dimensional targeting.
So, it’s fair to say that the fundamental principles of behavioural analysis are ones that will be instinctive to any seasoned retailer, and that, for most businesses, the data necessary to drive such a strategy exists. The missing links are simple: a sensible way to expose that data to a relevant application, and an interface to that application that makes sense to a business user whose core skill is selling, not data management.
The beauty of it is in the marriage of old-school retail sales skill and the sensible application of business intelligence technology by people who understand retail. We’re currently performing this service for a number of our retail clients – if you’re keen to see how behavioural analysis can transform your business, drop me a line at email@example.com.
It's heartening, in this day and age, to see numerous top-flight retailers making significant investment, both in terms of cash and resource, in their online business. Recalling conversations which took place in the early days of this century, when a website was often seen as little more than an indulgence on the part of the marketing department, we've come a long way. This is universally seen as a Good Thing, and last year's trading numbers showed the positive impact the online 'channel' is having on the high street's bottom line; without the continued explosive growth in online business, the overall picture today would be of utter disaster.
So today's high street is a distinctly 'multichannel' one, with room temperature operations comprising of what general parlance calls the key 'channels': instore, online, call centre and perhaps, in some cases, mail order and mobile. Each business treats these with varying degrees of integration and deftness, on which more at some other time. Something that's seeming increasingly odd, though, is the way the myriad ways of interacting with a brand online are lumped into one 'channel'. Instore is somewhat easier to encapsulate like this; the interaction is fairly simple and varies little from store to store, but the mercurial nature of the online consumer is somewhat harder to pin down in this way.
Let's take a sample sales cycle as a case in point, say for example I'm getting fed up with my crappy old fridge and need a nice shiny new one with all sorts of whistles and bells and so on. A lifestyle fridge, if you will.
- I'll probably kick off by just typing in the brand I'm after into Google. A few retailers will pop up, along with some comparison sites and the brand's home site as well. I'm initially interested in the price range, so I'll go with the most familiar retailer to start with.
- I'll browse the retailer's site, compare a few models and possibly email some of the URLs to my other half to get her opinion.
- Crucially, I'm not going to make a purchase yet. It's a big ticket item and I'm not going to drop a grand or more just like that. In all probability I'm going to do some more research, on review sites and at other retailers.
- Whilst on the way home from work, I'm going to pop into a store to have a look at the model I'm considering. I'll check out the door action and generally poke it about and fiddle with it. Again, I won't buy it here, as the store's about to close and I'm fairly sure it'll be cheaper online.
- So we're on the home straight - a quick price and delivery service comparison and I'm ready to buy.
Now, typically this would be viewed as a cycle traversing two channels. I've used both the web and the store as a research tool, eventually purchasing online. So far, so pedestrian, but think about the complexity of the online activity:
- Search: a vastly complex environment. My initial choice of website will be entirely informed by what comes back in the top three on the page. The page I land on once I click through will also affect my behaviour: is it just the homepage or am I presented with a Big Fridge landing page?
- Onsite Browsing: a totally different and possibly even more complex deal. At this point, the business knows exactly what I'm looking for, derived from my upstream traffic. Does it adjust my experience to account for this?
- 3rd Party Sites: Often working on the basis of an affiliate deal, these sites need careful management to ensure a mutually profitable relationship. A good 10% of a retailer's turnover can come through this channel, so it's worth paying some serious attention to.
- Email: A continuing frustration of mine centres around people emailing me broken links, or links which Outlook has helpfully truncated, rendering them useless, or links to dynamically generated pages which only lead to the homepage. Is this common interaction properly supported and leveraged?
So, in this brief sales cycle, I've actually used four distinctly different channels to interact with a business. The fact that I've used one interface (my PC) to do this is irrelevant. Now, for financial reporting purposes, it's fair enough to see 'the website' as one line. But in terms of operations, the opportunity in really understanding the intricacies of the interactions your customers perform with your brand, and allocating enough skilled resource to genuinely work that interaction, really shouldn't be underestimated.
So try not to see it as one distinct 'channel' - there's a lot more to it than that. Over the coming months, I'll expand on the multiple opportunities current technologies have in the retail space, but in the meantime, if you're keen to find out more about how you can make the most from your online business, drop me an email at firstname.lastname@example.org.
My years spent working at Oddbins have left me with a long-standing interest in wine, as I'm sure some of you know, and having just been talked up from intending to spend £0.00 to actually spending... a lot more than that in a wine merchant in Borough Market this lunchtime, it's clear that I'm always open to being sold some. Be it a particularly good New Zealand Pinot Gris or a decent quantity deal, there's a fair chance I'll be interested.
Interesting then, that despite numerous emails, direct mails and so on from Virgin Wines, I have yet to purchase anything following the rather ropey half-price case I bought off them shortly after they launched. Now, originally the problem was their catalogue - it just fundamentally wasn't that good. I've heard that recently it's got a lot better though, so it's not that that's putting me off.
Consider then, the tone of their recent email to me, a follow-up to one asking me to join a subscription deal they've recently put together, with the subject '3 reasons NOT to join our club':
I am not a sensitive person by nature, but I have to say that I am feeling a little hurt. We’ve invited you into our Club, but you’ve clearly decided not to.
So, as a one-off attempt at sheer bribery, I‘m offering you your first, trial Club case HALF PRICE at just £47.88 (that‘s a ridiculously low £3.99 a bottle!). Plus, two FREE gifts, worth £30. That‘s an overall saving of nearly £80.
Sound good? Then click here to claim your HALF PRICE case and FREE GIFTS.
But you‘re probably not ready to join yet. You‘re probably thinking..."
It then goes on to answer the three reasons it reckons I have which are preventing me from joining. The actual reasons are fairly simple - I like to choose my wine myself, I can't have it delivered to my house and I don't want to carry it on the tube home from work. Oh, and having put together pre-mixed cases myself I know exactly how the margin works and have no intention of buying a dozen wines when I know at least half of them are probably going to be rubbish.
There are so many things wrong with this. Not only do they have the presumption to guess what I'm thinking, they do so in the most confrontational way possible: "you've clearly decided not to" sounds ridiculously petulant and has put me on the back foot in the first sentence. So far, so not good.
Unfortunately this is pretty standard for the tone of their communications. Falsely matey, inappropriately jokey, and borderline offensive - I recall once getting a bit of direct mail, having changed my email address but not updated it with them, saying 'what have we done wrong? why haven't you told us your new email address?'. Shocking.
On the other hand, I urge you all to sign up for the Innocent Drinks newsletter. Without fail, this really brightens my week (although having said that does make me wonder if I shouldn't get out more). Generally there's a bit of news about fruit (surprisingly interesting), new smoothies, news reports and things going on in their office, plus a few other bits and pieces and, every week, a handful of random things they've found on the web that they like. Never anything about what they do, just fun stuff.
Now, to get an idea of how well appreciated their newsletters are, have a look at this, one of the YouTube links in this week's email. Now by the time you read this the comments might have moved to a later page, but at the time of writing, about 30-40% of them are all about Innocent. People love the newsletter, love receiving it, and feel that much closer to Innocent as a brand as a result.
These, to me, are great examples of how a brand can be managed purely through tone of voice. Virgin Wines set out their brand as irreverent, young-ish, good value and exciting, but they just come across as unpleasant and irritating. Innocent have not dissimilar aspirations, but by treating their customers like equals and engaging with them on an honest, open and informal level, they hit the target spot on.
Yes, there's a content aspect here, but more fundamentally than that, it's about understanding your audience, and pitching your tone appropriately. Simple, really... isn't it?
When a retailer's business hits the rocks, everyone and his dog has an opinion. It's a rare industry whose dirty laundry is so publicly aired as that of high street retail. The announcement earlier this month that Ethel Austin was to go into administration, with the attendant loss of 181 head office jobs and 33 store closures, provoked a fair bit of 'of course, I saw that coming', and it's fair to say that, for anyone who's ever been close to this sort of thing, the story's all too familiar.
So yes, you see a sorry-looking store on the high street (or in Ethel Austin's case, the street next to the High Street), and the writing would appear to be on the wall. But what you're seeing is a symptom, not a cause, so what's the disease? Retail Week journo Amy Shields gives an excellent overview of Ethel Austin's history in this article, which is well worth a read: a concise analysis of the events leading up to the collapse of a national retailer.
Now, I'm not going to expand on this much more, but what I will say is to point out one key element of the article, which reports that in 2002, the firm's new owners 'did not change the formula, but took out costs and pumped up the profits', which is a very strange oxymoron indeed. This sort of short-term strategy will bring a business to its knees, whipping away much-needed development funding and (crucially) morale like a rug from under its feet.
Recklessly applied cost-cutting, whilst promising a result of sorts in the coming quarter, is ultimately not only unsustainable, it injects rot deep into the business. Staff morale hits zero at head office, and this soon filters out into stores. As both the fabric of the estate and the attitude of store staff slip into disrepair, customers quickly find newer, shinier, more helpful stores to shop in.
And there's the root of the problem. Retail at this scale (300 stores) is a model which is both extremely delicate and highly change-resistant. A long-term view must be sought, and far-reaching strategies implemented and bravely adhered to. Debt, however, does not work like this, and in the end was more of a factor in Ethel's decline than anything else. The moment this business started to falter was the same moment the focus on the balance sheet moved from annual to quarterly returns. In other words, once the purpose of the business, its reason for existing, was to rapidly return on an investment rather than to ensure its continued existence long into the future.
So what's the future for Ethel? Well, the position it's in now is a tricky one to say the least. The estate is... challenged, the margins are terrifying and the overall proposition was leapfrogged by Primark, Peacocks et al some years ago, so I won't be holding my breath. Still, where there's a will there's a way... isn't there?
EDIT: The story develops - Elaine McPherson (of MKOne fame) has bought Ethel Austin from administrators MCR for a rumoured £10m. Whilst the closures and layoffs performed by MCR will remain in effect, McPherson has pledged to return the business to its former glory. Arguably, at such a (relatively) low price, one is able to embark on such a mission; would be great to see it make a comeback, but if not, the assets remaining within the business should return on that investment if cleverly stripped. Not that this author is suggesting for a minute that that could possibly be on the cards.
What could play a key part in making that mission a successful one would be a top-notch, cutting edge multi-channel retail strategy. Elaine, we're only a phone call away...
As a relatively recent convert to the agency world, having worked on the client side in retail all my professional life, I sometimes find myself seeing both sides of a problem, both in work we do for our clients and in wider industry issues.
Recently I experienced one such moment when, several minutes into a discussion panel session on ‘Tomorrow’s Advertising Formats’, I realized that in between the thinly (and in one speaker’s case, not at all) disguised adverts for their companies lay the answer to all their questions.
Diverging from the start from the main topic of the event, the panel quickly moved to discuss just why, oh why, are advertisers not driving forwards with new advertising formats and media channels or, in effect, why don’t our clients listen to everything we say? Speaking as someone who, in a previous life, was frequently sold ‘the next evolution in advertising’ or ‘a genuinely revolutionary way to engage with your customers’, and without exception found the offer to be wildly overpriced, poorly thought out and totally inappropriate for the business, it’s both enlightening and depressing to find that the sort of misinformation peddled by these people is constructed entirely within the closed circuit of their peers.
Whilst on the client side, something I’ve always looked for in an agency was someone who understood not only my industry, but who understood my brand, and the interaction my customers had with it. This applied to media buyers, to creatives and to full-service development agencies alike. Now, with this in mind, let’s look at a number of comments which that evening’s panel came out with, and consider how well these ‘industry-leading’ minds understand the customer:
“Bluecasting (broadcasting a message via Bluetooth, so that any Bluetooth-enabled devices in a specific area pick it up) is a fantastic way to engage with consumers at the most relevant times.”
“Television adverts generate an ‘emotional’ involvement from the viewer, whilst online video advertising promotes a more ‘rational’ interaction.”
“Marketing departments tend to actively prevent brands developing dialogues with their customers.”
“Some people pay a monthly amount for their mobile phone.”
“People like advertising – it’s how they find out about new things.“
Each comment more bizarre than the first, from the nonsensical (rational vs emotional?) to the outdated (anyone remember the fiasco that was bluecasting?) and the downright wrong, this selection neatly encapsulates the general themes of the evening.
One of the repeated complaints some of the panelists voiced was about how little Marketing departments and advertising buyers bought into their more innovative ideas. Call me a pedant, but personally I tend to be more receptive to innovation when it’s recommended by someone who truly understands both my position and the context of the market in which I operate.
What I noticed from the closed circuit discussions going on at this industry event was how little practical understanding was demonstrated in the room, and how most of the opinions voiced would render a seasoned retailer or media owner speechless. And that answers the complaint: develop a mutual sense of trust with a client, based on rock-solid sector knowledge, a thorough understanding of the customer relationships at work, and an acute awareness of core business drivers, and only then will your more progressive suggestions gain traction.
Because then, and only then, will the client know that your recommendation is made through careful, pragmatic business thinking, and not so you have something to brag about at your next industry panel.
And this, ladies and gentlemen, is why I made the leap across the desk and joined Conchango.