InternetRetailing’s Ian Jindal is not known for holding back when “telling it how it is.” In a recent interview, the Editor in Chief of the UK and Europe’s leading ecommerce publication drew attention to the changes that retailers will need to make as customers become smarter shoppers; “I think there are three trends that we should take notice of: the first one is the customer, the second the store and the third, the rise of logistics.”
Jindal’s predictions are firmly supported by recent international research carried out by the by the University of Arizona’s Terry J. Lundgren Center for Retailing. The survey shows that the main influencers of retail spend – dubbed ‘Digital Divas’ who represent 20% of shoppers and influence 69% of sales – are using multiple devices and shopping around share information. Jindal’s take is that “retailers like to talk about putting the customer at the centre of their businesses, but they haven’t really meant that and they haven’t acted upon it. The customer now has the mobile in their hand, they are able to navigate our data, our information, purchasing decisions, as well as across retailers. So I think we’ll see phenomenal changes in the power of the customer.” In fact, the study shows that these fahionistas consult almost four sources of information before making a purchase.
With devices’ interfaces continually improving, shoppers can buy, ‘rate’ or ‘share’ their experience at the touch of a button.
So more smart devices mean smarter shoppers, but what about in store? The research, which was sponsored by Demandware, suggests that these influential shoppers are twice as likely to want to use mobile technology in store than other customers and they visit an average of 3.4 online or in-store destinations during their shopping journey. This supports Jindal’s view that “…the customer is no longer just walking into a mini distribution center on the high street – they really are navigating your whole brand, via mobile, kiosk, in-store and, of course, improved customer experience. In store is going to change phenomenally. It won’t just be eCommerce. It will be true multi-channel.”
Smart stores will require smart operations as Dr. Anita Bhappu, PetSmart Professor of Retailing & Consumer Sciences at the University of Arizona, one of the survey report’s authors, suggests; “Digital divas exert a significant influence on spending of the overall customer base, and this social influence is changing the retail landscape, fast. Retailers who really put their customers at the center of the process through investment in stores, staff and logistics, will be more successful at adapting to this multichannel and socially networked marketplace.”
Ian Jindal is more specific; “Having optimised processes in a very highly competitive market over maybe 30 years, we’re now seeing those processes – that previously were a competitive advantage – actually slowing down our ability to respond to the customer. So, I think the biggest challenges retailers will have is unbundling some of those processes, to make them more agile and less silo-based.
Then they need to retrain and invest in their staff. Because, while we focus on technology, staff are the main interface with the customers – whether on the phone, in the store or even answering social media comments.
So, I think a combination of silo structures, processes and people are really going to be a challenge, but a great opportunity for those who get it right.”
The opportunity that Jindal refers to has already been realised this Christmas season by several retailers, including: House of Fraser, whose sales were up 6.3% in the six weeks to January 5, with online revenues up 48%, as increasing numbers of customers used their mobile phones and tablets to shop on the internet, and John Lewis, which saw a 14.8% increase in the five weeks to 29 December with a 44.3% increase in online sales.
The message then is clear; change is happening and it’s happening now. Retailers who want to benefit from the opportunities highlighted by Ian Jindal need to make sure that, like him, they are “on the button” and they need to make double sure that the button is connected to a great experience.