The Retailer - Issue 66

Issue 66 - August 2019 THE RETAILER

Setting the scene for success

TECH SAVVY CONSUMERS

DISRUPTION FOR A NEW DECADE

THE RETAIL MORPHOSIS

COFFEE

FAMILY GROCER

Aussie and Proud? So arewe.

For the last 30 years eftpos has been providing competitive and convenient payment solutions to all Australians. Today, we have become the first payment service to adopt the Australian Made logo. Tomorrow, is a new day: we are updating our infrastructure and seeking to adopt the most innovative product technology. This is our commitment to Australian consumers, merchants and the local industry.

CONTENTS Issue #66

Features 08 5G AND THE RETAIL REVOLUTION

5G is set to revolutionise the retail sector by providing innovative technologies and solutions. As the network rolls out, forward-thinking retailers should look to embrace 5G sooner than later 3O WOMEN IN RETAIL: THE FLOURISHING DIGITAL NETWORK How an expert business consultant uses technology solutions to impact the bottom line and create new business opportunities 40 2019 EFTPOS ARA AUSTRALIAN RETAIL AWARDS EXCLUSIVE See who took the crown at the 2019 eftpos ARA Australian Retail Awards! 50 ICEBERG LOYALTY: A NEW WAY TO DISRUPT YOUR COMPETITORS In today’s competitive market, a different way of thinking is necessary. It is disrupting the status quo of retail marketing that will drive genuine customer loyalty

IN-STORE 10

REGULARS 04 From the Executive Director 06 Retail news from across Australia 22

Keeping upwith e-commerce

16

Stay true to your brand in an age of upheaval and ‘disrupt without damage’ Ethical fashion is the newblack for the future of retail

Five strategies to upskill your employees

24

TECHNOLOGY 14

28 Sensing a successful store design 34 Retail is a numbers game 38 The power of the senses: How in-store atmosphere persuades customers to buy 54 The rise of the ‘gig economy’ and fall of traditional work structures 58 Influencing the customer experience tomaximise sales 64 Retail leases for a newdecade ONLINE 12 The future of shopping is conversational 18 How retailers can create a digital footprint which accelerates sales 48 Revolutionising retail payments with tokens 52 Building digital success in retail 60 The technology retailers need to keep on top of online reviews

Making the most of your customer experience by going omnichannel 20 How the next generation of devices will improve the retail experience 26 Unlocking the potential of AI 32 Maximising profitability starts with advanced inventory insight 36

The era for the food and beverage industry to go digital

56 62

Healthcare at the heart of retail

Machine learning and artificial intelligence are transforming retail

65

Will disruption save retail?

ARA PRODUCTION TEAM Editor in Chief Zoe Thompson zoe.thompson@retail.org.au Marketing Specialist Trina D’souza trina.dsouza@retail.org.au Design coordinator Beth Hirsch beth.hirsch@retail.org.au

Melbourne Office Level 1, 112 Wellington Parade East Melbourne VIC 3002

External Contributors Adjuno, Blue Yonder, Customology, Daylight Agency, Honeywell, Kronos, Lease 1, Live Person, Manhattan Associates, Mastercard, McCartney Design, MeldCX, Mood Media, Nielsen, Online Marketing Gurus, Oppo Australia, RB Health, SAP Ariba ANZ, SoftwareAG, SOTI, Tetra Pak, The Realise Group, Workpro, Zendesk

Events and Sponsorship Account Manager Chris Sav chris.sav@retail.org.au Retail Institute training@retail.org.au or call 1300 368 041 Graphic Design Bandit Design Group hello@banditdesigngroup.com.au

Follow the ARA

australianretailersassociation @austretailers @retailaustralia australianretailersassociation

Australian Retailers Association Phone (toll free): 1300 368 041 Fax: (03) 8660 3399

Copyright Contents may not be reproduced in any form without permission from the Australian Retailers Association and then only with suitable acknowledgments. 2019 Australian Retailers Association ISSN: 183404720

From the Executive Director

ith the end of 2019 fast approaching, this special Awards edition of The Retailer focuses on Setting the Scene for continual success in the retail sector. As we transition into the next era of retail, I am proud to celebrate Australia's extraordinary retailers on the national stage that is the 2019 Australian retail and the theme Retail Morphosis highlights developments in the retail sector and the industry’s achievements to date. In recent years, the industry has undergone a revolution, becoming a highly integrated network that is evolving and changing at a rapid rate. I would like to take this opportunity to personally thank our corporate sponsors, esteemed judges, and the entire ARA team for organising this event. Your ongoing support and contribution to our annual Awards has allowed us to fulfil our endevour to provide a space where we have been able to acknowledge our outstanding Australian retailers for almost fifty years. W eftpos ARA Australian Retail Awards. This year’s Awards reflect the history of

Finally, I’d also like to thank the retailers who submitted a nomination or were nominated by their peers for this year's Awards. The high standard of submissions received by the ARA is a true reflection of the passionate retailers who contribute to the vitality of this thriving sector. While international marketplaces, innovative mobile technology and the evolving needs of the contemporary consumer pose as threats to the sustainability of Australian retail, it’s the innovative retailers who continue to reinvent their businesses that stay ahead of the curve and triumph against the challenges. We hope you enjoy this special edition of The Retailer , and we forward to seeing what the next decade will have in-store for retail.

THE AUSTRALIAN RETAILERS ASSOCIATION COUNCIL

President Rowan Hodge

Vice President Anthony Wilson Secretary Steve Plarre Treasurer Graham Dear Advisory Councillor Andrew Ng

National Councillors Toby Darvall

Charlie Davey

Mark Daynes

Ralph Edwards

Clayton Ford

Jack Gance

Beth Knight

Russell Zimmerman Executive Director Australian Retailers Association

Greg Leslie

Drew Meads

Stephen Younane

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CommBank Retail Insights.

CommBank’s latest Retail Insights Report – Edition 7 – explores resilience within the retail industry and the factors behind why some retailers consider themselves resilient compared to others. The research looks at why the mindset of leadership and landlords contributes to the resilience, and success of retailers. Download your free copy at commbank.com.au/retailinsights To learn more about how you can put our insights into practice within your own business, call ARA on 1300 368 041 and they’ll put you in touch with a CommBank Business Banking Specialist. Explore unique perspectives on trends and developments in the Australian retail industry to help you become a more resilient retailer.

Things you should know: This report is published solely for information purposes. As it has been prepared without considering your objectives, financial situation or needs, you should, before acting on the information, consider its appropriateness to your circumstances and if necessary seek the appropriate professional advice. The information in this report is based on a survey of 638 decision-makers from small, medium and large retailers across Australia, with turnover ranging from less than $1 million to over $500 million, and in-depth interviews with seven retailers and six retail property landlords by ACA Research on behalf of the Commonwealth Bank. Any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of the publications compilation, but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made. Commonwealth Bank of Australia ABN 48 123 123 124.

T ICONIC TOYS“R”US AND BABIES“R”US BRANDS RETURN TO AUSTRALIA RETAIL NEWS FROM ACROSS AUSTRALIA BY ZOE THOMPSON [ARA]

lmost two thirds of online shoppers shun celebrity influencers when shopping online and more than six in ten (61%) feel that celebrity influencers are out of date according to the latest research released today by Bazaarvoice, a provider of online ratings and reviews solutions. Fashion and lifestyle bloggers have a larger influencer on consumer purchasing behaviour than royals, models, actors or sportspeople with one in five shoppers turning to bloggers to help inform shopping decisions. But its everyday shoppers who have the greatest power to sway buyers according to Bazaarvoice. Kate Musgrove, Bazaarvoice Managing Director APAC, states, “The message to retailers and brands is clear: improving the functionality of the online retail experience to include shopper reviews is the most powerful way of keeping customers on the path to purchase. A well-thought-out digital strategy may put a product at the top of people’s Instagram feed, but the presence of reviews and the opinions of people just like them is what will seal the deal.” The research looked at the shopping habits, preferences and behaviours of more than 1,300 Australians and found that more than 80% of people seek out other shoppers’ reviews before making an online purchase. The proportion is growing year-on-year with an 8% increase in the number of people using shopper reviews when compared to 12 months ago. The findings are even more pronounced in female shoppers, with almost one in five women reading more reviews than 12 months ago. According to Ms Musgrove, the research highlights the growing importance of authenticity in consumer marketing. She explained, “Dove’s ‘Real Beauty’ Campaign launched in 2006 started a marketing revolution where consumers applauded and voted with their wallets for authenticity. This has been shown to be closely linked to trust. If a consumer can see real authentic feedback or photos, they will trust the brand more than if they see a heavily filtered and airbrushed photo. If a retailer opens itself up to user generated content in the form of reviews – good and bad – this will instil greater trust from shoppers.” The research found that nearly 40% of people say that the most important aspect of a review is knowing about other shoppers’ experiences of the product, with the same amount using reviews to validate their purchasing decision. Also, 34% agree that reviews give them information on whether a product is good value. Ms Musgrove concluded, “The retail environment is evolving quickly, and retailers cannot afford to fall behind in their adoption of trends such as personalisation and user-generated content. “The rise of organic influencers is also another key trend based on authenticity where an influencer becomes an advocate that promotes a product based on their genuine love of a brand. Micro influencers - those with around 3,000 followers in a niche area - are also becoming increasingly important for brands and retailers to engage with. “Shoppers are becoming increasingly savvy and can now see past paid promotions and flattering filters and are seeking out candid and relatable content to inform purchasing decisions.” A THE INFLUENCING POWER OF SHOPPERS HAS REACHED NEW HEIGHTS IN AUSTRALIA

ru Kids Inc, the US-based parent company of Toys“R”Us and Babies“R”Us, and Hobby Warehouse Pty Ltd in Australia announced an exclusive licensing agreement which will see the Toys“R”Us and Babies“R”Us brands return to Australia and make their debut in New Zealand. The new license agreement includes rights for Hobby Warehouse to sell through the www.toysrus.com.au and www.babiesrus.com.au websites for Australia and New Zealand. Hobby Warehouse aims to launch physical ‘experience centres’ for Toys“R”Us and Babies“R”Us beginning in 2020. Hobby Warehouse Chief Executive, Louis Mittoni, said: “We are delighted to bring the much-loved brands of Toys“R”Us and Babies“R”Us back to Australia and to introduce them to New Zealand. We believe play is extremely important in the development and wellbeing of children and their interaction with family and friends. Play enables children to develop their imagination, collaborate, problem solve, explore, create, or express themselves spontaneously. “Our mission is to encourage children to engage with as many forms of play as we possibly can. Hobby Warehouse is a digital native with a keen understanding of how to accelerate and match the requirements of the modern shopper.” Hobby Warehouse’s management team together with commercial advisor, Kevin Moore negotiated with Tru Kids’ executives and advisors for the Australian and New Zealand licensing rights. Moore said: “Previously, the Toys“R”Us and Babies“R”Us business model in Australia was focused primarily on large, physical retail stores which had high fixed costs and extended periods of relatively low sales due to seasonal factors. Going forward, the business model for Australia and New Zealand will be online focused, with smaller and fewer physical ‘experience centres’ that allow children and their families and friends to see and touch our products.” Tru Kids Executive Vice President of Global Licensing & General Counsel, James Young, said: “We are thrilled to partner with Hobby Warehouse to bring Toys“R”Us and Babies“R”Us back to Australia and to launch in New Zealand. Louis Mittoni and his team have a strong digital vision and understand both the heritage of our iconic brands and how to evolve the shopping experience for the modern consumer. This is an exciting milestone for our company as we continue to grow Toys“R”Us and Babies“R”Us around the world.”

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REGULARS | NEWS

orth Queensland small businesses affected by the North and Far North flooding can now apply for new recovery grants of up to $10,000. Federal Minister Natural Disaster and Emergency Management David Littleproud said the grants were being jointly funded under the Commonwealth-Queensland Disaster Recovery Funding Arrangements (DRFA). “Small businesses drive local economise and these floods have really hurt so many Queensland small businesses,” Minister Littleproud said.” These grants will be available in 14 local government areas to provide further support to small business owners. “We need to help flood-affected small businesses survive and prosper.” The grants are available to eligible businesses in Cloncurry Shire, Flinders Shire, McKinlay Shire, Richmond Shire, Townsville City, Burdekin Shire, Burke Shire, Carpentaria Shire, Charters Towers Shire, Croydon Shire, Douglas Shire, Etheridge Shire, Hinchinbrook Shire and Winton Shire Council areas. Queensland Minister for Employment and Small Business Shannon Fentiman said the impact of the monsoon disaster had severely affected the region. “Local businesses are the lifeblood of our communities and getting them back up and running is key to guaranteeing our long-term economic recovery,” Minister Fentiman said. “These grants ensure that affected business owners are financially supported through their recovery and can undertake repairs to buildings, plant and equipment. “The grants will also support small business owners to take steps, so they are better prepared and more resilient to future disasters.” Resilience funding is open to businesses across the 14 local government areas, including those who have already received Special Disaster Recovery Grants or Loans and those that were not originally eligible for these funds. Repairs funding is available across all local government areas subject to specific eligibility criteria. Visit www.business.qld.gov.au/recovery to read the guidelines and submit an application for resilience or repair funding under the Small Business Disaster Recovery Grants.  SMALL BUSINESS RECOVERY GRANTS NOW AVAILABLE IN QUEENSLAND N ARM Architecture Principal Ian McDougall said Melbourne Central was the first CBD site to explore such dramatically transformative changes to its offer to maximise its relevance. “Melbourne Central is reconceiving the notion of what retail is and exploring what else it can be and seeing its rooftop as a valuable site for more than just financial exchange,” he said. Melbourne City is currently considering Melbourne Central's redevelopment plans Council for approval, with construction, projected to commence in early 2020 with minimal impacts to trading. In February, Melbourne Central was named as Australia’s most productive retail centre by the prestigious Shopping Centre News Big Guns list for turnover per square metre.

MELBOURNE CENTRAL TO UNDERGO MAJOR TRANSFORMATION

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elbourne Central is set to undergo its biggest transformation in almost 20 years as part of a quest to become a ‘temple of meaning’ for Melburnians and evolve into a globally recognised place of cultural and social exchange that nurtures and inspires its users. As of 2021, the centre will reinvent itself with the addition of an expansive open-air space offering a 2,000 square metre public oasis atop the city, a series of unexpected experiential spaces, a surprising new large-scale art installation, exciting hawker stalls and much more. An experiential space, it will be a haven for emerging retail and cultural concepts, a place for events, education and learning. Coupled with the centre’s recently announced new 10-storey commercial office tower Frame, as well as its newly opened 1,800 square metre boutique food and drink retail hub ELLA, it marks the largest transformation of the site since its 2001 redevelopment following the departure of Japanese department store Daimaru. And in a nod to the past, Melbourne Central’s owner The GPT Group has brought back the original architects, ARM Architecture, responsible for the dramatic makeover that reimagined it as the distinct collection of precincts and laneways it is now known for. “Melbourne Central has long been a groundbreaker in the design and experience of urban retail centres, with a progressive approach that has kept pace with the city’s urban fabric,” said GPT Group Development Manager, Romina Edwards. “It will be the first retail centre to shift away from being a place of solely consumerism, to a temple of meaning. The newMelbourne Central will deliver genuine cultural experiences with new and unexpected partners and challenge the way people perceive and experience retail.” Its full designs will be unveiled in the coming months, but the new look will involve the addition of two new retail levels that transition to the new timber office tower’s skylobby and surrounding rooftop. Existing Drewery Place will be reactivated, becoming an additional entry for the commercial tower and featuring a small cafe; while the rooftop will face to the north, commanding plenty of light andviews of the iconic Melbourne Central cone.

AUGUST 2019 | RETAILER 7

FEATURE | TECHNOLOGY

5 G A N D T H E R E T A I L R E V O L U T I O N

5G is set to revolutionise the retail sector by providing innovative technologies and solutions. As the network rolls out, forward-thinking retailers should look to embrace 5G sooner than later.

BY MICHAEL TRAN [OPPO AUSTRALIA]

5

G is coming. With it comes a suite of new technologies and opportunities that will impact the way consumers engage with brands and businesses.

5G will afford new opportunities for almost every sector, and retail is no different. It’s conceivable that the brick-and-mortar experience over the next few years will be fundamentally different from how it is today. The new communications technology will also drastically improve e-commerce, meaning retailers will need to utilise this new technology on both their online and offline platforms. A PERSONAL SHOPPING EXPERIENCE While 5G will allow for faster internet speeds, a key improvement is latency reduction. Latency is the time it takes for data to be sent from one device to another. 4G latency is around 60 milliseconds; 5G has the potential to be under one millisecond. In other words, phones and other internet- connected devices will be able to analyse their environments millisecond-by-millisecond. This provides many opportunities for retailers. For instance, offline shopping will become much more about the experience. By powering facial

recognition, artificial intelligence, augmented reality, and more, 5G will digitise bricks-and- mortar stores, creating the ultimate hybrid experience. Retailers will more easily be able to gather data to create customer profiles and create personalised experiences. The 5G experience will start before customers enter the store. For example, screens placed behind store-front windows could react in real- time to potential customers walking by, with facial recognition technology allowing for tailored greetings for repeat or VIP customers. This is important, as half of the Australian shoppers surveyed by Mood Media for a recent study say they’ve been attracted into clothing stores due to window or inside-screen content. 5G will also power smarter artificial intelligence, so machines will be better at making decisions like humans. This means mirrors in clothing store change rooms (or your phone camera) can be turned into sophisticated virtual shopping assistants. After trying on a shirt, you could tell the virtual assistant that it’s a little too tight on the shoulders or short by the arms. Based on your

Like any new technology, it’s about evolution, not revolution. But, for forward-thinking retailers that embrace 5G sooner rather than later, the opportunities are huge. SO, WHAT IS 5G? While 3G allowed mobile devices to browse the internet and 4G powered mobile video and gaming, among other things, 5G will bring further advancements to the network, opening up new opportunities to engage with customers via their smartphones. 5G smartphones will start launching in the coming months and, for most people, will act as a direct gateway to 5G capabilities. As the technology and network mature, we can expect to see much faster download speeds, 4K, and 8K video streaming, lower latency, and the emergence of augmented and virtual reality applications.

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could lead to significant growth in the online retail sector. Research from Adobe Digital Insights , suggests that mobile-based retail through 5G could add as much as $12 billion in the US alone. Further, the same technology that will allow in-store AR to flourish applies to mobile and online shopping. As adoption of AR apps and virtual reality headsets expands, customers will be able to yield many traditional benefits of bricks-and-mortar shopping virtually, like trying on clothing or experiencing how a piece of furniture fits in a room. For instance, many of us know what it feels like to buy a great piece of furniture only to find it looks out of place in our home. AR will allow you to virtually ‘try out’ that couch, table or house plant by intelligently placing it in a room and allowing you to view it on your smartphone. Right now we’re on the cusp of 5G, which is expected to launch this year and undergo further enhancements in 2021. Retailers need to understand both

customer profile, the brand and size of the current shirt, it could recommend a different size or a similar shirt from another brand that would be a better fit. Finally, 5G-powered augmented reality (AR) promises fantastic new benefits. AR refers to applications which layer information on top of a camera’s field of vision. 5G will greatly improve a smartphone’s ability to recognise objects. Customers could browse through a grocery store with an AR app on their 5G phone that differentiates which products adhere to dietary needs, like gluten or sugar-free, for instance. MORE CONVENIENT E-COMMERCE Well-utilised 5G technology will make bricks-and-mortar shopping more of an experience. This is essential, as the new generation will focus on improving online shopping. While it’s true that 5G’s most significant benefits will come from reduced latency, the increased internet speeds it promises are also important. According to Google , 53% of mobile users leave a site if one of its pages takes more than three seconds to load. The reduced wait times 5G will bring,

the online and offline implications of 5G. To ignore 5G is to ignore huge opportunity. 

The new communications technology will also drastically improve e-commerce, meaning retailers will need to utilise this new technology on both their online and offline platforms. +

For the last decade, OPPO has focused on manufacturing camera phones, while innovating mobile technology breakthroughs. With a presence in over 40 countries and regions, 6 research institutes and 4 R&D centres, the company focuses on providing high-end features at a desirable price point. Its most recent smartphone, Reno 5G, marks the first 5G handset for OPPO, and is currently the most affordable 5G smartphone on the Australian market. For more information, visit: oppo.com/au

IN-STORE | E-COMMERCE

Keeping up with e-commerce Key changes retailers need to adopt in-store to improve the customer experience.

BY CLAUDIO BRATOVIC [HONEYWELL]

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A recent survey conducted by Honeywell business critical mobility and IoT partner, SOTI, revealed that 45.53% of Australian consumers consider handheld mobile devices provided by store associates, that can display stock balance, pricing, stock levels online and at other stores, to provide themwith a better shopping experience in-store. Moving forward, retailers will seek to extend mobile device capabilities to more associates than ever before. Using these devices to connect every department of the operation will create employee efficiency and help deliver better customer experience. Customers expect associates to provide critical information in a timely fashion in order to fastrack their decision making process. Adopting mobile devices in-store will assist in making this much easier. Mobility in-store offers numerous benefits to retailers, with many already recognising that they can automate several associate tasks, improve store productivity and lower costs through the adoption of mobile devices. IMPROVING THE SHOPPER EXPERIENCE SOTI’s research revealed that what customers want out of their in-store shopping experience is personalised customer service (61.03%), followed by a fun and entertaining experience (45.20%). So, anything retailers can do to make shopping easy, fun, and enjoyable will assist in increasing customer satisfaction.

he demise of bricks-and-mortar stores has been a topic of contention over recent years. While several traditional retailers have closed their doors due to a downturn in business, many consumers are still shopping in-store. Any time a customer walks into a store, it presents an opportunity for stores and associates to make a connection and develop loyalty; but to keep customers coming back and continue to drive sales, retailers need to make some changes. UNIFYING MULTIPLE SHOPPING CHANNELS Consumers expect more flexibility with their shopping these days. They like to browse in-store while also reading product reviews online. If they buy something online, they want to be able to return it in-store. The successful retailers of today, understand how important it is to make goods and services available to consumers via multiple shopping channels. Retailers need to integrate these channels to ensure the consumer has a consistent and seamless experience no matter the interaction – be it in- store, online, or by phone. LEVERAGING MOBILITY IN-STORE The use of mobile devices as part of the in-store experience is becoming an expectation of consumers, with more stores investing in technology that enables associates to work more efficiently and assist with in-store communications.

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Retailers need to integrate these channels to ensure the consumer has a consistent and seamless experience no matter the interaction – be it in-store, online, or by phone.

COMPETING WITH E-COMMERCE There’s no denying that online shopping has disrupted the retail sector. Online stores will continue to up the ante with their services, and it is crucial that bricks-and-mortar stores find a way to keep up. Retail stores need to focus on providing customers with something unique, something that customers cannot experience through shopping online. According to the SOTI research, being able to see and touch the product (71.97%) and try on/test out a product (69.78%) remain high drivers for customers visiting physical retail stores. This provides retailers with a good opportunity to ensure that when customers come in store, they are engaged, both by the products and store associates. Through embracing these new changes in-store, retailers can create efficiencies for associates and improve the customer experience to foster a successful sales environment. 

Retailers should be taking advantage of the data they have available, which provides insight into how their customers are shopping. Through tracking previous customer purchases, store associates can be more intune with what their customers are looking for, and this allows them to offer a more personalised service to customers based on their previous purchases and shopping habits. There has been a rise in interactive technology and events in stores, with more retailers offering customers an entertaining experience that can only be enjoyed in-store. For example, Ikea are looking to introduce display suites in-store that allow customers to privately experience Ikea products in a way that is more reflective of how the products will fit in their own home, rather than just on a shop floor. These types of experiences are inviting customers to engage more with in-store products in new and interesting ways.

Honeywell Safety and Productivity Solutions (SPS) provides products, software, and connected solutions that improve productivity, workplace safety, and asset performance for our customers across the globe. For more information on how mobile technologies can enhance a customer’s retail experience, please visit honeywellaidc.com/en-AU

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ONLINE | CUSTOMER INTERACTION

+ By 2020, there is no doubt that customer

The future of shopping is conversational With online shopping sitting at 10 per cent of total retail sales, it could be argued that the web is not working for most businesses. So, what’s the answer?

experience will overtake price and product as the key brand differentiator.

BY ANDREW CANNINGTON [LIVEPERSON]

ustralians are starting to embrace ecommerce, yet perhaps not as fast as retailers would like. With online shopping sitting at 10 per cent of total retail sales, it could be

prefer to use conversational interfaces, such as SMS and Facebook Messenger, to interact with their friends and family. Retailers are now able to bring that same interactive experience into the business realm by having conversations with customers either in their branded application or directly in third party messaging applications. This new frontier of brand-to-consumer communication enables retailers to forge more immediate, impactful relationships with their customers and maintain a continuous connection with them at every step of the customer journey. Take this from the former CEO of online outdoor recreation retailer, Backcountry: “We’re hearing from our customers that this is an experience that they’re not finding anywhere else in e-commerce ... We’re seeing more loyalty, higher lifetime value, and just a deeper relationship with our customers.” This begs the question: with the website not working for most retailers, why wouldn’t you go conversational? 

argued that the web is not working for most businesses. Only a few retailers, including Amazon and eBay, have truly been successful at building online businesses at the scale envisioned when the website was created in the 1990s. Why is this? Because consumer expectations are rising and the increasingly complex and competitive landscape requires online retailers to provide a frictionless shopping experience. However, many retailers have gone in the opposite direction, building digital fortresses around their brands and forcing consumers to navigate unintuitive websites and apps on the brand’s terms. By 2020, there is no doubt that customer experience will overtake price and product as the key brand differentiator. The key to success for retailers will be providing and delivering an outstanding customer experience. Good customer experience comes down to how it feels for a consumer to interact with the brand. Navigating websites, hamburger menus, and search bars (that often don’t turn up the information the customer is looking for) are not natural behaviours. On the other hand, asking questions and having a conversation are innately human traits. Forward-thinking retailers are building their shopping experiences around this with conversational commerce. With conversational commerce, shoppers can converse with brands and make purchases through the digital channels they already know and use with family and friends, such as Facebook Messenger, iMessage, and WhatsApp. Through a combination of human agents, artificial intelligence and bots, retailers can provide a hyper- personalised experience to shoppers, guiding them from a question (“I’m after a little black dress, can you help me?”) to purchase without leaving the conversation, gaining meaningful insights and data in the process. The rise of messaging apps and voice technology is transforming how people communicate and get information. Consumers already

LivePerson makes life easier by transforming how people communicate with brands. Our 18,000 customers, including leading brands like HSBC, Qantas, and Harvey Norman, use our conversational commerce solutions to orchestrate humans and AI, at scale and create a convenient, deeply personal relationship — a conversational relationship — with their millions of consumers. For more information, visit liveperson.com

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AUGUST 2019 | RETAILER 13

TECHNOLOGY | CUSTOMER EXPERIENCE

MAKING THE MOST OF YOUR CUSTOMER EXPERIENCE BY GOING OMNICHANNEL In fashion and philosophy, the beauty of a circle is marked by an absence of a beginning and an end.

+ As we look towards a new era, there’s no doubt that customers’ expectations of CX will remain high.

BY MALCOLM KOH [ZENDESK]

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ow do I make a purchase? What delivery options are available? Why haven’t I received my order? How do I organise a refund? These are just some of the questions customers are likely to ask a retailer’s customer service representatives. And it’s how these questions are answered, and the overall experience created that can have a big impact on a customer’s relationship with a retailer. Meeting consumer expectations of customer service and customer experience (CX) in the digital age has become increasingly complex over the last decade, and technology has had a positive impact on the world of retail in many ways.

Customers can make a purchase and organise a refund all without leaving the comfort of their home. At the same time, with these new channels, customers want that same accessible and easy purchasing experience around the clock, with every purchase they make. The focus now is on creating a seamless experience that is integrated across all of the channels consumers are using. Our recent research shows, almost half of Australian customers have significantly higher expectations of customer service than they did a year ago. The result has been a decrease in customer satisfaction, both in Australia and around the world. Even more concerning, bad shopping experiences can remain front of mind. Customers are four times more likely to remember

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unfavourable experiences from two years ago than favourable experiences with retailers. And that one bad experience has the potential to impact a customers’ perception and long- lasting relationship with a business. As we look towards a new era, there’s no doubt that customers’ expectations of CX will remain high. For retailers, there is an inevitable need to look at how you’re interacting with your customers to build long-term, positive relationships. The silver-lining to CX is in the approach. While it might be daunting to think that eight in ten people will leave a company following just one bad experience, customers are very clear about what it is that makes a good experience, and how businesses can ensure they meet this. A quarter of customers view providing multiple options for contacting customer support as helping to build a positive experience. In essence, it’s an omni-channel service approach to customer experience that will help businesses to establish seamless, positive experiences for customers. An omni-channel approach is one that integrates customer service across channels, so customers can reach out in whichever way they find easiest. This ensures customers receive a seamless experience across the board, and customer service agents can easily share information with customers to ensure issues are solved quickly and easily. But an omni-channel approach shouldn’t forego the value of self-service. Over half of customers value companies that provide themwith online resources to help answer their questions before having to rely on customer support. There is a significant opportunity to further enhance the omni- channel approach by augmenting CX with technologies like automation, artificial intelligence (AI), and machine learning. For example, automation can be used on chat to automate responses. AI can even go a step further to recommend articles that may be of interest to customers based on their previous actions and supporting themwith self-service to resolve issues quickly. The overall benefit of technologies like AI, whatever their use, is to create a seamless customer experience, improve efficiency, and reduce cost. While businesses are always looking to offer the best products or services, it’s important to focus on creating a positive customer experience to foster strong, long-term and positive relationships with customers that will last into the new era. Omnichannel CX is one way to make this happen. 

The best customer experiences are built with Zendesk. Zendesk’s customer service and engagement products are powerful and flexible, and scale to meet the needs of any business. Zendesk serves businesses across hundreds of industries, with more than 125,000 paid customer accounts offering service and support in over 30 languages. Zendesk is headquartered in San Francisco and operates worldwide with 16 offices in North America, Europe, Asia, Australia, and South. For more information, visit zendesk.com

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IN-STORE | BRAND

Stay true to your brand in an age of upheaval and ‘disrupt without damage’ A business ready to disrupt is one which first knows its brand values and customer intimately.

BY CHRIS GRAY [DAYLIGHT AGENCY]

ew technologies, innovations, and trends continue to influence and shape the retail environment. An age of disruption is certainly upon us, and there is evolving pressure on retailers to adapt and respond to changing trends and consumer demands. While the word ‘disruption’ often has a negative connotation, it can have a positive effect on an industry if managed in the right way. The goal of any organisation is to be a ‘positive disruptor’ which means staying true to its core brand values while at the same time delivering customers new, exciting, and innovative services. It is possible to ‘disrupt without damage.’ Here are five ways to ensure your brand is protected during a time of change. 1. DEFINE WHAT YOUR BRAND STANDS FOR A brand is more than a name, logo, product, website, or tagline. It’s certainly the sum of all these elements, but importantly, it is the intangible feeling it creates – its personality if you like. This is what defines a brand and gives it competitive difference.

Seek to understand your brand’s personality and know what makes it distinct to a rival. Consider your values, your purpose, and your actions. Defining the true essence of your brand’s personality is key to ensuring these precious elements are preserved during a time of change.

2. UNDERSTAND WHAT YOUR CUSTOMERS LIKE ABOUT YOUR BRAND

Is your brand known for creativity, leadership, heritage, integrity, cooperation, innovation - or all of these things? Knowing what your customers like about your brand is key when considering whether new trends and innovations will be appealing to your biggest fans. If your brand is known for exceptional face-to-face customer service and you plan to implement a product that will disrupt this positive attribute of your business, your customers could be left confused and disgruntled. From a customer’s point of view, disruption in the marketplace can be bewildering. It is essential to ensure any new product or trend that your company introduces is in line with your brand values and customer expectations.

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3. CONSIDER THE RISKS OF NOT ADOPTING CHANGE What would be the impact to your bottom-line if your business chose not to adopt an innovation? What would be the impact to your customer? It may be significant, or it may be wise to let the wave of disruption pass by and stand strong in your current processes, especially if new trends do not complement your business. In some cases, businesses that have ‘jumped on the bandwagon’ and introduced changes in the fear of being left behind, have experienced a negative impact on brand reputation and customer experience. In other cases, new trends have grown brands and reinforced their leadership and adaptability in the eyes of consumers. The move towards sustainability, which has seen supermarkets in some States eliminate plastic shopping bags, has been a major disruption in the industry, and consumers are adapting to the trend knowing ultimately it is for a greater purpose. In this case, the impact on a brand that may have chosen not to adopt this change would have been monumental. 4. BE THE INNOVATOR When you know your brand personality and understand your customer well, your business can feel brave enough to become the disruptor. What new product could revolutionise your customers’ experience? What innovation could add value to your industry? Is there a trend you choose to avoid? A consumer feels comfortable, and trust grows when they know a brand they support is making tough decisions that ultimately has their best interests at heart. Key emerging trends such as artificial intelligence, sustainability, and blockchain will certainly require brands to be bold and respond, or continue along the same path.

5. REVIEW YOUR COMMUNICATIONS ROADMAP Communications is the lifeblood of any business and connects the brand with the consumer. If your business introduces a new product or service, the way it is communicated to the consumer is essential. It may be in the form of advertising, social media, traditional media, digital media, or point of sale. Or all of the above. While it’s important to get the channel right, it is crucial that the messaging reflects your brand values and communicates to your customer the positive impact the change will have on their shopping experience. Finally, when a brand decides to disrupt, they need to ensure there is a full company commitment to the new approach as any false claims can lead to distrust or over-promising which could potentially dilute a hard-earned reputation. A business ready to disrupt is one which first knows its brand values and its customer intimately. ‘Disruption without damage’ can then proceed and be an overwhelmingly positive experience. 

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What would be the impact to your bottom-line if your

business chose not to adopt an innovation? What would be the impact to your customer?

The Daylight Agency is an integrated communication services firm which specialises in advertising, digital/ social, marketing, public relations, and reputation management. For more information, visit daylightagency.com.au

AUGUST 2019 | RETAILER 17

ONLINE | SALES

HOW RETAILERS CAN CREATE A DIGITAL FOOTPRINT WHICH ACCELERATES SALES Are you leaving revenue on the table? Maximise your online sales through these five steps.

+ Do your research. What are your top competitors doing? What buying

BY ANDREW RASO [ONLINE MARKETING GURUS]

behaviours are common to your customers?

W

hile Australian retailers understand that digital holds enormous potential, many don’t fully understand how to

After seven months of digital optimisation, search engine optimisation (SEO) and search engine marketing (SEM), this retailer noticed multiplied sales, achieving more than $2 million in incremental sales. They also increased their return on ad spend (ROAS) to 14:1, so that for every dollar spent on advertising, $14 of revenue was generated. The great news is that by following some straightforward steps, these kinds of results can be - and have been - replicated over and over again. Here’s how to do it.

How are customers searching online for your product?

maximise the opportunity. There are countless Australian retailers with substantial untapped revenue. Let’s take the case of an Australian fashion retailer client as an example. This retailer services hundreds of thousands of customers and has over 110 stores Australia wide. However, they aren’t gaining sufficient sales online.

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STEP 1: AUDIT YOUR DIGITAL FOOTPRINT AND DO YOUR RESEARCH Start by auditing your digital footprint to assess how wide the gap is between where you are and where you want to end up. Is your website content and user experience resonating with your customer? How well can Google index your website? Do your research. What are your top competitors doing? What buying behaviours are common to your customers? How are customers searching online for your product? Once you understand the data, you can create a scalable growth strategy. STEP 2: SHAPE YOUR SITE STRUCTURE AND CONTENT AROUND YOUR CUSTOMER PROFILE Examine what your competitors are and aren’t doing and where opportunity calls. Base your website structure and content around the market leaders and customer profile data. When it comes to content, the goal is to strike a balance between both quality and quantity. There’s a strong correlation between website content length and search engine rankings. More website content delivers a 90% chance of fast keyword ranking uplifts. Howmany sites are talking about and linking to you? The number of referring sites is statistically significant when it comes to increasing your rankings. What is the quality of these sites? Higher quality backlinks with higher URL ratings will give you domain authority and has a high correlation to better rankings. Competitive analysis can uncover quick wins and real opportunity. What types of links are competitors getting? Start by auditing the top three. Look at the volume of links competitors are building in the top three spots and shape your strategy around this. Strategic link building takes time. That’s why it should form a core part of your ongoing efforts. Focusing on quality and quantity of links over a long period is crucial for building real authority online. STEP 3: BUILD A ROBUST LINK BUILDING STRATEGY

STEP 4: INTEGRATE SEO AND SEM TO CREATE THE ULTIMATE POWERHOUSE An integrated Search Engine Optimisation (SEO) and Search Engine Marketing (SEM) strategy will maximise results. Introducing high performing SEM campaigns into SEO will drive extra results in both SEO and SEM. The learnings from SEM should guide your SEO keyword methodology. SEM allows you to validate the keyword selection process. SEO content initiatives will deliver a better quality score for SEM, which brings down the cost per click and increases the return on investment. SEO site architecture initiatives will also boost quality score and usability. Better site categorisation will again deliver a better quality score and cheaper traffic.

STEP 5: OPTIMISE YOUR WEBSITE FOR CONVERSION Make sure your website is optimised for

conversion. Some simple tweaks can double or triple your website conversion rate, leading to a very healthy sales pipeline. Is your website easy to use? Is it mobile responsive? What are the loading times? Conduct A/B tests to see how two groups respond to different versions of your website so you can determine which performs better and optimise accordingly. Are you worried about leaving revenue on the table? Then make sure your digital footprint is working overtime for you. 

Online Marketing Gurus is an award-winning Australian search and digital agency with expertise in SEO, Google Ads, social media advertising, and content marketing. Online Marketing Gurus helps businesses grow faster. By leveraging the power of digital, we help our clients get more leads, more traffic and grow their businesses with explosive results. For more infomration, visit onlinemarketinggurus.com.au

AUGUST 2019 | RETAILER 19

TECHNOLOGY | DEVICES

How the next generation of devices will improve the retail experience The impor tance of retailers investing in more in-store mobility and how next-generation devices (mobile devices, scanners, etc.) will transform the retail experience.

BY MICHAEL DYSON [SOTI]

s the e-commerce industry continues to grow, bricks-and- mortar stores must ensure they are creating a seamless experience

and item-by-item basis. This is because they prioritise buying high-quality products at the most affordable price. With the explosive growth of online shopping and birth of the omnichannel, shoppers demand a seamless experience across all retail options. This means bricks-and-mortar stores should be aware and proactive in designing seamless shopping experiences, that will continue to attract shoppers into their store and entice them to fill their shopping baskets.

To create a fluid omnichannel experience, retailers need not only to think of leveraging mobile technology and Internet of Things (IoT) for online shopping and the supply chain but also how these technologies will play out in-store. Store associates are essential for fostering an accessible and enjoyable in-store shopping experience for customers. While some may think that associates are becoming less and less relevant, innovative retailers who have embraced mobile technology know that equipping sales associates with

across all channels. From in-store, online, mobile, and social, it is important to provide customers with the kind of shopping experiences they crave. THE CHANGING ROLE OF THE STORE ASSOCIATE Australian shoppers often blur the distinction between online and in-store shopping to create their most preferred retail experience on an as-needed

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