digitalization is at the heart of retailing innovation ·...

DEBORAH WEINSWIG, EXECUTIVE DIRECTOR–HEAD OF GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 Copyright © 2015 The Fung Group. All rights reserved.

1

September 28, 2015

Digitalization Is at the Heart of Retailing Innovation

Innovation, Alibaba, beacons, social media and the future of retail were all under discussion at the Future of Retailing Innovation event on September 16 at Campus London. TrueStart, a London-‐based incubator, organized the panel discussion, and FBIC’s London team attended.

The panel consisted of Doug Gardner, CIO at British retailer River Island; Craig O’Donnell, CIO at commercial property developer Land Securities; Ashton Crosby, Investment Director at asset management firm True Capital; Stuart Sunderland, founder of catering company City Pantry; Cande Alarcon, Client Account Lead at consultancy Accenture; and Richard Anson, founder of online rating and review firm Reevoo.

The audience was varied, and included startup entrepreneurs and people with backgrounds in retail, consulting and finance. The discussion consisted of a series of questions read by the moderator, Baz Saidieh, CEO of TrueStart, and questions from the audience. Below, we detail the main points covered during the discussion.

1: Facilitating Shopping Experiences Defines Innovation in Retail

The panel agreed that an exciting innovation is anything that positively impacts efficiency and facilitates the shopping experience. Accenture’s Alarcon mentioned a specific innovative app that can locate tweets geographically and create a heat map according to topic. The technology has obvious applications for police and ambulance services, but also for commercial analytics.

2: Foreign Direct Investments Are an Opportunity for UK Retailers

The panel sees the expansion of international players as an opportunity rather than as a threat. For example, River Island’s Gardner said he sees Alibaba as a partner that can help River Island expand overseas, rather than as a competitor. And Alarcon noted that a large number of Asian companies turn to Accenture for help in pursuing investments in the UK (15 companies in the last three months, she said). She considers this trend a sign of the British economy’s dynamism rather than a competitive threat for UK-‐based firms.


2

3: The Border Between E-‐Commerce and Social Media Is Blurring

The panel was asked what they think about Facebook adding a “Buy” button and the trend of social media integrating e-‐commerce features. While the panelists see this as a natural development within social media, True Capital’s Crosby stressed that this is a two-‐way trend. He noted that companies are also deliberately moving into the world of social media in order to take advantage of the visibility social platforms provide. River Island, for instance, is very active on Facebook, Instagram and Snapchat, and benefits hugely from having a presence on social media, which is used extensively by the company’s main target audience of teenagers and young adults.

4: Blogging and Microblogging Influence Digital Shoppers

Fashion and food bloggers have gained a lot of visibility and have become important in influencing people’s behavior, particularly when it comes to shopping choices. Collaboration with bloggers can be beneficial for retailers. Crosby suggested that a way to engage bloggers is through financial reward: retailers can grant a share of sales revenue to bloggers who write articles that impact customers’ purchasing decisions.

Microblogging through social media can be even more effective as a promotional tool. Rather than paying professional bloggers, River Island encourages customers to act as microbloggers. This can be more effective, as consumers tend to trust the advice of their peers, particularly when the company under discussion has a young customer base. To support its efforts, River Island launched the hashtag #wearingRI and publishes hashtagged photos of shoppers who receive a certain number of “likes” on its Facebook page. This form of reward encourages customers to post online pictures of themselves and their friends wearing River Island clothing.

Source: lolsmg.com


3

5: The Store of the Future Is Digital

During the early days of e-‐commerce, some observers started to envision a future in which stores would have been made redundant. A few years on, Gardner observed, it is clear that brick-‐and-‐mortar stores are here to stay. E-‐commerce has changed the role of the physical store in retailing, but has not diminished its importance. The store remit now includes acting as a showroom as part of the multi-‐channel experience: shoppers can be tempted by the products they see in a store, and then decide to buy them online.

Gardner also highlighted how the store of the future is part of the digital/multi-‐channel experience and, as such, must be equipped with technology that facilitates two-‐way communication between the retailer and the customer. In-‐store wi-‐fi, beacons, interactive screens and other technologies will be used in digital stores to encourage and facilitate the multi-‐channel experience. According to Gardner, no single technology is really useful if it is not part of a broader effort to implement a real digitalization of the store.

For a more detailed analysis on the use of in-‐store technologies, please see forthcoming quick take on personalization in retail.

6: Technology’s Goal Is to Serve the Customer, not the Retailer

Technology must be used wisely and make the shopping experience more straightforward for customers, Gardner observed. While in-‐store technology in essence serves to help retailers track customer behavior,

customers need to perceive that the technology’s main point is to help them make the most of the time they spend shopping.

So, shoppers need to be persuaded that enabling technologies, such as in-‐store beacons, are not meant to bombard them with marketing messages, but to make their shopping experience more straightforward by assisting them during their visit and helping them make the most of their time in the store. For example, tracking devices can be used to help shoppers navigate around the store and locate the items they are interested in.

MAIN TAKEAWAY: Multi-‐Channel Is the Future of Retailing Innovation

Retailing innovation clearly involves the digitalization of the shopping experience as part of the implementation of multi-‐channel strategies. No single channel will prevail: retailing in the future will be defined by the integration of online and offline, together with strategies involving social media, professional bloggers and microblogging.


4

Deborah Weinswig, CPA Executive Director—Head of Global Retail & Technology Fung Business Intelligence Centre New York: 917.655.6790 Hong Kong: +852 6119 1779 [email protected] Filippo Battaini [email protected]

Marie Driscoll, CFA [email protected]

John Harmon, CFA [email protected]

Aragorn Ho [email protected]

John Mercer [email protected]

Shoshana Pollack [email protected]

Kiril Popov [email protected]

Jing Wang [email protected]

Steven Winnick [email protected]

HONG KONG: 10th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: 852 2300 2470 NEW YORK: 1359 Broadway, 9th Floor New York, NY 10018 Tel: 646 839 7017 LONDON: 242-‐246 Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0)20 7616 8988 FBICGROUP.COM

digitalization is at the heart of retailing innovation ·...

Documents