The fabric of retail is changing
Digital innovations are enabling online retailers to offer highly personalised, boutique-style services to shoppers, who like it so much they are spending more
“Wherever you make a journey more relevant and helpful it improves sales and customer experience,” says Matt Atkinson, chief marketing officer at Tesco.
“So long as you apply that principle the uplifts come, and although it can be variable, it tends to be in magnitudes of 15-20 per cent better.”
As Atkinson suggests, the results can be impressive, which is why personalisation is one of the key buzzwords of 2014 as retailers – big and small – look to tap into what consumers really want and become part of the conversation.
A one-size-fits-all approach simply won’t cut it any more, particularly online where the tools and technology exist to finely tailor the experience to an individual’s needs.
As a pure-play digital business, women’s clothing brand Baukjen realises just how critical it is to interact with consumers on a personal level, as it doesn’t have the benefit of being able to offer customers a place to try things on in a shop. It introduced a free eStylist service for customers last year, which head of customer operations Chloe Smith believes “removes the final barrier to buying fashion online” and has resulted in higher sales, fewer returns and more repeat business.
Boutique experience online
“The eStylist service is a way of providing a boutique experience online,” she says. It works by shoppers outlining what they’d like help with ahead of a session, giving the stylist time to select relevant clothes, which they then present to customers via a live video chat.
“We don’t push the customers to purchase there and then if they are not ready to buy,” adds Smith. “Instead we follow up a little while after. We find this works better for our customers.
“The key is developing a relationship; our customers come back to us for guidance and tips time and time again as we offer genuine advice, not a sales pitch.”
Results are good, with 94 per cent of session customers going on to purchase and their average order value is 28 per cent higher than for customers who don’t use the service, says Smith.
The additional guidance, which can also be conducted via email or live chat, means customers are 40 per cent less likely to return items, while 89 per cent become repeat customers.
All of this means Baukjen was able to achieve a return on investment within two months of launching the service.
It is for these reasons that the company extended the service to its sister brand, maternity wear company Isabella Oliver, particularly as it finds pregnant women seek additional reassurance about sizing.
“One of the most common questions we get asked is ‘what size do I go for during my pregnancy?’,” says Smith. “Not only can we reassure customers that they can go with their pre-pregnancy size but we can visually show them how our designs can be worn through all stages of their pregnancy.”
While an increased level of interaction helps to reassure customers and build long-term relationships at Baukjen and Isabella Oliver, the primary objective of men’s personalised clothing service Enclothed is convenience.
“Our customers tend to come to our website because they are too busy or they just don’t want to go shopping,” says Dana Zingher, who co-founded the business with Levi Young just over a year ago.
The company, which has just unveiled a new website with additional features, works by building up a detailed profile of each customer before sending them a box of items based on this information. Customers don’t pay anything for the service, or delivery or collection, just the items they decide to keep.
“Typically a first box will contain about 10 items which is really so we can get to understand their style and size,” says Zingher. “Out of that they generally keep about 30 per cent. Everything they don’t keep is returned along with their feedback, so that next time they order we know exactly what they’re looking for. The number of items we put
in goes down as we get to know our customers but the amount they keep goes up.”
After registering, customers are asked to provide information about their size, the brands they like, how much they are prepared to spend for each type of item and how they like clothes to fit, as well as any particular requirements such as shirts that are long in the sleeve.
They are then shown a series of Pinterest-style images to determine their style, which Zingher says works better than asking people outright “because what one man perceives as smart casual might not be the same as another”.
It’s taken a long time to get right as there is so much personal service involved
Enclothed has about 2,000 members and 300 regular customers but as the business becomes more established and its technology gets increasingly sophisticated, it hopes to boost this to 2,000 loyal and frequent shoppers.
Although its customer base is small, Zingher believes the model can be upscaled for larger retailers.
“The barrier to entry is low,” she says. “The difficulty comes in getting the service right. It’s taken a lot of time and effort to achieve it as there is so much personal service involved.”
No extra charge
One thing both these personal services have in common is that they are free for the customer, which Baukjen’s Smith says has been critical to its success. “Research confirmed that charging customers a fee would act as a barrier,” she reveals.
Likewise, Zingher thinks consumers feel “punished” if they have to pay for collection or returns when items bought online don’t fit or are unsuitable, which can put people off buying again.
“There is actually a pretty big margin when you’re buying at wholesale and selling at retail so we believe we should be passing that on to the consumer, particularly as we don’t have the massive overheads of a shop,” she says.
Failing to meet expectations
But while these retailers are tailoring the experience to suit specific customers’ needs, many are still failing to meet expectations, according to O2’s ‘The Rise of Me-tail’ study, which reveals that more than half of consumers surveyed find the online retail experience “very impersonal”.
One retailer looking to remedy this is Start London, which is aiming to replicate the intimate nature of its Shoreditch-based boutique on its website by adding frequently updated high-definition panoramic pictures which guide customers through a virtual tour of the store, allowing them to buy selected products along the way.
“It enables us to show off the Start ethos and personality in a much better way online,” says digital manager Natalie Duthie.
Powered by London-based start-up Avenue Imperial, which operates an affiliate payment model, retailers can also include a ‘snapshot’ function which allows customers to select any item and be instantly connected with an in-store assistant for additional information and the ability to purchase. Berlin-based store The Corner is the first to use this aspect of the tool but it is something Duthie is considering for Start.
On the cutting edge
Annoushka Ducas, founder of jewellery brand Annoushka, which is available from standalone boutiques and stores including Harvey Nichols, Harrods and Liberty, believes providing a personal service online can also alleviate some of the issues people have when buying from luxury brands.
She says: “Visitors can receive the same level of service as in store. Certainly in a market like fine jewellery, where often people can be intimidated to ask questions, it can be easier to ask in an anonymous yet personal one-on-one way.”
But it is not just the smaller boutique or digitally native brands that can gain an edge this way. Tesco is equally active when it comes to tailoring its digital offer to suit individual’s needs based on previous shopping behaviour and insight gained from Clubcard, which chief executive Philip Clarke recently revealed is set to become more personal, with a ‘digital Clubcard’ available this autumn (mwlinks.co.uk/TescoDigitalClubcard).
“We’re increasingly using data to add value to the way we do things,” said Atkinson at The Economist’s The Big Rethink event last month.
Along with concerns over freshness and ease of delivery, shoppers worry about products not being available when buying groceries online, and that staff won’t find an appropriate replacement. But it is an issue Tesco is looking to solve, says Atkinson.
“We can use historical shopping data to make relevant substitutions. The key is to create utility along the journey that makes the shopping trip a little bit easier for the customer.”
Another way the supermarket does this is by personalising the search function on its website. “If a customer is logged in and they search for milk we know what type of milk they’re looking for as we can look back through their shopping history [so we can shorten the purchase journey],” he adds.
The world is becoming increasingly connected but often what’s lost is the personal touch. Online retailers large and small have a wealth of information at their fingertips that can be used to tailor and improve the experience to individual customer needs.
“It goes back to the principle that when you make something personal and relevant it can only be better,” adds Atkinson.