Why Mobile is the Answer to a Connected Customer Experience
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Dawn Trenson, Director of eCommerce at Steven Alan and Phil Granof, CMO at NewStore, discuss the impact of mobile on the connected in-store experience, including: Providing a personalized omnichannel shopping experience Empowering store associates Ensuring accurate inventory Obtaining a holistic view of consumer behavior, regardless of space and time
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Why Mobile is the Answer to a Connected Customer Experience
- 1. NewStore Inc. #mobilemandate Why Mobile is the Answer to a Connected Customer Experience
- 2. NewStore Inc. #mobilemandate Dawn Trenson Director, eCommerce at Steven Alan Phil Granof CMO at NewStore
- 3. NewStore Inc. #mobilemandate History of Steven Alan
- 4. NewStore Inc. #mobilemandate The Tethered Self Source: StatCounter Global Stats (September 2015), Mobile includes smartphone and tablet traffic
- 5. NewStore Inc. #mobilemandate Introduction Providing a personalized omnichannel shopping experience Seeing the brand as the consumer sees it Empowering store associates Ensuring accurate inventory
- 7. NewStore Inc. #mobilemandate What Do You Do When You First Wake Up? Our interaction with each other through our phones begins as soon as we awake. Within the first 15 minutes of waking up, 4 out of 5 smartphone owners are checking their phones and among these people, nearly 80% reach for their phone before doing anything else. These statistics alone drive home the utility of and reliance on smartphones. The Tethered Self Among All Respondents reach for phone within 15 minutes of waking reach for it immediately after waking reach for it immediately and use as alarm clock 79% 62% 44% Among 18-24 year olds reach for phone within 15 minutes of waking reach for it immediately after waking reach for it immediately and use as alarm clock 89% 74% 54%
- 8. NewStore Inc. #mobilemandate Omnichannel Has Been Missing A Silver Bullet
- 9. NewStore Inc. #mobilemandate Mobile is the Silver Bullet Sales Associates Bricks & Mortar OnlineInventory Fulfillment
- 11. NewStore Inc. #mobilemandate Greater Comfort with Digital ∖ Fashion brands and consumers have become more comfortable with the digital marketplace allowing for increased personalization.
- 12. NewStore Inc. #mobilemandate Personalizing the Omnichannel Experience
- 13. NewStore Inc. #mobilemandate Empowering Brand Ambassadors
- 14. NewStore Inc. #mobilemandate Empowering Brand Ambassadors 90% of Sales Associates are discouraged from possessing a mobile device in-store. 49% of Store Associates said that the existence of a dedicated store associate app would impact their decision to take a job as an associate. Ironically, 90% of retail shoppers using smartphones in-store are creating a major experience gap in the store’s omnichannel strategy.
- 15. NewStore Inc. #mobilemandate Ensuring Accurate Inventory Build Shopping List Only 20% of successful retailers offer it. 39% of consumers are unlikely to visit a retailer’s brick- and-mortar store w/o it.
- 16. NewStore Inc. #mobilemandate See the Big Picture Know Me Value Me Inform Me Serve Me Secure Me
- 17. NewStore Inc. #mobilemandate Forget the Buzzwords Merchandizing Technology/Ops Marketing
- 18. NewStore Inc. #mobilemandate Your Story is Not “Your” Story Anymore
- 19. NewStore Inc. #mobilemandate Empower Instant Gratification
- 20. NewStore Inc. #mobilemandate Be Careful What You Do In-House… Web App Native App Kiosk Wearables Digital Display mPOS Beacons Clientelling Wayfinding WAN Associate App Personalization Visual Merchandizing Campaign Mgt. Loyalty PIM OMS Pricing / Offers Digital Asset Mgt. ERP Stock Room Task Mgt. Staff Mgt. Training WCM Merchandizing Transaction Engine BI Touch Points Store Systems Experience Platform Back Office
- 21. NewStore Inc. #mobilemandate What Do the Next 12 to 18 Months Hold for Retailers?
- 23. NewStore Inc. #mobilemandate Thanks for joining us! Be sure to follow us on Twitter @newstoreinc
- 24. NewStore Inc. #mobilemandate Mcommerce Summit: State of Mobile Commerce 2016 New York, NY Thursday, May 5, 2016 For more information please go to MobileMarketer.com COMING SOON...
Editor's Notes
- Please allow me to introduce myself. I am Phil Granof, CMO of NewStore, and joining me today is Dawn Trenson, Director of e-commerce for Steven Alan. NewStore is… Dawn...Please tell us about yourself, and briefly about Steven Alan: Steven Alan is a clothing retailer that has a strong presence in the United States, on the East Coast, in California, and in Texas. One of the key reasons for its success and ongoing growth is its approach to personalization. This has been a part of the Steven Alan brand from the beginning. His line of apparel is, of course, available in his own stores, but they are also available at other boutiques like Nordstrom. Similarly, his stores carry other brands. The whole idea is to generate a go-to place for men and women looking for a particular style of modern clothing, using mobile, and using wish lists to produce accurate customer knowledge. I want to share with you today a few things about the power of mobile in our lives. Everyone already knows mobile phones are everywhere. There aren’t many people around who don’t have one. And though they may not be distributed equitably all over the world, the stats show that there are well over 7 billion mobile accounts on this planet. But what is less known is just how much mobile is changing the world in more subtle ways. When it was just a phone, it allowed you to call someone, and they could call you. Same thing with SMS and texting. But now it is so much more than that. It shouldn’t even be called a phone anymore because person to person communication is just one of the things it does – and that’s not even the most important thing. Today, people are carrying around an Internet-enabled awareness device. It gives you awareness of people, things, and events all around you – anywhere on earth. If you have the most up to date home security device in your home, you can watch your dog sleep in your living room while you are 100 miles away. You can tell where other people are by GPS. You can get a copy of any document you left behind in the office. And you don’t need to talk to a switchboard operator to deal with a store or a utility. It’s all there. We all know all this, but when you step back and look at it, it is quite magic. All of this has a very special message for retailers. Because people are just so connected to their mobile phones, this means that “brand” is with them all the time. Not just email or voicemail, and not just when they are close to a store or on a website. The intangible, highly influential concept of “brand” travels with consumers always. It becomes part of their lives. And that is a huge leap forward.
- History of Steven Alan and the meaning of the brand. Question: Choice is the first step in personalization. From the beginning personalization has been a part of Steven Alan brand by offering other fashion brands a home in your retail store.
- The computing relationship between your PC and Phone is very different. the PC or laptop was a device you went to, whether it was on your desktop at the office or home, (or even when you had to sit down and open up the laptop.) There was a formalization in place; a real awareness that this computer was a separate device – a useful one – but still something separate. But the smartphone is way more than that. It has become part of who we are. Maybe one of the most significant examples of this is photography. Whether it is selfies or just recording something that is going on, it’s like the event hasn’t happened unless it is recorded into the phone, and shared on social media. Many people forgo seeing an event directly, preferring to see it through the screen of the phone, even when it is happening a few feet in front of them. If it wasn’t recorded on the smartphone, it didn’t happen. That’s a powerful representation of the degree to which we and our phones have melded. And it is important to note that these trends are not exclusive to Millennials. Every generation is going mobile. Sherry Turkle, the MIT researcher and author, coined the term “the Tethered Self,” which kind of illustrates how people and their smartphones are connected almost by an umbilical cord. I think we should now take this metaphor further removing the image the cord, and envisioning people and their devices as one. Are we cyborgs?
- A big part of what we want to talk about today are these four concepts: First, success in retail is about personalizing the shopping experience and doing this for each customer. Nordstrom, for example, provides personal shoppers for their clients, and when they do this, the experience becomes much more about the individual customer. With mobile, that becomes much easier to do, because data becomes immediately available. Sales associates can make sure the appropriate recommendations are happening at the right time. Mobile makes the aspiration of genuine customer intimacy a reality. Our second focus is on empowering store associates with the same technology that the customers have. They have to have it in the palm of their hands, and now they can. It leads to a dangerous disconnect when the sales associate does not have the right level of knowledge about customers’ interests, inventory availability, and competitive pricing. A related topic points to accurate inventory knowledge. On the surface, this sounds like boring warehouse management stuff, but in reality, it is about having a thorough understanding of what is physically available to satisfy customer’s needs. Fourthly, it is critical that the sales associates and the store see the brand in just the same way that the customer sees it. Specifically, this means the brand should not come across as a collection of highly integrated channels – like a website, a store and a TV ad – but instead it should create a singular relationship. This is a multichannel world. Brand perception falls on the shoulders of each customer to build in their mind. A brand that tries to come across through multiple channels will have less control and influence than a coordinated one.
- Over 25 years ago, Coco Chanel was quoted as saying, “Fashion is not something that exists in dresses only. Fashion is in the sky, in the street, fashion has to do with ideas, the way we live, what is happening.” All you have to do now is replace the word “fashion” with “brand” and the word “dresses” with “channels,” and read it again to get a sense of where we are now, and what she foresaw. “Brand is not something that exists in channels only. Brand is in the sky, and in the street – brand has to do with ideas, the way we live, and what is happening.” See? Mobile represents the first time brands can transcend time and place. When omnichannel is done right, channels disappear, and all you are left with is meaning and experience in minds of consumers. This is omnichannel nirvana. [Ask Dawn what she thinks of Coco Chanel’s statement...]
- 5. The Tethered Self (01:45) (06:42) But let’s talk for a moment about what mobile does to us and for us. It’s important to acknowledge the fact that this is a device that is with us pretty much all the time. For most people, for 90 percent of the day, their smartphone is within arm’s length. It is always within reach whenever it is not actually in a pocket or purse. Very often when somebody stops, to sit down, to wait for an elevator or a bus, standing in line, anyplace when they are not moving (and frankly many times when they are moving), they feel the compulsion to stop and check their phones. It has become a life force of its own; something I like to call a “first-person device.” For retailers, this development means a lot. It means that the shopper learns about the brand, enters the store, and shops for merchandise all while the smartphone device is with them. It is not a tool to do research and then leave behind, as we would have done with a desktop computer. Today’s shopper has an “always on, anytime, anywhere, when and where I want it” attitude. So there are lots of stats we can look at. They show that 8 out of 10 smartphone owners are smartphone shoppers and that as the years go by, anyone who shops online will be doing so through a mobile device, not a desktop. To go further into this, those who do use mobile devices are increasingly relying on mobile apps to help them along the entire journey. This is incredibly significant given that the majority of retailers in all sectors still state that apps are not an essential element in their mobile strategy.
- 8. Omnichannel Has Been Missing A Silver Bullet. (02:08) (10:28) So we have this term now called omnichannel. A term that, frankly, should disappear pretty soon, simply because it is no longer needed. It is everywhere. It’s like the air, or what water is to a fish. Any retailer that distinguishes itself by identifying its store and its omnichannel service as two separate items, is not getting it. The two should be one and the same. It’s all part of doing business in the mobile age. Anyway, if you look at this evolution chart, you can see that in the space of two decades we have moved from single-channel commerce – or a physical store – to separate channel commerce at the turn-of-the-century, where you had a store and a website, and maybe a call center. Then a few years later, we started to come together as multichannel commerce, but even then information available on desktops and the earliest mobile devices that have screens, was the same. It was a screen scraping exercise, which might have scored points for consistency, but lost a great many more for the lack of an easy interface. It’s hard to pull down menus and click on items on a 2-inch screen. By 2011, there was a far greater integration of everything that was online, and people started to recognize that a different, more agile design would be needed for smaller screen mobile devices. That’s when M-dot sites and mobile friendly sites started to enter the picture. But the problem was, this left the actual retail store hanging outside like a forgotten appendage. There was the store, and there was the mobile stuff, but still no true interplay of information. One of the biggest problems that this presented was a disparity between what the customer knows about a brand, the store, and the products, and what the store associate knows. You can’t have that when you want to deliver a totally satisfactory experience and lay the groundwork for the next and the next. Now today, you have the potential for a full omnichannel experience. We are still calling this omnichannel, even though no one likes that term, and it is essentially redundant. The problem is that companies are still organized in the 2008 setup, with different P&Ls, and backend administration. It has been extremely difficult to pull the mindset forward into a fully-blended state that adequately matches the needs and expectations of the mobile consumer.
- 9. Mobile is the Silver Bullet (00:54) (11:22) Mobile is the silver bullet. Mobile has put customer need at the center of the omnichannel experience. It’s what organizations like Forrester and others call the “mobile moment.” It says, “I have a need, and I am instantly connected to all elements of retail because I and my phone are one. I can connect to the bricks-and-mortar store, or I can connect online. I can have access to inventory, whatever.” Forrester calls is Mobile Moments and Google calls it Micromoments. For the retailer and the brand manager, it’s about putting customer need in the center. Mobile is the silver bullet. It is the remote control for life. It connects the customer to all elements of retail. Now it should be said that prior to the ubiquity of mobile, it did make sense for retailers to divide their skillsets in a siloed fashion. They could focus separately on the cost of fulfillment, improving inventory churn, training sales associates, developing responsive sites, and engaging stores. But mobile is now truly the chemical bond across all of these. [Ask Dawn what she thinks of this...]
- 10. Expectation Gap (00:54) (12:16) Maybe some of the stores, and even non-retail businesses, are blaming Millennials for the need to change so quickly into this mobile mindset. Millennials seem to come with these unrealistic expectations of instant gratification. But it must be remembered that this generation was born essentially with a mobile device in their hands. They grew up in an era of unfettered access to information that grew progressively easier as technologies became more mobile. In many cases, the senior managers of brands, stores, and businesses are older, and their formative years were spent in a far more structured and formalized environment. It is a fact that what you experience at the age of 10 imprints you for life, and makes it very difficult for anyone who was 10 in the 1950s, 60s, or 70s to gain a true internal grasp of the power of mobility. They may know it, but they do not feel it. And as for Millennials, they don’t need to know it or feel it either. They simply are it.
- 11. Greater Comfort with Digital (00:17) (12:33) So if you look at this bar chart, you can see that the marketplace is consistently starting to accommodate personalization everywhere. Retailers and brands are making greater investments in digital, and customers are responding positively. The gap is starting to close.
- Brands are working hard at this: Burberry clienteling iPad app “Customer One-to-One” equips sales associates across 300 stores worldwide. Associates can have personalized interactions with customers as they walk in based on shopping behavior, online basket, wish list and social network activity. This touchpoint was driving 30% of the brand’s total online sales. To be honest, in my last store visit, it was shelfware. Digital technology plays a key role in delivering the new in-store experience. Product search and access to information are facilitated through the use of tablets, apps, web kiosks, interactive digital walls and free in-store wifi. The result is a “connected store” that bridges physical and digital worlds and constitutes a powerful platform to gather crucial information on customer behavior. A connected store opens a brick & mortar retailer to numerous new opportunities which were previously mainly available to pure online players. This includes endless aisle, long tail, social media, home delivery and personalized interactions. In-store e-commerce kiosks can for instance make the entire product catalog available in the store (including drop-shipping – items purchased from a retailer but shipped directly from the manufacturer). The store can as a result focus on displaying high-turnaround SKUs and promoting customer services. Bringing the convenience of online shopping into the store in a compelling brand experience augmented with value-add services will highly contribute to building customer satisfaction and loyalty. Burberry upgraded its mobile platform at the end of 2014. The enhanced checkout process helped drive a three-fold increase in the share of mobile shoppers contributing to digital sales.1 “Burberry’s mobile penetration tripled in the past year,” Hilary Milnes, Digiday, November 12, 2015. Burberry achieves superior brand visibility across a wide assortment of category keywords (e.g., “scarf”). Unlike many of its peers, SEM efforts consistently drive to nearby stores. Burberry continues to be a first-mover on emerging platforms (e.g., Snapchat, Periscope, Apple Music), contributing to over 100M impressions for its S/S15 runway show held at Griffith Observatory.1 Apple TV Read more at: http://azurdigital.com/blog/new-in-store-experience/
- 13. Empowering Brand Ambassadors (01:15) (15:06) Some stores and brands are changing the title of their salespeople from “sales associate” to Brand Ambassador. And I don’t think this is purely a cosmetic nicety. I think there’s a lot to be said from this term. The older term, “sales associate,” tends to imply a subordinate individual whose sole job is to sell right there and then on the store floor. But a “brand ambassador” connotes something larger. It speaks about someone who helps deliver an awareness and comfort and enthusiasm of the brand that might result in a sale immediately, or one later through a mobile device. Since, as I said before, the customer travels everywhere with the brand, it makes far more sense for anyone charged with the task of selling in retail, to be legitimately given the power to speak for the brand and to use available data to ensure that it fits the needs of each customer individually. The brand ambassador travels with up-to-date knowledge about the customer, the store, the other stores, the warehouse, the competition, fashions and trends, and options for delivery. There is nothing about the experience – that is to say the shopping experience and the experience of the brand – that the ambassador cannot convey. Most stores have not got to this point yet. You can see from this image that there are a number of famous names that have already started to travel down this road. There are still some old school challenges, but this is what we are working on at NewStore.
- 15. Ensuring Accurate Inventory (01:19) (17:20) When you are running a store, you have to know what is available to you. It’s not just simply about selling products and optimizing fulfillment. It’s also about getting people in the store. Current stats show that up to 39 percent of consumers are unlikely to visit a brick-and-mortar store if the store cannot deliver accurate inventory information. People get annoyed when things are out of stock. Retailers who lack real-time inventory visibility lose up to 10 percent of sales, but only about 20 percent of retailers are currently doing anything about it. A great example of how to do this right is Home Depot. For years, a lot of big box stores took advantage of the relative difficulty customers had in locating items on shelves. The mindset was that a wandering customer would be more likely to make additional impulse purchases based on accidental discoveries. In some of these larger stores, it became difficult to even locate a sales associate. There weren’t enough of them, and they were always busy. That might have worked in the pre-mobile age. Now, however, Home Depot has recognized that a shopper will not commit to traveling to the store until they know not only that the item is in stock, but also where they can find it. The Home Depot app does just that. It confirms the available inventory, and also identifies exactly which aisle it is in. The wandering impulse-buy factor has now been replaced by intelligent customer-centric communication generated through the native mobile app. Only 20% of successful retailers are enabling real time views of cross-channel inventory inventory management for every 13 items a consumer wants to buy 1 is out of stock inventory management Retailers who lack real-time inventory visibility lose up to 10% of sales inventory management 71% of consumers expect to view in-store inventory online 39% of consumers are unlikely to visit a retailer’s brick-and-mortar store if the online store does not provide physical store inventory information
- 16. See The Big Picture (00:28) (17:48) Retail has gone holistic. It is no longer retailer-to-consumer, or channel down or anything like that. Mobile is making the customer visible to the retailer, and the retailer more visible to the consumer in real-time, all the time. As I said before, omnichannel is a redundancy. The new perspective is one in which consumer, retailer and manufacturer all coexist inside the same sphere without borders and without channels.
- Ecommerce, Retail, Multi-channel, web 2.0…buzzwords or reality– it’s all the same, driven by: 1. marketing 2. merchandising 3. technology/operations
- Traditional Fashion Advertising: evolution of traditional marketing (catalogs, direct mail), placement in magazines (big for luxury brands– I can speak to what this means from the magazine side of things…2005, I was the market editor at an Italian fashion weekly. Brands invest significantly for placement in magazines with no real measurable ROI. Maybe include some images from Vogue, Elle, W, etc…the full page Gucci, Burberry ads. Paid Search SEO and Email on to paid search, SEO, email Social advertising/promoted posts http://www.businessinsider.com/social-commerce-2015-report-2015-6), social media audience to grow business (http://retail-innovation.com/nordstrom-uses-pinterest-to-get-customers-to-influence-whats-on-display/) Nordstrom uses Pinterest to get customers to influence what’s on display The retailer has a “Pin” button for every item on its website. Social Influence: on to celebrity endorsements, brand ambassadors (this works for online only retailers. One example Revolve Clothing http://www.latimes.com/business/la-fi-advertising-disrupted-20150102-story.html
- What is especially difficult for omni-channel retailers: buying & allocating goods to a network of retail stores with entirely different customers Retailers often make incorrect assumptions at the senior level: ‘we’re one brand/store, product assortment and depth should be the same across all door’; ‘web is just like a brick & mortar…only need to allocate as if it were our second flagship’ Regardless of how strong the assortment is, not having the right product in the right place at the right time: can’t grow the business. If they can’t buy it from your store (now), they’re buying elsewhere. This stifles growth, impacts customer experience and contributes to retail staff turnover (associates who earn commission– will not be compensated if they don’t have the product to sell. Turnover costs: http://www.eremedia.com/tlnt/what-was-leadership-thinking-the-shockingly-high-cost-of-employee-turnover/#) For entry-level employees, it costs between 30-50 percent of their annual salary to replace them. For mid-level employees, it costs upwards of 150 percent of their annual salary to replace them. For high-level or highly specialized employees, you’re looking at 400 percent of their annual salary. Empowers sales associates, provides instant gratification for customers, will reduce margin expenses.
- Simplified perspective of Forrester Digital Store The ‘failure’ of simulated omni-channel: https://www.luxurydaily.com/unified-commerce-is-holy-grail-most-retailers-are-still-seeking-report/ So many retailers are lacking sophistication is technical systems, have resource constraints, can’t hire/keep the right tech staff, are not making the right investments in technology Result is antiquated/siloed systems across channels Operationally: organizations are strained– spending too much time/budget on attempting to normalize reporting and systems– ‘square peg in a round hole’, eCommerce systems typically real time while brick & mortar locations are using legacy systems that update/poll overnight (at best). [I can add some ‘anecdotal’ to here…can’t mention by name, but, these were issues I lived as a retail at L Brands– one of the largest retailers in the country, saw these painpoints while consulting at FitForCommerce, still living this at Steven Alan] How NewStore solves: retailers should be focusing on RETAIL, not spinning wheels attempting to connect systems– that never ends well. This is a solution that addresses the technical & operational issues associated with true ‘omni-channel’.
- 21. Over the Next 12 to 18 Months, What are the Big Digital Initiatives? The next year to year and a half is both a long time and a short time. Based on what you have seen, what are your predictions? What advice would you give to others in the industry? Follow-up questions could include: Are you willing to tell us what is in store for Steven Alan? How will you try to further understand consumer behavior across channels? What technologies need to be built into the in-store experience How does mobile play into your future?
- Some questions were sent to me pre-webinar: What are the biggest pitfalls to avoid in adopting a mobile-first strategy? For Steven Alan, what is your greatest challenge with mobile other than the omni-challenge? For Steven Alan, as the Ecommerce Director what are your expectations for mobile? For Steven Alan, what are your predictions for mobile in three years? For Steven Alan, what are your predictions for retail in three years? For Steven Alan, what advice would you have given to yourself two years ago, knowing now what you know?
- This is the final slide that MCD has requested be at the end of the deck.