Multichannel Trends Report 2017

Dale Western, head of online trading, Jack Wills

Multichannel and ecommerce leaders from businesses including Net-a-Porter, Jack Wills and Dune sat round the table at The Swan on London’s South Bank to share what their priorities are for the year ahead.

At the Drapers’ multichannel breakfast with enterprise resource planning company HSO and payment service Klarna, it became even more clear that the fastest-growing channel is mobile.

SecretSales co-founder Sach Kukadia says mobile now accounts for 65% of the flash Sale site’s sales and 81% of its traffic: “Everything we do is focused on mobile first. We try to catch consumers on the move. We don’t think about PC or laptop any more.”

Negin Yeganegy, group ecommerce director at Yoox Net-a-Porter Group, says the company has adopted a mobile-first mindset over the past five years, and mobile is incorporated into everything it does.

However, Julia Deutsch, digital marketing manager at luxury etailer Avenue 32, reports that despite a lot of traffic coming from mobile, its conversion lags behind desktop: “We have customers of an older age group. We’ve done focus groups and people feel more comfortable buying a product above a certain price on a desktop rather than mobile.”

Yeganegy says Net-a-Porter shoppers are now at ease making high-value purchases on their phones, thanks to the investment it is making, particularly in its app: “The experience is getting better, images are getting bigger and the editorial is easy to read. All their payment information is stored. That seamless experience has contributed to them feeling more comfortable paying.”

When it comes to apps, the room is divided on whether they are a worthwhile investment.

Jack Wills head of online trading Dale Western says it “walked away” from its app as it did not offer anything additional to its mobile website: “The apps that do well offer something unique to the app. If it’s just a glorified mobile site, I don’t see a huge benefit other than the push notifications.”

Yeganegy says part of the reason Net-a-Porter’s app is successful is because it does add something extra: the ability to read its editorial content offline, which is popular with many commuters.

Slick editorial has become a feature of many fashion websites, as brands and retailers hire journalists to make sure their website is a destination for those seeking style inspiration.

Although content is a big driver of engagement for Net-a-Porter, the etailer is working to further link it up with commerce and social to make it “more shoppable”, says Yeganegy.

It is a similar story at Jack Wills, where the retailer is looking at different ways to integrate content into the shopping journey.

However, content does not encourage SecretSales shoppers to buy. The etailer ditched its online magazine in 2015 after it failed to boost sales.

“Our shoppers are there to find and buy things quickly, not to peruse the site,” says Kukadia. “If they’re window shopping, we’re not doing our job. They need to think: ‘That’s too good to miss. I need to buy that now.’”

Nonetheless, curating content, marketing and product was a priority for many around the table.

Personalisation is at the heart of Thread’s business model. The menswear personal styling platform uses a combination of professional stylists and a powerful algorithm to recommend product for its shoppers.

Business development manager Laura Southern explains: “We take the hard work out of shopping.”

Net-a-Porter has focused its personalisation efforts on its EIPs – extremely important people – says Yeganegy. The etailer also integrates a “human touch” into the curation, as personal shoppers add their own recommendations to the mix.

However, Kukadia was dubious about the impact of personalisation: “I don’t believe that personalisation can needle shift what I’m doing – and, believe me, we’ve given it a good go.”

Kukadia argues that personalisation is based on assumptions and can limit product discovery: “I’m a man and I’ve been shopping for shoes – is that all I want? I might want to buy my girlfriend lingerie but the personalised content is all about shoes. It eradicates upselling opportunities.”

Although mobile may be a priority, retailers around the table were seeking a connected experience across all channels. A single-customer view is an objective for many and those with stores are using technology to achieve this.

Hawes & Curtis head of marketing and communications Anastasia Roumelioti admits it will be a “marathon”: “Right now there is a lot of manual work. We’re taking the data from online and stores, and putting it in Excel, and we create marketing models there.”

Dan Horlor, international business development manager at payment specialist Klarna, says DIY retailer Screwfix has a simple solution to achieve a single-customer view.

“When you go into store, you give your email address. That’s it. You can go a hell of a long way to getting a single view of the customer with a low tech solution,” he says.

Technology has become a familiar feature in stores as digital screens, transactional iPads, and even virtual mirrors become more commonplace.

Western says Jack Wills is working out what the “right balance” of in-store technology is – it is cautious that tech does not impact the “magic” of its heritage-style shop design.

For Orlebar Brown head of ecommerce Jamie de Cesare, technology in store has two purposes: to inspire and to capture customers’ details.

In-store technology can provide a vital bridge between the online and offline worlds, says Hector Hickmott, sales director at HSO: “When you have an online business, you can see every single thing that customers do, but the moment they go into a store, they’re invisible. The technology is available to give you the same data points and learn the same things.”

Hickmott says discreet technology can track customers in store, and highlight where and when they shop. He also points out that apps can inform retailers when customers are in store and what is on their wish list, which provides an opportunity to offer promotions.

Another hot topic in the multichannel shopping experience is delivery. All attendees agreed that for shoppers, it is the faster, the better.

Western says Jack Wills is using its store stock to help it fulfil orders more quickly: “Waiting three to five days just doesn’t cut it any more.”

Kukadia agrees that speed is key: “Amazon can deliver me groceries, technology, PS4 games all within two hours. Because of that convenience I’m using it a lot. This is the general direction online is going. It’s not about price – it’s about convenience.”

Retailers that can nail this convenience, and provide shoppers with a seamless, connected experience, stand to win big in this increasingly complex multichannel world.

The premise should be simple. A consumer browses a site at work, finds a dress she likes and orders it from her mobile when she gets home, making her choice of payment and delivery options. When it arrives, she finds it does not fit, so she wants to take it back to her local store for a quick refund.

In theory, she should be able to expect a coherent on-brand experience where she is known to the retailer across all channels. But the multiple methods for ordering, paying, receiving delivery and making a return mean there are countless variables for every customer journey and retailers are left running to catch up.

Pureplay etailers are having to adapt to faster processes and customer demand for new payment or delivery options. However, they are not grappling with the complete mind set change that bricks-and-mortar retailers have had to make in pursuit of a joined-up experience between stores and ecommerce.

Touker Suleyman is owner of menswear retailer Hawes & Curtis and womenswear brand Ghost, and took a stake in womenswear etailer Finery London in January this year. He says etailers have it easier in that sense because they are not having to change their entire business models. He maintains that stores remain important but, increasingly, retail will be focused on flagships in key locations and growth online, as consumers’ buying habits change.

“You can tell a consistent brand story across one channel, but it becomes harder the more diverse it gets,” he says.

Focus on outcome

Robin Coles, product and technology lead at enterprise business solutions provider HSO, agrees it is a particular challenge facing bricks-and-mortar retailers.

He says they need to stop thinking of omnichannel or multichannel and align themselves around outcome: “A customer can come in and browse, decide they want click-and-collect or to have something delivered in 90 minutes, but the systems and business cultures haven’t necessarily aligned to that way of thinking. The customer is completely in control. Retailers need to be able to respond to what the customer wants to buy and how they want to buy it and work back from there.”

Coles believes the challenge is twofold. First, there is a cultural change that needs to take place: retailers need to stop thinking of store sales and online sales in silos. Second, there is the issue of legacy systems.

In the first instance, he points to retailers making the move from having ecommerce directors and retail directors to employing a chief customer officer, who is purely focused on the customer experience regardless of channel.

It is a decision House of Fraser took almost two years ago with the appointment of its former CCO Andy Harding. Current CCO David Walmsley has most recently completed an exercise to fully determine who the key customer is to make sure every part of the business meets his or her needs.

“Our core beliefs are about being attentive and anticipating our customers’ evolving desires, combined with that sense of exploration and discovery,” he says, explaining that these should play out across every user journey, whether in store, online or through mobile.

Meanwhile, Ted Baker founder Ray Kelvin argues he has no need for a CCO because “everyone is consumer focused” and that it is all about “having a clear focus on the brand” rather than the channel they are serving.

Updating legacy systems

When older systems do not allow the full integration necessary for the all-important single view of customer or stock, it can be the bigger retailers that suffer the most from the cost and complexity of installing new processes and technology.

Coles argues it is often the mid-tier retailers that are the quickest to adapt, because they face a relatively low cost of investment compared with the potential return.

“Everyone wants a joined-up system but, often, retailers are using older systems where the existing vendor is not investing or they have got to a growth threshold where they can go no further,” he says. This creates a need for investment.

Last year, retailers such as Jigsaw and AllSaints moved to a single view of stock, which allows them to fulfil online orders from stores. Not only does the move make for a better consumer experience as stores are effectively transformed into mini-distribution centres, it also has benefits for the retailer by increasing sell-through by as much as 10%, says John Cossey, head of merchandising at Jigsaw.

Today’s customers are extremely demanding when it comes to service, functionality and availability, and with so much choice available, they will simply switch to a competitor if the experience does not live up to their expectations.

Patrick Bousquet-Chavanne, Marks & Spencer’s ‎executive director customer, marketing and M&S.com, says: “Ultimate convenience is what customers are looking for, empowered by technology – total fluidity between orders and pick-up.”

M&S is currently mapping the different cross-platform journeys to highlight any problem areas that could be encountered by customers.

“This is all about being forensic in identifying the critical issues and removing one at a time for all the friction points, based on customer feedback,” says Bousquet-Chavanne.

“The best experience is seamless, frictionless and fast,” adds Luke Griffiths, general manager at payments provider Klarna UK. “Even great-looking websites with fantastic products and services will fail to deliver if the basics aren’t right.

“While consumers have different expectations from different brands, they all want speed, convenience, and flexibility in terms of browsing and buying. Any friction – from complexity, confusion or lost connections – will create a barrier to sale.”

Griffiths suggests that customers want one-click ordering, more choice at the checkout and the ability to try before they buy, while platforms need to be responsive and transportable across devices.

The firm started working with Arcadia Group last year to allow shoppers to buy goods and pay for them at a later date - and has optimised the in-checkout offering of consumer financing to require minimal data entry and real-time decisioning to smooth the path to a frictionless sale.

Rising costs, faltering demand and more challenging trading conditions all suggest retail is set to get tougher, so ensuring consumer loyalty becomes ever more important. Offering a reliable, seamless, cohesive experience that meets customer’s demands is the next battleground for retailers.

Cybercrime has long kept heads of IT and marketing departments awake at night, but as the threats increase in number and scale, it is quickly becoming a key priority for CEOs. Figures from IMRG and Capgemini show consumers spent £133bn online with UK retailers in 2016 – up 16% on the year before and driven largely by the growth of sales via smartphones. In the same period, professional services firm KPMG has indicated, the value of fraud committed in the UK soared by 55% year on year to £1bn, prompting a warning about cybercrime and the risk of more large-scale scams as the economy comes under pressure.

Data breaches can lead to serious reputational damage and, under new European Union legislation set to come into force in the UK next May, could result in a hefty fine. As a result, it is more important than ever to make sure customer data is protected.

So far in 2017, law firm Fox Williams has advised three clients who have suffered data breaches – one of them twice.

“It’s something we’re seeing an awful lot more of,” says Nigel Miller, head of the firm’s cyber and data protection practice. “It’s happening more, but the regulatory landscape is also changing. Until relatively recently, people could keep a data breach quiet – but now there’s more focus on letting the regulator and those affected know.”

More than a third of businesses lack a formal strategy for dealing with cyber-attacks, a report published by the Institute of Directors and Barclays in late March shows.

“Ensuring the protection of customer and business sensitive data is a critical area of focus for all retailers,” says Haroun Saleemi, head of ecommerce at womenswear retailer Quiz. “It is important for retailers and third-party partners to implement robust and sophisticated information security policies to ensure they stay a step ahead. For ecommerce sites, retailers can consider de-risking their businesses by adopting hosted payment page options. This can reduce the risk of potential data breaches and is one step that can be considered when becoming PCI [Payment Card Industry Data Security Standard] compliant.”

Under current UK law, no legal obligation sits with retailers to inform their customers about a data breach, although it is recommended that they notify the Information Commissioner. However, the EU General Data Protection Regulation (GDPR), which was officially adopted last year, will replace the UK Data Protection Act (1998) on 25 May 2018 and place new responsibilities on retailers when it comes to taking care of their customers’ data. [WILL IT STILL?]

“If you experience a breach that’s of reasonable seriousness, there will be a legal obligation to tell the Information Commissioner,” explains Miller. “If the breach is such that people’s information is at risk – say credit card or banking details were taken, or sensitive information that could be distressing to the consumer – you’d have to notify them as well.”

The Information Commissioner can currently issue fines of up to £500,000, but under the new regulations, the fines will be capped at €20m (£17.3m) or 4% of the company’s global turnover, whichever is greater.

Another serious consequence of a data breach is the damage it could do to a company’s reputation. Shoe retailer Office hit the headlines in 2015 when it received a warning from the Information Commissioner’s Office (ICO) after the personal data of more than one million customers was left exposed as a result of a hacking incident. More recently, in February of this year it emerged that Sports Direct reported a breach to the ICO last year, but did not tell the staff whose data may have been compromised.

“Security is no longer just an IT problem – it’s a business issue,” argues Darryl Adie, managing director of ecommerce agency Ampersand. “Public embarrassment can make or break a company, especially as consumers become more and more aware of the value of their data.”

Rob Feldmann, chief executive of flash Sale site BrandAlley, agrees: “You’ve got to question whether a business like us, which turns over £20m and is now profitable, would survive a huge data breach. It’s not so much the fines, it’s the reputational damage. The thought of customers starting to worry about the safety of the data they have given you is really scary.”

Jo Hooper, product director of cashmere brand Pure Collection, echoes these concerns: “Like everybody else, we’re very conscious of [the risk of data breaches], as we trade more online. Look what it did to TalkTalk [which last year was fined a record £400,000 for a breach that occurred in 2015], and its share price.”

There are a number of threats retailers and brands must stay alert to. Sophisticated phishing emails – when an email that appears to be from an individual or business a consumer knows is actually from hackers trying to obtain personal information – and the use of malware to infect devices with software that allows criminals to steal their data are on the rise.

“We live our lives online and so many facets of our personal details are available to anyone who wants them,” says Roberto Valerio, chief executive of fraud prevention service Risk Ident. He points out that criminals can buy emails and passwords online, which they use to target ecommerce websites, telecoms businesses and online banking portals. If they gain access to someone’s email account, they can make financial transactions and intercept the email confirmations, so the victim is none the wiser.

Miller adds that “ransomware” is becoming increasingly common. “Criminals can hack into a system and put a freeze on it, then tell the business to pay a certain amount or they will lose all of that data. Unless they have good backups in place, people often pay up.”

Most experts agree that hackers are not necessarily becoming more sophisticated, but rather the volume of transactions online and on mobile are increasing at a rapid pace, leaving companies more vulnerable to attacks.

“Many breaches happen because of human error on the part of someone at the company,” points out Miller. “We often hear of people losing a laptop with customer info on it, leaving it in the back of a cab. The big thing the Information Commissioner looks for in those circumstances is how the data was being protected. Was it encrypted? If not, you might get some regulatory action.”

There are different levels of encryption, says Adie. “The trick is to ensure the effort to break the encryption exceeds the value gained by doing so.” He adds that customer data, such as login details, are more valuable than financial data because customers tend to reuse passwords, whereas a stolen credit card can be cancelled immediately.

He advises putting a number of basic safeguards in place. “First, make sure company culture is one where customer data is treated with the utmost care. Second, have clear processes and controls for systems changes. Developers must be in constant training to keep up with security demands. And third, have a communications strategy in place if the worst happens, as the way in which a company responds to such an attack can have a huge impact on its stakeholder value.”

For independent retailer Ann’s Cottage, which has 12 stores in the UK and an ecommerce site, safety is a big priority.

“We want to protect customers the best we can,” says Amy Dutton, personal assistant to the managing director. “We use US firm SecurityMetrics to run tests on our systems and flag up if there is an error, to make sure we’re up to date with PCI requirements.”

Similarly, BrandAlley employs external companies to continually scan its front and back-end systems. “One looks for software vulnerabilities, such as a coding error that could let people through the front end,” says Feldmann. “Another monitors our servers, looking for things like changes in password and seeking verification. We also have a proactive firewall that stops people getting in. Whenever we have our quarterly board meeting, we talk about what we’re doing to keep on top of our data and make sure it’s secure.”

Marks & Spencer has two cyber-security teams, which work alongside each other. One proactively searches for signs of security threats using a number of tools to monitor incidents, as well as manual search. The other team is focused on mimicking activity they know is prevalent across the industry at any given time to ensure that all systems are protected and customers are safeguarded.

Finally, Miller warns against being too quick to accept responsibility and blame in the event of a cyber-attack: “Be careful to manage the legal risk, as well as the PR. You don’t want to expose yourself to more liability than necessary.”

Today’s fashion consumers expect ever-faster and more convenient ways to pay, and the payments market is evolving quickly. Cash and chequebooks are being consigned to the past: consumers expect a seamless tap-and-go payment experience, using their debit or credit cards or, increasingly, their smartphones. Contactless is finally a success story and a plethora of mobile wallets such as Apple Pay are now available.

But it doesn’t stop there: real-time payments, closed-loop systems and invisible transactions using sensors are just some of the innovations being developed, largely driven by the rise in mobile commerce.

“Cash won’t leave the system for some time because there are people who can’t access the new technology, but for many of us this massive change in the way we pay allows us to engage in the experience in a different way,” says Colin Payne, principal and global domain lead on digital banking at Capgemini. “In 10 years’ time, everything will be biometric and wearable.”

Payne argues that retailers must think carefully about the payments options they offer. “When you go into a shop or go online to purchase something, the way they treat you when you give over payment for the goods affects your view of the brand. It’s important to get that smooth and effortless.”

Luke Griffiths, general manager at payment provider Klarna, agrees: “It’s important for retailers to stay informed, as the market is moving faster than ever and margins are getting squeezed. New payment technology can easily become an important differentiator – boosting brand equity, increasing sales and driving repeat purchases. Successful merchants have a good sense of their brand and understand their customer. Some shoppers want choice, some want the newest tech, others want speed.”

At Jack Wills, which attracts a young and tech-savvy shopper, a quarter of online payments are now made on a mobile device using PayPal, while contactless and Apple Pay are enabled in all of its UK stores. “Companies like Amazon and Uber are changing customer expectations all of the time and in all aspects of shopping, including payments,” says Mark Wright, managing director of ecommerce at Jack Wills.

By the end of May, Jack Wills will launch a new payment platform across its stores and global websites. “This means we will have China Union pay enabled in stores, such as Bicester Village, and will also be able to start to localise options on our global websites, making it easier for local customers to pay how they choose to, not just using UK banking cards,” explains Wright.

In February, Visa unveiled a new London technology hub, which is focused on payment innovation. The teams there are looking at how passive biometrics such as face or voice recognition can be combined with sensors in stores to make the payment experience truly seamless – so a customer can walk into a store, pick up a product and walk back out, letting technology do the rest (see box).

Bill Gajda, senior vice-president of innovation and strategic partnerships at Visa, says: “What customers want – and we’re capable of doing – is to put payments in the background of the commerce experience. Emerging technology is about taking that friction out of payments and making them disappear. We’re going to see a huge change in the next 18 to 36 months as these technologies become commercial and scalable.”

For Shop Direct, removing friction from the customer journey is critical, says group ecommerce director Jonathan Wall: “We want our customers to find it as easy as possible to pay.”

However, he points out that Shop Direct tends not to jump on the latest mobile payment systems. “Our customer isn’t typically an early adopter. A lot of these platforms have come to the market and not met early promise, aside from some obvious significant players. There are some major new platforms on our radar that we could look at over the coming months, but any new payment technologies we do adopt have to mature and be right for our customer.”

The general advice from the experts is not to be blinded by the technology.

“You want it to be simple, effortless. Customers know a transaction is going to cost them money, but the process shouldn’t cause them pain,” says Payne.

As demanding customers expect to be able to shop seamlessly across several channels, retailers rely on good stock visibility to avoid unfulfilled orders and disappointed customers. Taking a joined-up approach to inventory, whether it is for online or in store, is more important than ever.

“The best way to think about a multichannel approach to stock is to almost forget it is multichannel at all,” explains Robin Coles, product and technology lead at HSO, which specialises in implementing ERP (enterprise resource planning) and CRM (customer relationship management) systems.

“From the customer’s perspective, they want to be able to buy wherever and retailers have to keep stock the same way, so all stock is available for sale wherever the customer is trying to buy. It should be seen as one channel with lots of different service points, whether it’s for a customer who wants something in 90 minutes or one who wants to collect from store.”

Godefroy Picart, product manager at merchandising solution company Devatics, agrees: “The biggest game changer for optimising stock holding is better connecting supply and demand across all channels. What if stocks ends up being in a group of stores when demand is in the e-channel? The biggest gains come from connecting supply with the demand through the unification of stock pools and intelligent routing of orders.”

Accurate data is paramount for womenswear etailer Finery London, says co-founder and chief operating officer Luca Marini.

“We swear by having numbers match and making sure we have ‘one true source of data’, whether it’s a busy time or a quieter one. We’ve had the luxury of building our entire system architecture from scratch, unlike some others who have had to patch together different systems over the years, and thus have more problems reconciling stockholding in busy periods.”

Premium retailer Jigsaw also stresses the importance of accuracy for a clear view of stock.

“For Jigsaw, good stock management online lies in the speed and accuracy of the interface between our ERP system and our website, and the accuracy of inventory in all locations, particularly in store,” says omnichannel director Kate Holt. “We have a robust regular stock interface and at peak it’s monitored continuously. To combat inaccuracies during peak we set buffers at SKU level that our merchandising teams monitor and adjust continuously.

As operations become increasingly complex across numerous channels, maintaining good stock visibility is often easier said than done. Retailers face the problem of “phantom inventory” – stock that is listed as available but is not, whether that is down to errors, damaged merchandise or theft. And, as Marini highlights, larger or more established fashion businesses can be hamstrung by out-of-date systems.

Some high street retailers have been turning to RFID (radio frequency identification) technology to help track stock and improve accuracy. Farfetch founder and chief executive José Neves is trialling RFID alongside cross-channel promotions, mobile payments and loyalty programmes as part of the etailer’s innovative Store of the Future programme, which aims to show how new technologies and data can help boost profits.

Fashion giant H&M has also said it is investing in RFID technology, as has Inditex, which has rolled out the technology across all Zara stores and plans to introduce it across its portfolio, including Pull & Bear, Bershka and Massimo Dutti.

“The whole notion of RFID has been slow to take off in retail, but it’s getting there now,” says HSO’s Coles. “It increases accuracy, although it doesn’t eliminate all errors because products might have the wrong tag that says the wrong size. Better quality process instore can help eliminate problems elsewhere in the supply chain.”

“The focus has to be making it easy to track the movement of stock from one place to another,” he adds. “One way to do that is by empowering stores and giving them equipment, like smart phones or tablets, to input stock in and allow them to do their jobs better.”

In-store iPads are among the initiatives Jigsaw has introduced to maximise its stock holding.

“iPads in our shops allow styles to be ordered in store and delivered to the customer’s home or to another Jigsaw store – our vision of the endless aisle,” adds Holt. “On the website, we also offer click-and-reserve, a function that allows the user to search for the style, colour and size they want across every one of our 81 stores. But our biggest initiative in recent months has been the introduction of One Stock. This is a solution that exposes stock levels from all stores to the online customer, allowing a store to fulfil an order when stock levels become depleted in our main distribution centre. Our stock availability online has never been better.”

No matter how well businesses keep track of what stock they have and where, discounting is still part and parcel of retail. Promotions can be a valuable tool, but problems start when retailers are forced to discount too often and for the wrong reasons, or on stock that could have been sold at full price.

Drapers delved into the thorny issue of discounting in exclusive research published last year, which revealed that discounting is being driven by the wrong motives. Of the multiple retailers, independents and brands surveyed, 32.2% said they felt compelled to go on sale to keep up with competitors, and 19.6% because they had stock to clear. Several big names, including Fat Face, have since taken a stronger stance on discounting and reined back on offering lower prices. Others have chosen to take a more targeted approach to promotions, including plus-size etailer Navabi.

Joint CEOs Bahman Nedaei and Zahir Dehnadi explain how they try to differentiate and personalise discounts to customers: “We use promotions to enhance the shopping experience of a single customer, based on what she likes and what she buys. A lot of customers don’t care about promotions, but there are those who are driven by them and we try to target them with a one-on-one approach,” says Nedaei.

Other retailers have opted to introduce schemes that reward loyal shoppers for their continued custom to keep them coming back. Last year, Asos launched its loyalty scheme in February, which gives five points for each pound spent on site. Every 500 points unlocks a £5 discount. Urban Outfitters is also looking to shoppers who come back time after time. The women’s, men’s and homewares chain launched its first rewards programme earlier this month. As well as offering incentives the more customers shop, the retailer is offering reward customers early access to sales, tickets to exclusive concerts and the chance to meet and greet the artists. Reward customers will also receive a gift on their birthdays and a “half birthday” six months before.

Ultimately, inventory accuracy will lead to a healthier bottom line with less need to mark down. The challenge is achieving this, and will require investment to do so.

As we move hit the spring 17 season, the retail market continues to develop and the following key points are driving business thinking:

Consumers do not live in an omni- or multichannel world. To them, it is a single retail experience. Retailers should focus on the multiple service options customers now expect, including 90-minute, next-day or standard delivery, and click-and-collect, all together in a unified experience.

Stock is an enterprise-wide resource. To remain competitive, it should not be held in silos: either in physical stores nor in warehouses, depending on the channel. Technology should be used to drive efficiencies for sourcing, order placement and resource scheduling.

Store staff are the window to consumers and, as such, they should be empowered with technology that drives customer service, providing detailed product information, customer orders, click-and-collect functions, delivering stock availability and allowing efficient in-store operations to be carried out.

Customer click-and-collect options should be made easy. The service should be front and centre in the store, well resourced, and not hidden away. It should be considered an opportunity, turning the visit to the store into a personalised experience.

Finally, technology strategies should be focused on outcomes, not just on processes – for example, providing customer service, minimising returns, optimising the store environment, maximising stock availability and reducing stock.

Next in line is less of a wave and more of a tsunami: the use of artificial intelligence driving outcomes, changing how retailers interact with customers, combing science with the retail art form. Watch this transformative space – it’s a big one.

While fashion may be driven by desire, style and aspiration, when it comes to online shopping, 24/7 access and convenient delivery is not enough for today’s consumers – they want personalised service through targeted promotions and curated outfits. They want websites and mobile apps that remember them – and their preferences – when they return. And they want services that reflect their lifestyles, and offer choice and flexibility.

For millennial and mobile generations, the digital experience is everything. The most successful fashion brands are those that recognise individuality, whether they are pureplay etailers using social platforms to expand their appeal, or multichannel fashion brands investing in more dynamic and interactive web services.

But attracting customers’ attention is only one part of the equation. Turning fashion browsers into buyers and converting clicks to sales is another. Poor online and mobile conversion is a serious issue: basket abandonment leads to lost sales.

Working with many of Europe’s leading etailers and fashion brands, Klarna has shown that frictionless payments and seamless access to flexible financial services can dramatically improve sales and boost customer loyalty.

By recognising and empowering consumers with one-click purchase, pay after delivery and easy consumer financing, the fashion industry can not only make it easier to buy online, but also deliver a more optimised checkout service.

Retailers and brands must continue to remove barriers to sales by simplifying processes and making mobile payments easier. It must also re-energise the way it engages with consumers at the checkout – using payment to put people first. This includes giving consumers the freedom to “try before they buy” and to spread their payments, so they can buy more of what they want, exactly when they want it.