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James knowles 2

James knowles 2

James Knowles, head of commercial projects, Drapers

Nine months in and 2016 has been a year full of change. From the lead-up and shock decision of the UK to exit the EU, and departures of a different kind on the high street in the form of 88-year-old chain BHS, to Missguided, previously a pureplay etailer, plotting its bricks-and-mortar arrival in Westfield Stratford in November, it is clear that the future of UK fashion retailing is going to look very different.

One thing remains consistent, however, and that is that the customer is in the driving seat. Knowing what the consumer wants and how to deliver on that expectation is critical.

So it is with this in mind Drapers brings you the 2016 edition of the Multichannel Customer Insight Report, sponsored by Adyen, K3 Retail, Poq and XPO Logistics. We have surveyed a nationally representative pool of 2,000 UK consumers to find out how they shop now, and crucially, how they want to shop in the future. Now relaunched as a digitally interactive data report, in the following chapters we have combined the survey findings from the past three years’ reports to identify year-on-year changes in consumer behaviour alongside analyses from our sponsors and retailers including Shop Direct, JD Williams and Finery London.

The findings, as you will see, make for interesting reading with some clear winners – the one that really stands out is mobile. The study shows that while the desktop PCs and laptops are the most popular devices for browsing and buying fashion, the numbers using mobile phones and tablets have risen steadily over the past few years. Conversley, while mobile apps might be a key focus for retailers right now, the findings depict a reluctance among consumers to adopt them, and suggests there is still work to be done.

Overall, what this shows is that consumers want a retail proposition that offers convenience and ease, allowing them to browse on one channel and complete the purchase in another, whether that be digital or physical, and for the whole experience to be seamless. That is what they want – now the challenge is for retailers to deliver it.

We hope you enjoy this year’s report and we would love to hear your feedback on the findings.

james.knowles@emap.com

Chapter 1

ONLINE

Consumers are displaying greater multichannel behaviour with increased mobile and tablet usage. Retailers Finery London and East share their views on the findings alongside report partners Poq and XPO Logistics

nickyl raithatha

nickyl raithatha

Nickyl Raithatha, chief executive and co-founder, Finery London

There are a few things that are very encouraging in this report for a pureplay online fashion retailer like Finery. First, more people are choosing to shop online than ever before – only 3% of people now never shop online. Second, more people are buying fashion online: 85% of those surveyed had made a fashion purchase online, up significantly from 79% in 2015. Last, people are still more likely to browse and shop on a pureplay etailer than any other website.

Another interesting theme in this report is the continued rise in the use of mobile devices. Comparing the results with those from 2015, there was a 17% increase in people browsing fashion on a smartphone (27% of people, up from 23%), and a huge 46% increase in people buying fashion on their smartphone (19%, up from 13%). While the laptop is still the most prevalent device, this increase in mobile reflects a change in consumer behaviour. Consumers are spending more time on mobile devices than ever before and are more comfortable using them to purchase. The rise in mobile is helped by the work online retailers have done to improve their mobile experiences to take advantage of this shift in behaviour.

The report also shows us that customers believe the key thing for an online retailer is to be clear and honest with its customers. This is shown by the fact that “clear pricing” and “clear sizing info” are the most important things for people, and that “unexpected delivery charges” are the main reason for people leaving the checkout page. The standard of ecommerce websites is always improving, making it much easier to shop online. This is something customers are aware of, and they are not willing to shop on a website that doesn’t meet their high standards of presentation.

simon maylott east

simon maylott east

Simon Maylott, interim head of ecommerce and customer insight, East

It is interesting to see the increased adoption of tablet and mobile, but we can observe very different behaviours across the devices among our 45+ customer base. People are using the tablet to browse and to purchase, but on mobile they are primarily browsing. Traffic split is pretty equal across all devices – with desktop/laptop, mobile and tablet each account for a third. It is interesting for me as someone who has worked for businesses with a younger customer [such as Arcadia’s menswear fascia Burton] to see that digital adoption among an older demographic [at East].

This survey shows consumers do not want an edited selection of product online. Where we perform most strongly, though, is when we do and support that with landing pages to optimise the customer journey by creating a curated view. On a daily basis when we offer that curated view we can see doing that increases conversion rates. Catwalks, 360° view, product shown on a model – they all work strongly for us, but I think they are expected now. These functions can also reduce returns rates.

We do a mix of photography, lifestyle and editorial articles, but all to support the product stories we launch every two weeks. The respondents in this survey did not seem to want editorial content, but it actually does not ring true to me. I think it could just be the customer not understanding what they are engaging with is content, because we see that they do respond to these things. I also think it depends on device, as I find engagement with content is greater on desktop than mobile.

The prime reasons for basket abandonment are exactly what is shown here, and really anything that prolongs the checkout experience. On mobile there are instances where retailers have one-click checkout, but they might not have the same on desktop, so consistency in areas such as this is key.

oyvind poq

oyvind poq

Øyvind Henriksen, CEO and co-founder, Poq

This survey confirms once again that customers of all ages have embraced mobile and tablet as a preferred shopping channel and are using desktop less often. While the percentage of consumers who use their laptop to buy fashion has been decreasing for the past three years (from 62% in 2014 to 45% in 2016), mobile and tablet use has been increasing steadily (from 11% and 20% respectively in 2014 to 19% and 24% in 2016).

This has especially significant implications for the retail channels that are most popular for online browsing and shopping: pureplay etailers, high street fashion chains and department stores. We have seen that retailers generate on average 37% of their revenue through the mobile web and 10% through apps. Notably, revenue transacted through apps is growing twice as fast as revenue transacted through desktop. It is important to work on perfecting your mobile experience now – before the majority of even the oldest age groups catch on to mobile – or you will lose customers to competitors who offer a better experience.

We can use these survey results to deduct some key considerations for translating the desktop shopping experience successfully to mobile. It is becoming more important that shoppers have the ability to browse through a lot of choices – 58% of respondents say this is a key consideration for browsing and shopping. This poses a challenge for mobile, as the real estate on mobile screens is much smaller than on desktop, and is where apps come in to their own. Apps are great for creating rich, interactive and easy-to-use mobile experiences that facilitate the browsing experience, because they are more tailored to the device that the shopper is using.

andy turner xpo

andy turner xpo

Andrew Turner, business development manager, XPO Logistics UK

An interesting set of questions and results underline that fashion is an important category in multichannel shopping: more than 35% of those surveyed are shopping online for fashion items more than once a week, for example.

It also seems from these responses that online shoppers are comparing items and browsing across multiple devices. This supports the concept of a multi-device, multichannel shopping journey. I also think the responses to question 11, “Does editorial content encourage you to … ?”, are enlightening. In this survey 35% of those asked did not want to see editorial content – all they wish to see is the product, front and centre.

The multichannel fashion shopper is focused on the product and is browsing on several devices and apps, before drilling down to their preferred product and retailer. Services and functions that support the shopping experience, including logistics and order fulfilment, must be channel agnostic, and deliver a seamless purchasing and delivery experience.

One key theme is that the consumer’s prerogative on style, choice, fit and value is only finally decided when they try the garment on at home. This perhaps goes some way to explaining the level of returned items in fashion etail, even when consumers identify choice, price, clear sizing and a zoom function as key features of a fashion retail website. Despite advanced website features and detailed product information, returned item volumes are still significant.

Demographic breakdown

36% of women and men shop online once a month, the most common response, followed by once a week, at 27% for women and 26% for men.

68% of 18-to-24-year-olds browse fashion on their laptops, the most popular answer across all age groups. The next most popular device for this age group is mobile, at 51%. When asked which device they use to buy fashion, just 35% of 18-to-24-year-olds said they buy fashion on their mobiles.

31% of men are most likely to shop on a pureplay etailer, such as Amazon, which was the most popular response for this gender. When it came to women the top response was a high street fashion chain’s website, such as Oasis, at 31% versus 28% that cited a pureplay etailer.

61% of women and 57% of men said clear pricing is the most important asset to them on a retail website, followed closely by “lots of choices” at 60% and 56%. Editorial content, a smaller edited product selection, and one-click payments were deemed the least important, all scoring below 10%.

41% of 45-to-54-year-olds are most likely to abandon a purchase because of unexpected delivery charges being added. This was the number one reason for basket abandonment across all ages.

Chapter 2

MOBILE AND TABLET

One of the big themes to come out of this year’s report is the increased instance of browsing and buying on mobile and tablet. Retailers Jack Wills and Shop Direct analyse the findings alongside report partners Poq and Adyen.

bilal jack wills

bilal jack wills

Bilal Adham, head of digital marketing, Jack Wills

It doesn’t surprise me to see uptake of mobile and tablet is so much greater this year. Because of Jack Wills’ customer demographic being 18-24-year-olds and university-goers, we find that we are ahead of where the wider industry is, so it gives us quite a good view. Our mobile traffic is the most significant part of our online business now, and in terms of conversion rates, we have seen significant growth in mobile conversion year on year.

I think conversion is improving thanks to the mindset of the customer and the increase in smartphone usage in the UK. Most people are quite happy to make transactions with a lower average order value on their mobile. People have grown up with technology, so find using websites more intuitive, while the sites also tend to be more responsive and adapted to what the customer wants in a mobile journey.

On tablet, our conversion rates are in line with last year and improving, but we have seen browsing on tablet decline. It is losing its share as more people switch to mobile.

When it comes to apps, I think they are for those people who are most engaged with a brand. Certain things, such as wishlists, which aren’t restricted by browser settings online, can work well in an app. That is where I feel the engagement in the app is – with your VIP customers. It is around loyalty and service proposition for me. In the longer term, I think the concept of the progressive web, where websites have app-like features, will come to the fore because it will allow consumers to use browser-enabled services. It is the easiest thing to use and therefore ideal.

jonathan wall

jonathan wall

Jonathan Wall, group ecommerce director, Shop Direct

The figures show huge jumps over the last three years in customers using their mobile devices to browse, research and pay for goods. Our experience absolutely mirrors this: our mobile sales rocketed from 44% to 62% of our total online sales during the same period. Customers are more comfortable than ever using mobile devices to shop, which is great for us as a pureplay and supports our mobile-first approach to testing and development.

One of the biggest increases that stands out to us from the survey is the number of customers who have made purchases through a retail smartphone app. This reinforces just how critical it is for fashion retailers to place their apps firmly at the heart of customers’ fashion-buying journeys – something we have doubled down on since launching our MyVery app last year.

The research also highlights the importance of standing out from the crowd with your app, as the number of fashion apps customers have downloaded onto their phones remained relatively static over the last three years. This could be a result of customer loyalty to preferred brands and something of a resistance to downloading new apps as they come onto the market.

Loving the brand is the key driver for customers to download an app, so it is crucial to align your app marketing strategy to your brand messages and create the two in tandem. Having been around for eight years, Very.co.uk has built up a lot of love and trust, which has helped us to drive more than one million downloads of the MyVery app within 12 months.

In response to the question ‘Do you prefer an app or mobile web?’ the biggest increase was among customers who dual shop across both. This highlights the importance of continuing to invest in both platforms rather than favouring one over the other. Our belief is that mobile web is most attractive for new customers and those who shop less frequently, while apps tend to appeal more to engaged, existing shoppers. So while we invest in and obsess about both channels equally, we plan features and journeys differently with those preferences in mind.

oyvind poq

oyvind poq

Øyvind Henriksen, CEO and co-founder, Poq

A key take-away from this survey is that there is no one-size-fits-all when it comes to mobile strategy. Consumers of different ages have different preferences in regard to mobile shopping, and customers who are more engaged with a brand prefer different channels from those who are just getting to know it.

The majority of older shoppers (aged 45-54 and 55+) cited Android as their preferred operating system (57.19% and 50.09%, respectively), whereas the majority of 18-24-year-olds (57.96%) preferred iPhones. Tablets were more popular for older consumers than for the young.

Also, the only bracket for which the majority (63.10%) of consumers noted that they enjoy using neither the mobile web nor apps was those aged 55+. This was the only group in which the majority of respondents (66.90%) cited that nothing would make them download an app.

The most popular prerequisite for downloading an app was simply whether the consumer loves the brand or not. This shows that apps are for your most loyal customers who spend more time and more money with you than other customers. A great way to promote apps to these customers is through incorporating the motivating factors that this study has identified, such as app-exclusive promotions.

The most important conclusion is that your mobile strategy has to fit with your customer demographic – but you need a customer who loves your brand if you want to engage them successfully with an app.

ian campbell adyen

ian campbell adyen

Ian Campbell, head of UK account management, Adyen

This year’s survey again highlights the smartphone’s dramatic growth as the device of choice. Now, 83% of shoppers use mobile to browse or buy, compared with just 43% last year. This rise, unsurprisingly, is particularly seen among young shoppers (18-24), who are more than five times likelier to browse and buy on mobile than older shoppers (55+).

While more shoppers are buying on mobile, a key concern for consumers of all age groups is the difficulty of making payment on a small screen – more than 50% say this stops them from completing purchases. This signifies a huge opportunity for mobile retailers, with significant rewards for those that deliver an optimised payment flow, thereby reducing cart abandonment. Functionality such as one-click payments, which do not require shoppers to re-enter payment details, is a great way to tackle cart abandonment, as is offering methods such as Apple Pay and Android Pay.

Additionally, retailers can leverage Dynamic 3D Secure, which is an additional security filter for online credit and debit card transactions where the customer is redirected to Visa/Mastercard to enter a password. This can be applied dynamically, based on specific criteria such as being a known shopper or transaction amount. The result is reduced friction for loyal customers and peace of mind for retailers.

There has also been a marked rise in the use of mobile apps – three times more shoppers are downloading them than last year. Shoppers increasingly see apps as a way to connect with the brands they love, and young shoppers favour apps over mobile sites as a means of buying fashion.

On the tablet front, this year’s survey has again seen overall usage drop, as the convergence of mobile and tablet devices continues with larger, faster, more powerful handsets making it easier to browse fashion from a smartphone. However, when it comes to making a purchase, tablet owners are increasingly favoring this device – with almost 30% now saying they finish a transaction on tablet, three times as many as last year, again pointing at the clear preference for finishing a transaction on a larger screen device.

Demographic breakdown

58% of 18-to-24-year-olds use an iPhone. However, the majority of all other age groups said they use an Android device – 57% of 45-to-54-year-olds favour this over an iPhone. Also, 52% of men are more likely to use an Android device, with nearly 20% less using an iPhone.

38% of women said they use their mobiles to browse fashion and 28% of men. Women are least likely to use them to scan QR codes in stores or on advertising at just 4%, while only 4% of men engage with fashion brands on social media platforms on their phones.

47% of those aged between 35 and 54 will use their iPad/tablet device to browse and research fashion products. However, 25-34-year-olds are most likely to use this device to buy: 39%, versus 37% of 35-44 year olds and just 30% of 45-54 year olds.

45% of women and 32% of men are most likely to use their mobile to browse and buy fashion while in the evening while watching TV. Both genders are least likely to do this in the mornings before leaving the house, at below 10%.

51% of 35-to-44-year-olds have not downloaded a retail app, rising to 75% of over-55s. For those that have, they are most likely to have downloaded two to three apps, with as many as 36% of 25-34 year olds doing so.

Chapter 3

IN-STORE

The survey shows consumers are not engaging with technology in stores, unless there is a tangible improvement to their shopping experience. Retailer Thomas Pink casts its eye over the results, alongside Adyen and K3 Retail.

erica vilkauls

erica vilkauls

Erica Vilkauls, chief operating officer, Thomas Pink

The survey is suggesting very clearly that customers have yet to adopt the idea of technology in stores as useful, with such a large percentage saying they do not want technology as part of the in-store shopping experience. There is a very clear message to retailers in this survey – no technology can replace great human personal service and great store management.

As someone who is currently working in the area of digital as part of the in-store experience, I noted that this survey demonstrates sales assistants have to work with technology to improve the overall shopping experience. Customers seem happy for technology to help find the right products for them and make the experience more fun. However, it must also offer speed and convenience. Shopping on the web is a fairly solitary experience and that suits some. Some customers, though, want that human interaction and providing it, along with some theatre in store, will ensure these customers keep coming back to physical stores.

Customers want fast and easy payment in store and some retailers are now doing away with the static cash and wrap and introducing mobile payments. This is a great use of technology that has a big impact on the customer. No more queues.

Click-and-collect continues to grow as a preferred delivery method. What is key to customers is their item actually being there when they come to collect and for the collection area to be clearly highlighted to them. Radio-frequency identification is a technology that accurately tracks every movement of a product, but is unseen to the customer. It is fantastic for those retailers wishing to be truly omnichannel, as stock is where it says it is.

How disappointing to see Sale and discounts as the main reason go into stores. Thank goodness great service is next. Retailers obviously have a long way to go before they wean their customers off discounts. I’d hope great windows, interactive screens and a personalised approach to customer service (hand in hand with technology) will mean this switches around at the next survey.

The use of mobile as part of the in-store experience is still not great, but this may well grow as retailers have their apps on customer phones and shoppers can choose to receive personalised suggestions. As long as information is pulled by the customer rather pushed by the retailer, consumers may find this increases their enjoyment in store.

This survey shows us that retailers should be considered about their use of technology in store, and it should go hand in hand with human interaction. Get that right and both customer and retailer will benefit.

angus blest

angus blest

Angus Blest, senior manager, strategic partnerships, Adyen

With ecommerce providing an ever more convenient shopping channel, the need for retailers to innovate and create engaging, seamless experiences while the customer is in store continues to increase. Once again, this survey highlights the opportunities available to retailers that make use of in-store technology to enhance the customer experience: almost 50% of those surveyed abandoned purchases as a result of queue size – something that could be tackled by queue-busting mobile POS terminals. In addition, 39% abandoned a planned purchase because items were not in stock – an issue that can be eliminated with endless aisles, where customers can order products online via in-store tablets/kiosks to be delivered to their homes or by click-and-collect.

Historically, changes in shopper behavior in store has moved slower than across digital channels. However, this year’s survey reveals a clear desire for in-store technology to speed up the payment process, as 33% of shoppers said they would like to see contactless payment, up 50% from last year, and twice as many respondents as last year want to see Apple Pay at the checkout.

More shoppers are using click-and-collect – more than 50% of those surveyed use the service when buying online. Shoppers increasingly expect a seamless experience across channels: one-third of those who use click-and-collect say they would like the option to return online purchases in stores. This can also be seen as an opportunity to re-engage the shopper and save a lost sale through understanding why they want to return the item, and if there is something comparable on offer.

tony bryant k3

tony bryant k3

Tony Bryant, business development director, K3 Retail

Retailers have now firmly recognised the value of the store in their long-term strategies. And in the ongoing digital revolution, these physical spaces are becoming customer-centric hubs focused on the customer journey in a way that had simply not been possible before the more recent technology developments.

The growth of in-store wi-fi is also fuelling this boom in connected devices. Interactive fitting rooms just one development that is gaining traction in the industry, and branded apps are also becoming part of the store engagement programme for many retailers.

The merging of channels as a result of the phenomenally successful click-and-collect concept has created opportunities to upsell to customers visiting the store to collect the items they ordered online. This convergence of ecommerce with bricks and mortar is very real today.

“Showrooming” will become ever more important and retailers have to embrace changes to shopper habits and their journeys that involve the store. Retailers who regard online and mobile as cannibalising their store sales will have to change their thinking radically and recognise that the two areas are complementary parts of the customer journey.

Today, there are many clear strategies from retail brands that focus around the customer journey. They are looking at how to use the mix of channels to recruit and retain customers, and how to achieve better margins by managing these customers across the various channels in a seamless, customer-centric way.

However, there is also a realisation among retailers that they have to be cleverer about the product journey, moving products to customers down the most relevant channels to generate clear profitability. This is all part of a greater equilibrium across retailers’ stores and online divisions. As part of this process, some retailers are reassessing their store portfolios. With growing success online, many retailers have been forced to take a close look at their physical estates and review store size, locations and number of units, even allowing for the potential draw of click-and-collect. They are realising that they can still hit the necessary demographics from a lower cost base than the one associated with bricks and mortar.

Demographic breakdown

49% of men and 46% of women do not want to use in-store technology, while around 21% do.

65% of the men that do want to use in-store technology, want to do so if it helps them select the right product, while 58% of women feel the same way. For those that don’t, it is because they want to be served by people.

47+% of 18-34 year olds most want to see contactless payment in stores, the most popular response across all age groups, followed by kiosks. The least popular are social mirrors and iBeacon technology, at below 10% of all age groups.

30+% of all age groups said collection points close to the doors and the speed of receiving their parcel upon arrival are the most important aspects of click-and-collect.

54% of women and 48% of men are most incentivised to go into store for a Sale, followed by friendly service for 39% of women and 44% of men.

52% of women and 43% of men are most likely to abandon an in-store purchase when the queue is too big.

Chapter 4

SOCIAL MEDIA

Facebook remains the dominant social media platform, but Instagram is fast catching up, particularly among 18 to 24 year olds.

amber atherton

amber atherton

Amber Atherton, founder of Brand Fan Girl and advisor to Whalar

From a social perspective this year’s survey clearly highlights the shift in landscape when it comes to who has the power to influence consumer’s purchasing decisions. Whilst celebrities, fashion bloggers and influencers are still highly relevant, peer to peer referral and brand discovery via friends, family or colleagues ranks the highest at 27%. This is part of a wider trend in the democratisation of influence that we are trying to address at Brand Fan Girl working with brand’s real life followers to promote brands in return for rewards, using small social groups at scale to achieve the same reach that one traditional ’influencer’ would but in a much more organic way. Platforms like Instagram partner whalar.com make it easier for brands to connect to great content creators with influence, as 50% of people with active instagram accounts follow brands, so it’s the ideal platform for exploration and brand storytelling. Engagement with brands on Instagram is 10 times higher than Facebook, 54 times higher than Pinterest, and 84 times higher than Twitter [according to figures from Forrester Research]. Relevant, relatable and timely content is the formula for success when it comes to increasing engagement on social. Using influencers should be a legitimate part of any brand’s marketing budget, they are no different from publishers, with a measurable reach, engaged audience and an ability to create content that resonates in an authentic way. Millennials and Generation Z have lost trust in brands so social influencers bridge that gap.

Demographic breakdown

80%+ of 18-34-year-olds use Facebook, the most popular social network among all age groups. This is followed by Instagram for 18-24 year olds, and Twitter for those aged over 25.

41% of 18-24 year olds are most likely to have browsed fashion on Instagram, with Facebook a distant second at 27%. However, all other age groups are most likely to have used Facebook.

60% of men and 45% of women haven’t ‘liked’ or ‘followed’ any fashion brands on social networks.

45% of women and 54% of men don’t want fashion brands to communicate with them on social media. Those that do want to know when the Sale is on, at 37% of women and 25% of men.

35% of 18-24 year olds would purchase through social media if a retailer offered this, falling to 14% of over-55s.

38% of women will click links through to a fashion retailer’s website when they see branded communications, which is more than the 34% that said they would do nothing.

Chapter 5

PERSONALISATION

This year’s survey respondents said they are less likely to share personal data. But are they just becoming more selective about the data they will share? Retailer N Brown Group and K3 Retail review the findings and discuss where the market it heading.

finn christo

finn christo

Finn Christo, group ecommerce conversion rate optimisation manager, JD Williams/N Brown Group

The biggest shift from last year’s research is people not feeling comfortable sharing their data – more than 50% of respondents say they would not be happy to share any personal details. Press coverage relating to recent data-privacy issues may have contributed to these concerns.

Yet for people who are willing to share data there is a pay-off: they get faster check-out, more personalised information and targeted offers.

Consumers have alslo become more specific about the information they are sharing. Most apps do now make it easier for users to personalise what they do and do not want to share. It is no longer a binary yes or no to consumers – they are becoming savvier. For example, email address was huge last year – 68% of people were willing to share this information – but this has dropped to 60% this year.

The older demographic is much less likely to share details, but this is already starting to shift as generations are becoming more digital savvy.

It is good to see consumers are happy to receive email alerts as frequently as once a week, and in some cases more often – the number of respondents willing to get alerts every day and two to three times a week increased compared with 2015. Mobile phone usage means that having the information sat in your inbox makes it much easier to inform a customer journey.

One of the things at the forefront of my mind with this is, would the consumer recognise personalisation if it was done really well? I think if it is a bad experience, you are more likely to feel negatively about it, whereas if it is done really well you will just think it is a great customer experience – rather than necessarily seeing it as personalised. I don’t think anyone is really offering that one-to-one personalised experience where the consumer thinks “this is curated just for me”.

It’s not just about product recommendations based on past purchases or browsing history – it’s about welcoming users with a fantastic and bespoke customer experience, knowing the type of products they want to buy, which brands they want to see and what type of content they are more likely to engage with.

peter duncan brown k3

peter duncan brown k3

Peter Duncan-Brown, fashion sector specialist, K3 Retail

Customers today expect an experience that is unique to them. They want the journey they take with a retailer to be tailored to their desires and demands. However, achieving personalisation at scale is a tough challenge and technology is the vital enabler.

Retailers need to harness the power of technology. The delivery of a personal experience to every shopper is worth chasing since the prize is potentially huge. But it has to be done across all channels to give a seamless customer experience and not one that is constrained by silos.

The truth is that lots of shoppers leave stores without having any engagement with a sales advisor and also having failed to buy anything. They could have been browsing or searching for something that they failed to find. In many cases the retailer is completely unaware of the shopper’s mission. Gaining data around the customer journey in the physical environment is critical to the retailer’s digital strategy, because this can then be used across channels to improve experience.

Some retailers have moved away from traditional Monday morning boardroom reports and instead have adopted a new way of working. Real-time data is now visualised through dashboards on desktop PCs and mobile devices.

A lot of the solutions today are not just centred on historic reporting mechanisms but are far more predictive and analytical. They also ensure that access to the data and insight is based on an individual’s role within an organisation.

This is data democratisation in action. It is fair to say the data overload that has been swamping retailers is now being managed much better by restricting visibility within the organisation to just the information that is of most relevance. This could be broadened out over time.

This approach is enabling retailers to utilise the relevant data across all customer touch-points, which is the underlying requirement for delivering a more personalised experience for all customers regardless of the complexity of their journeys.

Demographic breakdown

71% of over-55s are uncomfortable with providing details for retailers to personalise the service they offer them. For those that are comfortable, fast one-click checkout was the top response.

Less than 10% of all age groups are comfortable with providing retailers with their social media login details, financial status and income, occupation and company name, and work telephone number.

57% of men and 55% of women would not act upon a mobile alert from a retail while out shopping.

31% of 35-44-year-olds are happy to receive a retailers’ email alerts once a week when they have signed up for them. This was the top response across all age groups, though 18-24 year olds are equally as happy to receive these two to three times a week.

51% of 18-24year-olds said personalisation does encourage them to buy more. This falls to just 14% of over-55s.

Chapter 6

DELIVERY & RETURNS

From evolving click-and-collect propositions to demand for same-day delivery, retailers’ logistics operations are adapting to the multichannel consumer. Retailer Missguided and XPO Logistics discuss the trends and talk best practice.

brett

brett

Brett Young, operations director, Missguided

It doesn’t surprise me that when customers are asked what is most important to them, they say free delivery – who wouldn’t? You might be more likely to win the sale, but I think it depends on the product. If that is right then the lack of free delivery is not necessarily a driver away from the site. Customers will be willing to pay if it is good value. The real challenge arises when another retailer, which does offer free delivery, is selling the same product. What is really important is that no matter what the customer pays, the retailer must deliver the service they have promised.

The same principle works with returns – which is the second-highest rated option at 62% – but the experience is different. With delivery you will pay because you want that item. There is no value to the customer in returning an item. They just want their money back. So I think it is much more important to offer free returns than it is to offer free delivery.

You have to offer next-day and we do. We have actually taken it one step further and while our standard next day offer has a 10pm cut-off, we then have a premium next-day delivery for orders placed between 10pm and midnight, which allows for a next-day evening delivery between 6pm and 10pm.

We don’t offer same-day delivery, although we are looking into it. You have to have stock in the right locations, which means stores. When you are purely online, that is difficult. Could we hit Manchester or Liverpool? Yes. But could we serve London, Kent and the Isle of Wight, for example? No, because we don’t have that stock location benefit of the shops. Looking at more targeted locations such as university campuses could work very well for Missguided, however.

This report also shows the increased uptake of mobile, which presents issues in itself. How many people who use mobile and tablet are able to print off a return label? I think paperless returns will become key. We were the first to go live with Asda’s ToYou service, where you can print a return label off at the store, and make use of the click-and-collect option there.

It all comes down to ease of service, whether the customer is paying or not, because that determines their overall experience.

andy turner xpo

andy turner xpo

Andrew Turner, business development manager, XPO Logistics UK

Fast and convenient delivery – and preferably free – is what fashion consumers want. More than 80% of replies state that free delivery is important, more than 60% of those surveyed consider free returns to be important and 44% say “quick” delivery is important.

It is unsurprising that “next day” and “click-and-collect in store” options are very popular with those surveyed. These services are the staple of the key home delivery options offered and allow customers to receive their goods tomorrow at home or a make a visit to a retail store, which fits in with their commute or lunch-hour plans.

Further evidence of consumers getting delivery to fit with their diary is provided by the number of responders who have answered positively to using “named day” or “buy in store and deliver to home” service options.

“Same day” has been used by more than 8% of the people surveyed and will continue to grow in the future. Many retailers and logistics providers are changing infrastructure to support same day as a result.

Demographic breakdown

56% of women and 53% of men have used next-day delivery when shopping online, whereas less than 3% of both genders have used a 90-minute service, and fewer than 10% have used named-hour or collect-from-locker options.

76+% of all age groups said free delivery is of key importance, followed by +56% that cited free returns. Nice packaging was the lowest ranked consideration, at less than 14% for all age groups.

43+% of men and women would still use a retailer that doesn’t offer same day delivery, while +32% that wouldn’t.

70+% of all age groups will pay £1 to £5 for standard delivery, falling to 10% or less that will spend £6 to £10. Younger consumers are generally happier to pay more.

24% of 18-34-year-olds will pay £6 to £10 for same-day or next-day delivery, falling to 12% of over-55s.

Chapter 7

PARTNER COMMENT

Drapers report partners share their views on the trends shaping multichannel fashion retailing.

myles dawson

myles dawson

Myles Dawson, UK country manager, Adyen

This year’s report highlights the continued evolution of today’s fashion consumer. These time-poor, highly connected shoppers demand a fast, personalised and consistent experience across all sales channels.

Competition in the form of experience-focused, disruptive retailers such as Grabble (often described as “the Tinder of fashion”) has raised the bar by pioneering innovative shopper journeys that match the demands of today’s consumers. The report highlights that consumers demand engaging and personalised content, convenient and rapid shipping options (next day as a minimum) and frictionless checkouts. To remain competitive, retailers must continue to focus on technological innovation to deliver these requirements.

Central to providing these seamless customer journeys is the payment flow. Too many retailers leave this until the last minute and end up with a clunky checkout, which ultimately damages conversion. A recent survey showed that 66% of shoppers have abandoned a cart in the last 12 months due as a result of a distraction. This is simple to avoid if payment is placed at the core of the technology strategy.

Furthermore, the right payment solution can provide vital customer insights, giving a single view of the shopper across all sales channels. This enables omnichannel journeys such as endless aisles, click-and-collect and cross-channel returns, which in turn helps build loyalty and drive revenue.

tony bryant k3

tony bryant k3

Tony Bryant, business development director, K3 Retail

We’ve had multiple channels, multichannel, cross-channel and omnichannel, but none of these are of any great importance any more. Retailers should be focused on customer journeys.

It is no longer good enough to think in terms of channels. We have to consider the journey that customers want to take. Consumers now demand retail 24/7, any time, any place, anywhere and, as we see from this research, they will use the channel most appropriate to them at a particular moment in time.

To focus on the customer journey, retailers need to go back to basics and move away from the complexity of recent years. At its heart, retail is straightforward and still adheres to the five key tenets: plan, buy, make, move and sell. Technology is merely the enabler for retailers to work towards delivering on these fundamental aspects. In doing so, they can give customers the experience they desire, whenever and wherever they want it.

The opportunity now exists for retailers to use technology in a variety of flexible ways, which is making it possible for them to serve customers easier, faster and better than ever before. The successful retailers will be those who overcome the challenges of delivering a personalised service against a tide of consumers who are reluctant to share personal details unless there is a clear benefit to them.

michael langgut co founder of poq

michael langgut co founder of poq

Michael Langguth, co-founder, Poq

For most of the UK population, spending even a day without their mobile phone would be unthinkable. When was the last time you left the house without your mobile phone? Or even forgot to look at it for over four hours? Mobile devices have become indispensible in all walks of life, and consequently the mobile channel is also fast becoming the mainstream’s favourite channel for online shopping.

This doesn’t necessarily mean that shoppers are losing interest in shopping via desktop. It just means that it has become much easier to shop on mobile. You can now add an item to your wishlist on desktop, use your phone to check whether it is available in store, and then try it on in the store. This kind of scenario makes it easy to see that the best shopping experience is the one that is not hindered by channels, but facilitated by them. But it is only possible to create this type of experience if you add mobile to the mix.

For the first time, it is possible for online shoppers to receive a consistent experience across all online channels. The most customer-centric retailers now offer a login that works universally across desktop, mobile web and app. It has become super-easy to add an item to your bag on desktop, reconsider the purchase throughout the day, and then open the app to pay for the item using just a fingerprint.

andy turner xpo

andy turner xpo

Andrew Turner, business development manager, XPO Logistics UK

Multichannel retailing in 2016 is complex, fast moving and competitive. Shoppers expect flagship store, concession, outlet store, desktop site and mobile to work together, and offer a seamless journey. Flexible fulfilment and logistics, including a single, accurate, real-time view of inventory levels and location, allied with a compelling, relevant menu of home delivery and collection options are vital to create the offer, satisfy the customer want or need, and then support the retail experience of receiving, owning and wearing a fashion item for the first time.

The tech-savvy and channel-aware shopper will seek to satisfy individual needs by exploring online, in store and via the web or mobile, before drilling down to the product, channel of purchase and final-mile option that best suits her or his life on that particular day.

An easy-to-navigate product website, great size and style availability, a friction-free check-out process, flawless on-time delivery, an exceptional unpacking experience and then a smooth returns process are the baseline for the leading multichannel participants in 2016. Five key themes are developing for how the market will evolve:

First, same-day delivery for main cities and population areas will become increasingly prevalent in the next 12 to 36 months. This will require smaller warehouses, close to cities, to satisfy same-day demand. The second area of continued change will be cross-border fulfilment. Direct-to-consumer services, to a customer in a different end-market geography, will continue to increase in popularity. Third, autonomous technology will start to become more common in warehousing, freight transport and final mile distribution. The fourth area of retail market improvement will concern the fulfilment of customers’ orders from the best stock location, be that store or warehouse. This will become a core process as more retailers and brands move to next generation point of sale and inventory systems.

Finally – and very important in fashion retail – will be significant developments in returns processing for the online channel, facilitated by improved systems, technology and evolving partnerships between retailers, logistics service providers and technology platforms.

These changes and enhancements will be led by fashion retailers and brands, working closely with logistics partners and technology providers. This report provides a powerful insight into how fashion consumers are thinking and how retailers and fashion brands can respond.

Multichannel Customer Insight Report 2016

Produced By James Knowles

Design by Sinead Ham
Illustrations by Jamie Jones
Sub editing by Samantha Warrington & Joel Barrick
Senior account managers Rebecca Soni & Michael Richardson
Survey conducted by OnePoll between July 15-27, 2016

Published in association with Adyen, K3 Retail, Poq and XPO Logistics