ARA Retailer Magazine 57 May 2017

Issue 57 – May 2017

Customer-Centricity A crash course in the fundamentals of customer-centric retailing Share, Socialise&Shop Harnessing customer behaviour through Social Media Tending Talent The future of retail lies in cultivating the skills for a changing industry

THE RISE OF THE SOCIAL SHOPFRONT

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CONTENTS Issue #57

Features 14 FUTURE PROOFING AUSTRALIAN RETAIL TALENT For retailers to thrive in today’s climate, a skilled workforce is imperative

16 THE RISE OF THE SOCIAL SHOPFRONT From insta-stalking to snapchatting new fashion trends, social media has become the new frontier for retail marketing

20 A CRASH COURSE IN CUSTOMER-CENTRICITY A tactical primer on the fundamentals of customer-centric retail

REGULARS 04 From the Executive Director

OMNICHANNEL 22 Omni-Channel: How Retail Analytics Can Help 40 Category Management in an Omni-Channel Age 42 Automation: Achieving Customer Loyalty and Satisfaction 52 Why 'Discovery Stores' are More Powerful than Flagships 54 Leasing for the Store of the Future CUSTOMER EXPERIENCE 26 Observations of Frustration 30 Combining Sensory Branding with Advances in Technology 34 Simple, Speedy and Seamless Customer Experience

06 Retail news from across Australia 08 The ARA’s Quarterly Retail Debrief 28 Accessorial Liability – Are you at risk?

PAYMENTS 12 Apple Pay to Level the Playing Field for Mobile Wallets 18 Mobile Wallets: The Future of Retail Payments 24 Solutions for Contemporary Retail Challenges 36 Defining the Online Path to Purchase

44 Staying Human in the Digital Age 46 The Paradox of Data Exchange

ARA PRODUCTION TEAM

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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 Offic e Suite 104, 40-48 Atchinson Street St Leonards NSW 2065

Graphic Design Damien Dunstan damien.paul.dunstan@gmail.com External Contributors FCB, Retail Doctor Group, Paul Farina, Experian Australia, Hitwise, Openpay, TruRating, Mood Media Australia, Data Republic, Lease1, Suez Technology, Stocard, JDA Software, Emote Digital, i=Change

@retailaustralia @austretailers

Editors Katherine Mechanicos Benjamin Staley araretailer@retail.org.au

australianretailersassociation australianretailersassociation

Advertising Account Manager Hussein Hamka 1300 368 041 Hussein.hamka@retail.org.au

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 T he second quarter of 2017 has seen modest growth across the retail sector, with Janu- ary sales exceeding expectations. Although February retail figures saw a disappointing turnover, we are confident the industry will

transparency and certainty about retail lease deals during negotiations and simplify the pro- cess of transferring a retail lease, creating stron- ger and fairer relationships between retail ten- ants and landlords. Looking ahead, we will see various global retail giants enter the Australian market. From the likes of Amazon to German hypermarket Kaufland, Australian retailers will need to concentrate on personalised experience as a point-of-difference to retain their consumer’s attention and loyalty. We believe other interna- tional supermarket chains will also be entering the Australian market next quarter, providing fierce competition for Aldi and its growing cus- tomer base. While we may see some strong shifts in the marketplace, the retail sector is constantly evolv- ing, withmany outside factors pushing the indus- try forward. In this issue of The Retailer , we focus on customer-centric retailing and how the adop- tion of technology in the sector creates seamless shopping experiences. This frictionless func- tionality removes payment as the focal point of a purchase and transforms the overall shopping experience into the main event. Overall, retail trade figures for the first quar- ter of the year represent a stable foundation for the rest of the trading year, and we are hopeful for the continued growth of the sector as further significant legislative changes are implemented throughout 2017.

pick up next quarter with various key trading pe- riods on the horizon. The industry has also seen many significant issues pass through Parliament, giving the sector a strong push in the right direc- tion andmore in line with our global competitors. In February, we saw the Fair Work Commis- sion (FWC) pass the motion to reduce Sunday penalty rates from double time (200 percent) to time and a half (150 percent) for part-time em- ployees. The decision also reduced casual em- ployees' rates from 200 percent to 175 percent. With retailers previously paying employees dou- ble time on Sundays, many retailers were unable to open their doors on Sundays, impeding on retail growth across Australia. Over the last two years the ARA have worked hard to reduce these rates under the General Retail Industry Award 2010 ( GRIA ). With this new amendment, the ARA is excited to see the retail industry grow and the national unemployment rate decline due to the reduction in Sunday penalty rates. Another great achievement for the retail industry includes the NSW Government imple- menting significant changes to the NSW Retail Leases Act to increase transparency and fairness between NSW retail businesses and landlords. These significant changes will ensure greater

THE AUSTRALIAN RETAILERS ASSOCIATION COUNCIL

President Roger Gillespie AM – Bakers Delight

National Councillors Robyn Batson – Sussan Group Wayne Curnuck – Curious Grace Graham Dear – Leading Edge Group Ralph Edwards – Bright Eyes Mhairi Holway – Pandora Jewellery Steve Plarre – Ferguson Plarre Bakehouses Mary Poulakis – Harrolds Liz Siminsky – Angus & Coote

Russell Zimmerman Executive Director Australian Retailers Association

4 RETAILER | MAY, 2017

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RETAIL NEWS FROM ACROSS AUSTRALIA LULULEMON OPENS REGENT STREET STORE IN LONDON T his January, lululemon opened the doors of its highly anticipated new store on London’s renowned Regent Street. At 6,344 square feet and sprawling over two floors, the store is set to transform the traditional retail experience in the UK and throughout Europe. The overall aesthetic of the store, designed by independent agency Daziel & Pow, has a classic and refined feel.

Behind the cash desks on each floor are large digital screens showcas- ing product stories and store ambassador clips. Upon entering the store, a uniquemannequin feature showcases the latest from lululemon’s innovative product line. The digital installation, located near the ground floor fitting rooms, stim- ulates your senses and encourages you to find the stillness within. Detecting movement from the yoga mat positioned in front, the life size screen trans- forms your own poses into a unique piece of artwork. Upstairs is the dedicated community space, an area curated to create a relaxed atmosphere and sense of belonging. Here you’ll find a flexi-space for your yoga practice, including complimentary classes weekly and a relaxing café area. A prominent part of the community space is the Vision & Goals wall, encouraging guests to always strive for greatness. Lululemon’s interactive fitting rooms enable guests to see the reflective features on their chosen outfit. Once inside the room, laser beams highlight the reflective elements in the surrounding mirrors. A space to stretch, sweat, connect and enjoy the latest collections, lulu- lemon’s Regent Street store has been created to offer a retail space with a dif- ference, a sanctuary to escape from the buzz of the city.

SEPHORA LAUNCHES ITS FIRST MOBILE SHOPPING APP G lobal beauty authority SEPHORA has launched its free iPhone and An- droid app, Sephora – Beauty Shopping, delivering to its customers a seam- less shopping experience, live beauty content and exclusive offers. The app gives Sephora customers the opportunity to browse and buy as well as learn and play, at their convenience, in the palm of their hand. Users will be able to watch expert tutorials and share their beauty wishlist with fam- ily and friends. Once a Beauty Pass member, the app allows shoppers instant access to their accounts, where they can track their membership status, collect points and redeem rewards. The Sephora – Beauty Shopping app will also hold members’ Beauty Pass barcode so they will no longer need their card in store, seamlessly linking the traditional and digital retail experience. Users can now discover the best in beauty - makeup, skincare, fragrance and more - anytime, anywhere, whilst receiving all the benefits of a store experience. Shoppers will also be treated to app-exclusive rewards that include flash previews, early access to product launches and surprise promotions.

lululemon Regent Street is located at 187 - 191 Regent Street. London.

The Sephora – Beauty Shopping app is now available for free from both the App Store on iPhone and Google Play on Android.

6 RETAILER | MAY, 2017

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REGULARS | RETAIL DEBRIEF

THE ARA'S QUARTERLY RETAIL DEBRIEF A BRIEF SUMMARY OF THE AUSTRALIAN RETAIL MARKET FOR DECEMBER 2016, JANUARY 2017 AND FEBRUARY 2017

BY KATHERINE MECHANICOS [ ARA ]

he Australian retail industry, although continuing to face a difficult operating environment, has been growing steadily over the last quarter. In this retail debrief we’ll look at Australian retail spend over the last quarter (December 2016 – Febru- ary 2017) using our combined research with Experian and consumer insights tool Emma (Australia’s cross-platform

ARA’s combined research with Experian revealed that handbags and sports shoes accounted for the most growth in January sales across the Clothing, Foot- wear and Personal Accessory retailing category 4,5 . With further insight from Emma data, the ARA has uncovered that the most active consumer segment in this retail category was  Mosaic Group L Regional Endeavours 4,5 . This Mosaic Group represents ageing citizenswith limited access to shoppingdistricts 4 .When they do shop, they stock up on practical, long lasting items 4 . In fact, according to Experian data, Mosaic Group L Regional Endeavours have more than doubled their average spend compared to last year, revealing millennials aren’t the only gener- ation spending big on retail 4,5 . We’ve also seen consumers spending more on entertainment and experi- ences with Takeaway Food Services increasing 9.2 percent in December 2016, 11.6 percent in January 2017, and 8 percent in February 2017 1,2,3 . According to Experian data, the Mosaic Groups contributing to this strong year-on-year growth includes  Mosaic Groups A Exclusive Environs,  G Middle Australia and L Regional Endeavours 4,5 . Experian’s Mosaic describes Exclusive Environs as brand conscious wealthy families with extra cash to spend on finer things 4 . These affluent families are usually time conscious, juggling their successful careers with family life and therefore are more willing to opt for quick ser- vice options when needed 4 . Mosaic Group GMiddle Australia represents mixed family forms who mostly purchase for their family and value Australianmade goods. With many innovative food services like UberEATS and Deliveroo en- tering the market and changing the perception of fast food services, Exclusive Environs and Middle Australia are increasingly adopting these quick and easy solutions to ease the stress in their busy and family orientated lives. Although Exclusive Environs and Middle Australia differ from Regional Endeavours quite significantly, Experian’s Mosaic identifies these groups as big spenders when it comes to entertainment and experiences, meaning retailers could increase their sales by focussing their marketing efforts on these consumer segments 4 . 

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audience mosaic metric). The ARA has also been working with ShopperTrak to understand peak shopping periods by measuring foot traffic across bricks- and-mortar stores nation-wide. Lastly, we’ll have a close look at the e-com- merce market with help from our partners at Hitwise to get a better under- standing of consumer behaviour online. RETAIL SPEND December 2016 trade figures illustrated a positive Christmas retail perfor- mance, with a moderate three percent growth year-on-year 1 . January 2017 retail trade figures also proved successful, exceeding ARA and Roy Mor- gan’s predicted growth figure of 2.9 percent with a 3.11 percent increase from last year’s sales 2 . Unfortunately, February retail figures were lower than expected with a 2.68 percent year-on-year growth 3 . In regards to re- tail spend, this quarter showed strongest growth in both clothing and food retailing 1,2,3 . December 2016 saw a significant increase in clothing retail compared to last year, with an 8.1 percent growth year-on-year 1 . However, department stores and other recreational retailing including sporting and camping equipment, entertainment media and game retailing saw a strong decline this quarter due to the official closure of Masters stores across Aus- tralia, and a shift in consumer spending into other recreational channels in- cluding Netflix and online gaming.

8 RETAILER | MAY, 2017

REGULARS | RETAIL DEBRIEF

ABS RETAIL TRADE: YOY % CHANGE (December 2016, January 2017 and February 2017 ) Source: ABS & EXPERIAN

Dec15 vs Dec16

Jan16 vs Jan17

Feb16 vs Feb17

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

RETAIL CATEGORY

MOSAIC GROUPS DESCRIBED BY THEIR SHOPPING BEHAVIOUR

 A. EXCLUSIVE ENVIRONS Brand conscious, wealthy families with extra cash to spend on the finer things

I. BOOKS AND BOOTS Young professionals and students who spend their low disposable income on enhancing their

B. KNOWLEDGEABLE SUCCESS Entertainment loving affluent families with children who influence purchases

image

C. INDEPENDENCE AND CAREERS Cashed up young professionals who value experiences, technology & fashion

J. PROVINCIAL LIVING Singles and broken families who spend their low disposable income on the entertainment of

D. AFFLUENT ACREAGE Affluent retirees who are willing to spend with a bit of research

their children or themselves

E. DISTANCED EXISTENCE Regional families who spend high on home improvement and no-nonsense Australian made

K. TRADITIONALLY GREY Ageing citizens with low income who enjoy the simpler things in life. They will buy in bulk and

products

for special occasions

F. NEW HOMES AND HOPES Young families in new homes who spend high on entertaining their kids and fixing their homes

 L. REGIONAL ENDEAVOURS Ageing citizens with limited access to shopping districts. When they do shop they will

 G. MIDDLE AUSTRALIA Mixed family forms who purchase for the family and value Australian made quality

stock up on practical, long lasting items

H. INTERNATIONAL INFUSION Trendsetting and image conscious multicultural families who will buy a lot at bargain prices

M. REMOTELY BLUE Price conscious and remote families who are all about comfort and durability at the best price

MAY, 2017 | RETAILER 9

REGULARS | RETAIL DEBRIEF

www.kogan.com 21,994,082

www.harveynorman.com 28,918,943

24,618,274 www.coles.com.au

6,114,974 www.rebelsport.com.au

11,080,187 www.asos.com

2,526,116 www.beerwinespirits.com

9,398,059 www.ozsale.com.au

8,808,369 www.theiconic.com.au

30,175,239 www.woolworths.com.au

www.jbhifi.com.au 46,978,425

11,157,818 www.aldi.com.au

10,333,551 www.apple.com/au

5,270,623 www.cottonon.com

15,208,007 www.danmurphys.com.au

www.thegoodguys.com.au 20,621,409

19,463,259 www.etsy.com

28,918,943 www.harveynorman.com

26,245,903 www.bigw.com.au

31,822,452 www.kmart.com.au

16,027,221 www.ikea.com

8,731,491 www.spotlightstores.com

57,994,402 www.bunnings.com.au

23,082,626 www.target.com.au

76,769,624 www.amazon.com

17,310,291 www.myer.com.au

55,742,027 www.ebay.com

46,978,425 www.jbhifi.com.au

57,451,895 www.ozbargain.com.au

287,398,457 www.ebay.com.au

INDUSTRY KEY

TOP WEBSITE RANKINGS: TOTAL VISITS (December 2016, January 2017 and February 2017 ) Source: HITWISE

Desktop VS Mobile

Other Retailing

43% Desktop

57% Mobile

House & Garden

ONLINE RETAIL With online sales accounting for seven percent of total retail sales and growing five times faster than traditional retail spend, e-commerce is a critical sales platform for retailers. In fact, the top five highest ranking websites in this quarter all include retail products and services 7 . While some are traditional retail stores like Bunnings and JBHifi, top online players such as Ebay, Amazon and ASOS appear to be most popular for online consumers 7 . According to Hitwise data, in the last quarter we saw consumers engage with these channels through their mobile devices as they are rapidly becoming the most used platform for online shopping 7 . The frequent use of cashless payments has continued to grow over this period, along with other emerging payment services like Afterpay as they have seen a strong incline in website traffic in the last quarter. A total of 60,000 Australians searched for AfterPay in December 2016, demonstrating its growth as a payment method across product categories including fashion and accessories, technology, toys and hobbies and home and garden 7 .

37% Desktop

63% Mobile

Department Stores

34% Desktop

66% Mobile

Grocery & Alcohol

30% Desktop

70% Mobile

Appliance & Electronics

41% Desktop

59% Mobile

Apparel & Accessories

44% Desktop

66% Mobile

Source: HITWISE

10 RETAILER | MAY, 2017

REGULARS | RETAIL DEBRIEF

FOOT TRAFFIC : WEEK ON WEEK (December 2016, January 2017 and February 2017 ) Source: SHOPPERTRAK

40%

30%

Boxing Day

20%

10%

0%

-10%

-20%

-30%

-40%

FOOT TRAFFIC Over the last quarter, ARA and ShopperTrak have seen mixed re- sults in foot traffic across bricks-and-mortar stores. In the lead-up to Christmas, footfall was quite high, peaking at 20 percent two weeks before Christmas 6 . Once the holiday period died down, we saw foot traffic decrease in the first week of January, as Australians headed back to work after the Christmas period. However, in the last week of January shopping traffic peaked again at 29 percent, as Austra- lians stocked up for back to school sales 6 .

What is interesting to note about these figures is that there was a significant decline in foot traffic over the last quarter com- pared to the same period last year. The only day with an increase in footfall across bricks-and-mortar stores was Boxing Day, peak- ing at 26 percent growth year-on-year 6 . This dramatic leap in foot traffic suggests that many shoppers no longer want to wait in line at physical stores, and instead prefer to shop online at their con- venience, especially during the Christmas period.

DATA SOURCES

FUTURE OUTLOOK With international competition and technology advances challenging the retail sector, the industry is constantly in a state of change. However, these retail figures for last quarter look promising for the year ahead. As we enter into the next quarter, it is important to ensure you are marketing to the right consumer segment. Although millennials are increasing their purchasing power, according to Forrester Research, baby boomers are outspending younger adults online on a 2:1 per capita basis. And as mobile devices are becoming the most used platform for purchasing goods and services, it’s important to think of alternative ways to enhance your site and make your online store as user-friendly as possible. With rising consumer demand for alternative payments, implementing this simple functionality on your website is an easy way to convert sales. In the next retail debrief we will review Australia’s March, April and May retail spending figures, focussing strongly on key trad- ing periods such as Easter and Mother’s Day. If you have any inquiries about the data provided, please contact the ARA. Until next time, we wish you a strong and substantial quarter ahead. 

MAY, 2017 | RETAILER 11

REGULARS | POLICY

APPLE PAY TO LEVEL THE PLAYING FIELD FOR MOBILE WALLETS RETAILERS STRIVE FOR OPEN ACCESS ACROSS ALL MOBILE PAYMENT PLATFORMS

BY HEATH MICHAEL [ ARA ]

I n recent years, the retail sector has been impacted by considerable payments sys- tem change, much of which has been of great benefit to the sector. The Australian Retailers Association (ARA) runs the Australian Merchant Payments Forum (AMPF) on behalf of Australia’s retail merchants to advocate competitive, innovative and consumer friendly payment options for the retail sector. As always there are still various challenges facing re- tailers including maintaining a fair, open and low cost transactional environment. We are excited by the opportunities that mo- bile wallets and mobile payments can provide for

merchants and customers. For retailers, mobile wallets can improve and simplify the payment experience, while creating the opportunity to deepen the relationship with customers. For cus- tomers, they have the potential to make life sim- pler and more convenient by combining payment cards, loyalty cards, identification, public trans- port cards and more into one device. Apple Pay, Android Pay and Samsung Pay are all currently available in Australia, with awareness and interest in mobile wallets increasing rapidly. There is now an opportunity for innovation and for new players, platforms and services to emerge in a quickly developing market. However, these

benefits will not be achieved unless consumers and merchants have a choice between mobile wal- lets and mobile payment services regardless of the device or platform they have chosen to use. With Apple’s iOS or Google’s Android installed on almost every smartphone sold today, a mobile wallet available on both of those platforms will stand the greatest chance of attracting customers, merchants and card issuers. A mobile wallet only available on the Android platform is unlikely to provide the same opportunities and retailers will need open access to that wallet to benefit from re- wards schemes, product pick up, marketing or any other multitude of benefits.

12 RETAILER | MAY, 2017

REGULARS | POLICY

A consistent user experience is particularly important to retailers for the purposes of market and customer support. For example, while some supermarkets have trialled an integrated wallet with Near Field Communication (NFC) technology on the Android platform, there is a need for mo- bile wallet solutions to continue to use an external ‘pay tag’, as this is the only solution available to all mobile phone users. Access to the iPhone’s NFC function would al- low retailers to develop or participate in mobile wallets that provide a consistent and fully inte- grated experience to all users regardless of their choice of smartphones. It would also allow loy- alty programs, coupons and rewards to be more effectively integrated into these mobile wallets for a richer and more convenient customer expe- rience, as consumers would be able to choose how they wished to pay, either with loyalty points or with dollars. We believe that NFC technology will be essen- tial for mobile wallets and mobile payment ser- vices for some time to come, as the NFC infrastruc- ture can be upgraded through software to provide richer information and additional services devel- oped by merchants and acquirers. Unfortunately, Apple Pay remains the only app that can use the

able to use the touch pad. The lack of open access to the NFC function on the iPhone does not make this possible today. Mobile wallets with access to the NFC function can offer the speed and convenience of a ‘Tap’n’Go’ payment, but mobile wallets that require addition- al steps or take more time to make a payment will impose costs on merchants and are unlikely to be used by customers, particularly in a busy shop or at the front of an impatient queue. Simply put, asking the user to take the additional time to un-

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lock their device, open a specific app and choose a specific option inside the app will likely fail the ‘friction free’ test. Unfortunately, the Australian Com- petition and Consumer Commission (ACCC) have not authorisedmerchants and banks to collectively negotiate with Apple over this open access. Therefore, the ARA will continue to pursue this significant issue on behalf of merchants. 

“ For retailers , mobile wallets can improve and simplify the payment experience, while creating the opportunity to deepen the relationship with customers. For customers , they have the potential to make life simpler and more convenient by combining payment cards, loyalty cards, identification, public transport cards and more into one device”

iPhone’s NFC functionality, therefore the potential for innovation in mobile wal- lets and mobile payments will be limit- ed. It will take years for any alternative standard to be agreed upon and to be- come as ubiquitous and familiar as NFC. Further to this point, Australian con- sumers have rapidly adopted contactless (‘Tap’n’Go’) card payments, as over 70 percent of face-to-face card payments on the major international scheme brands are now contactless. This has been achieved by Australian banks and merchants investing in the widespread deployment of NFC acceptance touch pads and associated software and equip- ment, all of which has been provided on a fully open access basis. For ARAmem- bers, the touch pads have either been purchased outright or paid for as part of their merchant acquiring arrange- ments. This investment has been made on the basis that any consumer with a payment device of their choice from any scheme issued by any bank would be

MAY, 2017 | RETAILER 13

FEATURE | TRAINING

FUTURE PROOFING AUSTRALIAN RETAIL TALENT FOR RETAILERS TO THRIVE IN TODAY’S CLIMATE, A SKILLED WORKFORCE IS IMPERATIV E

BY BENJAMIN STALEY [ ARA ]

A ustralian retailers are facing complex challenges and oper- ating environments, charac- terised by change and ongoing disruption. The entrance and influence of international brands and rapid dig- ital technology advancements have created on- going competitive pressures within the indus- try. As a result, the ability to innovate and drive improved processes is imperative to remaining relevant in retail. Specifically, retailers in the Australian indus- try have long been challenged by the availability of local talent to fill buying, planning and online retail roles. This shortage of skills is compounded by the lack of formal training options that support employers in growing their internal teams. Suc- cess in each of these areas is directly attributed to the skills held in key technical functions such as merchandise management, visual merchandising and online retailing. It has become critical that the national training system supports skills development in these key areas to ensure Australian retailers remain com- petitive and commercially viable. Retailers have expressed the need for industry defined, nation- ally recognised standards to provide skills devel- opment options for the current and future work- force - and we have listened. In conjunction with SkillsIQ, the ARA Retail Institute has collaborated with retailers to fully understand the commercial

Key aims of the New Retail Series

impact of skill gaps and limited access to talent. This collaboration has resulted in The New Re- tail Series – a series of innovative training pilots focusing on these contemporary skills require- ments. The Australian retail industry broadly con- siders this a priority development, with the aim of this pilot program to develop a series of specialist skills programs to close the growing skills gap. As the New Retail world evolves, an agile and highly skilled workforce is critical to re- maining competitive and growing in these challenging times, and many major Aus- tralian retailers have acted as key drivers in the planning and development of these for- malised qualifications. Extensive work has been undertaken to analyse job roles and define skills needs that allow individuals tomake valuable con- tributions to a retail business. Feedback was sought on the relevance and accuracy of this work and a range of retailers had the opportunity to share their views on the skills required in their sector by attending our industry forums. These forums gathered together small groups of industry professionals and subject mat- ter experts to discuss a range of relevant topic ar- eas. Informed by these insights, The New Retail Series aims to provide a new platform for profes- sional development to build sustained talent and productivity improvements in merchandise and online retail teams. Developed by the industry for the industry, the

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Develop Australian retail talent pool to globally competitive standards Build consistency and currency into the skillsets of Australian retailers Sustain long term talent development in specialised skills for New Retail Strengthen partnerships between industry and education sector to lead the future of retail

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frameworks underpinning the series are a result of extensive consultation and have been devel- oped by leading practitioners to international standards of best practice. Innovative programs like the New Retail Series form part of our long- term commitment to developing talent through excellence in education and striving to guide the future of the Australian retail sector.  ARA Retail Institute is the leading national body providing for the education, consulting and professional development needs of the Australian retail industry. SkillsIQ is a not-for-profit Skills Service Organisation (SSO) supporting industry in developing standards to equip the people-facing workforce with the right skills.

14 RETAILER | MAY, 2017

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FEATURE | MOBILE THE RISE OF THE SOCIAL SHOPFRONT FROM INSTA-STALKING TO SNAPCHATTING NEW FASHION TRENDS, SOCIAL MEDIA HAS BECOME THE NEW FRONTIER FOR RETAIL MARKETING

BY KATHERINE MECHANICOS [ ARA ]

FEATURE | MOBILE

H ave you ever wondered what you could achieve with all the time you spend on social media? For me, these network- ing platforms have en- capsulated every part of my life. I wake up and I check my Snapchat. I get on the train and I’mon Instagram. And if that’s not enough, I’m still glued to my phone before I go bed. If I added up all this time I spend on social media I’m sure I could have written a short novel, finishedmy tax return or dedicatedmy time to un- derstanding how to get a home loan. So what do we do on these social platforms that creates this addictive behaviour? I’m sure like many of you out there these channels are great way to connect with your friends, but for many of us these platforms are also a primary source of information. In fact, I spend most of my time on social media stalking celebrities; the clothes they wear, themake- up they use and the brands they buy. Either way we look at it, we know that social media has attached itself to every individual, cap- tivated the hearts of many businesses and embed- ded itself within various industries. INSTA-SHOPPING Social media platforms are now harnessing this addictive consumer behaviour and transforming their applications to become valuable tools for retailers. A prime example of this is Instagram’s highly-anticipated shoppable tagging tool. This innovative e-commerce tool is designed to encour- age people to make instant purchases through their social applications. Instagramdeveloped this seamless shopping tool after seeing strong con- sumer interest across specific product categories including fashion, beauty, apparel and accessory brands. This integrated feature will not only make consumers’ lives easier, but also give retailers an alternative channel to increase their digital sales. This frictionless functionality will give retail- ers a simple, clean way to share details about their products within the Instagram app itself, allowing consumers to shop seamlessly from their social media feed. Users will be able to scroll between

candid footage like that produced through the Spectacles concept. Joanne Jenkinson, Head of Network Innovation and Social at Pacific Mag- azine, believes this technology is a highly-effec- tive way to gain and retain consumer interest. CATWALK CARTS Myer has also embraced consumers’ strong desire for live content by launching their ‘Catwalk to Cart’ digital campaign for their Melbourne Fash- ion Runway show earlier this year. This new tech- nology allowed attendees to shop the catwalk live from their runway seat, giving consumers a quick way to save items they liked to a wish-list by swip- ing left or right. At the end of the show, attendees

the tagged products by swiping left and right from their home screens. If the user wishes to purchase the product, they can do so by tapping the ‘Shop Now’ link. This link will direct the user to the re- tailers’ website to purchase the product instantly. Instagram has been working with 20 US retail brands on this integrated feature including Kate Spade, Macy’s and Michael Kors, and will hope- fully roll this technology out to all retailers later this year.

SHOPPING STORIES In addition to harnessing consumer be- haviour on Instagram, large retailers are also channelling consumer addiction

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could review their wish- list and transfer their fa- vourite products directly to their Myer cart for pur- chase. This tinder-esque functionality capitalises on established customer behavior and has proved quite successful in engag- ing shoppers. Customers using ‘Catwalk to Cart’ at the VAMFF show used the interface for an average of 14 minutes each, interact- ing with products during the show and creating their personalised wish- lists. From these three ex- amples, it’s evident that

through social media giant, Snapchat. With 150 million people us- ing Snapchat every day, and almost 9,000 snaps shared every second – it’s no wonder retailers are using this platform to market to their consum- ers. The most attractive feature for retailers is the fact that Snapchat’s tech- nology allows retailers to explore transparency in a completely different way. Un-cut, raw content may be a public relations nightmare, but this un- touched and live footage is a consumer’s dream.

“ Snapchat’s unique vantage point is perfect for the up close and personal nature of makeup and hair tutorials and we definitely envisage using this tech- nology going forward to connect with our fans in new ways and expand it to other content categories”

JOANNE JENKINSON

[ PACIFIC MAGAZINE]

retailers and social media platforms are working together to increase digital sales through leverag- ing consumer behavior. We’ve already seen Face- book and Pinterest restructuring their platforms to integrate a more seamless shopping experience for their users, with many more to follow suit in the near future. As more retailers embrace this social revolu- tion, it’s starting to look like I might be spending more of my day shopping rather than stalking celebrities. Either way, I guess my home loan will have to wait! 

In fact, Priceline Pharmacy and Pacific Magazine have jumped on board with Snapchat using their latest product, Spectacles, to broadcast exclusive behind-the-scenes footage at their Virgin Austra- liaMelbourne Fashion Festival (VAMFF). Snapchat Spectacles are sunglasses with an integrated video camera allowing users to seamlessly share their stories with their friends, followers and wider net- work. Both Priceline and Pacific Magazine un- derstand that consumers are losing interest in rehearsed content, instead preferring real and

MAY, 2017 | RETAILER 17

PAYMENTS | LOYALTY

MOBILE WALLETS: THE FUTURE OF RETAIL PAYMENTS With digital connecting consumers and retailers more than ever before, bridging the gap between online and offline for retailers is key.

BY RADINCK VAN VOLLENHOVEN [ STOCARD ] T he traditional wallet as we know it is rapidly be- ing replaced by mobile management platforms, prompting retailers to explore new ways to engage customers. Mobile wallets can be a strategic market- ing tool for retailers to drive repeat cus- tomers and improve sales. Digital loyalty programs are the foundation of this. Over the next three to five years, the humble wallet will be completely replaced by smartphones that can house loyalty cards, identification documents, driver’s licenses, payment cards and even medical records. With plastic loyalty cards taking up about half the space in a typical aver- age-sized wallet, offering consumers con- venience in storing and managing their loyalty cards in one place such as digital loyalty wallet app Stocard, is key to win- ning them over. While a large membership may not necessarily mean a loyalty program is ef- fective, well executed loyalty programs are a great way for retailers to collect and interpret data to better understand their customers. Increasingly, digital loyalty programs are revolutionising the retail landscape – by combining advanced an- alytics, personalisation of data, as well as linking mobile and in-store shopping ex-

periences, retailers can generate engage- ment driving business results. As stated in Nielsen’s Global Loyalty Sentiment study “57 percent of Australian consumers are more likely to return to a retailer if they have a loyalty program in place, and 48 percent will spend more if they know they’re going to be rewarded.” Marketing departments are under enormous pressure to get loyalty programs right to ensure consumer trust and retention. As technology advancements help build and enhance customer relationships, equally important is respecting user data and privacy. Consumers are happy to part with some of their data, as long as they are receiving value in the form of tailored and personalised offers, extra perks or co- creation opportunities. As brands acquire more information about their customers, it is vital that they act with a level of care and responsibility. Acting on every data point with persistent marketing messages may cross the line and push away customers. Retailers need to strike the right balance in customer centricity and personalisation. According to eMarketer’s Loyalty Mar- keting Report “Creating stickiness in a dis- tracted world”, mobile is changing loyalty marketing by raising expectations of im-

mediacy and consistency across channels. It has also opened up exciting new oppor- tunities in real-time messaging, customer service and seamless customer experi- ences. With consumers shifting to mobile devices to manage their loyalty cards, it is inevitable that mobile will drive the future of payments. The trending convergence of payments and loyalty is being closely monitored by financial institutions and technology companies. Contactless terminals and a wide array of mobile payments providers are necessary factors to encourage con- sumer adoption. Merging loyalty rewards, including automatically enrolling pro- grams and payments in a single function, will enable retailers to turn transactions into relationships with customers. With services like Stocard, tapping a smartphone rather than rummaging through a wallet is a convenience that needs to be appreciated. To be success- ful, a mobile wallet needs to accompany the user throughout the whole customer journey and mobile payments is the next phase. This year we will see a significant transformation in digital loyalty and mo- bile wallets which will actively shape the future of how people discover and pur- chase products and services through their mobile device. 

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Radinck van Vollenhoven is the Country Manager of Stocard, a payment solution helping retailers close the loop between mobile and offline. With more than 12 million global users, Stocard is the leading wallet app for loyalty. For more

information, visit stocardapp.com

18 RETAILER | MAY, 2017

FEATURE | STRATEGY A CRASH COURSE IN CUSTOMER-CENTRICITY A TACTICAL PRIMER ON THE FUNDAMENTALS OF CUSTOMER-CENTRIC RETAIL

BY BENJAMIN STALEY [ ARA ]

ingly expects. But enough about the why of customer-centricity, what really matters is how . Let’s dive right into basics of cus- tomer-centric philosophy, and the prac- tical steps to execute these ideas in your retail business. KNOW YOUR CUSTOMERS INSIDE-OUT You can’t create a strategy with a laser-fo- cus on customers if you don’t know who they are, and what they want. This may sound obvious; however, many retailers base their conceptions of their customers on assumptions rather than facts. A rich and accurate understanding of the market can only be achieved by taking a scientific approach to both sourcing and interpret- ing customer data. Collecting valuable in- telligence about shoppers has never been easier and more powerful, with customers interacting with retailers across a range of touchpoints from in-store to e-commerce platforms and social media. If you haven’t already, start capturing the data you need to explore the follow- ing questions; Who are your customers? What is their ideal customer experience? What key factors affect their buying de- cisions? What makes them remain loyal? How do they interact with your brand? Using your data-driven insights to an- swer these will enable you to identify the specific customer profiles at the epicen- tre of your business.

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ustomer-centricity. We’ve all heard the jargon, and for the most part under- stand what it means. To put it simply, it’s about making the customer the centre of your business’ universe – every product, every touch point and every experience built around their needs and desires. It’s a powerful idea with tangible value, yet for many retailers, implementing it effectively is easier said than done. And the risks of ignoring customer-centric principles are real; complacent retailers can get lost in the sea of competitors all vying for the limited attention of the same potential customers. The customers of today demand more from retailers than ever before, and they are spoilt for choice in the retail space. So why shouldn’t they choose the brands that are most aligned with what they want and understand who they are? Customer ac- quisition, loyalty, engagement, conversion and value all hinge on a retailer’s ability to build trust and provide the seamless expe- rience that the modern shopper increas-

20 RETAILER | MAY, 2017

EXPERIENCE IS THE NEW BLACK If there is one expectation that the ma- jority of today’s shoppers can agree on – it’s good customer experience. They want a simple, convenient and person- alised path to purchase. They want the highest standards of customer service, from fielding enquires, to product rec- ommendations and expert advice. They want to feel valued and special, and have products and services tailored specifi- cally to their needs. And they want to be able to shop at any time, from anywhere, across any platform. If you want to re- main competitive in a sea of retailers who meet these customer requirements, you better take note. Building a shop- ping experience around the customer is no longer optional, it is essential. Removing barriers for

ble down on what works and eliminate what doesn’t.

IT’S ALL ABOUT LOYALTY In today’s retail environment, loyal customers are the key to long-term sus- tainability and growth. It’s really that simple. In deconstructing the success of retailers with customer-centricity at the core of their operations, we see a common theme of an unyielding focus on nurturing customer loyalty. Those customers that authentically trust your brand will consciously choose to shop with you, despite the competing offer- ings of other retailers. The hard part is, customer loyalty isn’t something you can just buy – it has to be earned. This isn’t a short-sighted approach to increase one-off purchases, it's all about Cus- tomer Lifetime Value. To cut-through the noise that swamps your customer from all directions, your secret weapon is highly-targeted brand messaging. Re- tention is imperative, so make sure you tailor your content, branding, stores and customer experience to your highest pri- ority customers. By incorporating these deep custom- er insights into your retail operations, you can effectively strategise on how to attract, connect with, and sustain loyal customers. Understanding and catering to the needs of the customer is more valuable than ever before - they are the people who are ultimately responsible for your business’ success. In the grow- ing customer-centric landscape, thriving retailers are heeding this invaluable ad- vice; to avoid coming last you, you have to put the customer first. 

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customers to shop, find in- formation and enjoy the customer experience can be guided by putting yourself in their shoes. A clear and pleasant customer journey should appear completely seamless, with as few bar- riers and little difficulty as possible on behalf of the shopper. Ask questions to both satisfied and unsat- isfied customers to isolate strengths and flaws of the path to purchase. Find out what they love and what they hate, and take it se- riously – it’s all feedback. Objectively run through the

The hard part is , customer loyalty isn’t something you can just buy – it has to be earned. This isn’t a short-sighted approach to increase one- off purchases, it all about Customer Lifetime Value .

customer experience as if you are the shopper, looking carefully for hurdles and bottlenecks. Once you know, dou-

MAY, 2017 | RETAILER 21

OMNICHANNEL | ANALYTICS

OMNI-CHANNEL: HOW RETAIL ANALYTICS CAN HELP Omni-channel defines the new retail landscape, requiring top brands to knock down marketing silos and deploy data analytics to earn customer loyalty.

BY ELEONORA SHAPIRO [ SUEZ TECHNOLOGY ]

I n this day and age, customers are literal- ly everywhere — in store, online, on so- cial networks, in chat apps and on their phones. Retailers who are dominating this new chaotic market are doing so by becoming experts in omni-channel retailing. Transforming your business to suit omni-channel retailing requires a new way of thinking about how retail operations need to be organised. It starts when retailers take a step back and look at themselves from the point of viewof the customer. Traditionally, retail marketing efforts have tended to operate in silos. There might be one group in charge of in-store promotions, while an- other handles visitors to the website, and a third group is called in to launch mobile initiatives. The problem with marketing silos is that cus- tomers see a retail brand as a single entity, regard- less of which channel they use to shop. Customers may search for a specific brand on mobile, touch the website link to browse the selections, and then stop by the store to pick up what they want, all as part of a single shopping event. Many channels, one brand. That's why customers perceive discon- nects between channels as a failure by the retailer. Leading retailers have adjusted to this world- view and have seamlessly integrated the varied marketing efforts among these many channels.

ly? That’s not only possible, it’s happening now at competitive stores.

Without analytics programs in place, tradition- al retailers end up sending conflicting messages to their customers. Salespeople in store may be oblivious to the messages received by the custom- er digitally, leading to greater customer frustra- tion and cart abandonment. Market leaders in the retail industry don't let that happen. As every retailer is unique, there are many ways brands can utilise creative applications and intelligent software to create a seamless omni-channel experience for consumers. The good news is that analytics for unifying om- ni-channel marketing is just one of the many ways retailers are applying this next generation of data tools to boost revenue and retain cus- tomer loyalty. HEAT MAPPING Retailers can see exactly how customers are moving through the store, where they stop and what attracts their attention. This is the secret to in-store promotions that customers consider share-worthy on social media. COUPONING IN REAL TIME What if a customer could be identified based on demographics while they shop so that the most valuable coupons appear in their email instant-

POS INTEGRATION When customers receive discounts or promotions on their phones, whether it's a text, an email cam- paign or a social share, they want the salesperson at checkout to scan the on-screen barcode and ap- ply the discount. It can be that simple. PEOPLE COUNTING Technology can now answer questions such as "How many people shop without buying?" and "How many cashiers will be necessary for the coming week?" The ROI fromhigher revenues and lower costs makes this one of the most popular ap- plications of retail analytics. Retail has already been disrupted by digital technology. With a customised solution for ev- ery retailer, now is the time to take advantage of these intelligent applications and pull ahead of slow-moving competitors. 

With an array of advanced technologies, Suez Technology has the experts in omni-channel at its disposal. For more

information regarding Suez Technology visit analytics.sueztechnology.com.au or email info@sueztechnology.com.au

22 RETAILER | MAY, 2017

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