Issue 62 - July 2018 THE RETAILER
At the heart of retail
CONTENTS Issue #62
Ask your customers to press CHQ or SAV toget cash out and avoidATMfees.
Features 10 IS TECH ENOUGH TO IMPROVE THE CUSTOMER EXPERIENCE? By harnessing the right technology, retailers can enhance the overall experience for their customers. 14 LOYALTY AT THE CORE OF RETAIL How retailers can grow their customer base and increase consumer loyalty. 18 WHY YOU NEED PURPOSE IN AN AGE OF MISTRUST In a competitive environment where overseas rivals are putting pressure on local retailers, businesses need to invest in building their brand purpose for their customers and their people.
REGULARS 04 From the Executive Director 06 Retail news from across Australia 08 Matters of the heart are not always so simple 22 The heart of hiring 28 The cultivating culture of retail 40 The benefits of managing your workforce
Clearly, transparencywins in a customer-centricworld How to boost the motivation of a retailer’s most valuable asset: their shopfront workforce
eftpos is a great way to give your customers added value with their everyday purchases. The more cash they get out from your store, the less cash you will have on the premises, helping to reduce the cost and risk of doing business.
32 Fromonline shopping to ‘reality’ shopping - AugmentedReality for retail 36 Food and the instant gratification era 42 Customer-drivenfinancial innovation at the heart of retail 48 The value of home 46 The three levels of inventory insight youneed to deliver omni-channel profitability
CORPORATE SOCIAL RESPONSIBILITY 16 Productswith a purpose 20 Transparency is the newblack 26 The homeless grapes project 30 Fashionably conscious 34 The newsustainable future 38 The true value of CSR in retail
CUSTOMER EXPERIENCE 27
Mobile marketing for retailers: location is everything Consumer engagement in an on-demand economy
50 The retail ‘S’ factor 52 Breaking down barriers and building consumer relationships
ARA PRODUCTION TEAM
Editor Katherine Mechanicos firstname.lastname@example.org Advertising Account Manager Chris Sav 1300 368 041 email@example.com Graphic Design Mikeila Scheckenbach firstname.lastname@example.org
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Australian Retailers Association Phone (toll free): 1300 368 041 Fax: (03) 8660 3399 Melbourne Office Level 1, 112 Wellington Parade East Melbourne VIC 3002 Sydney Office Suite 104, 40-48 Atchinson Street St Leonards NSW 2065
External Contributors Monitor Deloitte, eStar, Pronto Software, FCB Group, Kentico, Stocard, Temando, Manhattan Associates, Plattar, Foodora, Nuticare, iNEEDa, the Australasian Circular Textile Association, BDO Aus- tralia, Fresh Eye Solutions, Get Capital, i=change, OrderUp!, SAP SuccessFactors, Victoria E-commerce, Vinomofo
Copyright Contents may not be reproduced in any form without permission from the Australian Retailers Association and then only with suitable acknowledgments. 2017 Australian Retailers Association ISSN: 183404720
The Retailer is printed on FSC paper stock using vegetable based inks by a printer with ISO14001 Environmental Management System Accreditation
From the Executive Director H eading into the second half of 2018, the Australian Retailers Association (ARA) have seen the With so many changes occurring within the sector, it is important to remember the purpose of the industry. This edition of The Retailer will focus on the heart and soul of retail, delving into retail authenticity and transparency.
retail industry begin to steady the ship when it comes to sales growth, averaging a 2.75% growth year-on-year (YoY). While this is below the Q1 benchmark set in previous years, retailers across the country are seeing growth begin to settle into a more consistent pattern, which the ARA hopes will provide a springboard into a period of steady improvement across 2018. With the Fair Work Commission (FWC) ruling a 3.5% increase to the minimumwage this year, the ARA are hoping the next stage of the penalty rates reduction will bring balance back into the industry and preserve jobs across the sector. This month, Sunday penalty rates will drop to 180% for permanent staff and 185% for casuals. Although this four-stage transitional arrangement is longer than the ARA would have liked, we believe this reduction will provide retailers with the much-needed breathing space in such a high cost environment. The ARA are also looking forward to Low Value Threshold (LVT) GST coming into effect this month, as it will create a fairer tax system and put our local retailers on a level playing field. We’re hoping this tax fairness will give a much- needed boost to the industry. The ARA will continue to monitor the implementation and progress of this legislation to ensure the best outcome for retailers across the board.
In such a purpose driven world, retailers should be proactive about the ‘conscious consumer’ and ensure every part of their business including environmentally friendly products, sustainable supply chains and customer and employee values align with the retailer’s vision, purpose and mission statement. To ensure the ARA are also aligning our services with the ‘conscious consumer’ we would like to remind our members that The Retailer will be moving to an online platform. The ARA will be leading by example, and promise to move the majority of our printed publications online, reducing our impact on the environment. Our last printed issue of The Retailer will be our 2018 October edition, to align with our Retail Awards. To ensure you continue to receive this publication digitally, please ensure your contact details are up to date with our membership team by phoning 1300 368 041 or emailing email@example.com. The ARA are always excited to embrace change and can’t wait to see what the future holds. Until next time, we wish you all a healthy and substantial trade. Best wishes,
See new opportunities in your online business banking with Daily IQ.
THE AUSTRALIAN RETAILERS ASSOCIATION COUNCIL
With our business insights tool Daily IQ, you can receive customised insights about your cash flow, performance and customers to help you take advantage of new opportunities. Daily IQ comes free in your NetBank and CommBiz online business banking.
President Rowan Hodge – Battery World
National Councillors Robyn Batson – Sussan Group Graham Dear – Leading Edge Group Ralph Edwards – Bright Eyes Mhairi Holway – Pandora Jewellery Steve Plarre – Ferguson Plarre Bakehouses Mark Daynes – Jeanswest Anthony Wilson – Wilson Retail Toby Darvall – Ishka Andrew Ng – Lagardère Travel Retail (advisory)
Optimise cash flow Track your cash in and out, identify cash flow trends and explore ways to make your cash work harder. Enhance performance Compare your performance against your industry, see trends in card sales, and identify your busiest times. Grow customers Discover more about your customers including the percentage of new versus repeat, who are the most valuable and how frequently they shop with you.
Find out more about Daily IQ Contact ARA on 1300 368 041 and we’ll put you in touch with a CommBank Business Banking Specialist. commbank.com.au/DailyIQ
Russell Zimmerman Executive Director Australian Retailers Association
Things you should know: As this has been prepared without considering your objectives financial situation or needs, you should, before acting on this information, consider its appropriateness to your circumstances. Daily IQ is not optimised for iPads or mobile devices. Daily IQ has been prepared as a research tool for general informational purposes only and should not be relied on to make business decisions or for account reconciliation. The information may be incomplete or not up to date and may contain errors and omissions. Any projections and forecasts are based on a number of assumptions and estimates, including future events and contingencies, which may be inaccurate. Commonwealth Bank takes its responsibility to protect the privacy of its clients very seriously and applies strict security and privacy controls to the way it handles information. This has been applied to Daily IQ. The Performance module (Industry Sales Comparison, Busiest Times and Total Card Sales) and Customer module within Daily IQ are only available to CommBiz and NetBank customers with a CommBank merchant facility settling into a CommBank settlement account. ARA may receive a fee from Commonwealth Bank for each successful referral. Terms and Conditions for CommBiz and NetBank are available at commbank.com.au. Commonwealth Bank ABN 48 123 123 124. AFSL and Australian credit licence 234945.
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RETAIL NEWS FROM ACROSS AUSTRALIA
REGULARS | NEWS
AMAZON ANNOUNCES A FULFILMENT CENTRE IN SOUTH-WEST SYDNEY I n order to meet growing customer demand in Australia, Amazon has announced a new fulfilment centre in Moorebank, south-west Sydney. Sydney represents an important development for growth strategy in Australia, following a steady and progressive increase in customer demand. This new facility builds on the capabilities of Amazon Australia’s first centre in Dandenong south, allowing the retailer to continue to fulfil their commitment to fast and reliable deliveries. This investment will benefit both customers and the local economy by generating employment and providing small and medium sized Australian businesses with an opportunity to more easily access millions of customers across the country. The new Sydney fulfilment centre, along with the existing building in Melbourne, will allow Amazon to handle current and future customer demand and speed up delivery to customers across the country, and is planned to start operations in the second half of 2018. Amazon launched in Australia late last year offering customers tens of millions of items from 23 different categories, including consumer electronics, fashion and Amazon devices. Since then, Amazon has continued to bring new products and services, with the recent launch of Amazon Prime, offering free delivery to 90% of Australians.
SAMSUNG SHOWCASES MOBILE INNOVATION IN SYDNEY S amsung Electronics Australia launched its new Galaxy Studio in Westfield Parramatta, creating an innovative and immersive space that gave visitors the chance to go hands-on with a range of technology. The studio opened in time with the launch of the Samsung Galaxy S9 and S9+, and was open to visitors during May this year. The Galaxy Studio was designed with the purpose to immerse shoppers in all aspects of Samsung’s mobile technology and is built around core experience zones. These include an interactive table, super slow-mo studio, Augmented Reality (AR) emoji gallery, alpine skiing as well as a 4D Virtual Reality (VR) theatre. The open fit-out invited visitors to explore the vast array of interactive technology, allowing them to creating their own slow-motion videos using props, record their heart rate whilst on a skiing simulator, and enjoy playing a shooting game in VR. Customers had the ability to express themselves in new ways, redefining how we use our smartphones to share and consume content. The Galaxy Studio is an exciting environment for people to visit, interact, and ultimately have some fun.
BOOST JUICE ENGAGING CUSTOMERS THROUGH THEIR SMARTPHONES B oost Juice has recently launched ‘Find the Fruit’, its second gamifi- cation app and sequel to ‘Free the Fruit’. Their first application saw over 329,889 downloads and 225,970 prizes given away. Boost Juice’s venture into gamification provides a unique and engaging experience for smartphone users. Using Augmented Reality (AR) technology, customers are encouraged to get active and walk around to find disguised fruits on the map displayed on their phone screen. Players will also have the capability to link the game to their Boost app to redeem prizes and receive in-game bonuses. Boost Juice is a brand built on a ‘Love Life’ philosophy, and introducing features to the app that encourage health and wellbeing helped the retailer fulfil this for their customers. It is known that gameplay is an important part in most smart-phone users every day agenda. It allows users to unwind as well as socialise. This is a method for retailers to have fun with their customers, build a stronger connections, as well as brand awareness.
THE PAYMENT SOLUTION REWARDING BUSINESSES DURING TAX TIME T ax time can be stressful as well as time consuming for retailers, but there’s good news for those gearing up to pay their Business Activity Statements (BAS), with new online payment platform B2Bpay offering full credit card points and Qantas Points on all payments made to the ATO. Powered by Zenith Payments, the leading payments and prepaid card provider in Australia, B2Bpay is a solution that allows small businesses to pay all their expenses via a single, secure online portal. Retailers can maximise credit card rewards on all payments in addition to boosting cash flow, productivity and tracking of business expenses. Zenith has brought Qantas Business Rewards on board to allow Qantas business rewards members to earn Qantas points on all expenses paid via the B2Bpay platform. With the burden of the financial year, this time of the year can be really stressful for retailers. B2Bpay negate the usual loss of points that occurs when paying the ATO directly by credit card. Instead retailers can be rewarded with full credit card points and additional Qantas Points as well.
Samsung inspires the world and shapes the future with transformative ideas and technologies. For the latest news, please visit the Samsung Newsroom at news.samsung.com
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Learn more at amazon.com/about
Boost a true Australian success story. Founded by adventurer and suburban mum, Janine Allis in 2000, the brand now operates in more countries than any other juice bar in the world. Learn more at findthefruit.com.au
JULY 2018 | RETAILER 7
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REGULARS | POLICY
REGULARS | POLICY
EASE OF DOING BUSINESS: ECONOMY RANKINGS
COUNTRY OVERALL RANK
STARTING A BUSINESS
ACCESS TO TRADE
Matters of the heart are not always so simple The ARA believes that investing in the future of business, especially retail, should be at the heart of our Government's economic strategy.
1 World Bank 2018, ‘Doing Business: Economy Rankings’. 2 World Economic Forum 2017, ‘The Global Competitiveness Report 2017-2018’. 3 Oxford University Centre for Business Taxation 2016, ‘G20 Corporation Tax Ranking’.
BY HEATH MICHAEL [ARA]
Business Investment. When researching business investment across the globe, we looked straight to the World Bank and its 'Doing Business' series. 'Doing Business' assesses 190 countries across the world for their ease of doing business. The 2017 edition places Australia 14th, ranked behind our neighbours New Zealand, as well as Singapore, Denmark and South Korea, to name a few. Out of 190 countries, Australia ranks poorly on key indicators including cross-border trade (95th), registering property (51st) and electricity access (47th). Despite this, retail entrepreneurs can take comfort in Australia’s high rankings for starting a business (7th) and access to credit (6th). This proves that matters of the heart are not always so simple, and while the positives are definitely there, the negatives correlate with some of the more significant challenges facing local retailers in 2018. The ARA believes that every new regulation, tax, law and public servant increases the compliance cost for business. We support the fundamental
he Australian retail sector has faced a dynamic of change over the last decade: increasing competition from
principle of small government, which removes the laws and regulations which create unnecessary time and cost burdens for business. Retailers are clearly identifying the size and scale of bureaucracy within local government as a priority concern for their businesses. Many retailers often need to engage with multiple regulators, with differing timeframes and requirements, sometimes just to solve a single issue. The World Economic Forum’s Global Competitiveness Index , ranks Australia 80th out of 137 countries for ‘Burden of Government Regulation.’ Alarmingly, this places Australia behind a number of third-world nations, which is unacceptable for a G20 economy. It is clear that while we have come a long way since the GFC, there is more that can be done to stimulate investment. Businesses need incentives and certainty to grow and employ more workers. The ARA believes that investing in the future of business, especially retail, should be at the heart of the economic strategies of our Governments at all levels.
At present the high corporate tax rate in Australia is discouraging investment and hurting competition, especially with overseas businesses who enjoy better trading conditions. Recent moves by several of Australia’s G20 counterparts to reduce corporate tax rates by 2020 will place Australia further behind the world’s advanced economies . The ARA advocates the view that each dollar raised in tax revenue is one dollar less that a business or households spend. The realities for business and retailers are well known: we can continue to suffer the death of a thousand cuts or drive policy agendas which cut, reduce, speed up regulation and drive investment. Government should follow its heart, to help get ours racing again.
international and online retailers, globalisation and a fluctuating economy all testing retailers’ mettle and promoting significant structural changes at the heart of the retail industry. Since then, the Australian Retailers Association's (ARA) policy team have called for recognition by all levels of government that long-term business planning requires investment certainty, low taxation, a flexible wages system and reliable, inexpensive sources of energy supply. At the heart of retail investment strategies lies the need for a strong, globally competitive economy which provides businesses large and small with the commercial freedom to take calculated risks, invest and secure productive rewards that benefit business owners and managers, their families, employees and consumers want. The ARA recently submitted to the House of Representatives an Inquiry on Impediments to
The ARA works to ensure retail success by informing, protecting, advocating, educating and saving money for its 7,500 independent and national retail members, which represent in excess of 50,000 shop fronts
throughout Australia. Learn more at retail.org.au/member_advocacy
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FEATURE | CUSTOMER EXPERIENCE
Is tech enough to improve the customer experience?
By harnessing the right technology, retailers can enhance the overall experience for their customers.
BY MATT NEALE [ESTAR]
Y ou could argue that customer recent years, despite the rise of new and recycled offerings, such as Artificial Intelligence (AI), machine learning, Augmented Reality (AR), Virtual Reality (VR) and a whole lot of other ‘virtual’ buzzwords. Is this what customers want? And if so, how are these tools improving the overall experience? Retailers need to strip down these virtual technologies into the components that make an actual, positive difference to their customers and their experience. By using technology to gain a better, more unified view of the customer, along with advanced customer behaviour analysis, retailers can vastly improve the overall customer experience. The buzzword technologies themselves are not the differentiators. It’s the application and combination of these technologies that will drive the next major changes in our in-store and online experiences. STEP 1: CONVERGENCE What used to be called omni-channel is changing, as it becomes relevant in real-world scenarios and refined in practice. experience in the online landscape has not fundamentally changed in
Transactional channels (in-store and online) are becoming unified, providing a single view of customers, full-breadth of product range and improvements around returns, extended ranges, aisle functions and Click & Collect capabilities. As things continue to progress, there will be an emergence of ‘commerce systems’ to replace the current separate point of sale (POS) and e-commerce systems. Once these channels are unified, the buying history of online customers will be available for analysis, again influencing the future experience that shoppers will have. STEP 2: ARTIFICIAL INTELLIGENCE, PATTERN RECOGNITION AND MACHINE LEARNING Going a step further, there will finally be some progress in the use of AI, which has been promoted as the next big thing for decades. In addition to the more traditional applications of AI, such as trend identification, insight generation and reporting, more exciting applications are becoming possible, including facial recognition, visual search and customer behaviour analysis. Applied to retail, these features create opportunities to improve the customer experience. Visual search, for instance, makes it easier for customers to find what
they are looking for, since they no longer need to try to describe it, or understand how a retailer might have tagged a product. Retailers like THE ICONIC and ASOS have already embraced visual search. They allow customers to upload an image of something they want to purchase and display products that look similar to that image, irrespective of any text descriptions or classifications in their back end systems. FOCUS ON THE ‘ACTUAL’ WITHIN THE ‘VIRTUAL’ Retailers will need to strip down ‘virtual’ technologies into the components that make an ‘actual’, positive difference to their customers and their experience. By using technology to gain a better, more unified view of the customer, along with advanced customer behaviour analysis, you can vastly improve the customer experience. It’s not the buzzword technologies that are the differentiator, it’s the application and combination of them that drives the next major changes to our in-store and online experiences. eStar is Australasia's leading specialist e-commerce solutions provider, delivering outstanding experiences with some of the region's best brands, through a combination of thought leadership, user experience, development, design and partners. Learn more at estaronline.com
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LOGISTICS | SHIPPING
LOGISTICS | SHIPPING
Clearly, transparency wins in a customer- centric world Transparency in shipping, fulfillment and supply chain is becoming increasingly important as a way to drive customer experience. I f Amazon’s gargantuan rise has taught retailers one thing, it’s that putting customers at the heart of your business will pay handsome dividends. This singular purpose to design the shopping experience around what's convenient for customers sounds easy, but savvy retailers know that executing it well is a lifelong commitment. How can retailers design their supply chain in a way that customers can appreciate its transparency? In Temando’s State of Shipping in Commerce (Australia) report, almost 40% of shoppers honed in on convenience as the key reason they shop online. We know that convenience through an e-commerce lens is multi-modal and multi-faceted. Convenience begins before a consumer jumps on an online store right through to when they are returning their order for a refund or exchange. Here's three ideas that retailers can adopt: TRANSPARENCY AT CHECKOUT AND BEYOND Did you know that four out of five shoppers are likely to become a repeat customer after a positive shipping encounter? Being transparent throughout the shipping process can remove shopper anxiety and reduce customer service calls bottlenecks. As a result, retention rate rises. How can retailers be more transparent? At checkout, serve shipping options that take into account the delivery location in real-time and show dynamic pricing that fairly reflects the cost of delivery if 'free shipping' is not an option. Then, throughout the post-purchase process, engage your customer in great tracking communications to leverage each touchpoint as a customer experience opportunity. > BY SHEEDA CHENG [TEMANDO]
With technology solutions available from companies like Temando, retailers do not have to feel like they're going at it alone when it comes to updating their shipping and fulfillment practices, so I encourage you to consider partnering with a vendor. TRANSPARENCY IN PACKAGING For a third of shoppers surveyed by Unilever, a convenient experience should not be at the environment’s expense with this segment opting to buy from brands that are environmentally conscious. How can retailers drive sustainability from their supply chain practices? Instead of using one standard box full of loose fill polystyrene chips to pack a much smaller item, why not invest in the future of your business with automated packaging solutions like the CVP-500? It can wrap each
order optimally around the dimensions of the items using 3D technology to cut down cardboard use by 20%. Making a business case for such an investment may seem daunting initially, but what is the true cost of losing customers due to your irresponsible packaging practices? A Nielsen report showed that millennials and Gen Z (the very consumers who continue dictating who, how, why, and where they'll shop), are driving a more sustainable society, so brushing off a need for more transparency in packaging will have long term ramifications.
Being transparent throughout the shipping process can remove shopper anxiety and reduce customer service calls bottlenecks.
TRANSPARENCY WITH ACCESSING PACKAGES We've covered supply chain transparency at checkout with dynamic shipping options through to sustainable methods of packaging. But what about addressing those missed deliveries that frustrates consumers to no end? How are retailers increasing transparency at this stage of their customer's journey? Offering alternative pick up points, such as technology enabled parcel lockers like the ones offered by Packcity that don't rely on business hours to operate is one option. Some retailers, such as Decathalon France, are taking this idea further by placing lockers with customised branding in their bricks- and-mortar stores to pull online customers into their physical environment. This tactic not only reduces wait time at the counter, but it drives the basket size of the online customer who ends up buying more items in store. Aside from the feel-good factor, these three ideas are all easily achievable and are proven to increase revenue and profits while driving operational efficiency. Forrester found that Australia is the fourth largest e-commerce market in Asia Pacific at a predicted $31 billion US of online retail sales in 2018, but India at $27 billion is poised to surpass it in 2019. But it’s not too late to change the course. Focus on anticipating shoppers' needs, use supply chain as tools for success, and let your actions show your commitment to transparency and customer-centricity.
Sheeda Cheng is the Head of Brand for Temando, an Australian-founded shipping software company that is part of the global Neopost Shipping group. Discover how Temando helps retailers drive great customer experiences with powerful shipping and fulfillment technology by connecting with her on LinkedIn or through temando.com
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JULY 2018 | RETAILER 13
FEATURE | LOYALTY
LOYALTY AT THE core of retail How retailers can grow their customer base and increase consumer loyalty.
Loyal customers are looking for more than a discount – they want a seamless, value-driven experience that is intuitive and personalised, convenient and instant.
BY RADINCK VAN VOLLENHOVEN [STOCARD]
T he role of retailers has shifted dramatically compared to only a decade ago. Consumers now browse, shop and transact across multiple touchpoints and locations, meaning retailers must be on the pulse at all times. Indeed, some of the biggest challenges and opportunities for retailers today is the ability to ‘know’ their customer, empower their purchasing habits, and importantly, retain them in more thoughtful ways than ever before. Digital platforms have played a pivotal role in linking online and offline retail experiences, with data intelligence filling the gap and enabling highly personalised and omni-present retail experiences across online, mobile, and bricks- and-mortar stores. Through the intelligent use of data, retailers can offer customers a highly personalised experience. Websites can be individually personalised to each user based on algorithms and predictive analytics, while online data can create compelling cross-channel experiences. Mobile apps with built-in location intelligence can generate huge amounts of valuable data including online shopping behaviour and closed loop attribution in-store. This provides retailers with significant leverage for engaging customers in real-time and with relevant content. When considering that 64% of Australians own a smartphone, and a quarter of Australians use their smartphone for a retail transaction, the smart technology of mobile platforms provides a powerful portal for seamless and integrated shopping experiences.
Mobile-based loyalty apps like Stocard are also proving to be an asset in nurturing customer loyalty. The advent of digital wallets has replaced the need for multiple plastic cards, and with a high level of in-app transparency, consumers now have more control and visibility over their rewards, including the ability to shop for exclusive deals – and according to Nielson, 48% of consumers said they are likely to spend more if they are going to be rewarded. Australian retailer and iconic lifestyle brand, Country Road, have implemented a successful loyalty and mobile marketing strategy. Country Road wanted to better connect with existing loyalty members to drive incremental store visits and sales. By applying predictive analytics and location intelligence through the Stocard app, Country Road engaged customers with tailored offers through geo-push notifications when customers were within the radius of a store. Country Road were also able to showcase the brand’s fashion and lifestyle products specific to a customer’s profile. When building brand loyalty, retailers can also benefit by shifting their mindset from simply offering loyalty programs to becoming a loyalty business at the core. Loyal customers are looking for more than a discount – they want a seamless, value-driven experience that is intuitive and personalised, convenient and instant. Additionally, retailers can offer cash back, flexible redeemable points, affiliated partner rewards, and loyalty mileage – where points earned don’t take several years or hundreds of dollars of spending to accumulate.
Three tips for retailers to help boost customer engagement and loyalty through mobile marketing
1. TURN ON MOBILE PAYMENTS Mobile is an important extension
of a retailer’s storefront, and with consumers nowmore smartphone dependent, it makes sense that mobile transactions are enabled. Beyond convenience, an important element to consider is the functionality and design of the mobile interface, as well as the user-friendliness of the transaction gateway. 2. ACTIVATE LOCATION INTELLIGENCE Geo-location, combined with the smart technology of mobile-app integration with physical stores, offers another pathway to engage customers in close proximity. There is a fine line with this approach – as this is an invitation for the customer, therefore you must be wary not to bombard them and step over into creepy territory. 3. IMPROVE YOUR SERVICE BY PROVIDING A FEEDBACK SYSTEM To get to know your customers and ensure the services you provide meets their needs and expectations, ask customers what they think about the purchasing and transaction experience, as well as customer service. This feedback loop can easily be added to your mobile or online site, customers can rate their experience and receive an in-store incentive.
Radinck van Vollenhoven is the Country Manager of Stocard Australia and New Zealand, helping retailers close the loop between mobile and offline. With more than 25 million global users, Stocard is the leading wallet app for loyalty. Learn more at stocardapp.com
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melbourne CONVENTION & EXHIBITION CENTRE 26 & 27 august
CSR | ECO-FRIENDLY
I n a purpose driven world, where everyone strives to find meaning through good choices and fulfillment, companies are under more pressure than ever before. In fact, according to the 2015 Cone Communications and Ebiquity Global CSR Study, 90% of global consumers are more likely to switch to brands associated with a good cause. This trend isn't going anywhere any time soon, so what are we doing about the rise of the ‘conscious consumer’? With the world affected by excess waste destroying both our land and oceans the changes in buying behaviours is at an all time high. Clothes, homeware, cosmetics, food products and medical care all starting to make environmentally focused changes in a traditionally chemical dense market. Let’s get one thing straight, there is still a very long way to go. However, more businesses are emerging and responding to current social trends and adapting to the demand of their customers. These changes are beginning to permeate the mainstream, creating a competition of sustainability across the market. GREEN CONSUMERS LEADING THE PACK ‘Going green’ is no longer a stigma attached to a minority, in fact, it’s the ‘cool kids on the block’ that are now taking charge and leading the way. In fact, eco-innovative companies are increasing by 15% annually, while other competitors remain flat. Why? Because consumers are engaging in purchases with businesses they trust. In order to gain trust and remain in favour with consumers, retailers are having to meet the demand by providing products and services that are better for their environment. Looking to the future of consumer behavior, where customers increasingly seek out sustainable and natural alternatives, James Dutton, Founder of Nutricare, said that green is set to be the newmainstream for commercial products. now introducing healthier, safer, and more environmentally focused products as the competition of sustainability grows. BY JAMES DUTTON [NUTRICARE] PRODUCTS WITH A PURPOSE: WHY IT MATTERS MORE NOW THAN EVER BEFORE? In a world where people are seeking purposeful purchases, businesses are
“We’re on the brink of sustainability being embraced by the mainstream, and there’s never been a better time to be a profit-with-purpose business,” Dutton said. This is just the beginning. The buying power of eco consumers will only increase as time goes on, which is one of the major reasons why successful businesses factor this in before they enter the market with new products. This is the ultimate way to achieve competitive advantage in the future as intense price competition becomes unsustainable. Major retailers are facing a huge demand for rapid change in how their products are packaged. Nielsen’s 2015 global sustainability report showed that 52% of consumers are making purchase decisions based on packaging that shows the retailer is making a positive social and environmental impact. New to the market brands like Nutricare are able to respond to changing customer preferences quickly. Later to market, innovative brands are founded with the core mission to reduce excess waste with their packaging and create sustainable alternatives, which appeals to both customers and retailers. With this in mind, supermarkets and grocers are urged to pay closer attention to the ‘little guys’ pathing the way for environmental innovations to replace a chemically dense market. Let’s look at this as a win-win opportunity for grocers to increase their flexibility to meet standards, and promote consumer based incentives. Although the rise of the purpose-driven consumer raises the challenge of competitive sustainability in the market, businesses have the opportunity to embed real social change into the core of their thinking. Ultimately, the goal is for manufacturers to reduce the cost of production associated with eco-practices, thus increasing volumes in the marketplace, that reflect greater profitability and opportunity for the eco-consumer. James Dutton founded Nutricare in 2016. As an Australian natural health innovator, James has developed advanced solutions to common health and personal care items on the market. Created with the most premium, sustainable ingredients available, these products aim to empower consumers with choices that will make a significant difference to their everyday lives and the world we live in. Learn more at nutricare.co TEAMING WITH SUPPLIERS BRINGS SUSTAINABLE COMPETITIVE ADVANTAGE
Australia’s premier textile, clothing & footwear trade show.
Open Days Sunday 26 th August, 9.00am to 6.00pm Monday 27 th August, 9.00am to 2.00pm Door 1 - Bays 1, 2 & 3 Melbourne Convention & Exhibition Centre
For a full list of exhibitors please visit fabevent.com.au.
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FEATURE | BRAND PURPOSE
FEATURE | BRAND PURPOSE
Why you need purpose in an age of mistrust
In a competitive environment where overseas rivals are putting pressure on local retailers, businesses need to invest in building their brand purpose for their customers and their people.
T rust is a fundamental building block of customer loyalty. Yet it’s increasingly in short supply as brands across the spectrum are taken to task for mishandling personal data. Even if you’re not one of the financial institutions or social networks in the eye of the storm, your business is at risk of becoming collateral in this dogfight over data, trust and who gets to be taken seriously. Trust is eroding quickly and it’s a serious problem here in Australia. From a list of 28 nations in the 2018 Edelman Trust Barometer, only six countries have suffered a steeper loss of trust during the past year.
with 57% buying from or boycotting brands based on social or political issues. Purpose initiatives help demonstrate beliefs and commitments to customers who are increasingly looking to put their money where their trust and values lie. Consumers want to see brands follow through on marketing messages with concrete actions in their communities and their workforce. Australia has long struggled with low employee engagement rates – with just 24% telling Gallup researchers that they feel connected to their work. Demonstrating purpose through corporate
claims. Purpose must be a sustained part of your business, not just a publicity tactic. Exactly how you follow through on your stated values will be heavily scrutinised and consumers have more platforms than ever before to make their feelings heard. As Oxford University trust expert, Rachel Botsman says, “Trust doesn’t sit in one place and it isn’t a project. Trust is embedded in the DNA of an organisation.” THE LIMITS OF PURPOSE Despite its undoubted value, brand purpose also has a limit in this age of mistrust. In an academic study involving 1,375 customer responses about 93 brands across 18 industries, CSR activities had a positive impact on customer attitudes and retention rates. This was particularly true of brands suffering from a weaker position in the market and those hamstrung by small advertising budgets. Yet these purpose-based initiatives can’t make up for resting your laurels and failing to innovate. It’s those who do good deeds and engage in innovation who do the best. For many Australian retailers, there’s a lot of ground to make up. For those who can secure the trust of their customers in an unsettling age, the pay offs are significant. In the UK, trust is now the second most important factor for consumers behind price when deciding where to shop, according to PwC. Having a great product is no longer enough. Consumers want to understand your values and see how you live them. The most powerful brands will combine purpose with innovation to keep customers loyal.
BY AARON GREEN [SAP SUCCESSFACTORS]
social responsibility (CSR) activities creates a virtuous cycle. Engaged employees who feel like they can be their authentic selves at work tend to stick around and be more productive. They also provide better customer experiences – a key differentiator for retailers. Purpose also goes beyond CSR efforts to include initiatives that Human Resources (HR) spearheads within the workplace. It’s about ensuring values are
Another study by the Havas Group found brand trust in Australia was the lowest in the world at just 25%, compared to a global average of 57%. The situation may take a further hit with the implementation of new data breach regulations forcing companies to quickly reveal when customer data gets hacked. THE POWER OF PURPOSE All of this comes at a time when retailers are feeling the
Consumers want to see brands follow through on marketing messag- es with concrete actions in their communities and their workforce
Aaron Green is the head of SAP SuccessFactors ANZ. SAP SuccessFactors is a global provider of cloud-based human resource software and fully integrated human capital management (HCM) systems. It helps companies of all sizes improve employee engagement, productivity and team performance by connecting your people with your purpose. Learn more at successfactors.com
reflected in how they treat staff. Such efforts are no substitute for traditional marketing but it’s a powerful extension. And it makes for compelling storytelling opportunities. Yet retailers must bear in mind that consumers are more conscious than ever of inauthentic
pinch in-store and online from slick overseas rivals. Brand purpose is a great way for retailers to build consumer connections and stand out from the crowd – but only if it’s done right. Edelman’s Earned Brand 2017 found 65% of consumers buy on the basis of their beliefs,
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CSR | TRANSPARENCY
Victoria Greene is an e-commerce marketing expert and freelance writer who admires brands that embrace honesty. You can read more of her work at victoriaecommerce.com
There’s a fairly thin line between dressing up the truth and breaking it entirely. +
Transparency is the new black How retailers can use transparency in marketing
DON’T OVERSELL, BUT OVERDELIVER Product descriptions can really get out of hand if you’re not careful. There’s a fairly thin line between dressing up the truth and breaking it entirely. Imagine that you’re selling a phone accessory, and you put up promotional information that boldly states, “Compatible with any smartphone!” even though you’re not absolutely sure of that. Inevitably, someone will come along with a phone you’ve never heard of and find the compatibility lacking, leading them to take a very dim view of your business. Then imagine instead simply putting “Compatible with most smartphones, including [list]. Contact us if you’re unsure”. You might not make quite as many sales, but you won’t run the risk of incurring complaints and returns from buyers irate that you misled them. In fact, you may just get a great review from someone who bought the accessory for a supported phone only to find that it also worked with an unlisted one. Be honest with what your products involve - it’s the best approach in the long run. USE SELF-DEPRECATION TO WIN PEOPLE OVER Ever since the rise of social media, turning even the driest of businesses into social-facing brands, the value of calculated informality and charming self-deprecation have become readily apparent. Because the line between individual and company is blurred online, users end up drawn to brands for the same reasons they’re drawn to friends: they like them, associate with them, and view them as honest and aware of their faults. As a result, it can be incredibly effective to lampshade your more contrived tactics. You can still use all the tricks of the trade - apply pressure through social proof, draw people in with cryptic subject lines or use countdown timers - but whenever you think you might be getting too nakedly promotional, throw in a simple self-
effacing remark about your sales tactics being a bit excessive. In doing so, you might just hang on to users who would otherwise have been angry with you but instead end up being empathetic. TURN CUSTOMERS INTO ADVOCATES I touched upon the prospect of getting good reviews through providing customer experiences that overdeliver upon what you lead them to expect, and the added social proof of reviews isn’t the only benefit of that approach. In fact, it isn’t even the biggest benefit if you do it correctly, because that would be long-term customer loyalty and advocacy. Why is this? Well, customer retention is a massive part of running a successful business of any kind, let alone in the commerce world where people have good reasons for spreading their purchasing around. Stats continue to show that recruiting new customers is much more expensive than keeping the ones you have, and that customers typically spend more through businesses they’ve used for some time. The more you do to demonstrate to your customers that you’re willing to be transparent with them, the more loyalty you’ll engender, and the more eager they’ll be to not only stick with you but even defend and recommend you on an ongoing basis. Consider how powerful that can be - impress someone with influence in a relevant community, and they’ll single-handedly drive sales for you at no extra cost. Transparency is all about winning trust, not only in the short term to yield a few sales, but in the long term to retain a loyal customer base that loves what you do and will support you without you needing to ask. By working it into your marketing, you can cut down on the churn and earn a great brand reputation for years to come.
BY VICTORIA GREENE [VICTORIA E-COMMERCE]
I n the digital world, being customer-centric is more important than ever before - and it was already incredibly important. Companies invest huge amounts of time and money in finding better ways to win and retain customers, and something that comes up often is transparency. Being transparent is all about letting the customer in, being truthful about what you do and why you do it, and establishing an operational consistency that people can rely on. It’s something every retailer needs to embrace in its marketing efforts, and here’s how I suggest doing it: SEEK AND LEARN FROM CRITICISM When you have some kind of problemwith your operation that might affect your business (or is already affecting it), you have two options: you can keep it quiet and address it internally, or you can openly comment on it through your marketing. Naturally, most companies would like to avoid mentioning negatives, but the latter option is often the better one (contrary to common perception, focusing on positives isn’t always the best approach). Here’s why: If you avoid an issue that you know is going to irritate your customers, their perception of you is only going to get worse. Customers want to feel heard and know that their opinions are being taken into account. Ignoring, avoiding or minimising their concerns will leave them viewing you as negligent and indifferent, and very unlikely to want to hear from you again— but if you readily address them and show that you want to improve, you can turn negatives into positives.
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ARA Retail Institute
REGULARS | TRAINING
Division of Australian Retailers Association
Diploma of Retail Merchandise Management BUYING. THE FABRIC OF AUSTRALIAN RETAIL.
We’re not only helping people find employment, but providing them with a rounded work opportunity. +
THE HEART OF HIRING The Retail Ready Jobs Program gives employers a new way to hire, without compromising on quality.
DESIGNED FOR RETAIL BUYERS & MERCHANDISE PLANNERS
A first for Australian retail, the Australian Retailers Association have developed a tailor-made course for mid-level buyers and planners. This unique qualification includes a range of activities including concept theory, case study analysis, practical workshops and hands-on assessments. Courses will run from March 20018 to April 2019 in Victoria, NSW and Queensland. In-house training is also available.
BY SARAH MULDOON [ARA]
F or over two years the Australian Retailers Association (ARA) have been partnering with Myer’s flagship store in Hobart, Tasmania, to deliver quality training services and job outcomes for candidates struggling to find employment. With excellent customer service being central to the retail experience, hiring the right talent is the first step to achieving this goal. Representing over 7,500 local and international members in more than 40,000 locations, the ARA’s training department, the Retail Institute, provides retailers with an excellent opportunity to engage with enthusiastic jobseekers within the community, equipping themwith valuable skills and work experience through the Retail Ready Jobs Program. While traditional hiring practices can be time-consuming and costly, with low retention rates and high staff turnover, the seven-week employment program provides Myer with a no-risk, targeted recruitment process, where they are able to select from a pool of suitable candidates, and work with the ARA and Employment Service Providers to deliver high-quality training. The collaboration between Myer and the ARA has led to the Retail Ready Jobs Program being expanded to suit Myer’s specific needs, as well as to enrich the overall experience of each participant. Supported by a team of programmanagers, facilitators and senior Myer
employees, the training now includes seminars on grooming and presentation, shrinkage and loss-prevention, visual merchandising and sales techniques. Debra Crump, ARA’s programmanager, believes that a close working relationship with Myer has been vital to the success of the program. Of the 12 participants who completed the department store’s most recent program, all have been offered ongoing employment at Myer. “The participants are immersed in the culture from day one. Each time we run the program that relationship gets stronger,” Ms Crump said. It’s amazing howmuch their confidence and self-esteem grows when given the chance to prove what they’re capable of. The program really changes lives. It gives hope for the future.” James Spencer, a recent participant in the ARA Retail Ready Jobs Program, is one of the candidates who secured a casual position with Myer. The 22-year-old had struggled to find employment in the retail sector for over a year before he decided to try his luck with the program. “I was trying to get as much out of it as I could.” James said. “I saw it as a great opportunity to learn new skills and get my foot in the door.”
James found the program gave him the tools and confidence he needed to excel in a retail setting. After initially feeling intimidated during his first week of work placement, James says he is now thrilled to be given the chance to demonstrate his skills at Australia’s largest department store. “Myer is the pinnacle of customer service and retail environments in Australia. It was definitely the best starting place I could hope for,” he said. Kathleen Kelly, the Assistant Store Manager for Myer, Hobart, believes that the program has caused them to re-think the way they hire staff. “The program opens up more channels that traditionally, we, as a business, wouldn’t always think to access," Ms Kelly said. "It’s great to have a wider range of people coming from the community and receiving specific training and coaching that will help upskill them for the retail environment. We’re not only helping people find employment, but providing them with a rounded work opportunity.” The ARA’s Retail Ready Jobs program provides an entry level employment pathway for jobseekers into the retail industry. This program is free for all sized retailers, connecting passionate jobseekers with job-active providers and positioning retail as a long-term fulfilling career. For more information regarding the ARA’s Retail Ready Jobs program please visit retailreadyjobs.com
PICK & CHOOSE (PER WORKSHOP) $450
FULL DIPLOMA (11 WORKSHOPS) $4500
ARAMembers can enjoy a 10%member discount off each ticket.
“Finally a course that gives me the skills I need to take the next step in my retail career.”
For more information visit w. info.retail.org.au/buying e. firstname.lastname@example.org p. 03 8660 3341
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