RLI Talks Podcast with Bernardine Wu
What are the important benchmarks and best practices that can be applied to prioritize and plan for a post-pandemic retail industry?
We’re not going back to normal, we’re going to the ‘next normal’. In this next normal, there are going to be things that stay – [there will continue to be] a greater interest in contactless retail [BOPIS adoption rates increased from 66% to 76% and BOPUC increased from 4%-59% during COVID], safety, sanitation, etc. But, there’s a different relationship that has already started. First and foremost, there must be a recognition of this cultural and behavioral shift. Secondly, there’s no doubt a re-evaluation on where everyone is spending or conserving cash. Third, double down on digital. [There is this] increase in reliance on digital. One of our mantras is “customer-centric and digital-first.” The customer has always been driving our business decisions, but we need to really understand this customer who wants to shop or play with us anywhere, anyhow, anytime on any device in any way that they want. Most of those things can be supported with some kind of digital program/enhancement/technology tool.
What is the first thing retailers and brands should be doing to ensure they survive?
After the notion of a strategy that is driven by the customer and is digital-first, one of the top focus areas is around data. The reality is that we have plenty of data now – we are collecting an immense amount of data. But the question is what do we do with it? How do we use the data to know her (the customer)? She is in charge – how do we use this data to understand her preferences and grow a relationship with her? [We need to] be able to lead her to the products or experiences that we know that she’s going to be interested in. If we understand that, then we can serve her better. One of my favorite sayings is: Data is like a rockstar. If not managed, it’ll trash the place. I think that a lot of companies are [beginning to] prioritize data like an enterprise project. We should all have a Chief Data Officer to lead this charge. It should be an enterprise role whether you’re a 20-person company or a 200,000-person company. Data is the lifeblood. There’s a lot of work that the industry needs to do around actually turning that into specific, actionable insights so that we can make better business decisions.
The recent rapid adoption of digital shopping has redefined retail. What does it take to build a thriving and expanding ecommerce business in today’s marketplace? And how much investment is required for a retailer to engage in ecommerce marketing?
It starts with vision first. There’s an opportunity here for companies to think about their vision and purpose again. Are we here to just sell stuff? Or are we here to help our customers find the right things they need to live better, enjoy life, be healthier, etc. Are we here to build community? The next thing is culture. Culture eats strategy for breakfast.- Peter Drucker. You can have the strategy, but if your culture is not aligned with your vision and how you want to go about it, it’ll be hard. You also need to think about how much investment is required. It’s less about how much, but more about how and where you apply it. We’ve seen brands and retailers with limited budgets and small teams do amazing things.
Great customer service can make or break a brand, what are the key factors retailers should be looking at to give their customers an engaging experience?
It’s really important to do ‘voice of the customer’ studies, whether it’s your team surveying customers or a firm you’ve hired. Then, create personas and map out the customer journey. I mean literally map it out. As she comes into your store / shopping center, what is the journey that she could want to take or has been taking? Again, use data. If you map out this journey, what’s needed, what’s missing, and what could really support your brand becomes really apparent. You can learn a lot more from doing these studies [because you] truly get to know your customer and what kind of engaging experience makes a difference for your brand. Then you can figure out features or functions that make sense for that customer experience or boost conversion.
What simple strategies can retailers adopt to sell more to existing customers?
We often talk about customer acquisition, but loyalty and lifetime value (LTV) is probably the better bet in the name of the game. There’s always attrition, but we’ve got to get into this mindset of loyalty & LTV – which again is steeped in data. There are many technologies that are important to this- CDP/CRM, PIM, ECP/ERP, OMS/WMS, etc. Whether you have a homegrown system, 3rd party system, a combination, or you’re adopting a new technology, this is where it’s critical to map out customer data so that you can build that loyalty and LTV. We have to know what she’s bought in the past, but we also need to know what her preferences are and why she’s buying these items. We need to learn what style she prefers so that we know what to offer to her in a personalized way. This is one of the biggest thrusts for businesses today because now we can send behavioral promotions, personalized product recommendations [70% include them in the cart], ‘complete the look’ functionalities [only 44% offer kitting], etc. All of these pieces are going to grow sales for us through building loyalty.
You recently launched an Omnichannel Retail Index Report for 2020. Who are the trailblazers leading the way and how did they perform across web, mobile, store, and crosschannel?
We are quite proud of this work we have done over the years with the National Retail Federation. It’s a study of 125 brands and retailers, mostly based in the US, where they have websites, mobile sites, and 100 of the 125 have stores. Through this study of 300+ criteria, we’re able to understand who’s doing what, trends, and adoption rates of various tools & capabilities. As far as trailblazers go, there are winners across many areas. For example, in the US, Best Buy scored really high on the web and crosschannel, but not on mobile. Home Depot did really well across the board. Amazon, of course, scored high on web, but they’re not even in the top 10 on mobile in terms of these customer experience capabilities. Since COVID, there’s been a push for BOPIS. If you don’t have BOPIS, you’re missing out on a table stake. [Also], BOPUC is something that was on many roadmaps, but everyone had to solve for it in 1-2 months. Sure, some are clunky, but that is a must-have. There are capabilities that everyone is focused on, but now we want to be able to do more. [Only 13% offer curbside return options, 4% send SMS notifications for order pickup, 6% give a unique phone number for pickup, and 34% promote BOPIS on the homepage]. There’s many examples where there’s adoption, but what’s the follow up for that?
Besides BOPIS & BOPUC, what are the key lessons learned from the Omnichannel Retail Index Report for all retailers?
There’s quite a few. In this time when we have a lot of products and choices, product recommendations is a table stake. Only 52% are personalizing recommendations for BOPIS orders based on purchase history and behavior. That notion of data being needed is absolutely important. Then there’s messaging. If we really want to be customer-centric but only 16% of us have our customer service phone numbers prominently in the header on the website, that’s not really sending a customer-centric message. There are some capabilities that are simply table stakes. If the adoption is high and [you’re] not doing it, that’s table stakes and you need to catch up. If the adoption is low, it might be something that is up and coming and worth investing in. The name of the game is going back to [your] masterplan and prioritizing these different capabilities.
It is well known that half of businesses fail after five years and only a third make it to ten. Where are they going wrong? What can they do to turn it around?
Cash is king. Given the timing of things, everyone went into cash conservation. We’re headed into the holidays and many [companies] are dependent on this holiday burst. There must be a re-rationalization of spending money on prepping for the holidays. Make sure you’re thinking about what levers are going to make a difference during holiday as well as after the holiday. A lot of people have their eggs in the holiday season, but the holiday season has already started. [This] is the time to double down on digital and implement some of these capabilities. If you’re in a fight-for-survival mode, rationalization is going to be even more important. Look critically at the components within your marketing program and figure out what’s really performing for you. Double and triple down on those. Forget the ones that are not. The other thing I’ll say is that experimentation has become more important. Many businesses suddenly figured out some technologies/processes (e.g. having an associate go out and put purchases in customers’ trunks). It’s a little clunky and manual, but that’s okay. A lot of companies learned that they can do some things in a pilot way and just get on with it. You should budget 5% towards experimentation or failure. I know it’s hard to do when you’re being cash tight, but you might have to put it in places in order to figure out what the better levers are in order to gain advantages later.
More and more brands are starting to engage with their consumers through Social media marketing. What should they be doing and what should they avoid?
Social media is table stakes. One must figure out the purpose of the social media outlet. It has to align with the brand. I’d be careful about trying to get as many likes/clicks as possible. Just like regular marketing, we want quality. We’d rather have fewer quality engagements to build towards loyalty and LTV. Use social media for social listening, customer service, and leveraging user generated content. Less than 50% [of brands and retailers] in the Omnichannel Retail Index Report allow you to like, pin, or tweet from the product detail page. Maybe even more important, only 28% allow you to email products to yourself or your friends. How many times are we taking a picture with our phones and texting it to our friends while we’re in the dressing room? Let’s enable that better so the customer can literally be shopping with their friends. Being able to collect that user-generated content (customers’ pictures and videos) [is important]. Conversion rates increase when there are photos and videos on the product detail page. I would think about social media in an expanded way. Have a strategy and measure it.
What would you say to those thinking about starting a successful online business, what are their first steps?
Do your homework and due diligence. Be data-minded. Understand your products, assortment, and catchment area. Again, map it out. We have this notion of ‘Idea to Doorstep’. From the conception of the product all the way until that product is in the customers’ home / workplace, etc., [think about] how you are going to deliver on that promise and delight. Mapping that front-to-back is critical. It doesn’t mean that one has to do everything along the way themselves. There’s plenty of help, technologies, consultants, etc., but you have to think about that journey all the way from idea to doorstep.
What’s changing in the world of ecommerce today, what lessons have you learnt and what inspires and motivates you?
- Innovation is getting faster. It was fast before, but it’s at hyperspeed now.
- Invest in people in addition to your data. Talent is important. The right people doing the right things at the right time with the right partnership and the right rewards and compensation is critical.
- Get help. Listen to more podcasts, read more articles, hire help / consultants, and get the right technologies / solutions in place.
Any final tips, strategies or success stories you can share to help retailers take their business to the next level?
Look in every nook and cranny – where can digital help? Digital does not necessarily mean expensive technology. It could just mean looking at the data or thinking about it differently. We’ve had some great success stories. We’ve worked with over 600 brands, retailers, shopping centers, and real estate developers. One of my favorite [growth stories] was with a global intimates brand. We did a project where we just focused on the checkout process. We prioritized some new techniques and tools by stack ranking them. They only implemented 3 of these things and they garnered a $60M uptick in 3 months. My last point would be: be willing to change things up. Be willing to let go and experiment with something different.