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.

IMRG reports that Monday 1st December recorded the UK’s largest ever online shopping volumes, but the anticipated VAT-driven spike failed to materialise, leaving sales values and traffic volumes flat.

It all makes interesting reading, in a week when: Zavvi, has been forced to suspend web sales of DVDs, games and music products, Woolworths closes down, 247 Electrical does too, and Debenhams’ site crashes out of action (Debenhams had an availability rate of 28.01% between Thursday 20/11/2008 and Wednesday 26/11/2008, according to this Keynote Systems Performance Index.

***Shameless plug***:  Salmon’s client Argos ranks pretty damn highly in said index

The IMRG Senate Christmas statement makes great reading. Here it is in full:

Christmas is coming and it is going to be bigger than ever this year online with over £13.8 billion to be spent by the UK’s 27 million e-shoppers during the festive season, according to Forrester Research*, which compared to IMRG’s 2006 data is up 42% on last Christmas.

So what is contributing to this huge uplift in spend online? Shoppers are migrating online to find more choice, convenience and better prices. But more than that, the internet is all about independence, immediacy, modernity, attitude; it’s where many people now feel most comfortable. Some 61% of UK homes are now connected to the internet, 15.2 million households, according to National Statistics, and with 84% of online households in the UK using a broadband connection, shopping online has never been quicker and easier. And as well as sales going up, consumers’ confidence in shopping online is also rising.

According to the latest IMRG Customer Service Index by eDigitalResearch and ipoints, confidence in web site security rose two percentage points in the past quarter to 75.6%. Commenting on this Gerald Kitchen, CEO of SecureTrading said that “growth is set to continue as consumers become more comfortable with the security aspects of trading and purchasing online. It was not long ago that consumers were uncomfortable with even purchasing low ticket value items like a CD. Today, we are seeing consumers purchasing items costing thousands of pounds”. The IMRG Customer Service Index also revealed that customer delivery satisfaction had risen to 80.2%.

The demographic profile of the web is changing from the young male dominated scenario of recent years and this is feeding into the sales growth online.

Women aged 18-34 are now accounting for 21% of all time spent on computers in the UK, which equates to 13 minutes out of every hour online, according to Nielsen/Netratings. And there are twice as many women aged 18-34 active online as there are girls under 18 or women over 50. Over 50% of women under 25 now buy clothes online every month.

At the older end of the age spectrum around 30% of total time spent online in the UK is accounted for by the over 50s, with the number of broadband users aged over 55 growing at nearly twice the overall adoption rate among European internet users, according to the European Interactive Advertising Association. Also in the UK internet users aged 55+, the ‘silver surfers’, are the 2nd largest demographic group online, according to Hitwise. The UK internet population is now split almost equally between males (51.5%) and females (48.5%), according to the latest Nielsen/Netratings.

Reflecting this change in profile of online shoppers, retailers are seeing buying patterns altering on their sites and in some cases are opening new departments and product areas to capitalise on these new customers, especially in the run up to Christmas.

Commenting on how sales patterns are reflecting the change in online user demographics, Ulric Jérome, Managing Director of IMRG Member Pixmania says: “We have seen sales growth among the older generation of ‘silver surfers’ and women. They now see the value of technology and have more disposable income than previous generations, meaning technology products are becoming a part of the DNA of their lifestyle. They now embrace technology and understand the ease-of-use and convenience of online shopping better than ever.”

Another IMRG Member, Amazon, have launched four new stores on their UK platform this year and look to capitalise with a broad product range offering in the run-up to Christmas. Brian McBride, Managing Director for Amazon.co.uk said: “2007 has been a great year for Amazon.co.uk. Not only have we seen the launch of four new stores – Sports & Leisure, Jewellery & Watches, Shoes and Baby – but we have seen record breaking sales for the likes of ‘Harry Potter and the Deathly Hallows’ and ‘The Exclusive Catherine Tate Comic Relief Special’ DVD. The proliferation of broadband in UK homes is certainly allowing a greater proportion of the UK public the opportunity to shop online. This means that every age group, across both sexes, is now well represented in the share of internet retailing spend. Whilst there are certain areas that have seen accelerated growth, like the so-called ‘Silver Surfers’, there will be a continued strong increase in internet retail spend across all groups of the UK adult population for a good time to come. This promises to be our biggest Christmas on record and we look forward to serving millions of customers with an incredible product selection, at customary low prices and with a delivery option to suit every shopper.”

The strength of the female purchasing power is no better illustrated than at Play.com, where their influence is being felt in the all-important top selling albums for Christmas. Commenting on this Stuart Rowe, spokesperson for Play.com said: “What is going to be number one selling album at Christmas is the burning question on everyone’s lips. It’s looking set to be the battle of the divas, with Play.com already receiving massive pre-orders on Leona Lewis, Kylie Minogue, Celine Dion and the Spice Girls. However when it comes to gifting, anything goes. The Now That’s What I Call Music series always does well with the general public, and Live Lounge 2 and Radio 1 Established 1967 are already proving very popular choices with our customers. If we had to suggest what will be the biggest seller on the site as a gift purchase, we think it’ll be a 3 way fight between Kylie, Leona and Westlife, who should never be underestimated in the Christmas market – last year they took on both Oasis and the Beatles and won. Music is a great gifting option at Christmas. It is affordable, accessible and instantly rewarding.”

Are Christmas sales online heading for another record amount? With more people online, greater choice and availability and even more parcels being delivered than ever before it certainly looks that way. Jonathan Wall, Marketing Manager at dabs.com, observed: “Shoppers continue to use the internet as an easy way to seek out best value, especially at Christmas time when budgets can be tight. Retailers such as dabs.com have used the flexibility of their online store to create special “bundle deals” which offer extra discount and help stretch the festive budget even further.” Val Walker, Royal Mail’s Head of Multi-channel Retail Marketing, said: “Royal Mail is geared up to deliver a record breaking online Christmas and expects to handle more than 100 million gifts and presents ordered on the internet during the festive period. Royal Mail has responded to the needs of the online shopping community, both shoppers and retailers, with the introduction of a new service which improves the delivery experience. ‘Royal Mail Tracked’ enables retailers to provide their customers with a tracking number when the goods ordered are dispatched so that they can track the progress of their delivery themselves. The service also enables retailers to give their consumers the opportunity to specify an alternative delivery point, such as a porch, shed or a neighbour, should they not be at home to receive the item. This new service builds on the success of Royal Mail’s Local Collect service which enables online shoppers, who are not at home to take delivery of an item that cannot be posted through the letterbox, the opportunity to ask for it to be taken to a Post Office branch near their home or work.”

Jo Evans, IMRG’s Managing Director commented: Like a lot of people, I have already begun my Christmas shopping without having to battle with traffic and crowds, by buying online. I have thousands of shops available to me, and if they are displaying the ISIS / IDIS logos, I know they are trustworthy and reliable, and I can shop safely and securely receiving my purchases at home in good time for giving to my family and friends.”

Footnote: * Source: “Europe’s 2007 Christmas: An Online Retail Wonderland”, Forrester Research, October 2007.

Some facts I recently picked up at the IMRG members meeting. Breathtaking stuff.

• 85 Million parcels presently being delivered to UK homes per month

• Number of UK households online has increased to 61% (15.2M) 84% of these have broadband (29/08/2007)

• 18% of Brits buy groceries online (09/08/2007)

• Tesco online sales reach £1.2 billion (17/04/2007)

• Online adspend overtakes newspapers (28/03/2007)

• 16% of worldwide population online (23/07/2007)

• Young women dominate UK internet (17/05/2007)

• TK Maxx confirms theft of 45 million bank card details (30/03/2007)

This article from the BBC business website (“Mail order looks beyond the printed page”) is also a great read.

The exceptionally wet July weather led to a jump in internet shopping, with online retailers reporting an 80 per cent year-on-year increase in sales last month.

Shoppers spent more than £4.2bn on online shopping in July, a record monthly figure, according to the Interactive Media in Retail Group, which tracks sales by e-tailers.

• Game has acquired Gamestation from Blockbuster for £74 million, which will give it a boost as it adds 217 stores to its portfolio in the UK.

• Scene7 is to be acquired by Adobe.

• Doubleclick has been acquired by Google for £1.6bn. Microsoft complained the merger could have a monopolistic effect and US regulators are reviewing the deal.

• Jakob Nielsen claims Web 2.0 “neglects good design” practice. Personalisation can make sites “glossy but useless” and designers should focus on usability, good search, and jargon-free text first. Remember Boo.com? Looked great, didn’t sell…

• A version of the Ubuntu Linux o/s will be developed for net-enabled phones and devices.

• IMRG estimates that the global internet shopping marketplace will be worth £250bn in 2007. UK Shoppers will spend £78 billion a year online by 2010 – doubling the web’s share of retail sales to 20%. This year internet shopping is expected to reach £42bn. Internet sales grew by 3,553% between April 2000 and December 2006.

• eBay profits soared by 52%, its quarterly profits grew to $377 million, a leap of 52%, with a 26% surge in the number of registered users. eBay’s global revenue rose 27% to $1.77 billion, which the company attributes to a 51% rise in payments through PayPal.

• According to eGain Research conducted in December 2006, 38 per cent of major UK companies are ignoring e-mails from their customers. 67 per cent fail to deliver an acceptable response to customer e-mails. Only 10% of retailers managed to respond within one hour, which was the poorest performance amongst all sectors tested.

• The Launch of the Kate Moss range of clothes helped www.topshop.co.uk achieve its highest rank and share of visits of the past year. The website ranked number 2 among Apparel and Accessories websites and number 138 among all UK sites, exceeding its previous high of position 238 on 26th December 2006. Demand on the Topshop website was reportedly so high that the Kate Moss collection sold out in just 12 hours.

• Home Retail Group has reported annual profit at the top end of estimates, and said it is confident of making of making further progress this year. The group reported profit before tax, goodwill and one-off items up 12 per cent to £376.7m in the year ended 3 March 2007.

• Microsoft unveils Table Computer…