Retailers need to be more proactive and service-oriented, and they must collect and make use of customer data to survive in this age of strong technological and social change, said Colin Bradshaw, one of the speakers at the European Outdoor Summit in Sheffield last month, in a speech on the future of retail technology and customer loyalty. This applies to both offline and online retailers, he added, but most of all to the operators of physical stores, and proposed that they should increase their investments in staff training and staff development.
His speech came after a study conducted in Germany by GfK, which indicated that one-tenth of the physical multi-brand stores in the country are likely to shut down by 2020. Another recent German study, concentrating on the shoe-retail sector, indicated a growing concentration in the internet space around big marketplaces that are introducing new services like Zalando or Amazon, to the detriment of smaller, unprofessionally managed web stores.
Like other speakers at the convention, Bradshaw encouraged retailers to intensify their customer-centric approach as the internet is fostering a notion among consumers that “it’s all about me.” While they still want to know what others think about specific products and services, they are becoming more conscious of their own individual needs, making it harder to get results through classic mass marketing methods.
Here is the typical thinking of the new generation of connected customers, as Bradshaw sees it, sending a message also to the brands, many of which operate their own stores: “I want apps from brands that let me tell it what kind of stuff I like and then pings me notifications of what’s in stock, where. One that lets me see what people are saying about the stuff online and even shows me how much it is at their competitors’ stores nearby. And that sends me offers that I just scan in-store if I want to redeem them.”
To help meet their expectations, retailers need to collect data about their customers, using the right filters and the best possible data aggregation tools, and make use of the data for sophisticated digital marketing with a more customized approach. They should learn how to use the data properly and follow the evolution of digital technologies, which tend to evolve every 12 months or so, or use data aggregators like Gartner to do the job for them.
Retailers need to have a data strategy to understand consumers. Aside from the publicly available data, they should put together their own data based on web logs on their website, sales and inventory analysis, customer relationship management (CRM) tools and social networks. Bradshaw noted that it’s legal for a physical retailer to offer free wi-fi and to monitor the journey that a customer makes on an internet browser located in his own store to check what else may be available elsewhere. The data captured by monitoring the customer’s purchasing journey can help the retailer to make better buying decisions and to adjust pricing.
Bradshaw, an industry consultant and a management professor at the University of Bedfordshire, implied in his presentation at the EOS that the best results can be obtained through a better control of the customer’s purchasing process. He pointed to the success of big new “asset management models” such as Alibaba, which has no inventory, or Facebook, which creates no content.
The speaker proposed that retailers should switch from an “anonymous” or “reactive” mode to a “proactive” mode - or even, in the future, an “anticipatory” mode. The proactive attitude would involve new data-based methods such as behaviorally targeted offers, automated marketing messages, channel analytics, cross-channel strategies, matchback systems and multivariate testing.
With these tools, retailers can provide a “curated” shopping experience to their customers that are tailored to their needs, said Bradshaw. A supplementary stimulus can come from the use of augmented media. He said that today’s connected consumers want an “end to end experience,” and suggested that technology can help retailers and brands to “empower them all through the journey” until the purchasing decision.
Offline, the shopping experience must be fulfilling, or the customer will walk away and not come back. Research conducted by Forrester and Oracle back in 2012 shows that 89 percent of customers tend to switch to another store after a poor experience, with 27 percent of them looking for an alternative online. The research also shows that 86 percent of customers would pay up to 25 percent more for a good shopping experience.
In the online space, another study conducted in the same year shows that 60 percent of the users of a mobile device tend to write off a website after a poor experience, 40 percent visit another company’s website that provides a similar service, and nearly 25 percent will tell friends, family or co-workers about their poor mobile experience.
Bradshaw describes the new customer’s attitude about the collection of personal data as follows: “When I give brands information about me – I expect them to use it effectively & responsibly. So that everything they send me is focused around what I’m interested in, and when I go online it’s organized around me. Even in the store, I’d like to be able to log on to my app using my phone and it’ll guide me to what I want.”
Interestingly, Andy Rubin, chairman of Pentland Brands, noted in his keynote speech at the convention that 65 percent of customer journeys start on a smartphone today. He called for greater “personalization” in the online and in-store experience, adding that salespeople should act as “differentiators” in guiding the customer through the assortment and the availability of products.
After the conference, Bradshaw summed up his message to the brands and the retailers as follows: “The consumer today has much greater access to information and opinion than before and is therefore much better placed to make informed decisions. Today’s consumer has perfect or nearly perfect market knowledge. Therefore, brands and retailers have to up their game not only by providing the basic offerings at a good price but also by clearly articulating their added value, making it plain and clear to the consumer.”
Observers feel that Big Data are not so useful. According to Bradshaw, many of those who collect the data are asking the wrong questions. Rubin suggested that the above trends may call for companies to rethink what constitutes outdoor activities and the market around them. As an example, he pointed to an urban fitness challenge, with obstacles consisting of police cars or fire engines. Obstacle courses and other activities along the lines of Tough Mudder also raise questions about the remit of outdoor activities.
The contours of the outdoor retail market are becoming increasingly blurred as well, Rubin pointed out, as outdoor companies face competition from companies such as Uniqlo, Lululemon and Mr Porter, the men’s version of netaporter.com – not to mention Aldi and outerwear retailing at less than €15.
To deal with such transformations, Rubin advocated investments in clear innovation, the environment, employees and omni-channel retailing. He referred to the example of Burberry stores, where items of clothing are fitted with intelligent tags that activate changing room mirrors when customers try a garment. The mirrors then show information about the garment being tried on.
Another striking example is John Lewis, a British retailer that brought Google Street View into its flagship store and equipped staff with tablets, enabling them to demonstrate products and check out items for customers anywhere around the store. This year it has been trialing beacons working with a smartphone app that triggers the customers’ click and collect order when they enter the store or car park, and helps them navigate around the store based on their shopping list. Pentland is the majority owner of JD Sports Fashion, which includes the Blacks and Millets outdoor chains.
Sally McCoy, chief executive of Camelbak, highlighted other participation and consumer trends through the rise of Millennials and Gen Z. While tech is innate to them all, McCoy described Gen Z as people who use five screens, who are mature, realists, communicate with images and judiciously share – while Millennials are more likely to be optimists focusing on two screens, who exchange with words and share all.
While the last decades have seen the development of increasingly athletic or even extreme outdoor activities, McCoy suggested that youngsters were driving a return to more “social” outdoor hobbies. The activities adopted by “outdoorist” consumers include Inooing, whereby young people congregate to hang out in hammocks. Music festivals are another form of social outdoor gathering.
When it comes to fashion, the changes have given rise to consumers such as the lumbersexual, a combination of lumberjack and metrosexual, who is most likely to wear a plaid shirt with Red Wing shoes and to have a beard. They have their own brands, such as Deus and Poler, “for people that wonder why everyone is trying to pretend they are going to do first ascents on alpine peaks.” The trend also favors the return of simple and classic products, such as Herschel backpacks or L.L. Bean boots.
On a much broader scale, the last years have seen the rapid emergence of athleisure, as U.S. consumers increasingly use garments with performance fabrics for their daily activities. Yoga pants are an important item in this trend, driven by brands such as Lululemon and Qor, a men’s cycling and fitness apparel brand with a distinctly urban appearance.
The more traditional outdoor brands have been capitalizing on these trends through their product ranges and marketing. Camelbak started sponsoring music festivals five years ago, while The North Face recently launched its mountain athletics range, offering free classes in town. Keen is also going on tour, reaching out to young consumers, and REI launched Evrgrn, a brand of camping gear intended for “instant gatherings.”
The rise of Millennials and Gen Z has implications for brand communication as well, as outlined in a workshop delivered by the Dutch consultant Liselore Stuut from Tulipa Media. Online influencers often have a reach that is a multiple of the leading magazines in their field – and the exposure may be multiplied again through sharing. Stuut advised that companies develop specific campaigns for them, preferably providing an experience that makes it easier for online influencers to deliver a post with a personal touch.
Stuut said that the influencers expect to be paid for each post relating to the brand (rates were said to oscillate around €300 to €500 for influencers with at least 20,000 followers) but are still careful in the selection of brands they want to feature as “sponsored posts,” to make sure their tone remains consistent and to avoid alienating their followers.
Stuut emphasized that such campaigns should not be designed to generate immediate sales, but to stimulate engagement with the brand and to reinforce recognition. Several bloggers are to be invited to the next edition of Ispo Munich, underlining the recognition achieved by these online influencers.