The team at IMRG write …Recently we hosted the IMRG Knowledge Lounge at the Internet Retailing Expo 2014, and our delivery guru Andrew Starkey chaired the afternoon ‘Operations and Logistics Conference’ on the event’s second day.
Our experts were on hand throughout #IRX14, with the IMRG Knowledge Lounge proving to be the port-of-call for retailers and suppliers seeking insight and assistance.
As well as offering expertise, we also wanted to find out the pertinent key trends from IRX. Here are our 10 main observations from the Internet Retailing Expo 2014:
1. Cross-border continues to grow
More retailers are developing cross-border strategies, new service solutions are coming online and new routes such as Russia and China are opening up, (notwithstanding recent barriers with customs clearance into some emerging markets).
The rolling average for cross border over the life of the IMRG MetaPack UK Delivery Index is now 22.5%. Taking the market as a whole, we estimate that 17.5% of all orders are now from non-UK shoppers.
2. ‘Friendly fraud’ is a ‘huge’ problem.
A number of delegates raised this issue at IRX14, particularly during Andrew Starkey’s Operations and Logistics Conference.
IMRG’s Head of eLogistics Andrew Starkey hosts the Operations and Logistics Conference at IRX on 27 March 2014
In the online retail arena, ‘friendly fraud’ is when a customer buys an item, uses it, and returns it under false pretenses. For example, someone might purchase a dress, leave the tags in and wear it to a party, then return it after the weekend claiming the item was not suitable.
Joe Murray, CEO of Worldstores, who was speaking on the Operations and Logistics Panel at IRX, said that this was a problem he has encountered, and shortly afterwards MetaPack tweeted in agreement: “‘Friendly Fraud’ huge issue moving forwards, how many retailers know the bottom line implications of GLIT?”.
Harking back to IMRG’s Legal Forum last month, one retailer claimed that it was not uncommon for them to received returned garments smelling of smoke and alcohol, but that granting the refund was unfortunately more practical.
So what is the solution?
It was suggested during the panel session that retailers coming to an agreement over pooling data in order to identitfy repeat offenders could be key in the fight against friendly fraud – what do you think? Tweet us here or join the discussion in our LinkedIn group here.
3. Advancements in Digital High Street technology
Taylormatic, by Italian company NoBrandSolution, uses XBox ‘Kinect’ technology to accurately map a consumer’s exact measurments.
Using eight individual ‘Kinect’ sensors, Taylormatic records your measurements in seconds. Andrea Motta, CEO of NoBrandSolution, demonstrated the technology to us at IRX and the results were accurate to the millimetre.
Bridging the gap between in-store and online, NoBrandSolution says: “Selling luxury goods could be done now in different places thanks to our multi-platform product, that allows you to start shopping in-store, and finalise the purchase at home”.
One iota is a cloud-based technology solution, bespoke for multichannel retailers. It is already being used by Littlewoods, very.co.uk, Superdry and ebuyer.com, among others.
Sanderson founded One iota with “a single vision, to help retailers and brands keep pace with their shoppers across new technology devices and channels”.
4. Big names are blurring the line between online and in-store
Argos is developing its retail proposal to keep up with internet retailing, as 45% of sales now originate from the online channel. Bertrand Bodson, Digital Direcrtor of Argos, spoke at IRX.
He said that ‘Fast Track’ collection for online orders was being piloted at six London stores, and that the record time for collection currently stands at 22 seconds.
He said: “45% of our transactions happen online, but the last mile for 90% of the purchases is in-store, as people order, come and pick their items up, so clearly the stores are very important piece of our journey at many levels.”
Whole House of Fraser outlets have been given over to digital shopping in Aberdeen and Liverpool, while its Edinburgh department store includes a Fifth Floor Online Store.
Sarah Baillie, Head of Multichannel Business Development at House of Fraser, said at IRX: “The winners will be those who make their stores work the hardest“.
5. Managing digital marketing is a minefield
George Ioannou, Founder of Digital & Wise, was one of our experts in the IMRG Knowledge Lounge. Throughout the two-day event, he was kept very busy as delegates sought his advice on a number of marketing issues.
Some of the more mature and larger companies at IRX spoke to George about conversion rate optimisation, and making the most of the web traffic they attract. He also offered advice on paid search among other issues.
George said: “Many of the companies I spoke to were active in digital marketing, although weren’t sure whether they were doing the right thing. Some weren’t sure which marketing activities to prioritise when they had a limited and tight budget.”
If you are seeking help with your digital marketing strategy, speak to George at Digital & Wise here.
6. Trading internationally – “every country is completely different”
Dave Elston, Head of eCommerce at Clarks, spoke at IRX.
In Europe, Clarks’ trade is 80% wholesale, and their brand identity is not as strong. “In the UK, a lot of people had Clarks shoes as children growing up, so they’re very aware of the brand. In Europe it is very different”, said Dave.
According to Dave Elston, the typical German consumer is comfortable using left-hand navigation or a search function, whereas a consumer in France is more likely to engage with banners and fashion propositions.
Payment solutions are also different. Generally, German consumers prefer not to use credit cards for online transactions, often opting for invoice payments instead. In Germany there is a heritage of catalogue shopping: “People are used to buying seven or eight items, having them delivered, keeping the ones they want and sending the rest back”, said Dave. This contributes to a high number of returns in Germany. “A lot of people say that, but the figures show that returns in Germany are very steep”.
For more information about offering your proposition internationally, IMRG members can view our 2013 Cross-Border Trading Guide here.
This year’s Cross-Border report will be launched at IMRG Connect in September.
7. Delivery is key – choice and clarity breed loyalty
Mark Robinson, Director of Customer Delivery Operations at John Lewis Partnership, was one of Andrew Starkey’s guest speakers at the Operations and Logistics Conference. He referred to the subject of delivery as a ‘competitive battleground’.
He said:”Anticipating and acting on in-flight changes in delivery options will be key for retail industry 2016.
“The retail footprint continues to change, and John Lewis increasingly must provide a diverse logistics framework”.
8. Retailers are taking delivery into their own hands
L-R: Mark Robinson of John Lewis Partnership, Joe Murray of WorldStores, and
Mark Starsmore of Disney spoke on Andrew Starkey’s panel at IRX14
Andrew Starkey, IMRG’s Head of eLogistics, said: “Some retailers are so sufficiently convinced that delivery is a significant loyalty driver, that they are considering taking some of this work back in house.
“Companies like John Lewis already do this for two-man delivery and are now piloting it for one-man parcel delivery in some areas. Also in the two-man space, Worldstores.com are so concerned that the 3rd-party delivery industry cannot keep pace with its customers’ expectations that it is looking to bring its deliveries in house”.
Andrew Starkey’s conference chairmanship was well-received by the engaged audience, with MetaPacktweeting “Andrew Starkey could give Stephen Fry a run for his money, throwing spot on delivery stats out at a rapid rate!”
9. Supermarkets are looking to influence customers’ online conversations
The role of marketing at the supermarket is changing to look to influence rather than broadcast, as customers increasingly use digital platforms to talk to each other rather than waiting to hear messages from brands.
Speaking at IRX, John Rudoe, Online, Digital and Cross-Channel Director at Sainsbury’s, said that while above-the-line advertising is ‘not dead’, it needs to be used in very different ways now as consumers increasingly shop across channels, whether in-store, on mobile or online.
He adds that where 20 years ago brands used to talk at the customer they must now make themselves a part of the conversation that is already going on.
John said: “The role of advertising is incredibly different. We spend a lot more time thinking about how we can influence that conversation that customers are having and how we talk to them.
“It’s not about shouting at them. That doesn’t mean we don’t do above the line advertising but we think about it very differently to how we used to think about it.
“The mindset is exactly the same as in the store – it’s about delighting the customer and managing customer needs and thinking about that customer experience and interaction. There is so much to take from the fundamental years of retail that is valuable in this new world.”
10. Many are looking forward to #IMRGConnect
We spoke with many IRX guests who said they were coming to IMRG Connect on 21 May 2014, to learn more about Customer Journey and Personalisation.
Retailers are constantly developing the whole experience and customer journey. At IRX14, Alex Klose of IMI Mobile explained how retailers were integrating social and mobile to deliver customer service as well as loyalty programmes. Marino Casucci, of Fact Finder, shared insights including the figure that 30% of stocked products are not found through in-site search.
Robert Muldoon, Delivery Solutions Manager at ASOS, said of Connect: “As an individual, as well as a retailer, I get to see a broad aspect of different subjects – things that I’m not knowledgable about, but within six minutes I’ve gained a bit of knowledge. It’s a really good insight.”
IMRG Chairman James Roper said: “If you’re not plugged into this community, frankly you don’t know what’s going on”.
For more information about #IMRGConnect in May, click here.