We recently held a round- table discussion on this topic at our offices. We invited retail digital professionals, working across different sectors such as automotive, building materials, fashion and department stores. We asked them how they connected online and offline today. We asked what the biggest barriers were to implementing effective solutions. We discussed the different strategies individuals were using to get senior buy-in and tackle the sometimes frustrating fiefdoms that exist within large organisations. Discussions ultimately centred around a few key themes that we see again and again.
First things first, there is no magic pill. I got you here under false pretences. Sorry, not sorry. Whilst we are all distracted trying to unpick this big topic and falling into the same trap of trying to do too much, the real answer lies in getting some focus and structured experimentation. Structured experimentation means understanding your current situation and defining an ambition. It means making space for teams to explore ideas and learn fast. Finally, it also means having the right tools to do the job. We’ve built a tool that enables the physical real-time connectivity between a customer and a store. This tool gives retailers the capability to explore the propositional directions a connected online-in-store service could offer. It’s not hard to set-up and we’refairly confident it might solve some interesting in-store challenges. You can skip to our quick summary of the tool at the end of this article..
Firstly, let’s peel back the layers on why there isn’t much linking happening with today’s retailers.
"There is no such thing as offline, but org structures don’t know that yet"
Modern reality means your average customer is never truly offline. They are online whilst they are in-store, actively price comparing with a competitor or living their usual connected lives on social media. This means that in many contexts, a consumer is both in-store and online.
The consequences for a retailer are significant. Often in- store staff have less information at their fingertips than a customer who walks in with a smartphone. Store staff are not privy to the details of the latest features on the store website, they live in the very analogue and slow world of a traditional silo business. Equally, how many digital teams consider a person standing in a store as an active use-case in the design of features on their websites and apps?
Even if all of this is acknowledged by a retailer, there is a lot of work to do on breaking down departmental structures that prevent store and digital teams from practical, shared agendas and easy ways to collaborate. Organisational challenges easily dominated the conversation at our roundtable. It’s a difficult topic and one that will not be addressed without tackling the second big theme.
The mandate is both too broad and too specific
Linking online and offline means addressing multiple independent and interconnected issues across the entirety of a retail business. On the one hand its deceptively easy to put in an annual plan as a tangible(ish) goal. In reality, it is the holy grail of retail digital transformation. A wholesale programme of activity that needs to understand the short-term opportunity and the long-term gain in order to determine a clear path for each retailer.
And it’s this assessment of benefit that appears to be lacking in the first instance. Many retailers feel pressured by the need to digitise. There are obvious gaps in customer experience (e.g. stock!) and certainly many areas of the business could be more efficient if only they could overhaul any of the many problems they are plagued with. Retailers don’t want to continuously rent new customers and recognise that solving known issues is about creating value for those who are already bought- in. But few retailers have gotten to the nuanced analysis of what a multichannel customer is worth to them. Do you just want your customers to spend more money online? Do you want them to go in-store more often? Are you actually talking about a loyalty scheme? Is it even about technology?
Without understanding the real value and potential of a multichannel customer, it’s easy to spread limited resources too broadly and under-invest in the things that will make the most difference to you. For a typical retailer where your in-store sales significantly outstrip your online sales, the focus of connecting online and in- store should be: How can I better service a multichannel consumer when they are in-store? To solve that problem, you have to test and learn.
There isn’t enough experimentation
Experimentation incubates risk, there are no guarantees and it can be difficult to quantify the business benefit of the activity if outputs are unknown. In our discussions, many mentioned their inability to take the finance team along the journey. Finance has to be accountable for the way in which money is spent and how it benefits the business. Equally, finance teams are not there to act as archaic gatekeepers, they want to help, but there is a question of how value is communicated so that everyone is on-board.
To make space to experiment in this area, teams have to be built differently and accountability practices may have to change too. Whilst digital and in-store teams sit separately with different leaders and agendas, they will struggle to connect business-as-usual let alone experiment effectively on tactical problems. Equally, recognising that ‘small’ R&D needs to happen in every delivery team (not just innovation departments) is key to having the fiscal freedom to try new things out.
The short-term approach is to build task forces. Small, multi-disciplinary teams that can proactively work together to solve critical problems for customers and the business. Task forces are not steering groups, they are not part-time resources and they don’t exist just to have meetings. A dedicated task force combining individuals from finance, in-store, online and logistics will likely be able to quickly and effectively crack-out good solutions. The value of giving such a team the room and time to take their ideas out into the real-world (I.e. in a single or small group of stores), means that you get end-to- end validation long before you’ve made large-scale investments.
Finding focus for your task force
Changing the language of experimentation from “fail early” to “learn fast” can and does, open executive doors. At the same time, endless free-form experimentation is unlikely to be a realistic activity for many but the Googles and Facebooks of this world. Structured, hypothesis- driven exploration, that aligns to business goals and big- picture KPIs, on the other hand, is hugely powerful.
To build the right hypothesis, we need to make safe assumptions. Safe assumptions have leading insights, data or behavioural indicators that suggest we should be interested in that area. Unsafe assumptions are built purely on anecdote and run the risk of being victim to fleeting technology and temporal needs (i.e. vanity projects!). Safe assumptions allow us to target creative efforts at the places where they will have the most value. For the innovation purists, its worth noting that safe assumptions do not hinder open exploration. Rather they try to place the emphasis on real customer behaviour and needs.
Now, linking back to our focus; servicing a multichannel customer when they are in-store, there are lots of safe assumptions that can be made based on today’s real- world behaviour.
From the business perspective:
- Many retailers do not know when an existing customer walks in the store.
- Those that do recognise existing customers, often do so through the use of loyalty schemes which come into play post-purchase.
- Therefore, retailers need a real-time way to identify existing customers when they come into the store.
From a customer’s perspective:
- They have no reason to identify themselves to a retailer when they walk into a store, as they don’t have a good enough reason to.
- Therefore, customers need good reasons and easy ways to tell us when they are in store.
What our tool does
We’ve built a tool that we believe could help run experiments around these safe assumptions. It’s a pretty simple piece of kit that connects a person who walks into a store, to a known goal e.g. coming to pick up their click & collect order. Our tool allows the customer to take an action on their smartphone and alerts the right people in-store to take appropriate action. Our tool satisfies the business context i.e. we can definitively say this is an existing customer in real-time. As a point of analysis, we can then explore how many of these customers bought vs. didn’t buy. Or the impact of various propositional solutions on the eventual value of their purchases on the day, and their overall experience.
Our tool, gives a dedicated task force and/or innovation team, a means of turning the store into a Digital SmartSpace (we will share more information on our vision for SmartSpaces in the coming weeks), where it is possible to ask a series of behavioural questions, and quickly test a number of ideas in a real-world context. We’re quite excited about the tool and are actively talking to retailers who want to pilot using it in a real store environment. Get in touch if that is you.
Ultimately, each retailer will have to go on their own journey to address the gaps that exist between their online and in-store experiences. Your modern customer is increasingly impatient. We all want what we want when we want it and how we want it. We expect greater levels of comfort and convenience from retailers and we’re not open to excuses about it. As with many things, the retailer that manages to strike the right balance between business as usual and learning fast might just win the day.
If you’re interested in setting up your own task force or would like to talk about our tool, do get in touch.
by Lola Oyelayo
Director of Strategy and UX
A passionate UX designer and researcher, Lola has developed her skills in large organisations and digital agencies, delivering delightful digital products and services. A self-confessed perfectionist, Lola is extremely vocal and knowledgeable about user-centred design. This journey has seen her become Scrum Certified, an official member of the "Agile is best" club and spokesperson for Agile UX development in our agency.