Omni-channel and retail innovation

Ernan Roman of ERDM Corp, discusses how technology is creating engaging retail customer experiences

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Omni-channel and retail innovation Technology is vital if a retailer is to build personalised services both in-store and online, says Ernan Roman, president, ERDM Corp.
By Staff Writer Published  October 17, 2018 What are some of the key issues that you are talking about at GITEX?

Ernan Roman: I am doing the keynote in the retail track, and so I'll be talking about retail innovation, customer experience innovation in the area of B2B and B2C. I'll be sharing a financial services case study, talking about financial planning and financial services, findings that have come from our research, relative to how personalisation has to be achieved, shifting away from these cohorts, personas and transactional profiles, to deep human data.

I'll be sharing a services case study that illustrates how shifting to real human data personalisation increases response rates for this financial services company by 500%!

And then I have invited to be my co-speaker gentleman from Shiseido. He is the senior vice president global marketing at Shiseido. He will be joining me to talk about what this amazing company Shiseido is doing in terms of omni-channel personalisation. What advice would you give to retail organisations that are just starting now to build an omni-channel retail operation?

ER: In this era of online, retail has no purpose or role to play unless the retail experience is a competitive differentiation. So, for example, what is the quality of service and guidance that I can experience when I go into someone's store?

The customer doesn't look at online versus retail, except seeing retail as being a pain more often than not. Therefore the challenge to retailers is innovate; so it is thrilling, exciting value added to go into the store and I can continue that shopping experience when I leave through my ability to go online.

It's using [about] technology to make the retail experience much more valuable, interesting, fun, and even cooler.

It is about how [retailers] use technology, with my permission, to learn more about me; to profile my preferences; my skin tone, my allergies, the kind of facial products I might like?

Or to have the technology in the store ... a makeup mirror for example, where I can either physically or virtually apply different cosmetics to see how they look, therefore accelerate the sampling process, and only apply those that actually do look good.

Or do they have the beauty stylist to record, with my permission, all my preferences so that next time I come into the [branch], the stylist can quickly access the information and personalise my shopping experience. Or I can go online to my account and access all my profile information, which has been enhanced as a result of the knowledge, value, and guidance from that retail beauty stylist?

Or to have beacon technology [in the store], so that when I'm approaching the store I can -based on me opting in for the service - when I walk into XYZ store, receive tips or be told that in aisle 7, the athletic leisure garments I like are there.

There is no tension between online and offline - each are augmenting and amplifying
one another.

Another very important thing that we're finding in the research, particularly amongst consumer millennials and Gen Z, is they, more than anyone, understand the amount of data that is being captured without their permission.

So they're saying you already have the basic simple transactional or browsing data. You're not even using that. This is kindergarten! You're not even using that to personalise [the service], so I am furious and frustrated at the ineptitude of marketers!

Now if you cleverly engage me [the consumer] to provide in spite of my privacy concerns, my-opt in preferences, then look how you can use it cleverly to augment the experience across every
single platform.

Use that data to continue to improve the customer experience in terms of follow up emails.

But the caveat is that - and this is something that I would absolutely urge some Middle Eastern companies to do - is learn from the mistakes of the US in particular, and do not do annoying or simplistic attempts at personalisation. A lot of that marketing outreach is very clumsy...?

ER: Yes, correct ... Let me read you a quote ... This is from our research efforts in the luxury retail market; ‘we are complex human beings with individual needs. It is insulting when we get personalisation and quote which reduces us to cartoon characters.'

So, for a great tip I would offer the Middle Eastern companies is learn from our mistakes. The US has done many things well, and we do many things well in marketing too. You can also look at what we've done and say, ‘Ooops that has not worked for America.'

[Retailers] in America that are doing things particularly well are realising that the level of personalisation has to go up dramatically in order to fulfil this need, or retail by itself will die.

Retail augmented with high value personalisation, differentiation, and multi-channel engagement will thrive.

Why is it that e-commerce companies, the young darlings in America that have been such exquisite e-commerce success stories, are now building retail? There is something that the retail experience brings to the customer, but obviously it is integrated into the rest experience. Which of the companies do you think are doing a good job of delivering this omni-channel personalised approach?

ER: Brands that I consider brilliant are Sephora, the cosmetics company because they were one of the earliest ones to recognise that they had to deliver excellence across the omni-channel experience. The ability to use the beauty stylist, be it a consultant in the best sense of the word, and help women find the right product, apply it, etc., is huge.

I interviewed a senior executive from Sephora a few years back on innovation and [he/she] said that the overwhelming majority of women are using the wrong foundation.

Sephora said is that is our fault as an industry, and our first job is to educate our customer, so she understands what's best for her complexion, her allergies, or whatever it is, so she then buys the right product.

If you've trained your frontline staff to focus not what I sell her, but rather what's her need and what's right for her... then that radiates out to every single element of your customer experience, because that is what your job is to do. Not just get the sale, but make sure my customer has the right product which actually ends up in a higher average order.

Neiman Marcus is another favourite of mine because of their use of technology. Neiman Marcus is developing the [use of beacons and VR mirrors to try products] technologies in its innovation lab.

The goal is not to replace human beings, but instead to do everything possible for the consumer.

 So the job of all this astonishing technology [Neiman Marcus is] developing is to enable the sales associate to do a far better job, serving the human needs of
the customer.

[Artificial intelligence] is there to help sales associates' be more effective in helping the customer.

That is a very different focus than most companies have with technology, which is about replacing inefficiency.

The ones that are doing badly are the ones that have become addicted to discounting, have addicted their customers to
discounting. Has US retail been very slow to wake up to the threat of the big online retailers?

ER: They've been very slow to wake up. Some have been so slow to wake up, that they just died in their sleep. Others are waking up too late and they're still thinking what omni-channel means.

Or they are thinking let's put a fancy facade on a brand new building, but then do not put the money into training the human beings ... so it's a gorgeous place, [but] the attitude, the lack of pro-activeness ... on the shop floor hasn't not changed dramatically, the disparity almost becomes even more pronounced.  Where should Middle East retailers start work?

ER: Middle Eastern companies are facing challenges ... then [the POS] counter it is a stunning opportunity. I mean one has to do research to find out how to do this well, how to create the value proposition ... but how do [they] gently ask [the customer] if he would give me additional deep information about himself, so that I can then reciprocate, by using this data intelligently, to provide [the customer] with the level of personalised follow up he would like ... but it is not email, it's text.

That is what has come out from one of our luxury brand research studies that if you engage [customers] gently, carefully, appropriate to the brand, ask the right questions ... Now you have to be [extremely] careful to only use it for what I told you too ... you'll have a huge return on investment.

Ernan Roman, president, ERDM Corp will be appearing at in the Retail track of the GITEX Conference. His firm provides specialised qualitative research to help brands understand how customers define their expectations for high value customer experiences, for brands such as IBM, Microsoft, QVC, Hewlett-Packard.

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