We're talking about retail and we're live. Welcome to Retail Week Live 2018!* This year we're back at the enormous Intercontinental O2 near the historic borough of Greenwich, the place where time was created and we will be bringing you all of the highlights (well, as many as we can fit in!) from the two day conference. As we enter an increasingly unpredicatable and turbulent year for the UK retail industry, it's never been more important to hear from leaders across the space and their priorities to build a stronger future for retail.
*(Retail Week Live Live Blog so good I've named it twice!)
And of course I'd be remiss if I didn't mention our presentation at 1:45pm (straight after lunch) in the Popup stage where we will be joined by Nati Harpaz, CEO of Catch Group to uncover why 2018 is the year of the marketplace. If you would like a snapshot of what to expect, we have a handy teaser here. We hope you can join us!
The team will be milling around all day and happy to discuss how and why becoming a marketplace operator can have a significant uplift on your product sales, you can contact us any time if you'd like to catch up.
And we're off. Theme of the opening by Retail Week Editor Chris Brook Carter is The Revolution is Here. As an industry we need to confront challenges head on. The terms omnichannel or digital first are misleading, as they seem to imply there is another option. This is a fallacy. The only way is embrace change.
The UK retail landscape is rich with examples of innovation and master strokes, did you know Sinsburys opened their first self serve supermarket more than 70 years ago?
The companies that are thriving are those who incorporate digital throughout ever area of their organisation from HR to Finance, Marketing to Supply Chain.
We're stepping into the unknown, and this is an exhilarating position to be in. We need to challenge ourselves to move fast and smarter. The message from Retail Week is that this will be difficult and daunthing but as Harry Selfridge said "There are no hard times for good ideas."
It's a rousing open and a call to arms for the industry to embrace the path ahead of us.
Interview with Jeremy Darroch, Group CEO at Sky
Curerntly Sky are in 23 million homes, reaching 150 million people every month. What's contributed to this success? The mentality that they are constantly "stepping into change."
What does customer centricity mean to Sky? - Being authentic. Customers are their lighthouse, they start by udnerstanding what's important to them, and use this to steer the business. It's embedded in their culture.
How do you get a shared company culture across so many divisions? - At the heart of their organisation is the belief in doing better. They demand change across their business. Anyone at Sky can say this isn't good enough, let's improve it. In order to achieve this, you have to get out there and meet people. Understand your staff. The days of leaders sitting in a glass office on the 10th floor are gone.
What have been the most profound changes you've seen over the past 10 years? - Consumer technology has revolutionsed how people consume information. 10 years ago people used their phones to make calls, they watched DVDs and listened to CDs. The rate of innovation has been forcred to change profoundly. This means the way we need to change too . Instead of focusing on fixed moments in time, we try to identify the big shifting plates and accelerate performance in those areas. The flip side is, there's always a danger that we say consumers have changed more than they have. The way they consume is sometimes different but in mant ways, we still watch TV live such as sports and the news. Whereas the way we engage with Drama tends to be on-demand.
What big innovation would you say you're proud of? Sky Q - our new TV Platform, really embraces combination of live viewing with on-demand behaviour, feeding in product recommendations and short form content. We're equally proud of the development of Sky Atlantic and our upcoming partnership with Netflix.
How important is diversity to Sky? - Big question! The battle for the best minds and talent will come to define the success of businesses in the future. This leads you to consider, how do we attract these people by making our environment as attractive as possible. We value difference because we know it makes us better. Success comes from the creativity of views coming together, anchored by the same culture but difference in views.
One change that's come you'd like to comment on - A.I - Alexa, Voice Control - these are just a small part of a huge opportunity. But this also brings significant risks. Look before you leap. VR and AR - this has huge potential. Sky are working with David Attenbourgh to have him talk to you in the Natural History Museum then to the Ocean to see a blue whale. (Wow - that sounds amazing!!)
John Rogers, CEO of Sainsburys Argos
The topic is: What lies in store as retail moves online?
|Argos began as a catalogue business. Free and Easy. We're now a tech driven business. Currently 3rd most visited site in the UK (after Amazon and eBay). The first retailer to hit £1billion of mobile sales and we have more than 1.2 billion hits online annually.|
The difference between pureplay and bricks and mortar retail has never been so stark. The headlnes from Christmas peak attest to that. Argos have experiences a 5% channel shift from offline to online year on year. Despite this there are still 400m square feet of retail space which are accounted for by the top 100 retailers. We need to consider how we are using this space in a time when the industry is moving online.
But online isn't the only answer. When Amazon acquired Whole Foods it was an acknowledgement of the importance of a store presence. The growing popularity of Click and Collect is clear evidence that physical spaces can complement online. It's convenient for customers. It's predicted by 2025 that 35% of consumers will be using a deliver to specific location service. John Rogers believes it will happen faster than this.
The Argos Fast Track service hasn't reached mass adoption yet, it's still not fully understood. Their Hub and Spoke model allows them to deliver 90% of UK households within 4 hours. Not many retailers can make this claim. But crucially, this model is cost-advantaged. They estimate it's 30% more cost effective than their biggest competitor.
Stores need to delight customers. After an intensive study, Sainsburys concluded they have an incredible excess of space. Putting in the Argos stores enabled them to bring Argos to previously uncovered areas and enhance existing coverage. It's resulted in an increase to food sales of 1-1.5%. They have so far introduced 191 Argos stores including 8 micro stores and 64 relocations. This has led to 15% increase in sales and that's projected to increase to 30% in next 5 years.
The focus now is to 'deliver moments of wow' giving customers reasons to come and shop in their stores.The motto moving forward is Whenever, wherever, however.
How do you compete with Amazon? - Don't try to compete on their terms. By leveraging our store network we are able to fulfil same day. Amazon can't do this. Argos have a currated range which helps customer's choose more quickly and conveniently, again Amazon can be an overwhelming service.
Andrew Griffiths - Parliamentary Minister for Retail is here to introduce the announcement of a new retail council - watch this space.
Now, time for a coffee!
And we're back. I'm hanging out in the Pop Up theatre, wearing very trendy headphones and pretending I'm at a silent disco. This session welcomes Craig Summers Managing Director of Manhattan Associates and Steven King Head of Technology at Kurt Geiger and we're talking about technology transformation. Two key factors to delivering successful tech initiatives: You have to start with a strong business case, it doesn't matter what the program is. And you need strong leadership which understands the impact.
Steven is discussing the importance when delivering technology transformation, that it doesn't disrupt the customer. The analogy of a beautiful graceful swan, paddling rapily under the surface is evoked. A measure of their commitment to their customer can be seen by the first question their CFO asks: "How does this effect the customer?" - not "how much does it cost?" Any changes we make won't have a negative impact on the customer. Using data capabilities in smart ways leads to better customer-centricity, if we know carriers are struggling with the snow we can segment customers by postcode and inform them quickly, this goes a long way.
Business Cloud applications need to be version-less. No-one asks what version of Facebook they are using. If it's not driving the growth you need to review what you're doing.
With regards to personalisation, we need a bit more common sense. It's pointless for retailers I frequently shop with to email me with recommendations not in my size. That's basic. So perhaps the message is we should concentrate on walking before we run?
Next up I'm in the beautiful Boutique Stage which is very lovely! Interesting session on the stand off between retailers, carriers and customers amidst increasing pressure to deliver goods faster than ever. Delivery Management startup Sorted are joined by Dyson, Footasylum and Wincanton to debate the topic.
The role of the store has changed. Customers expect more than to just pick up a product from a shelf, they want their hair styled using the products, they want 360 mirrors and basketball courts - a fully immersive experience. But the fixed costs associated with running stores is inhibiting future investment.
So what does this mean for the relationship between retailers and carriers? - We need to understand how to take the wealth of information available in the delivery chain from SMS, Bots, Notifications, Preferences and use this to improve the experience. Customers need control of the delivery. - Elephant in the room on this topic - are customers willing to pay for control? Would you pay to have a choice of carrier or to delivery to my mobile GPS point?
Wincanton are seeing an increasing preference from consumers (particularly young ones) to choose their carrier. The one they trust. What does your choice of delivery partner say about your brand?
Topic has come onto returns - questions from the audience should consumers pay for returns? - Nobody jumping up to answer this one, the answer seems to be retailers want to charge but customers want it free. For Sorted - if you offer free delivery you should offer free returns.
Derek Harding, Interim CEO Shop Direct
We build the entire customer journey with "her" in mind. Combining search, marketing, recomendations engine, deliveries - we don't think it terms of departments at Shop Direct we think in terms of the customer journey.
For Shop Direct - they see no future in creating a store network. You hold their stores in your pocket. They are focusing on ensuring you can get the item as efficiently as possible and return it if you need it.
The retail world is a challenging one. There are clear winners and clear losers. Shop Direct focus on their share of the market, and understanding how they can grow it. The customer should find the entire experience incredibly easy. It's that simple. Despite all the buzz about technology transformation, it's ultimately about simple shopkeeping. Have we got the right products? Right categories? Right brands? - and do we make it easy for her to find them, then buy them? Tech is the enabler not the inspiration.
Nati Harpaz, CEO Catch Group & Nick Bareham, UK Country Manager, Mirakl
And we're off, we're going to be talking about why it's the time of the marketplace. Catch Group have seen an increase in sales of 15-20% over the past year.
When you look at the fastest growing businesses globally, they all operate a marketplace. But here in the UK there's confusion around what a marketplace model really means. According to our teaser research infographic, 12% say they are currently adopting a marketplace. For Nick, this figure can be a bit misleading, many of these are actually operating a drop ship model. We say from the research that 70% of retailers said providing product choice is incredibly important - but there wasn't a clear strategy for how to deliver this.
Nati Harpaz discussing how to manage cost control - if a brand is selling the same product cheaper on eBay, what do you do? For Catch Group they work with suppliers to make sure they are price sensitive. When we were thinking about adopting the marketplace model, we weighed up building this in house, but soon realised it would take years of development and we really lacked the expertise that Mirakl bring. We never expected such profound results from using this model. Benefits across the business such as organic search is up 40% as we have million more SKUs - we now use marketplaces in our acquisition strategy.
It's a partnership between you and the sellers. Working closely with sellers gives fantastic results. There's no out of the box formula for marketplace. If you look at Farfetch, they have a highly curated experience but underpinning this is their marketplace. Equally, Harvey Nichols provide an incredible experience, and marketplace is powering the product availability - all highly selective and curated. The marketplace model can bring scale and range.
What we are finding now is that many retailers are finding limitations in the dropship model, the order management flow is limited, they are still having to commit to inventory - but is this scaleable? For Catch Group, they introduce healthy competition between buyers and marketplace. Catch have 800 sellers on their platform, but 4000 who wanted to join - they are selective in who they onboard.
Customers are very smart. They will always find a way to get the best price. If you're going to have a successful marketplace model you need to accept that a marketplace seller might offer a product cheaper than you do - but think about the big picture. If they don't shop with you they will go elsewhere, if you keep the sale on your site you have the opportunity to cross-sell and at least take a commission cut from the sale. Better than losing the sale to a competitor. If you want to grow topline growth - the fastest way to do this is through marketplace. If you don't want to sacrifice your own stock, you can think about the marketplace as offering a broader catalogue to eradicate out of stocks. Launching a marketplace disrupts your business from the inside.
We will be releasing the findings from our exclusive report in the coming weeks - so stay tuned!
Happy International Women's Day! We're proud to share our latest blog, featuring inspiring advice from the team!
Great content still to come from Retail Week Live 2018.
Moya Green, CEO Royal Mail
Key takeaway: Don't beat yourself up about everything you need to do at home, you don't need to bake every cookie, iron every shirt. take the big, meaty, risky roles, the experience is what makes you and gives you credibility. Urges all women to go home, look in the mirror and ask: how am I going to ask for more money?
Steve Rowe, CEO Marks and Spencer Interviewed by George MacDonald, Editor Retail Week
This is a great story, from Saturday boy to Chief Executive. The first day Steve Rowe was appointed Chief Executive he spent the day on the shop floor, visiting colleagues who'd been with the business 40 years. The questions he needed to ask himself: Who is our customer? What does our brand stand for? What's the current state of our omnichannel model? How does our international offering fit? Where should we be?
What does Digital-First mean to Steve Rowe and to M&S?
1. Being mobile first. 2. Working smarter, fail fast, do better. 3. Be aware and on top of evolving technologies : appoint "digital warriors' all over the business - we've traditionally been behind and we know we need to change.
What's the role of the store for M&S?
We've had a challenging few year - It's been difficult closing stores. But the reality is 1/3 of ur business will be online in the next few years. M&S have are currently doing a deep dive on what a profitable combination of online and offline looks for them. The integration between online and stores is vital. But Steve points to Amazon - the business responsible for the closure of many book stores, now opening a book store with real books on sale! Likewise, head over to White City and you'll see the new Missguided store. It's clear the store serves ore of a purpose than just a collection point.
What are the challenges with getting close to your customers?
Like many businesses, we're drowning in data, there's too much, we can't join them together. 32m consumers shop with M&S each year, we need to understand their needs. The Sparks Loyalty Program is helping, but like other parts of the business, this is also under review at the moment. It's all about growing customer lifetime value - how do we give our customers what they want?
M&S are concentrating on how they engage with consumers throughout their life. They are the market leader in school wear. Being there for women buying their first bras, they take pride in being the leader in this space, providing a comfortable experience that women always remember. Helping men buying their first suits. All of these touch points are an opportunity to be personalised and be memorable. We're not chasing fast fashion, this isn't our space. We want to provide well made, well fitted, quality goods for anyone in the UK.
Martin Hargreaves, CFO, Victoriaplum.com ; Adrian Evans, CFO, Made.com ; Dave Pattman, Innovation Director, Webhelp - How do pureplay companies invest to ensure great customer experience.
Adrian Evans - It's all about building for scale. This helps us future proof new regions and concepts to reach profitability at a faster pace.
Martin Hargreaves - We ask: What do we solve the problems our customers face? - and we work in an agile way, small changes that make a positive impact.
With so much technology available in the market - how do you justify tech investment? Adrian - we need to get the back end right, in order to be able to provide a great CX for our customers. We've been focusing on the final mile to make sure customers reeive goods when and where they want them. Underpinning that technology and the right people go across our entire business.
We need to distinguish between customer emotions and experiences: Finding something easy and convenient isn't an emotional connection, it doesn't build love and brand advocacy - it's just expected.
Kathryn Parsons, Co-Founder, Decoded
The penultimate session is all about digita adoption. Back when they were founded Decoded made the promise that they could teach anyone to code in a day. This came about after the founders realised the number of employees across all industries that were lacking technology and digital skills. And businesses were suffering because of it.
The power of learning to code enbables you to have conversations with all functions. Code and the new generation of A.I are extensions of a culture that brought us the printing press and the world wide wed.
Over 50% of Decoded's students have been women. But what holds them back is confidence. Women need to be empowered to be able to play a pivotal role in the digital transformation revolution.
0.001% can say they truly what understands behind the screens - this has to change. We have to all feel like we understand the world we live in.
How can we harness technology to work smarter, faster and harder?
Written by Laura Hare
UK Marketing Lead, Mirakl