Retail Stars Blog Series

Introduction

Author: Michael Mowat

As the busiest period of the year for UK retailers approaches, I’ve been reflecting on what has been working and not from a ‘Front Office’ perspective sitting firmly in the customer’s seat.

From my experience in the retail industry and at PwC, I, along with Oz Ozturk, Victoria Wright, Oliver Havard, Helen Wolstenholme, Jonathan Bartley, Rachael Eve, Ellie Taylor and Jerome D’Costa, will provide insights across eight lenses which are most critical to the customer. 

What is going on in the UK retail market?

Before getting into the results, I think we need to step back and understand the background that UK retailers are facing currently. To say it is a struggle would be an understatement; you only have to pick up a newspaper any morning and the headlines jump out, store closures hit average of 16 per day for the first half of 2019. Many high-profile companies have gone out of business, brands that seemed ‘administration’ proof have fallen by the wayside and most leave us with questions rather than answers to why it has happened.

Reasons for failure may include:

●     High fixed costs linked to long term rents

●     Once desirable locations are not anymore

●     Bricks & mortar mentality not translating to omni-channel

●     Cannot invest fast enough in new products

●     Inflexible supply chain with long lead times

●     Wrong inventory and too much

●     Unable to meet competitors’ delivery times  

These all sound plausible but raise questions on why companies are insular and when in decline look to drastic measures to succeed rather than investing whilst the going is good. The obvious missing candidates to why they are not succeeding is their markets are evolving, what their customers want never stands still and for all the cost cutting et al, how many of them really understand that? There are winners at both the top and bottom of the market. Where there seems to be challenges, are with those who operate in the middle of the market where differentiating themselves becomes even more critical in this space.

I appreciate that disrupt, innovate and change are lofty words but understanding their importance to the customer and how they engage with the retailer’s brand should be front of mind whether you work in Commercial, Customer Service, Finance, HR, Operations, Procurement or Supply Chain.

As we continue to lose these great companies of old, we are seeing the rise of nimble, asset light flexible companies that are able to close the gap quickly with the perceived ‘Leaders’ in their sectors.

Results:

Looking at retailers’ performances from a number of lenses, I and the other authors of these blogs, will provide examples of companies that we think are getting it right, how they are achieving success and most importantly what can other retailers learn and then apply to their business. We will read about the likes of Zara (who are able to convert a third of online orders into click & collect and therefore creating further traffic to the brand), Next and Selfridges who continue to re-invent themselves to remain relevant but there are some interesting companies who are making significant impact including Lululemon and Books@One which my colleagues will discuss in future blogs.

There isn’t a ‘silver bullet’ but plenty of trial and error, seamlessly being able to offer a consistent experience across omni-channel is high on customers’ wish list. Beyond that is regaining the excitement of shopping, novelty feeling, experiences, caring about our world through sustainability and influencing the conversation. Take the new HMV store in Birmingham, it is too early to comment on whether it can succeed long term but what an amazing start, ticking all the boxes of experience and creating a buzz for a format of retail which we all thought we had seen the end of... long live the dog!

Over the next 5 weeks, me and the other authors will be sharing more detailed outputs from each lens. The primary goal is to stimulate conversation to help you think about what more retailers can do to capture the hearts and minds of customers while reflecting on the winners and losers this Black Friday.

Community

Author: Victoria Wright

By having a physical store, whether it’s on a high street, in a retail park or just in a small village, it allows people to come together. This is a major advantage over websites and apps; a strength that companies should use to bring the community together.

My short blog will focus on three key themes as part of the Retail Stars blog series; well-being, diversity & inclusivity and local events. (Please see the introduction blog from 25th October by Michael Mowat for more information on the Retail Stars blog series)

Wellbeing

Well-being is buzzing right now. Everybody’s talking about it. It encompasses four main factors; mental, physical, emotional and spiritual.

So who are the retail stars in this space? A retailer that springs to my mind is Decathlon. A store that sells (and allows you to test in store) sporting attire, equipment and nutrition across almost every sport, from badminton to horse riding and from cycling to hiking. So how does Decathlon bring the community together? By organising sporting events in store but also in the local area. Each year, they (the store in Surrey Quays, London) arrange a 5km race, open to all ages and abilities - a chance to improve your well-being through fitness but also by meeting new people. Further, Decathlon partner up with several small businesses to put on fitness-related classes in store. This includes the likes of bootcamps, trampolining and yoga. More recently, they put on a Body Confidence workshop that I attended, designed to empower women and discuss mental health. All are a great addition to the in-store experience! Customers love to get involved, especially when the events are free or only incur a small cost. The range of activities offer the health and well-being benefits consumer needs alongside the positive impact on the community.

Westfield (shopping centre) have also begun to incorporate health and wellbeing into their offerings as it’s been a major factor for its growth in its shopping mall locations. Westfield now include healthy food court options for its shoppers as well as boutique fitness stores! Their role is now changing and moving away from being 100% fashion-centric but to targeting its customers with more fun, food and fitness. This is their way of bringing consumers to not just the shopping centre but all of the stores within!

Diversity & Inclusion

We talk about Diversity & Inclusion a lot in the workplace, but what are retailers doing to bring the whole community together? Regardless of gender, nationality or sexuality.

Earlier this year, Sainsbury’s (Bath, UK) encouraged colleagues and customers to learn to sign. A 150 day initiative creating an environment for those who are hard of hearing to support improved communication between colleagues and the local community. They even temporarily renamed the store to “Signsburys”! This unique shopping experience genuinely brought the community together and allowed shoppers that usually find the food shop difficult that little bit easier. The talking point here is how can retailers really bring this to scale by rolling out their initiatives on a national scale in order to have a much bigger effect and impact on many more communities?

Local events

Nothing brings the community together like a good local event! Personalised to each area, customers have the opportunity to experience something new and meet new people in their local area.

For example, Books@One (a bookshop in Ireland) proves that running a physical bookstore can be successful and it’s all down to the community! Consumers can really immerse themselves in the store; they may participate in community events, explore what’s happening in the area and the region, or enjoy a coffee and relax. Shoppers will realise the social benefits that arise from these local events; an alternative way that brings the community together.

Another retailer that builds the community around its brand is Lululemon. By collaborating with yoga and fitness professionals in the local area, Lululemon uses its stores to host yoga classes and meditation sessions. A great way to connect with people and thus creating the ‘human’ element and customer trust with the brand.

And more recently, Sweaty Betty have carried out some workshops to show the importance of mental health, demonstrating that the smaller companies can do innovative things too. They offer numerous events in their London branch, having linked up with athleisurewear and used the studio at No. 1 Carnaby Street to hold Pilates classes so consumers can “get back in touch with [their] body and mind whenever it best suits”. To continue the experience, Sweaty Betty also offered shoppers the opportunity to stop by Farm Girl to re-energise themselves after a workout with some healthy nutrition!

What can retailers learn from this?

I think that retailers should explore what in-store experiences they can provide that will bring more customers to the store. Can they hold classes or events? Taking a look at spaces or elements in your location may encourage people to meet and get together. Can retailers partner with smaller businesses? I think it’s about creating a space where your customers can use and experience retailer’s products and services while including all shoppers and thus reaching a wider range of consumers.

How can retailers put this into practice?

Identify what the customer needs and wants, putting them at the forefront and understand if this is aligned to the strategy. Calculate the costs and benefits; what will the ROI be before developing a plan to implement these improvements to the in-store experience? I think retailers should really think about what can drive footfall to their stores so customers can experience their offerings, while ensuring that their online presence is linked seamless to the store experience. It’s often around just going back to basics - we as consumers need more from our retailers than a place to visit to buy things, we have to have a reason to go to the destination.

Range and Offer

Author: Ollie Havard

Offering a range that caters for all of your customers is essential in today’s competitive retail space. I believe that shoppers are increasingly willing to leave loyalties aside if they feel a retailer no longer understands them or provides what they want.

Below, I reflect on some key themes I’ve found relating to retail range and offer, and highlight the ‘retail stars’ in their efforts to adapt and evolve to best serve customers. (Please see the introduction blog from 25th October by Michael Mowat for more information on the Retail Stars blog series).

Private label vs brands: getting the balance right

Getting the balance right between private-label and brands can be tricky. As consumers tighten their belts, own-brand products are often best positioned to provide value to customers. Aldi and Lidl are bringing the fight to the dominant UK supermarkets, and their market share is increasing year-on-year. Brand loyalty is wavering across the industry too: recent studies found that two in five (42%) UK consumers feel no loyalty to any fashion retailer, and one-third of grocery shoppers consider private-label as the most influential factor.

Next is one of the major UK retailers known for its quality private-label offering. However, this doesn’t necessarily mean brands should be avoided. Next is now embracing brands in their online ‘LABEL’ business to complement the private-label offer. Most recently, Next signed a deal with Ted Baker to create and sell Ted Baker-branded childrenswear from Spring 2020. Adidas and Nike are some of the big brands featured on Next’s site. Providing premium branded ranges to customers serves to complement the existing Next-branded lines, rather than at its expense, giving shoppers more choice and reason to shop with them and achieving a sensible balance. This seems to be paying off - online sales in July 2019 were reported up by 12.6% year-on-year.

Tesco is responding to the growth of private-label discount lines by trialling a new grocery brand, ‘Jack’s’, positioned as a competitor to Aldi and Lidl. This experiment expands Tesco’s range and builds on the launch of their own-label ‘farm’ brands. Jack’s stores stock a significantly smaller range than Tesco stores, but the core offer is standout low prices to match the two German discounters. Tesco is even preparing to introduce Jack’s-branded products into their standard stores. It will be interesting to see how this plays out, as Tesco focuses on developing a private-label range that offers significant value and being flexible to what customers want.

Dynamic and diverse ranges

We all know retailers that heavily focus on their unique selling point (USP) to drive consumers in-store or online. Think of Waitrose’s reputation for top quality food and wine, the ‘Next sale’ - these are key appealing factors. But it seems that simply offering a range that caters for customers may no longer be enough. Offering a limited range that provides the best value and choice may not necessarily win the affection, and business, of customers in this era. 

Sainsbury’s has used its acquisition of Argos as a launchpad for rapidly expanding its range and offer to customers. Sainsbury’s is now not only the home of grocery shopping - Tu clothing line and Argos general merchandise are also available in growing numbers of stores; Tu clothing is available on the Argos website, and more standalone Argos stores are closing and being replaced by concessions inside larger Sainsbury’s stores. This powerful and diversified range is now available in one place: shoppers’ trolleys can vary from ready meals to winter coats, cookware and televisions!

Department stores are designed to offer a classic ‘diversified’ range to customers - how is this still working for John Lewis & Partners whilst its competitors struggle? The retailer’s ‘Never Knowingly Undersold’ value gives customers another incentive to shop with them, whilst continuing to revamp their existing ranges. John Lewis also offers exceptional customer service, modern store layouts and frequent investment, further outperforming competitors and ensuring customers truly feel they ‘cater for all’. I’ve certainly found this to be the case when doing my (last minute) Christmas shopping!

Primark is perhaps one retailer that sticks to what they know best, and it is still working. Primark may have an online presence that showcases their latest lines, but they continue to resist the temptation to build an e-commerce function. Their strong proposition of on-trend, exciting and low-priced items drive customers in-store where they recognise the value on offer. Primark’s core offer strategy not only avoids diluting their keys to success, but also keeps the costs down so their customers can still grab a bargain. 

A fresh and responsive range

We live in a social media age where customers expect retailers to respond to trends in the market in record time. It’s clear to me that retailers are increasingly under pressure to keep up with the latest fashions - so who are some of the retail stars doing this well?

Fashion retailers are now showcasing their latest ranges on popular TV shows to gain traction, with contestants wearing the ranges themselves. Missguided and most recently I Saw It First have exclusively provided wardrobes for islanders featuring on the infamous Love Island reality show. This opportunity to preview a range on the most talked-about TV show not only gives unrivalled marketing power, but also the chance to dictate the summer trends in fashion and give your range influence.

I’ve also witnessed the rapid growth of vegan food in the UK and how the large supermarkets are responding. Tesco partnered with Wicked Kitchen to provide an exclusive range of vegan meals and introduced the famous Beyond Meat ‘bleeding’ burger to store shelves. Now Tesco is getting ready to launch its own ‘Plant Chef’ vegan line, to keep up with the latest trends and catering to shoppers’ preferences. This coincides with the upcoming launch of M&S Food on Ocado, where M&S is responding to the continued growth of online grocery shopping and taking the opportunity to expand their range to remain responsive.

What can retailers learn from this?

I think that retailers can consider the balance of the private-label offer against brands - is their own-branded range giving enough value and choice to customers? Growing a more diverse range that can keep existing shoppers and attract new ones is vital as consumers grow increasingly disloyal to retailers. Is their range bold and innovative enough to keep up with the trends and customers’ appetites?

Where do retailers go from here?

By frequently reviewing the overall offer to customers, and consider being in their shoes, retailers can see whether they are providing a diverse range that caters for their customers. I think it’s best that retailers keep an eye on upcoming trends and build in responsiveness to the supply chain, to ensure the range can adapt and suit customers’ needs at pace.

Check-out Agility

Author: Victoria Wright

 When we talk about checkout agility, what do we mean exactly? For me, it’s all about a frictionless experience upon checkout; making it quick and easy to open new registers when queues are increasing, mobile and contactless payments or in-app checkouts.

I have identified three key areas that demonstrate checkout agility, namely; ‘Scan and Go’, ‘Select and Go’ / Just Walk Out technology and ‘1-Click’. I have identified retailers that do this well and conclude with what retailers can do next to begin their journey to a frictionless customer experience at the checkout.

Scan and Go

Have you ever seen the scanners at the entrance of a store? By picking up one of these, you can scan your products as you shop - much quicker than queuing up and having somebody else scan everything for you! Then all you need to do is just purchase the items using the retailer’s app.

M&S are currently rolling-out “Mobile, Pay, Go” across six London stores before the Christmas period. This will enable shoppers to purchase their items seamlessly via the M&S app without approaching a till - with M&S being one of the first retailers to offer this technology to Android users. They’re constantly updating the app following consumer feedback to continually improve the experience for all consumers, focusing on providing a simpler customer journey. In addition, by streamlining the registration process through Sparks, it makes it simple for customers to get started. M&S are committed to “testing and learning, making updates and adding new features to ensure speed, convenience and a seamless digital experience”... just what the customer expects from any retailer! Other retailers using this technology are Tesco - all you have to do is scan your Clubcard account to begin and then you can just Scan, Pack and Pay! By packing your bags up on selecting products off the shelves saves the whole unloading and loading again at the till.

Waitrose have also introduced ‘Quick Check’ to ensure that shopping at Waitrose is quick and easy! Customers can scan items and pack them straight into their shopping bags so customers don’t need to spend time unpacking everything again at the checkout. Shoppers can see a running total as they scan items and when their shopping is complete, customers can just pay and go. Simple.

Select and Go / Just Walk Out technology

Have you ever been into a store, selected what you wanted and just walked out? Some retailers are cutting out the queuing at the tills, allowing shoppers to leave the store with their chosen items (while still paying of course!).

Amazon Go is powered by Just Walk Out technology to improve and speed up the store experience for consumers. But how does it work?

Amazon aren’t the only retailer using this technology however, with other retailers exploring this technology to improve the customer experience by eliminating the checkout process. BingoBox (Convenience Store in China) currently label all of their items with an RFID tag so when shoppers are ready to checkout they scan their items on self-checkout machines and pay via WeChat - however, BingoBox are working towards automatic purchases through image recognition, very similar to Amazon Go. And there are small start-ups that can make this happen such as AiFi who use AI sensors and a camera network-based system to enable a checkout free solutions for retailers. This technology is something that I believe more UK retailers should get on board with so I question why more retailers in the UK market aren’t using this technology?

I understand that some customers may be a bit apprehensive with this technology, afraid that it will be difficult to use in addition to privacy concerns. But the majority of those that have experienced it, love it! Think of all the time that customers can save, and potentially using that time to spend more time in store looking at products and selecting more items to purchase. But how does this compare to the cost of implementing this technology, particularly when some retailers and thousands and thousands of SKUs.

1-Click

The focus in the retail blog series so far has predominantly been on bricks and mortar stores, but what about online retailers and their checkout agility? An obvious retailer that offers a seamless experience with 1-Click is obviously Amazon - if you ‘buy now’ with 1-Click on the product page, your item will be delivered to your default address using your default payment method to purchase the items. This avoids the hassle of shopping basket software making it extremely quick and easy to buy the products you want. In addition, abandonment of the shopping basket through the ‘1 Click’ technology is significantly reduced and therefore leads to much smaller revenue losses for these retailers. It’s the speed and convenience that customers love about Amazon, particularly when tying together the 1-Click experience with the launch of Amazon Prime for super-fast delivery. Amazon are even looking at predictive AI to understand when you’ll run out of toilet paper and proactively dispatching more rolls to your home!

With Amazon’s patent for ‘1 Click’ now expired, it means that other retailers have been able to enter this space and reap the benefits - particularly for those in mobile commerce where abandonment rates can reach as high as 95% as a result of prolonged form-filling and checking-out. Some of the biggest retailers such as Apple and American Express have begun working on introducing ‘1 Click’ purchasing as a payment solution. Shopify Pay have also claimed that their version of ‘1 Click’ has improved checkout completion by 40%! But the question is, why haven’t more retailers taken advantage of this?

What can retailers learn from this?

I think that retailers should explore what they can offer consumers to improve checkout agility and subsequently improve their customer experience; something that should be at the heart of a retailer’s strategy. By making the checkout process as slick as the online process, retailers will drive consumers to the store as they now understand that they won’t get frustrated waiting in long queues to pay!

How can retailers put this into practice?

A lot of retailers have this technology on their wishlist so it’s important to identify the different methods of improving the checkout experience and understand what technology may be involved. Weigh up the cost of this with the benefits you’ll receive across happier customers with bigger baskets. It may be worth conducting some research and speaking to your current customers to understand their views. Or it may be that this new technology will reach out to a new set of potential customers, particularly those that like your products but may not yet be engaged with your customer experience.

Customer Experience

Author: Victoria Wright

 Customer Experience; a broad topic that can encompass a wide variety of factors. I think that it’s certainly high up on a shopper’s wishlist when they visit a retailer’s store or their website along with great products but only “10% of brands in the UK excel at customer experience” (Marketing Week, 2019). Customers want an experience that engages them; a seamless experience from entering to leaving the store. Customers want to leave happy and satisfied with the service offered to them. In this blog I look at three elements of customer experience;

●      Connecting with the brand

●      Seamless experiences

●      Seeing, touching and testing products

Connecting with the brand

What retailers spring to mind that make you feel excited? What do they do that makes you connected to that brand and means you keep coming back to their store or website, time after time?

With Christmas not far away, Harrods and Liberty have recently introduced their advent calendar - not your standard chocolate calendar for children, but one with small gifts and surprises inside. You really don’t know what to expect which keep customers excited as they anticipate what’s behind each door of the advent calendar.

The Story (based in New York, USA) do something radical for their customers - they showcase a different theme in their stores every three to eight weeks, consisting of events, displays and products all linked to the theme to provide an experience like no other. Past themes include, Colour, Love, Made in America. They’re making the most of the space and retail location, thinking about the experience per square foot rather than sales per square foot. With the anticipation of a new theme, customers come back again and again. I think that it’s the experiences that sell things, not just the place.

I also think that Selfridges are moving in the right direction. They have recently committed to investing in their customer experience to make it truly amazing; luring customers to the store by hosting experiential experiences. They intend on disrupting and reimagining retail - for example, they recently focused on their streetwear brands in their Oxford Street store - by introducing a skate bowl with skateboarding lessons being offered. A unique way that helps consumers connect to brands - surely a method that consumers will not forget.

Finally, we have the likes of Adidas who have recently opened a new concept store on Oxford Street, London. But it’s not the usual store that you’ll typically find on the high street. Adidas have embedded experiential digital innovation throughout, meaning that all of their products are brought to life; combining physical retail with digital retail. For example:

●      With LED flooring and walls, consumers can create patterns through movements and then have it translated onto a t-shirt

●      Shoppers can now use the Adidas app to check availability of products and then request it from a store assistant - and with the beacons in store, the staff can easily bring the product straight to the customer

●      Customers can use the RFID-enabled (radio frequency identification) mirrors in the fitting rooms to request different sizes or colours and have them brought straight to them - saving a lot of time for the shopper.

In addition to these experiences, Adidas have really started to focus on customer service by offering a number of services such as personalisation, tailoring and even trainer cleaning.

Seamless experiences

When you go shopping, what do want? To find the right product that suits your needs? To be able to ask for advice from Sales Assistants? To pay for your items hassle free? I think that customers expect it all and so they should. Consumers need to have this seamless experience upon entering the store to leaving it. The seamless experience applies online too, from browsing products to checkout, it needs to be engaging while being efficient. But what’s really key, is having a seamless experience across both; stores and online - an omni-channel experience.

The fashion retailer, Oasis works well to fuse their ways of shopping together. Sales Assistants in store have iPads to not only provide shoppers with the latest product information, but they also have the ability to place an online order for you if a product isn’t in stock - and have it delivered straight to your door. This consumer experience saves time and hassle for the consumer, meaning that even if the customer can’t have the product right away, the retailer is able to arrange an alternative way of ensuring that you leave as a happy customer.

Zara is also on my list of retailers that offer a seamless experience in store and online. With around a third of consumers ordering online to collect in store, it drives consumers to the stores with the potential of further purchases being made as shoppers step in store to collect their online order. It’s interesting to think what could drive this high statistic:

●      Is it the convenience of Zara’s store locations?

●      Is it easier for consumers to collect products than to have them delivered?

Either way, Zara must have a great online and in store experience for click and collect to be so popular. They're even rolling out a ‘robot-run’ service to automate the process due to such high customer numbers.

Touch and test

Traditionally, you may enter a store, have a browse of products, perhaps try something on or test it out. But what are retailers doing to really improve this showroom experience? This is a key advantage that bricks and mortar stores have over online retailers so they should be playing to their strengths.

Currys PC World have recently introduced ‘gaming’ stations in their stores - a great way to test the consoles as well as games. And with Black Friday and Christmas around the corner, it’s a great experience for all of the family to get involved.

Next are IKEA, who have always provided customers with the option to test their products - they lead you through their showroom across all potential rooms in the home, designed in a way that means you can’t skip any sections. They allow you to sit on the sofas and beds. You can open the drawers and cupboards. You can see the true size of items and what matches what. You then just have to find it all in the warehouse and squeeze it in your car boot… a customer experience like no other. But IKEA’s customer experience now goes a little further by offering fun and free family events across many of their stores, giving children (and adults!) the chance to be more creative and active. IKEA help families turn any room into a playground through the local events offered - helping them discover toys, games and arts and crafts in store.

Last but by no means least is Sonos. A brand that you can truly test - all you have to do is sit back, relax and listen. Experience what it would be like to own Sonos speakers. The unique experience offered encourages consumers to believe that they cannot live without the product - something that I think all retailers should aspire to!

What can other retailers learn from this?

I think that retailers should have a think about the customer experience that they offer in their store and/or online and question if it entices customers back. Retailers should look to understand what’s different about their customer experience. What gets their customers excited and enables them to connect to the brand? Are shoppers able to truly test their products? The retail landscape is changing and becoming more seamless; retailers need to be ready for what’s in store (pardon the pun).

How can retailers put this into practice?

I think that the first steps to improving a retailer’s customer experience would first be to review the current customer journey, ensuring that it’s aligned to the strategy and understanding how you measure the success of your customer journey. Another key factor in identifying where to improve, would be to speak to the customers themselves - many retailers offer the chance to shoppers to provide feedback, but how many retailers really listen to this and take action? I think it’s about creating a culture to ensure that shoppers are truly happy with the end-to-end experience. This is what matters.

Brand Purpose

Author: Victoria Wright

 Brand purpose is the reason for brands to exist beyond just making money. It’s about the actions that retailers take to do good in society. I think it’s important that retailers are transparent about what they stand for but also what they do as a result so customers can trust them and connect to retailers on an emotional level.

In recent months and even years, there’s certainly been a crack down on retailers to understand what they’re doing to be environmentally friendly as well as their fairness to their workers but also suppliers. Retailers are working toward minimising their waste, being energy efficient and maximising usability of their products. In this blog, I’ll take a look at retailers that I think have a clear brand purpose across three key themes; what they stand for, environmental purpose and people.

What they stand for

Unilever is always a standout star when it comes to brand purpose, particularly due to their scale and reach. They have 25,000 sales team to help them deliver their ‘Sustainable Living Plan’, which consists of two aspects. Firstly, they engage shoppers (with their retail partners) at the point at which they purchase products and secondly, by providing training and entrepreneurship opportunities to smaller retailers which helps to improve their incomes.

Another retailer that springs to mind that I believe has always had a strong and clear brand purpose is The Body Shop. Even since I was a child, I knew what the Body Shop stood for. I knew that their products weren’t tested on animals and that they campaigned on environmental issues. They have recently tried to go beyond brand purpose by bringing activism into their stores, not just for the staff but to get the customers involved too. The Body Shop want to bring them together to discuss issues that they care about, while at the same time inspiring positive change.

Environmental purpose

Many retailers have been focusing on reducing the usage of plastic bags. The number of plastic bags has reduced significantly since the introduction of 5p charge per plastic bag. But what else are retailers doing to reduce their environmental impact, which includes waste as well as their carbon footprint?

I think most people are aware of Waitrose where they have trialled (and recently expanded) their ‘Unpacked’ initiative which started in June. Primarily designed to cut down on plastic waste, it is interesting to see how customers have reacted to this change as they now have to bring in refillable containers, not only for fruit and vegetables but also dry food such as pasta and household goods such as washing up liquid. Overall, I think consumers have embraced it, particularly when prices are around 15% cheaper than when the products were packaged in plastic.

Interestingly, Carlsberg have recently developed two prototypes for the world’s first cardboard beer bottle. Designed to breakdown naturally to avoid hazardous waste, you might be wondering how it all works as surely the beer would just soak through the cardboard? A thin layer of recycled PET inside the bottle stops beer from turning it soggy while the other prototype has a film of PEF, which can be produced from plants as opposed to oil. I think it’s a great idea for all drinks manufacturers to follow suite and Carlsberg are certainly heading in the right direction to help save the planet!

People

There are several aspects to our theme on people and it revolves around fairness. I have taken a look at retailers that have a strong brand purpose in relation to their own people in addition to their suppliers and even their suppliers suppliers.

Tony’s Chocoloney is a great example of a retailer that has a genuine brand purpose - to end slavery in the cocoa industry. It may be more than double the price of a similar-sized chocolate bar but when you understand the story, it’s a price that I think consumers are willing to pay. Did you know that the chocolate is shaped to represent the different African countries? With each piece being uneven to represent how money made from cocoa is unevenly divided. Tony’s Chocoloney pay a premium to farmers as well as actively tracking down and combatting child labour - with 100% traceability of their beans to ensure transparency and fairness.

Next, with the National Living Wage due to rise to ￡10.50 an hour by 2025, some retailers are offering fair pay to their workers. With the likes of Ikea, Burberry, Lush, Richer Sounds and even smaller companies such as Farm Drop, it shows that it is possible to be successful at the same time as giving the living wage to all staff. We know how hard everyone in retail works - I’ve been there, done that, so surely it’s only right that employees earn a fair amount? I certainly believe that if employees are treated right, they are much happier (and productive).

What can other retailers learn from this?

Having a strong brand purpose is not just good for the planet or your people but it’s good for business. Shoppers certainly pay attention and are increasingly purchasing products and services with the retailer's values in mind. As a result, I believe that retailers need to realise that most consumers expect them to do what’s right, even if it means taking a slight hit on margins. It’s evident that retailers are trying to reduce their environmental impact and improve fairness for their workers and suppliers but I think that there’s still a long way to go before a significant impact is achieved.

How can retailers put this into practice?

For me, what’s really important is for retailers to have a vision and mission statement - what do they believe in and what do they stand for? But it’s not enough to make commitments, retailers need to have a real and feasible plan that they can execute, ensuring that they achieve what they set out to do. I don’t think it’s enough to just say retailers will reduce their waste and carbon footprint - consumers want to know how much will they reduce it by and how they will achieve their goals.

Quality & Trust

Author: Rachael Eve

Every aspect of retail from stores to marketing campaigns to the product itself, shapes the customer experience. In a competitive and globalised market, quality and trust are integral components in creating long standing relationships between retailers and customers but they are also key differentiators. Consumers are increasingly thoughtful in where to spend their money and for retailers to gain their loyalty, they should consider three key themes:

1. Don’t be all things to all people and understand what matters to your customer
2. Strive for visibility and transparency of your supply chain
3. Deliver the quality promise that you market

Don’t be all things to all people and understand what matters to your customer

Retailers need to understand what customers want and how they can deliver it. With greater information shared between shoppers (from product review websites to Twitter feeds), retailers should be proactive in how to drive engagement and harness insight to improve their strategy and operations - ASOS would be my #retailstar in this area. Not only does ASOS use Instagram as a platform to share lifestyle events and their sustainability agenda, but customers can purchase directly from an image or leave a comment asking about styling advice or missing shipments (and as they use a shipment partner to fulfill orders, this in itself presents a high level of reputational risk).

Retailers are investing in CSR teams to set quality and trust strategies which should be carefully integrated into category strategies and aligned to commercial teams as a business partner rather than a routine compliance function. These functions do require investment, however, and taking one example, there is room on the high street for a ￡25 M&S cashmere jumper and a ￡600 Harrods high-end comparable. The challenge for retailers is how to align commercial strategies with responsibilities to society and sustainable farming.

Strive for visibility and transparency of your supply chain

It is paramount for retailers to have visibility over their supply chain as customers look to know where products are coming from and that they are sustainably and ethically produced (pioneered by the likes of Stella McCartney, H&M and Vivienne Westwood and hashtags such as #WhoMadeMyClothes). There is mounting pressure on retailers to reconsider the information shared with consumers through their channels, campaigns and product labelling to make the experience as transparent as possible. Sharing data with customers is no longer considered a competitive disadvantage and certain brands have already been doing it for years - H&M, Nike, Levi’s, Patagonia to name a few. However, others remain highly protective with the view that “we don’t want our competitors getting our data”. Being transparent about the provenance of products is a core internal retail process and I think that retailers should be putting pressure on each other to open themselves up.

Supply chain visibility supports brand protection as much as delivering quality and trust with shoppers as counterfeit products now represent a $397bn global industry. Moving away from unique identifiers, brands and retailers from Johnny Walker to Macy’s to Lululemon are investing in sophisticated anti-counterfeit technology. In the luxury industry, authenticity goes beyond the initial transaction demonstrated in the growth of the second hand market and websites such as Vestiaire Collective (for some, Chanel handbags are considered a ‘nest egg’ for retirement).

Technology can be successfully employed to track products as they move from raw material to the factory to the customer which supports anti-counterfeit practices but also inventory management and omni-channel fulfilment. Technology can range from the Internet of Things (IoT), Artificial Intelligence (AI), QR codes, Radio Frequency Identification (RFID) to Blockchain. While still in its infancy, Blockchain is being experimented with by Nestle and Walmart to track the origin and movement of stock at a transaction level, and in doing so, allows for greater control over safety, quality, authenticity, and supplier management. Ralph Lauren is pioneering Digital Product Identities (IDs) which will provide customers with reassurance over authenticity but also provide a means to enhance the brand experience through product information and styling tips that customers can reach by connecting through their smartphone. By ‘leading with digital’, Ralph Lauren can optimise operations and deepen brand engagement.

Deliver the quality promise that you market

Retailers need to have control over their supply chain and rigorous QA processes to develop each product to the intended standard, minimising the risk of faults or defects in production. Once basic safety and legal standards are met, the retailer has the option to position their products in such a way as to engage effectively with audiences. This is particularly important if used as a go-to-market strategy. Waitrose is a food retailer synonymous with quality and have positioned themselves as ‘custodians’ in sustainability.

Stella McCartney is a #retailstar for championing a defined approach to sustainable fashion, investing in R&D to drive this forward (see our upcoming #retailstars Innovation blog to read more on this topic). Customers care less about a ‘Made in…’ label, and more about the social and environmental impact of production. Burberry, Kering and Inditex are a few of the major fashion brands that have signed up to industry-wide commitments to mitigate against climate change. However, these companies must be confident that their operations are aligned with their intended strategy to enable them to make the product in the way the customer is happy with or their reputation is at risk.

What can other retailers learn from this?

Retailers need to understand how and when to differentiate themselves. It is important to regularly review strategy and operations to determine where on the ‘roadmap to success’ they are. How far off the mark are they from delivering their customer promise and where do they want to be in terms of CSR? With the rise of smaller, more sustainable brands (e.g. Veja and People Tree) the pressure is on for household names to adopt more agile approaches to sustainability or potentially face a loss in market share.

How can retailers put this into practice?

If retailers want to be known for quality, value and trust, and build loyalty with their customers, they need to build a brand on the foundations of transparency and integrity (a concept that Jo Malone has championed for years). Control over operations is crucial in delivering a seamless omni-channel experience and to make sure that they can meet and exceed expectations.

Innovation

Author: Rachael Eve

Walmart’s founder said over 50 years ago that ‘to succeed in this world, you have to change all the time’. We have all seen that the rise of digital technology has forced retail to undergo a period of major change. Retailers are having to rethink their future strategy and work hard to be innovative in order to differentiate themselves from their competitors and achieve growth.

A number of the blogs within this #retailstar series have already highlighted the changes to the consumer landscape, and here I will focus on the concept of retail innovation around three key themes that many retailers should consider;

1. Shaping and enhancing the customer experience through retail architecture
2. Applying new approaches to product manufacture
3. Supporting strategy direction with new product development (NPD)

Shaping and enhancing the customer experience through retail architecture

Burberry has long been regarded a #retailstar for ‘innovation’; with their Chief Creative Officer, Riccardo Tisci, recently winning the WSJ’s Fashion Innovator Award. Burberry’s history of innovation stems from the creation of the original gabardine fabric in the 19th Century to the experiential retailing they have applied to their stores. In 2012, Burberry opened an iconic Chicago store with a stainless steel facade system to mimic the iconic check and the brand has been an early adopter of applying technology to the store experience - employing RFID tags to communicate product information with shoppers as they walk up to a mirror - bringing together the physical and digital worlds. From Burberrys recently announced partnership with Chinese internet giant Tencent Holdings Ltd. to Farfetch’s Store of the Future, retailers are aiming to capture online/offline customer data and experiment with it to enhance interactions between shoppers, store staff and products, creating personalised and unique shopping experiences with a view to drive loyalty.

Harrods have announced that they will extend their recently renovated ‘Beauty Halls’ to standalone stores in the UK - a significant step for the retailer that has largely kept to its Knightsbridge, London, footprint. Attempting to set themselves apart from other department stores and beauty brands, their aim is to create an ‘immersive and inspiring’ experience through “magic mirrors”. Powered by AI (a technology employed from L’Oreal to Zara), Harrods shoppers can virtually try-on makeup without opening a tester.

Ralph Lauren is synonymous with the concept of lifestyle branding and by introducing Ralph’s Coffee shops and Ralphs bars to selected stores, they take the customer journey beyond a fashion experience and into lifestyle. By aligning their strategic approach to the customer’s lifestyle, the brand are encouraging existing shoppers to stay in store for longer but also attract a new demographic through a wider range of merchandise. From Ralph’s Coffee to Dover Street Market’s artistic fervour, these experiential stores present a sensory experience for shoppers and an opportunity to build relationships with their shoppers in new ways.

Applying new approaches to product manufacture

With the importance of ethical and sustainable considerations within fashion and beyond, there is increasing investment in R&D to apply new approaches to product manufacture. Some brands are built on the concept of alternative fabrics (such as BAM Bamboo Clothing) while others seek out innovative fibres to include in existing ranges. From the use of pineapple leaves (seen at Hugo Boss) to the microscopic spores produced by mushrooms to create Mycelium “leather” (the basis of Stella McCartney’s infamous Falabella bag). H&M is my #retailstar in this area for their focus on supporting small businesses with their Global Change Award, which provides funding and encourages innovation through sustainability. Their notable 2019 winner was Sustainable Sting; a company that grows nettles to create fashion. In the space of conscious consumerism, shouldn’t all companies be taking note?

Innovation in manufacturing is not limited to fabrics and fibres, but also in production processes themselves. 3D technology isn’t necessarily new, but footwear manufacturers have been investing in this technology in force (Nike, Adidas and New Balance to name a few), with a focus on optimising production at scale, developing new designs, eliminating labour costs and improving speed to shelf. As these examples show, innovation through manufacture is not simply about meeting customer expectations, but about creating opportunities to improve brand strength, optimal operations and sustainable growth.

Supporting strategy direction with NPD

It is a well known fact that retailers can utilise NPD to diversify their range and target new audiences. The purpose of a retailer is to provide products or services that customers want at a price point that they are comfortable with and ultimately, the key feedback is through the till point. NPD can be challenging, facing into ambiguity and risk but it doesn’t have to be done alone; with a rise of brand partnerships from H&M x Giambattista Valli or the recently announced Prada x Adidas collaboration. Dyson is my #retailstar in this area - moving beyond their well-known household electricals to haircare, tapping into the burgeoning health and beauty industry.

Retail is becoming data rich as more of the business goes digital. From assessing the impact price elasticity to understanding the customer journey, retailers can access an accurate view of business performance and their customers using advanced data analytics. If utilised effectively, they can use this source to test and refine their innovation strategy and align it closely to their business strategy.

What can retailers learn from this?

Innovation is not one dimensional and I think that retailers should assess where it can be applied to be most impactful for their business, allowing them to grow and differentiate themselves. Using the example of Burberry discussed earlier in this blog, innovation has spread across the breadth of their business from retail architecture, through to their fabrics and finally the customer experience. Innovation is not done just to say that the retailer is innovative, but it is for a purpose; it is all for the customer. Retailers are using innovative techniques to win the customer over and to keep them coming back, product after product. What a #retailstar!

How do you make this work in practice?

To effectively manage the innovation journey, retailers need to have a clearly defined strategy and direction of travel, but to also invest in the right places such as R&D teams or data analytics, to inform decision making and minimising risk. I think that by looking at what others are doing in the industry and also further afield will provide great ideas but retailers need to do what’s right for them and their customers. I believe that by putting the customer first, retailers can identify how they want to be innovative to improve the customer journey and then the planning can get underway.

Loyalty

Author: Helen Wolstenholme

In today’s digital era, customers aren’t really brand loyal and will happily switch to a lower cost, especially with the level of promotional activity occurring within the retail sector. However, price alone is unlikely to drive brand loyalty as other brands will always look to undercut and thus drive consumers to buy from the brand with the cheapest price as opposed to the specific brand. So why do customers continue to shop at the likes of John Lewis when they could buy the same product online at a cheaper price?

In this blog, I will focus around two key themes; brand loyalty and loyalty schemes.

Brand Loyalty

Brand loyalty occurs when consumers “trust” the brand. Retailers are looking to promote customer lifetime value to drive a loyal breed of customers and provide a range that delivers year after year across the ages.

John Lewis is a great example of this, their original principles were ‘Value, Assortment, Service and Honesty” and their current values are “Value, Integrity and Vision” which aligns to their motto, “never knowingly undersold”. When consumers shop at John Lewis, they expect high quality products and excellent customer service and this is exactly what they receive. So despite challenging times, with a reported 99% decrease in profits, John Lewis continue to stay true to their values, by investing in partner training in order to drive improved customer service. On top of this they throw in a free coffee and a newspaper for Waitrose and Partners members to encourage you to come in and while you’re there you’ll likely pick up your milk and orange juice at the same time.

I think another great retail star for loyalty is Apple. I wonder how many of you who have an Apple device, would easily switch brands when it comes to phones, laptops and other electronics? Apple’s loyalty is driven from how it has created an emotive and personal message with its customers. Take the mission statement, “To bring the best user experience to its customers through its innovative hardware, software, and services” - which clearly puts the user experience first. In most cases, I don’t think that Apple has the best technology out there and other brands may even have the ability to create far more advanced devices and even just as easy to use. However, by putting the consumer first they’ve become known as the trusted brand for making complex technology easy to use for everyone.

Loyalty Schemes

Loyalty schemes not only give the consumer a sense of belonging, they also can be used to gamify how consumers shop or drive a personalised experience to drive consumers to buy more.

By providing a data source for the retailer through loyalty schemes, retailers can understand their consumers’ shopping behaviour, make ranging and pricing decisions but also support a more personalised experience. However, loyalty schemes are now changing and I believe that retailers who use the schemes purely for data with the odd discount (which everyone receives) are falling behind. The best are going beyond the points schemes and using loyalty as a differentiator - focusing on the experience side of loyalty. A few great examples of this I want to talk about are Starbucks, Sephora and Amazon.

Let’s start with Starbucks, known for their ethical standards to drive consumer trust; promoted through their green colour scheme, the signs in store and even to the facts on their cups. With increased awareness on social responsibility, we are seeing more and more consumers spend more if they believe in the company values. On top of this, Starbucks drives an omnichannel experience from in store to the app, whereby consumers can bypass queuing and tills and pick up their order in-store. Now you might think… well I’ve actually seen that in quite a few coffee shops now - but Starbucks go one step further. They have started using social categorisation through their rewards scheme whereby when you receive a number of points, you can enter different levels of loyalty and more offers are provided to you. Through the collation of data and the use of machine learning and AI, they have also set the bar for personalisation, through understanding what the consumer drinks they can understand their flavour profile and then suggest new products they may like - sounds a little scary if you ask me!

Did you know Sephora have 25 million loyal members which drive 80% of annual sales, a result many retailers can only dream of. How do they do this you may ask? Customers earn rewards for each purchase which they can then choose how they use, these might be gift cards or discounts. Sephora don’t drive sales by promoting discounts to gain new customers but by promoting loyalty which as a result may deliver a discount. Whilst Sephora’s initial price point may seem high, by using a loyalty scheme that results in reduced pricing they have made products accessible to more consumers, who may have ordinarily turned away, and without devaluing their products. On top of this, loyal members can also attend on-site events and classes and even get a free gift on their birthday!

Did you know that ? of households in the UK have an Amazon Prime membership? Of which, a Prime customer will spend four times more than a non-prime customers on average and 37% of prime members use ‘Prime day’ - a 36 hour shopping holiday for prime users only. For ￡79 a year, you get free two day shipping, a prime streaming service, photo storage and prime day sales and a gut-wrenching feeling of the need to shop again and again to make it worth your while.

So what can retailers learn from this?

A lot of retailers have used loyalty schemes as a one sided view to gain data on the customer in order to help then plan their range and pricing but with impersonal and limited promotions to encourage customers to shop with them. Consumers may sign up to the scheme, get a card and then realise that it doesn’t drive much value (with some points schemes giving no benefit) and leaving the card at home or in the bin. I believe that retailers need to step up their game and put the customers first, consumers don’t just buy products anymore, they buy service, experience and convenience, of which this means something different to every consumer.

How can retailers put this into practice?

I think that retailers should start by putting the customer first and think about why the customer would shop with you and not with anyone else. Next, I think it’s important to then build a brand and/or loyalty scheme that builds upon what you offer over anyone else that has a two way benefit for you and the customer. By just being the cheapest, you’ll likely drive increased sales temporarily but it will land you in the realm of low margins and continuous cost cutting which is what we’re seeing in the market today.

If you’d like to join the conversation please get in touch or post a comment below using #whoareyourretailstars? #retailstars