BT Fresca & Expedite Blog

For ten rollercoaster years, e-commerce has been operating at the wild frontier of business life – an exciting, fast paced discipline which threw off new ways of working, new business models and new customer insights almost every day of the week.

Well, that was then. Now, things are very different – at least, that’s my conclusion from two days at the Retail Week/Drapers E-commerce Summit which BT sponsored and hosted at our HQ last week.

I was expecting industry leaders to be discussing the strategic stuff that matters such as what multi-channel retailing really means now that the smartphone revolution has put a web browser in everyone’s pocket? Or whether consumers’ shift to value products is temporary or permanent? Or whether vertically integrated producers/retailers are still viable in an all-digital world? Or how superfast broadband will drive a radically different approach to building brands’ web presence?

Instead, we got a series of lectures on multi-variate testing, user testing, best practice in online consumer surveys and list upon list of KPI’s; all helpfully inscribed in PowerPoint better to befuddle the audience. One speaker even suggested that since running a slick e-commerce operation was all about manipulating spreadsheets, then the marketers should hand it over to their colleagues from the finance department

This heavy lifting is all terribly important, don’t get me wrong, but it’s not new, it’s not controversial and it’s not the stuff of debate worthy of a Summit. All e-commerce managers know they should be continuously testing don’t they? I got a strong sense that the e-commerce world thinks it’s cracked the ten year old conundrum of how to build the perfect website. You just need to work hard and follow best practice. Job done.

Surely there’s a risk that the e-commerce world has become too inwardly focused as it obsesses about rising to the challenge of the 27 different ways the British spell hummus? If it is, then e-commerce people will have journeyed from dot com pioneers to statistical geeks in less than a generation; finishing up as marginalised website optimisers, rather than contributing their knowledge and customer insight to the big challenges retailers are facing as we all claw our way out of recession into a brave new multichannel world.

@geoffreyb

As BT is the official communications services partner for London 2012, I’m fortunate enough to hop on a bus tour of the Olympic Park this snowy morning. What is immediately clear even through the misty windows of the bus is the incredible amount that’s already been achieved at the Park. The area, the size of London’s Hyde Park, was a forgotten and polluted backwater that’s now taking magnificent shape and is currently crowned by the wafting beauty of Zaha Hadid’s iconic Aquatics Centre roof. The roof itself weighs 2,800 tonnes, spans 160 metres and is supported in only three locations.

As I listen to the announcer tell me about the 2,000 newts that were temporarily relocated to an undisclosed holding area, my attention is caught by another habitat that’s been created in front of the hyper-connected regional transport station. It’s the enormous new retail centre.

Westfield Stratford also rises

Westfield Stratford City is 1.9 million square feet of almost unclaimed retail space. Anchor tenants Marks and Spencer and John Lewis / Waitrose have yet to be joined by any other major retailer. Recent mentions of Primark in Retail Week and The Independent indicate an interest in a 70,000 sq ft venture. Of course since the recession landlords generally have experienced an understandably cool reception for their retail properties. But perhaps this time the retailers should take closer look.

Will retailers go for gold at Stratford?

What’s uncontested is that while the Olympic Delivery Authority is on target to hand over the Park to the London Organising Committee for the Olympic Games (LOCOG), right next door, the massive retail opportunity sits untenanted. Up to three hundred stores could open for business in Westfield during the autumn of 2011, at the moment there are just three. On the strength of what’s been achieved so far, the London Games will be a tremendous success on many fronts. Not least the legacy of the Park and it’s many facilities.

Let’s hope that our UK retailers will include Stratford in their plans to give East Londoners a retail legacy, and show the world what world-class retailing looks like.

One of my good friends has a family-run men’s tailoring shop in an exclusive town in the counties, close to where I live. Their clothes are for those with deep pockets: the exquisitely tailored suits are hand-made by them or sourced from the finest tailors in Europe and typically retail at £2,500 or more.

There are not many shops like this one left in Britain. As a basic requirement they demand devotion, an unsurpassed knowledge, and an unwavering commitment to customer service.

Despite this, they are still challenged by today’s market conditions. As we sat discussing what options they had to generate new sales, we reviewed the marketing plans, multichannel plans, customer loyalty and family resources.

It struck me how ironic this is. I spend most of my time working with large retailers helping them to build customer loyalty with CRM programs and technology. These retailers are essentially trying to mimic the personalised service of my friend’s shop using pro-active personal communications, and reactive customer recognition & service in the store. Almost always with the careful application of a well thought out programme and the right technology these large retailers can improve their customer service significantly.

And so here I was, talking to my friend and helping her small enterprise adopt tactics that work for my clients. She has customer relationships that all retailers aspire to, and now she is reaching out to new customers to fight the affects of the recession.

For instance, due to her very short depth of style/colour/size combination (she often only buys one size deep) she is worried about advertising items on her site. I suggested that she allow the customers to preview early Spring Collections, and incentivise her customers to purchase items now, with personal delivery immediately the Spring Collection arrives with a bouquet of spring flowers.  Although she buys with key customers in mind, this way, she can determine who else may be interested in particular garments – garments that would not have been available in the shop come spring as they would have been reserved immediately for the loyal customer.

And then, I have high street brands asking how they can get more personal with their customers. Ever thought of holding a 50 year anniversary party at the local art gallery for key employees and your top customers – try your top 300 customers? That is what my friend’s family did – and the sales eclipsed previous years’ sales in the same period in the 6 months following that great thank you. I know of some retailers – only a select few – who do offer ‘lunch with the buyer’ or ‘VIP customer ticket to seasonal press launch’ for their very best customers. Not very costly – but track those VIP customers in your CRM system and you may be amazed how that can incrementally impact not only those customers ongoing spend – but that of their friends – who often behave like your the VIPs.

Thinking like a small retailer – where the customer must always be thanked personally for their custom – is not such a great leap of faith for large retailers – whether your ATV is £2000 or £20. Customers can be thanked cost-effectively - it just takes thought.

Tanya Bowen is head of CRM consulting at BT Expedite. You can contact her at tanya.bowen@bt.com.

Video is not a new addition to on-line retail. In fact, brands have been using it for years to increase the depth and add stickiness to their websites.

ASOS are industry leaders in their use of catwalk imagery and have had video on every single garment for a long time, but interestingly few retailers have followed suit.

However, with the launch of marksandspencer.tv earlier this year and the announcement that Next will be launching Next.tv shortly, it would seem this medium is finally gaining mainstream acceptance.

Video content is no longer seen as just a branding exercise, but a search engine optimisation (SEO) tool, and a revenue generator too.

As the ecommerce market place becomes busier, retailers are looking for ways to differentiate themselves from their competitors, and customers are demanding more from their online experience.

While online can never replicate the tactile, in-store experience, video gives you the opportunity to engage with, and excite your customers.

Not only that, but it can also aid customer retention and be used as a branding tool. Give your customers a reason to visit your site and show them something they can’t find elsewhere. Even something as simple as an enhanced product page can leave customers wishing for the same level of detail when they visit another site. What better reason for them to come back again?

The recently launched www.annoushka-jewellery.com has already begun to use video effectively in their wardrobe.tv section. A great branding exercise that adds warmth to the site, it is used as a customer communication tool to explain their stackable rings concept.  It gives you an insight into the brand philosophy that written content could never emulate.

Also worthy of note is the great use of catwalk video on designer website www.matchesfashion.com. Here you can select your favourite designer, watch their catwalk shows and shop directly from this video content.

Before now little consideration has been given to how video content can improve SEO. Without a doubt the richer and more relevant content your website has, the better.

However, don’t forget you can now search on Google by images, videos, maps, news, mail, books and blogs to name just a few. So the way brands think about search engine optimisation needs to change.

Let’s take the word ‘dress’ as an example, a highly sought after search term on Google listings. If you search for this word under the traditional Google web search, the page is awash with big brand names. Now take the same word and search on Google’s video search and you will find not one fashion brand come up. It’s most certainly not virgin space, but does show a clear opportunity.

In short, video content is used in three ways:

1.      Generate traffic - give customers something they cannot see elsewhere:  a reason to visit your website.

2.      Drive up site conversion & reduce return rates – engage with your customer, let the customer see exactly what they are going to be buying. Inspire them & show them your vision.

3.      Enhance SEO – optimise your site on multiple levels, because if you don’t, soon your competitors will.

Given the current climate it is doubtful that many smaller retailers can, for the moment at least, follow in Marks and Spencer’s and Next’s footsteps and create a new online channel, but brands need to embrace video now or risk being left behind.

Author: Laura Summers, Online Marketing Services Manager, BT Fresca

We’ve been supplying networks to retailers since 2004 and now connect over 2.600 stores with their HQ. Lee Wakefield, our head of networks, tells me that retailers are increasingly keen to source networks, hosting and in-store applications under a single service agreement. As the Americans say, there is “one throat to choke” and often a better financial deal too.

Lee’s had a busy year and has implemented new networks for Youngs Brewery, Graftons, Schuh and Barratts Priceless and others.

What’s next? As retailers are increasingly moving to thinner in-store applications, many are looking for extra network resilience by using 3G routers as back-ups. And  there’s Superfast Broadband which BT is piloting in London and Cardiff before rolling out nationally from 2010. This will bring low-cost connections of up to 40 Mb/s to the nations’ high streets which will give savvy retailers the potential to greatly enhance the in-store experience.

High definition video-links to remote experts, rapid up-dating of in-store advertising material and the delivery of much more engaging e-learning packages are just a few of the applications that Superfast Broadband will enable.

Retailers are increasingly looking for BT Expedite to manage and maintain all their in-store technology and, in particular, for us to be responsible for ensuring that the tills are working at maximum availability. 

One of the preferred partners we use is Barron McCann which has a team of engineers that fixes faults at retailers up and down the country. Dave Maltby, their new sales director, was in the office last week and told me that Barron now maintains over 10.000 points of sale on our behalf. The ten thousandth is a Wincor till at a WH Smith store in Bluewater.

Of more general interest (unless you want to buy a newspaper near the M25) is Barron’s take on the where the in-store technology market is going. According to Dave, self-checkout is finally gaining real traction and not only with the grocers; Wilkinson’s, B&Q and Wickes are among the non-food retailers taking the concept seriously.

This is good news for the engineers - self checkouts go wrong more often - and will give plenty of food for thought to applications providers such as ourselves. There’s been plenty of innovation in user interfaces for store staff over the years - touch screens, icons, hot keys and so on - but, if self checkout takes off, we may need a re-think.  In grocery a self-checkout needs to be quick and highly transactional in nature but I suspect that other sectors, particularly heavily branded ones, a customer facing point of sale system may need to look more like a website.

We’ve got a number of new features planned for our Mercatus buying and merchandising application. It’s a tried and trusted product but retailers never stand still and their software needs to constantly adapt to new requirement and business processes.

About twenty retailers, mainly from the fashion industry, use Mercatus including Coast, Phase Eight, Oasis, Jones the Bootmaker and Karen Millen but also garden centres such as Dobbies. One of the most attractive features of Mercatus is that its customer order management system is ideal for multi-channel retailing and this package integrates easily with the BT Fresca e-commerce platform.

Twice a year we get Mercatus users together for an advisory board meeting and we’re grateful for their guidance on where best to spend our product development budget. Following the last meeting, in May, we got the retailers to feedback the outcome of their voting of the priorities for the next releases of the software and here are some examples of what we’re working on:

Hand held terminals - Extends existing capabilities to view location of stock, create, receive and authorise purchase orders. This is particularly useful for retailers wanting to receive direct to store deliveries.

Customer Order Management - integration with latest (4.0) version of FrescaCommerce and with multiple fascias. Increasingly we’re seeing retailers operating more than one e-commerce site, for example, with an outlet operation.

Housekeeping - a stack of small changes that will make it easier to delete products/categories from the system and to recategorise product codes.

Demand forecasting - an extra tool to make it easier to use Mercatus for simple demand forecasting.  For example, this will include the ability to remove the effects of unusually strong or weak sales, to reflect historical promotional activity and to recognise out-of-stocks. Another feature will be the option to run a simulated replenishment cycle to see the impact before pushing the button for the real thing.

 These are just examples of what we’re doing next. Early in 2010, we’ll be engaging again with customers on the next set of priority changes.

It’s been a good week at BT Fresca. Not only have we launched the new Annoushka site, but our design team were highly commended in the Online Retail Awards.

The commendation was for Duo Boots who sell ladies shoes and boots in a wide range of sizes to fit the slimmest ankle. Dean Taylor, our head designer, tells me that his biggest challenge was communicating the width options available and how the customer should measure themselves. He solved this with an interactive piece of Flash where a boot could be made to grow and shrink in diameter. Dean was also pleased that the project supported Duo’s brand to credibily reposition itself as a supplier of boots that were tantamount to ‘bespoke’.

Other BT Fresca customers commended in the awards included Liberty and Matches.

There’s no guessing what’s going to be on the Christmas wish list for the stylish BT Fresca employees this year.

We’ve just gone live with the brand new Annoushka e-commerce site and it’s packed full of rather lovely things. Just perfect for the “the savvy woman who knows her own mind, who is individual in her taste, appreciates design and likes nice things.”

Annoushka is the latest venture from Annoushka Ducas and John Ayton, the husband and wife team behind Links of London.

Vogue has been very complimentary about Annoushka’s attempt to resurrect the notion of the parure; the concept of a suite of complementary jewellery that can be worn as an ensemble. The site, built on the Frescacommerce platform and integrated with Khaos Control, is carefully laid out to explain the concept and support the brand through, for example, including some really clear and helpful video content to advise customers about the role jewellery could play in their wardrobe.

We’re particularly excited about the stackable rings and this gold one with diamonds and sapphires has certainly caused a small thrill of anticipation in one corner of the office. The wish list could be getting a lot of traffic between now and Christmas.

Back in 2004, we thought RFID was going to be really, really big. Whole supply chains would be transformed by the provision of accurate, real-time information on the location and status of shipping cases, containers and reusable packing, all equipped with radio tags.

Tesco had announced its deployment in 1500 stores by Christmas, Wal-Mart had mandated its suppliers to put tags on all inbound consignments and the consultants had whipped themselves up into a frenzy of excitement.

Then nothing happened. Wal-Mart’s progress slowed to a snail’s pace; Tesco, dis-heartened that it couldn’t get the technology to perform, gave up and the consultants moved on to the next big thing.

Marks & Spencer, an early pioneer, soldiered on with its highly pragmatic approach. It adopted the simplest technology in its food supply chain and restricted item level tagging to an uncomplicated in-store stock-counting application. M&S (with BT as prime contractor) has now tagged over 250m items and is clearly getting real value from its “intelligent labels”.

The grocers, focused on supply chain improvements, still seem too burned by their early dabbling to contemplate putting a foot back in the water. In stark  contrast, fashion retailers are now leading the way. I’m wondering if we’re about to witness RFID’s second coming. Here’s why:

• The rag-tag of start-up vendors whose financial instability worried retailers in 2004 have coalesced into a smaller number of trusted, solvent technology providers such as Motorola, Avery Dennison and Checkpoint.

• The standards have been locked down and agreed and the technology works reliably.

• Over the past few months, there has been a steady stream of announcements from apparel and footwear retailers around the world.

Marks & Spencer has never published any metrics on its use of intelligent labels so this release of a thorough return on investment study by American Apparel is very welcome to all of us who believe the technology has a future.  

American Apparel has (like Marks & Spencer) a particularly complex product assortment and typically keeps 12.000 SKU’s on the shop floor at any one time. Once an item is sold, it should be immediately replaced from the store room but this doesn’t always happen. Consequently, out of stocks have been running close to 20%. In the pilot, RFID tags embedded in the garment labels were scanned at point of sale and automated replenishment lists sent to store staff. Out of stocks were reduced to <1% with a consequent increase in sales. American Apparel intends to roll the solution out to all its 260 stores over the next 18 months.

Swiss retailer Voegele this week announced plans to use item level garment tagging throughout its European supply chain. This follows a successful pilot in Slovenia and is also targeted at improving inventory accuracy.

Serge Blanco, the fast growing French sporting goods brand, will use item level tagging to speed throughput at its main distribution centre in Toulouse. Automating the receipt and dispatch of garments guarantees error free shipments to stores and has freed enough space for Serge Blanco to postpone moving to a larger DC.

The steady drip of positive news indicates that RFID is slowly coming back into fashion, at least on the continent, although each seems to have a subtly different business case. Mastering these different uses of RFID will present the next big challenge both to retailers and their technology suppliers.