Retail Expo2020 Day 2 Review
Day 2 of this year’s Retail Expo saw Author, broadcaster and mathematician Hannah Fry deliver a fascinating discussion of data analytics. Hannah examined a wide-range of studies and showed the power of data analysis across various industries from transport planning and agriculture, through to Police techniques investigating the most serious crimes.
In the retail field we find ourselves under remarkable pressure now, and carrying out mass data analysis may allow companies to spot patterns and opportunities that we wouldn’t otherwise. The implications for this around efficiency, operations and planning are vast; and as brands are having to do everything they can to maintain their existing customer base, now may be a good opportunity to use the power of data to understand their customers as well. Just as the global economy is in this uniquely challenging position, the sheer quantity of information we can now access is bigger than ever.
Though there have been a lot of headlines around the feats achieved by AI, machine learning and algorithms, perhaps one of the most interesting elements of the talk was around the limits of data analytics. Hannah was keen to insist that one must retain a scientist’s scepticism of the claimed insights and results of any studies. Clearly a lot can be learnt when stripping out the extraneous and focusing on the information at our disposal; but how we generate, process, and analyse that data can make all the difference. Hannah had humourous anecdotes throughout the presentation about how uncharacteristic human behaviour and unknown flaws in the data, or indeed the analysis, could lead to conclusions that were incorrect.
Remembering that people aren’t just data-points, that they can be idiosyncratic and unpredictable, feels apposite at the moment. As we all work to try and understand how the world will emerge from this crisis, keeping at the forefront of our mind that each of our customers is an individual, and treating them as such, will be as important as ever. Our datasets may offer us a guide, and while we have the ability to endlessly analyse and project, we must remain aware that we might not be getting the whole picture.
The second webinar of day two saw familiar face Caroline Baldwin head up a panel of experts to discuss how retailers are engaging with their customers and driving sales during lockdown and into the new normal.
Caroline was joined by Nicola Thompson, COO of Made.com; Robin Phillips, CEO, Watchshop; and Beth Horn, Head of Industry for Retail, Facebook.
The discussion made for compelling viewing as our panel shared their marketing experiences as the world has moved inside, and how this has affected consumer behaviour and what brands can do to maintain a strong brand identity through consumer engagement.
Our panel began by discussing how consumer habits have changed since the pandemic hit. Both Nicola and Robin expressed an initial dip in all consumer activity as the lockdown was enforced, however Nicola who commented that we do seem to be starting to settling into some form of “new normal.” With certain sectors, such as outdoor furniture doing especially well as consumers figure out how to enjoy being at home all the time.
Facebook’s Beth told a fascinating statistic that it generally takes two months for a change in behaviour to become a habit, and we’re pretty much right in the middle of that period now. (Some reading on that statistic here.) It remains to be seen what consumer habits will be formed as a result of these behavioural changes. What we do know is that social media use has rocketed during lockdown, with Facebook seeing 3bn users for the first time, logging on across their platforms each day.
It should come as no surprise that both our panels retailers, Nicola and Robin, pointed to a shift towards social media in their marketing and content strategies. A key part of this, which has perhaps been influenced by having less resources available, is authenticity. Nicola explained that very quickly their content strategy changed from commerce to community. Engaging their customers by sharing their work from home tips, or asking parents to send in their kids most creative box structures. Its these sorts of engagements that are going to really going to drive a level of “stickiness” from your customers to your brand.
The panel generally felt that the trend for faster, less polished content, that can speak to a consumer in a moment is a trend that will continue throughout the lockdown and beyond.
As more people are working from home it provides an opportunity for retailers to live the life of the online consumer, and experience first-hand what a good online sales journey looks like. Beth reveals that on average it takes a customer 23 clicks from arriving on your page to completing a purchase. That’s 23 opportunities to make small improvements. A great example that Beth shares is the frustration when asked to input her Credit Card details and the alphabetical keyboard pops up instead of the numerical one!
It’s so important that this is underpinned by an all-round great customer experience all round, as Nicola points out, delivering an incredible customer experience can create an advocacy among your audience and there really isn’t any better marketing you can do than that.
The Day 2 afternoon event, ‘Women in Retail’ was a thoughtful and engaging panel discussion about the opportunities, challenges, and initiatives available to women in retail. The panel featured Helen Galletley, Service Transformation Manager at Tesco; Chloe Bebbington, Social Media Marketing Manager at River Island; and Eiko Kawano, Group Experience Director at Publicis Sapient.
The discussion started with the panellists describing their career and experience in retail and how they felt that things had changed for women in the industry over the last 10-15 years. There was a particularly interesting conversation around professional development and the successes and failures of mentorship schemes. The panel had all taken part in mentorship programmes in the past and advised that a lack of goalsetting and breakdowns in communication had led to poor results, for mentors and mentees alike. Instead the panel suggested that their experiences of unofficial mentorship via bonding with trusted senior colleagues had been more helpful for their career progress.
In the wide-ranging debate there was some consensus on the importance of transparency and flexibility at work, especially around childcare and diversity in senior positions; as well as the need for employers to make clear their values and attitudes. A company’s ability and desire to develop their staff’s leadership and people skills will be important if they’re looking to attract a diverse range of employees who will stay there long-term. The panel also noted the need for employers to remember characteristics like confidence and interview performance generally favour men and that similarly capable women may be being ignored.
As companies across the globe adapt to the fact that many employees will have to work from home for the near-future, a more flexible and open corporate culture may develop naturally. We’re all used to the sight of our colleagues’ partners and children popping up in Zoom calls and hopefully an organic change in work culture will pave the way for more diverse work places in future.
As the 2020 Virtual Expo comes to a close, we are treated to a couple of presentations. Firstly, Tristan Burns, Analytics Lead at Pizza Hut Digital Ventures talks us through some of the innovative ways that Pizza Hut are using data to optimize sales. Ben Miller, Insight Services and Events Director, IGD will attempt to look into his crystal ball and predict the new normal.
Did you know that Pizza Hut is widely credited with selling the first physical item online? Essentially the first ever eCommerce transaction was for a Pizza! That being said, for a number of years following this Pizza Hut were not exactly eCommerce trailblazers. Largely leaving individual markets, or even stores to create online pizza stores. It became clear that Pizza Hut had fallen behind when the then CEO of Dominos began to describe his company as a “Tech company that sells pizza’s.”
Fast forward a few years and Pizza Hut has a consistent and global ecommerce solution that is not only loved by customers, but provides valuable data for analysis and optimisation.
The key pillars of optimizing Pizza Hut’s online food delivery service are the average order value and the conversion rates of each customers. Finding a good balance, and exploring the interplay between these has proved invaluable.
The most eye-catching example of this was some App optimization in the UK. The average minimum order value for the UK is £12 and originally the checkout button the app was greyed out if this threshold wasn’t met. This meant that Pizza hut couldn’t capture the value of the customers basket if they chose to abandon the transaction because of this. By allowing the checkout button to be clicked, and then a pop up informing the customer of the min order value. They found that most customers who abandoned the basket were within £3.
Pizza Hut introduced different pop up models, one was the control which merely informed the customer of the min value, one informed the customer how close they were to reaching the min value, and one offered customer’s the chance to buy products to make up the difference. As you can see below both Variants outperformed the control, with Variant two increasing conversion as well as overall spend.
Ben Miller closes the 2020 expo by attempting to predict the new normal. IGD are a research company who provide insight, training and best practice for the food and grocery industry.
In attempting to predict the new normal IGD have looked at previous retail trends, going back to the post war era to create 10 hypotheses of the new normal and what it may look like for grocery retail. These hypotheses will be tracked to see how their predictions pan out.
The 10 hypotheses span 3 key areas, Society, Shoppers, and Retail. We’ve picked one from each category to take a look at but you can watch Ben’s full presentation here. (skip to 27 min)
Looking at society initially, IDG are predicting a reversal of globalisation. The last few weeks has shown the fragility of supply chains as imports and exports are limited. This is leading to stronger domestic production. Longer term this is likely to lead to the reshoring of production, particularly with Brexit looking perhaps industries can look at the supply chain effects of the last few weeks and learn from them as we move towards December 31st.
One hypothesis for shoppers is that they will seek out more creative and social experiences. Some of these may be virtual initially as the public builds confidence that we have come through the health risks. Anything that helps people come together physically or virtually is going to be well received by the public. Could this point to retailers seeking to continue the experiential trend, particularly through events-based shopping experiences to get customers back through the doors on the high street?
Agile and flexible in-store formats are likely to be successful across all retail in the new normal. In the short term we are already seeing this in the grocery sector with social distancing measures such as queues, screens, one-way systems it looks likely that these will continue for the longer term as more retailers open their doors. Better integration between online and in store experiences should help drive customer loyalty up as well.
Will Ben’s hypotheses be accurate? Ben mentions himself that there has never been a more unpredictable time, but we, like many, will be watching with interest over the coming months and years to see how things pan out in the “new normal”