I was lucky to squeeze in a full day at Retail Bulletin’s Multi Channel Summit 2011 on Wednesday.  In this post I thought I’d document a few take-away’s from the key presentations, and additionally high-spot a few quotes from the various speakers and panels .  All in all it was a good day, and I recommend you add it to your calendar for 2012.  Enjoy the notes.

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Session: A Profitable Future Strategy in a Multi Channel World. Speaker: Simon Russell, Head of Multi Channel, John Lewis (JL)

To begin here are a few quotes from Simon’s presentation:

“Multi Channel does not mean online”
“What is key, is a seamless experience across the very many channels”
“Customer shopping habits are dramatically changing”
“How quickly can you change your business – to be able to sweat the asset – when the foundation is there to do so?”

Simon also highlighted the three typical categories of customers;

1. Acquired
2. Retained*
3. Reactivated

*Simon said notably that Retained customers spend “by far the most” with JL.

I also liked his graphic about the life-cycle of Multi Channel, this is my sketch of it.  This graph is an adaption of the Kübler-Ross model.  Where are you on the graph?

Delving deeper, Simon highlighted three key ‘tensions’ in evolving to a Multi Channel operational model and culture;

1. Internal competition
2. Channel profitability
3. Systems alignment

In terms of culture I was fascinated to hear that JL will introduce WIFI into their stores “and not shy away” from their price promise of being ‘never knowingly undersold’.   This is a very brave and bold stance given consumers hyper-connectivity to competitor pricing via smart phones. However, get it right, and JL will clearly engender a great deal of trust with shoppers by taking this approach imo.

Profiling JL’s inroads into systems alignment, Simon mentioned JL’s 130% yoy growth for their ‘Click and Collect‘ service – additionally naming it as JL’s fastest growing Multi Channel fulfilment method.

My ultimate takeaway was that JL are getting Multi Channel right.  We all know that anyway. Furthermore it’s so refreshing to see a Head of Multi Channel talk so little about technology.  That might seem strange coming from a CMO at a global SI but its been obvious to us at Salmon for some time that ‘cultural’ and ‘people’ based issues are far more complex than ‘technology’ when it comes to leading, steering and delivering any programme of change, particularly a transition to Multi Channel Commerce.

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Session: Driving wallet share and conversion through a consistent customer experience across every channel. Speaker: Jonathan Wall, Group eCommerce Director, Shop Direct Group (SDG)

Jonathan began by providing a brief review of SDG and their 8 marketing channels [catalogues, web, tablet, phone, mobile/sms, social, email, paid search].  What was fascinating was the revenue split by channel;

1. Phone – 30%
2. eCommerce – 67%
3. mCommerce – 3% (based on 5% visitor sessions)

Jonathan highlighted that according to Forrester 13% of clothing sales in UK will be bought via mobile – increasing to up to 15% in 2015.  So you can see a great shift already taking place for his customers, no doubt replicated elsewhere (n.b. lets remember Simon Russell’s earlier quote - “Customer shopping habits are dramatically changing”).

Jonathan also mentioned Facebook deals, and Facebook check-in’s being ‘sponsored’ in the future.  I could not agree more.  Its exciting, scary, fun and fast moving all in one.  I can easily imagine checking in at ‘Westfield’, ‘Oxford Street’ or ‘London South Bank’ and receiving vouchers, recommendations and deals for fashion brands, restaurants and museums. Taking it further into the Semantic web, a restaurant could offer discounts based on known table availability in real time etc. Awesome.

I found it very interesting that at SDG, mobile commerce AOV’s are 2% higher than traditional eCommerce! (although that is NOT the same in mobile Apps.)

Looking at near futures, Jonathan presented his belief that ‘images’ and not just QR codes have a big future in Multi Channel commerce, highlighting Google’s lead in this space. He described mobile if-you-like ‘connecting’ the Multi Channel experience. He also championed Amazon Windowshop as a great customer experience on tablets and slates which I share.

As an aside, it was interesting to hear from a predominantly ‘online’ retailer on his particular perspectives on Multi Channel. Understandably, in the absence of a high street presence, the emphasis was very much on mobile, but I imagine that pop-up stores, tablets and the complete integration of call centre operations are very high on the agenda at SDG (or is already an area where they have unique expertise).  It would be interesting to hear more about that. I’d also like to see SDG perhaps present on digital catalogues and their integration into the marketing-mix in the future. I am sure they are a critical component of their overall Multi Channel strategy.

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Session: Improving Customer insight and loyalty through a single customer view of the Multi Channel shopper. Speaker: Derek Ecclestone, Research Director, eDigital Research

Being a marketer I lean in favour of market research – and I do like the concept of ‘listening’ and turning ‘data’ into actionable ‘insight’; and then listening and learning again. Derek’s presentation provided a decent insight into the state of the nation – with the audience contributing their own contribution via WIFI voting handhelds.

71% of the conference audience (n.b. this will skew results, but still) said that their business was NOT fully capitalising on the mobile commerce opportunity.

Derek went on to say that, “Multi Channel integration was an EXPECTATION rather than a DELIGHT factor”, a scary thought for merchants just embarking on their Multi Channel journey.  This belief, combined with the fact that ‘Out of Stock’ remains the Achilles heel of reserve and collect models, illustrates just how critical systems alignment (right back into the supply chain) is vital for developing an excellent customer experience.  According to Derek, “2/5ths of all failed reserve and collect and home delivery transactions will see the shopper purchase from a competitor.” (Stats from Nov 2010 eDigital research study)

Derek offered up his simple way to measure lost sales:

% of potential Customers who fail to to buy due to integration issues
X
% who were lost to competition
X
Average shopping basket
= Cost of Integration fails / per month

On a positive note Derek says, “Obtaining Customer feedback is cheaper than ever” and that measuring, listening to, and responding to “continuous months of performance KPIs is key.” It was certainly food for thought.

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Session: Delivering a seamless reserve and collect service that delights your customers across any channel. Speaker: Chris Corbin, Head of Multi Channel, Halfords Group

(Disclaimer- Halfords are a Salmon customer, and we delivered the projects that Chris presented about)

“Stores and Service are at the heart of Halfords’ Multi Channel strategy”
“Online sales account for around 10% of total sales”

Chris started his presentation by highlighting Halfords, its trading model and what has worked in terms of Multi Channel.  This included these four areas;

1. Reserve & Collect advertising
2. Delivering a good site experience
3. Gaining in-store commitment
4. Meeting customer expectation

Chris went on to say that “cross functional commitment” is key to success.

I could go on more – as Chris’ presentation was excellent (one of the best on the day imho) but regular readers will have seen we’ve written lots about Halfords on this blog already.  For more info on the projects Chris discussed, simply follow these links:

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Other highlights

Mobile
One of the highlights for me were the various discussions on mobile, that filtered in throughout the day.  In the panel session entitled “Integrating Mobile into your Multi Channel Strategy” a few interesting perspectives were aired.  Mobile commerce still polarises people (and therefore organisations) and the apps vs. optimised mobile commerce website debate simmered gently.

Because each merchant has a different target audience with different affiliations to smart phones, its easy to see why this polarisation occurs. But four key retailing themes emerged, that transcend a debate about apps or optimised sites or iphone and android. Demographics aside, the context of mobile in retail involves these topics and I hope they weren’t lost on delegates.  They were;

1. Loyalty
2. Location
3. Personalisation
4. Localisation

Whilst Fergus Boyd (Acting Head of eBusiness, Virgin Atlantic Airways) said that it was his belief, “an app maintenance bubble is arriving” (a great point in my opinion) he also went on to discuss the true merits of mobile which was refreshing.

Culture
Simon Forster, Director of Debenhams.com came out with a beauty : “Multi Channel is an ‘AND’ culture.  Not an ‘OR’ culture.”

Priorities
IMRG say the top four priorities for 2011 in retail are;

1. Having an effective Multi Channel offering
2. Innovation
3. International
4. mCommerce

Legal
A discussion on “Cookies, Customers, Consent“ was very interesting.  The presentation by Mike Butler (Partner and Head of Commercial Law, Squire Sanders Hammonds) centred on the “Data Directive” [Directive 95/46/EC] and the e-Privacy Directive [Directive 2009/136/EC] which are as ‘grey’ as legal matters can possibly be it would seem!  The take home was that ‘Cookies’ sit at the centre of the debate with regard to privacy; and that the debate centres on ‘harvested’ vs. ‘collected’ data ['harvested' being unknown by the customer, 'collected' being known by the customer].  Bluring the regulation further is the issue of ‘static’ and ‘dynamic’ IP Addresses.  At the moment a static IP address are deemed ‘personal info’ in the UK.

Whilst it is blurred regulation wise, any complex eCommerce implementation comes into sharp collision with regulation, so it can’t be ignored.  Here’s two instances that will stop you thinking ‘what’s the fuss?’

1. Internationalisation – clearly brings with it different regulation per geographies. France and Germany for instance (and increasingly Holland) have strict privacy regulations compared with the US and UK.
2. Personalisation (incl. behavioural targeting) –  clearly brings to bear key issues such as ‘transparency’ and in particular ‘transparency’ vs. ‘consent’.

Interestingly as the US is coming more inline with the UK with regards privacy (Yes, you read that right) , the legal side of Multi Channel eCommerce remains as fast moving as ever. Watch this space……

Social Media
I have to say I was disappointed with the social media content at the conference.  Being told social allows a merchant “to have 1-to-1 conversations with customers”, felt like I’d been thrown back 4 years and unfortunately it tethered the debate at a level that was perhaps too high level from the outset.

However, Fergus Boyd (Acting Head of eBusiness, Virgin Atlantic Airways) at least offered more detail, highlighting Virgin’s strategy around the 3 S’s – Selling, Socialising and Servicing.  I also felt that Kiddicare‘s Simon Harrow (disclaimer:  Kiddicare are another Salmon customer) did more than most to explain how social media actually lowers costs (hooray – its not just about selling) in areas like customer support.  For the record, Kiddicare has created customer self service areas and FAQs together with a searchable database of support and service issues, directly integrating their forays into social right into their overall eCommerce strategy.

Perhaps more interestingly, Simon also suggested delegates should take a look at charities and their social media exploits, because they typically have a culture built around ‘helping’ and that they now benefit from a self fulfilling prophecy around the culture of ‘service’.

Whilst the debate about social media was generally high level, areas like SEO benefits were also mentioned, as were the usual suspects in terms of ‘Who is getting it right‘ – take a bow once more ASOS [Community site], M&S [facebook], TopShop [facebook]and Next [facebook].  Also huge credit to Charles Tyrwhitt, whose directors we were told, actively engage in social media circles and fold consumer feedback as far into the brand as is possible – product design. For the record other brands mentioned positively were BestBuy, Eurostar, SouthWest Airlines and JetBlue.

Other

“uCommerce” was mentioned. I’m not sure what it means but I’d hazard a guess at ‘ubiquity’, ‘uniqueness’, ‘universality’ or maybe even ‘unison’.  All the words seem applicable!

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I think that is as much as I can document.  As always the networking was very useful too.

Did you attend the conference and did I miss something big?  I’d love to hear from you.

[update 09/11/09] @dtunkelang Endeca co-founder & chief scientist departs to Google

In a move that will send shudders through the established eCommerce Search providers, Google has launched Google Commerce Search.

• Retailer access to the same, fast, Google search technology we know and love, to surface their own retail data
• A scalable hosted [cloud based] solution that aims to meet seasonal volume spikes and drops, in a cost efficient way
• Search grouping
• Search driven promotions
• Display configuration and customisation
• No additional administrative cost for deployment and maintenance
• Configurable reports
• Integrated Google Analytics

The result?

• Visitors can find the right products faster
• Visitors can filter results by category, price, brand or other attributes
• User-friendly spelling options and synonyms
• Increased website conversions and sales
• Easy deployment in days, and scale effortlessly

Yes there are many features missing when compared to the Enterprise / eCommerce search capabilities of an Endeca, Autonomy, Omniture or SLI Systems.

Yes uploading product data to the Google Merchant Center is not going to work for some.

But I wouldn’t want Google on the patch my product operates!  Not when you bear in mind the impact they can have by providing information services for free – just ask Garmin or TomTom.

And yet already the blogosphere is a-wash with speculation that this is another ‘building block’ in allowing anyone (i.e. not necessarily a company) to create their own online shop.  Where does that leave the SME merchant or the eCommerce Platform provider who focus on SMEs and the lower end of the midmarket?

Google Shop = Commerce Search + Checkout + Analytics + ???

We are in a fascinating era where technology innovation is fueling idea creation and disruption.  Great isn’t it?

Simply a seriously powerful tool bar to fine tune your search results:  Meet ‘Google Search Options’.

Here is a screen grab where I have googled an iPhone 3G, and started to drill down into search results by ‘reviews’ in the past ’24hrs’.

Don’t forget to look at the ‘Wonder Wheel’ feature too.

This Google Video will demystify all.

Salmon presented this morning, at a session hosted by Google and sponsored by Rackspace, entitled “The Route to Scalable eCommerce.” It was a best practices seminar on how to build a secure, scalable online business.

As the event was oversubscribed, here is a copy of the presentation to review.  Enjoy.

Any questions do please contact me.  I’d love to hear from you.

If you have been to any Microsoft event over the last 12 months, you could not escape the term “Software + Services”. But what is it? Why should you consider it?

For me, “Software + Services” is an approach that makes the best use of Web 2.0, SOA and SaaS in that it allows a company to concentrate on what they do best and build applications around their own expertise and processes, then leverage specialist applications like virtual earth, google maps, photosynth (amongst others) to deliver a deep, rich, powerful user experience that previously would have been simply too expensive to create. (There is more here)

But it’s not just the richness of functionality that provides a strong argument for incorporating services into your applications – there are many other reasons such as quality and cost. However, one of the most compelling arguments that I see is in business agility and time to market. Many new businesses today are under pressure to prove the business case and deliver a return on investment from technology quickly. For this reason, they simply do not have the time to invest in a major platform build.

At this point there are 2 things that I would look at:

What are my short-term tactical needs?
How does this fit with my longer term strategy?

Tactical needs, in a lot of situations, can be addressed with limited development through cloud services. This is attractive for a young business, where there tend to be limited capex budgets and a strong focus on minimising costs.

However, as a business evolves, its requirements become more complex (driven hopefully by its success) and it is at this point a business should have a sharp focus for being able to maintain control of its IT. This usually means that demands on the system dictate that it should be brought in house, or farmed out to a more appropriate managed service provider. This is where traditional SaaS providers tend to be an issue, as services such as Salesforce.com have little room to move. Personally, I feel this is where Microsoft is almost unrivalled in their ability to deliver a vast breadth of applications – available in the Cloud OR in your office; although they are clearly not the only provider.

So next time you are looking at a project, I would advise you to seriously consider what is available both off the shelf AND in the Cloud : and more importantly how it fits with the journey you want to take.

When speaking to friends who work in different sectors recently, it became apparent that their view of eCommerce and the on-line world is pretty shallow.

They see web sites as basically nothing more than a bunch of pretty pictures, designed, developed and operated by a troupe of digital interactive artists, shuffling about in un-ironed clothes with hair pointing in all directions and an iPod blocking any attempt at conversation.

Frankly I was a bit offended.

Design skills are necessary for sure, but if I were looking for a partner to help design, build and support an eCommerce site, I’d want someone with experience of running large-scale sites taking over £1M each day, an understanding of enterprise systems integration issues (SOA), solid commercial skills and a good grasp of the sector I’m operating in.

Where your average accounting, payroll or CRM system is concerned, change is often considered a bad thing. In strategic terms these are ‘operational’ systems where change is minimised wherever possible to reduce risk and keep a lid on costs. The life expectancy of such a system is often around the 8 to 12 year mark – although we know that some will become entrenched and live for 20 years or more as successive IT managers on 4 year job-change cycles duck the issue of replacing them for fear they’ll lose their job, reputation and future if it all goes a bit pear shaped on their watch.

But web sites are a bit different. To remain competitive they acquire new features on a frequent basis and are more akin to living breathing things in that they evolve in response to market developments. For websites, change is constant and there isn’t the luxury of a fixed quarterly or even biannual release cycle favoured by centralised IT departments. The outcome is that large scale eCommerce sites have a complex code base with multiple code streams requiring outstanding configuration management skills.

The systems infrastructure is intricate too. Managing peak load intra day and shifting demand throughout the year isn’t a trivial task. Frequently a dozen or more application servers will be required. And web servers, database servers, firewalls, routers, load balancers, etc. And they all need configuring and monitoring to make sure the site is up and stays up because – in financial terms – a site outage may be equivalent to shutting the doors on ten or more physical outlets. Now that’s the kind of thing that gets the CEO’s attention!

Integration wise, whether an eCommerce site is small or large there is a significant amount of ‘plumbing’ required to integrate with back-end systems and third parties. Data about products, pricing, offers, discounts and stock positions has to be sourced from somewhere. Orders need to be sent to fulfilment systems. Then we have to consider fraud detection, payment gateway integration (not forgetting 3D secure), image hosting, address verification, and mapping services too. We shouldn’t forget the bunch of data feeds required for affiliates and price comparison sites either. Or email and SMS communications.

I could go on with Web 2.0, social shopping, product reviews, RSS feeds, blogs, Google checkout, etc. but you’ve got the idea now, right? All of this integration work requires traditional Systems Analysis skills as well a detailed understanding of contemporary IT architectures and approaches such as Service Orientation. Experience suggests the more third party integration is required on a project, the more risky it is because of the dependencies involved. I’d want people that have done this before, lots of times and in the large.

In addition to the technical, there is also much to be gained from a partner that understands the business sector too. Any hard-fought for trust engendered by your website will either be reinforced or smashed to bits when the delivery promise made on the website is kept or not by the fulfilment operation that follows, so an understanding of the reality of the distribution centre and store environments is key to providing realistic information to on-line customers. A second site with separate branding probably means different packaging to be used in the DC. Is there physically room for another bench? How will the packers know which brand the order relates to? And let’s face it, Retail is a seasonal business and if you’re not ready for the Xmas peak, January is a lousy time to be looking for alternative employment as nobody has budget until April.

So sure, design and designers are important; an understanding of the psychology of the purchasing process and translation of that into slick browse and checkout processes will undoubtedly do wonderful things to conversion rates. But all in all eCommerce is a whole lot more complicated than pretty pictures.

I just wish my friends could see the big picture.