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INDUSTRY INSIGHT BUILD A SUCCESSFUL DIGITAL STRATEGY IN CHALLENGING TIMES While retailers are trying to keep the lights on, manage stock and retain jobs, their digital channels are also front of mind. DBy Shop You founder and CEO Kelly Slessor. igital strategy is a key focus of all retailers globally, but the challenge is how far into the future can they plan. Historically, a large retailer’s digital strategy spans three to five years, while for small retailers the average is one to two years. In the current environment, retailers are just trying to figure out what the holiday season will look like. The uncertainty of the coronavirus pandemic has left retailers in a position where they recognise the critical need to drive their digital channels but don’t have access to the resources or funding to do so. The key challenges retailers face in building out their strategy include the following. Discoverability As the noise online continues to increase, and customers around the globe turn to Google for answers, the challenge for retailers is to be found among the other billion-plus results that are displayed. If a retailer isn’t on page one of Google, then they don’t really exist. In fact, 36 per cent of people surveyed say they click on the first result that Google displays, and the proportion is down to 9.5 per cent for those who click on the third result. Often digital strategy doesn’t focus on search engine optimisation. Instead it’s seen as a task rather than a sales funnel. As with any effective sales channel, it requires investment. It’s a big job that needs consistency, commitment and a deep understanding of the customer. Retailers managing hundreds or thousands of products understand the complexity of labelling products for search. With many retailers, this task is carried out manually, which is extremely labour intensive. However, there are tools emerging in this space that use artificial intelligence to generate product descriptions, using a combination of the existing description and visual recognition. The optimal experience will be when a tool can take search trends and automatically feed them into the algorithm to ensure search data is dynamically updated. Online experience Retailers have been used to delivering an experience in-store and a print catalogue online. Amazon’s full ecommerce store launched in 1999, and until recently, not much has changed. However, the pandemic has shown how important it is for retailers to offer an experience online and to inject personality and a human touch into the online channel. We’re seeing multiple implementations of this, including live video call, online personal stylists, chat, virtual concierge and general guided selling applications. The challenge is in getting the balance right. Intelligent applications need to know when to switch from computer generated communication to human. This ensures a seamless customer experience. The opportunity cost of not having people on the shop floor is an additional cost often not factored in. Fulfilment Until six months ago, fulfilment wasn’t really part of the digital strategy. Many retailers didn’t even see it as part of the customer experience. Today, logistics – including options such as Uber-style delivery, click and collect, and ship from store – are a crucial part of the customer journey. Due to Covid, contactless fulfilment has become a viable option. According to McKinsey and Company research, 57 per cent of surveyed consumers said they planned to order online, and click and collect. It’s no surprise that when Accent Group launched click and collect, its sales and conversion rates doubled overnight. The challenge with offering multiple fulfilment options is getting the technology platforms to talk to each other. In many cases, the platform and inventory management system used by a store is separate and not integrated with the inventory management system online. Connecting the systems requires investment. This is critical to any retail business, especially at a time where partial or full lockdown is still a reality. One of the overall challenges underpinning retail is reliance on legacy systems. Many of the retail systems, such as point of sale and enterprise resource planning, don’t allow for fast paced innovation to happen and often are extremely expensive to upgrade. Most retailers have spent years and hundreds of thousands of dollars patching archaic technology. What is needed is a complete overhaul of the technology systems, allowing retailers the flexibility to grow, adapt and enter new markets without a huge investment. Those retailers that have invested and continue to invest in technology, such as Cue Co, Nike (Retail Prodigy Group) and Accent Group, have been able to deliver the best customer experience in a turbulent time, and have reaped the rewards. About Kelly Slessor Kelly Slessor is the founder and CEO of Shop You, a personalised virtual shopping mall, and has driven digital growth and innovation in retail for more than 20 years. She has worked with hundreds of retailers and property groups globally to develop their digital strategies and drive higher conversions through connection. Find out more at www.kellyslessor.com 20 RETAIL WORLD OCT, 2020