As the industry gears up for the Drapers PayPal Etail Awards this month, judges Hash Ladha and Dan Lumb decode the future of fashion retailing.
Apple isn’t a retailer but it retails the best in the world. There are non-retailers doing our job better than us and if Amazon ever buys Argos, the world will change forever.” A typically bold, not to mention dramatic, statement on the future of best-in-class multichannel retailing from Oasis deputy managing director Hash Ladha, who joins Drapers along with Dan Lumb, ecommerce director of Reiss, fresh from their morning spent judging the Drapers & Retail Week PayPal Etail Awards.
It’s Lumb who then raises the point that retailers need to concentrate less on the term multichannel and more on the behaviour of the customer. “It’s about offering the customer a channel to buy product,” he explains. “Back in 2001 Reiss was offering customers the option to buy online and collect in-store. We weren’t doing it because we were thinking about multichannel, we were doing it because the customer asked for it.”
Lumb has a point. The past 12 months have seen many retailers launch a variety of channels in order to be fully multichannel without always researching whether or not their customers are actually present on these channels. Rumour has it that Oasis’s Facebook store, which launched in the run-up to last Christmas, has not been as successful as the business hoped, although Ladha is quick to refute this, saying the retailer is “pleased” with its performance so far, but it’s a work in progress.
“I think we have more work to do on it and it is early days, but we are going through the same process that we do with the introduction of any new channel, which is to launch, learn and refine. Good retailers should try and succeed and try and fail in new emerging channels,” he says.
Social media is definitely a channel that many retailers are still finding a challenge to understand but which can have a big impact on sales and brand awareness. Lumb has seen social media at its height for Reiss when Kate Middleton has been photographed wearing Reiss. “When Kate wears our product the news spreads like wildfire. All we have to do is say ‘yes, it’s Reiss’ and the community does the rest for us. Visits to the site were up 100% year on year on the Monday in March that Kate wore the blue Reiss dress, and then we saw a knock-on effect in the US when the story broke there the day after. We had two big days of traffic because people became engaged and social media played a massive part in this – it’s a great way to spread the brand message quickly.”
At Oasis, Twitter has become part of internal as well as external communication with the launch of a new initiative called the Shadow Board. Each member of management is on Twitter and shadowed by a younger member of the team (born after 1980). Ladha explains: “The launch of the Shadow Board was done through Twitter and allows us to interact as a management team via Twitter. We have transparency among our colleagues in-store and in head office as well as with our customer base. The generation Y shadow board are our mentors; we run decisions by them and ask how they would do things because they are a different generation who think in a totally different way and are far more socially connected.”
Over the past six months, the number of customers using mobile and tablet devices has soared. Etail trade body IMRG reported the total percentage of online sales via mobile devices grew from 0.4% to 3.9% between February 2010 and November 2011. Earlier this year, Mark Newton-Jones, chief executive of home shopping retailer Shop Direct, said he expected half of all sales to come via mobile phones in the next four years. In February, private Sales website BrandAlley launched a mobile-friendly site with plans to double sales via mobile this year.
So what expectations do Ladha and Lumb have of these channels in the next 12 months? “The traffic to Reiss’s website from Apple devices is anywhere from 20% to 25% a day. Our desktop is still our main platform for sales on the site but I can now see it moving monthly more towards tablet devices,” says Lumb. “By Christmas I predict it could be as high as 30% of our sales as we develop the Reiss-specific tablet site and customers become more indulgent, spending longer on site and looking at more product. “ And how does mobile compare with this? “For us, mobile is less about selling and more about research,” Lumb explains. “Customers want to add things to wish lists or a basket or find where the local store is. Apps are a great tool for brand engagement – I would never say they do that much in terms of money but the great thing about apps is you don’t need wireless to access them so can engage with the brand at any time.”
Part of the challenge for individuals in ecommerce management positions such as Ladha and Lumb is ensuring the brand message and delivery is done as effectively and efficiently as possible, as part of an overall brand strategy. To do this, they need to ensure they have the right team around them. The last five years have seen the industry move away from hiring ‘ecommerce gurus’ who know all aspects of ecommerce to recruiting for specific roles within the market such as a search engine optimisation manager or content director.
Ladha outlines what has brought about these changes: “Retailers are changing their structures to align much more with pure-plays now – an acquisition team and a retention team – and whether that will work in multichannel remains to be seen as the management has to get it. The thing with pure-plays is you generally have people who are non-retailers running them, they get acquisition and retention and they understand the conversion and metrics. The most challenging thing in the online space is finding people who have the personality to work within the industry and the relationship-building skills coupled with the technical knowledge and expertise that is required.”
Lumb quickly agrees: “You really don’t get that many branded, creative, commercial people. Look on Econsultancy right now and search for SEO jobs – at least 60 will come up. There’s a serious lack of knowledge out there – you’ve got to be technical but you’ve also got to get content.”
It’s clear that the multichannel journey for most retailers is still in its infancy, although Ladha says Oasis has now taken it to the next level by introducing an omnichannel strategy. “The difference is, to be a multichannel retailer you need more than one channel; to be an omnichannel retailer you need to become one inventory through multiple channels. Since we launched the omnichannel strategy in October 2011 we’ve revolutionised our offer because it means that all product, wherever it is, is available to all customers, at all times. The results of this show that since October conversion rates have doubled.”
So what’s next for high street retailers and for the multichannel industry as a whole? Ladha, willing as ever, takes a punt: “I don’t think anyone can predict what’s going to happen in the next 10 years, but if I was going to take a wild guess I’d say there will be some smart people coming from the world of m-commerce saying that us dinosaurs from the ecommerce era shouldn’t be on the board any more!
“Looking forward to the next few years I think it’s just going to be more of the same with a lot of innovation for innovation’s sake. However, I think it will also see businesses becoming more customer-centric and getting a better understanding of their own customers’ needs. The most fundamental change will be the focus on market share and to get that you just have to be the best at what you do.”
Lumb thinks it’s going to be focused on the customer, too, but also on the technology. “It’s going to be about offering people choice; people are going to expect more and we’re going to have to work harder. The evolution of websites will make companies start again in terms of customer journey as it’s currently becoming a bit safe and repetitive,” he says. “It’s all changing and evolving at such a rapid pace – what an amazing industry to be part of as we take it to the next level.”