IN CONVERSATION WITH DANNY BARRASSO: WHAT DOES THE FUTURE OF RETAIL LOOK LIKE?
Retail isn’t the easiest place to work at the moment. The continued pressures of declining sales, rising costs, intense competition and uncertainty around Brexit are a challenge for even the most successful businesses. However, spin a challenge on its head, and sometimes an opportunity arises. For the past year, we’ve been working with Danny Barrasso, CEO at Esprit (Europe & Americas), on an ambitious project to transform the European fashion house. We invited Danny to join us and a number of retail leaders at our latest executive round table dinner, to share his experiences and talk about what the future looks like for retail. Here’s a summary of their key conversation points.
Like all good journeys, we kicked things off with the customer. Everyone agreed that the customer should come first, while also recognising that today’s consumers can create a challenge for more traditional retailers. Brands that began life in bricks and mortar, rather than emerging as digital disrupters, struggle to keep up with increasing consumer demands for a seamless multichannel experience. Free delivery/returns, visibility of stock availability, and buy online/return to store options – means increased cost, additional complexity and a need to review operational processes.
REINVESTING IN TRANSFORMATION
When sales are in decline it can feel counterproductive talking about investment but freeing up budget by cutting costs in those areas that are underperforming or overfunded redirects money to transformational projects. Everybody recognised that deciding where to cut and where to invest isn’t easy and in the short-term will cause disruption. However, implementing plans to reduce headcount in roles that no longer suit the strategic vision for the business and recruiting for those roles that do; moving from a DC to ship from store model or rethinking commission models to drive employee engagement could drive long-term growth.
RETHINKING COMMISSION MODELS TO DRIVE EMPLOYEE ENGAGEMENT COULD DRIVE LONG-TERM GROWTH
BUSINESS CASE PRIORITISATION
Danny talked through how a clearly defined scoring matrix to measure proposals against means he and the Esprit leadership team can be sure they invest in projects that support the strategy of the business. Measures like ‘ease of implementation’, ‘return’, ‘impact on the customer’ and the connection between these: is it easy to do but has a low return, or hard to do but good for the customer? The room debated the challenge of business cases being submitted where you can’t compare like for like. Ultimately, we agreed that until we’ve fixed that problem having a strong finance team is key. Business cases that have been tested by the finance team demonstrate a rigour around the numbers that replace project optimism and introduce at least one element of consistency.
DATA NEEDS TO BE SMART
Most of our attendees talked about having too much data. After collecting consumer data for years, it turns out quantity isn’t everything. The story of an organisation whose data showed them that people who bought kitchens are also likely to buy a bird feeder was a case in point… The true value comes from understanding the customer and their journey, identifying or gathering the data that is relevant and turning that into insight. For those businesses with an abundance of data, using it to address an existing issue/challenge can help to shape data strategies moving forwards by illustrating the data needed. In retail, this could be analysing the data for more intelligent stock replenishment or to help predict which items are most likely to be returned. Know your question and then use/collect the data to solve it.
SUPPORT CUSTOMER FACING STAFF
In store assistants are often responsible for a number of activities including processing deliveries, managing returns and keeping the retail area organised; if they have time, they might also be able to spend time with their customers. Improving the efficiency of operations can have a hugely positive impact – freeing up employees to focus on delivering the best customer experience, which in turn can lead to increased sales/reduced returns. That could be making changes to things in store – better changing room experience to reduce return volumes and provide interaction opportunities between staff and customers. Or changes further upstream at the DC like improving the delivery process of stock to store through better organisation of stock in totes.
BRAND EXPERIENCE IS ALL ABOUT AUTHENTICITY
Bringing a brand to life is about so much more than the marketing strategy. This can be seriously undermined if the experience online or instore doesn’t match the brand promise. Delivering on that promise depends on staff being able to live and breathe it with ease. Empowering staff with the skills and tools they need to use daily will transform the customer experience as well as the employee experience. We talked about a healthcare company that brings in retired doctors and nurses to help train pharmaceutical reps; a high street business that trains its staff to an A’level standard about its product range and the importance of using technology to support the experience not the other way around.
BRINGING A BRAND TO LIFE IS ABOUT SO MUCH MORE THAN THE MARKETING STRATEGY
In a physical environment, there are numerous opportunities to create a sense of theatre. That’s not to say it’s easy, but it’s an exciting prospect. Translating that into the digital world is a challenge most of the room faced. How do you relay the expertise of your staff through the website? How do you tell the story of a unique piece of jewellery or explain how your organisation is addressing environmental issues and sustainability? Consumers choose brands that resonate with them on various levels – adopting a channel, and experiential mix that meets those demands requires a clear sense of purpose, a focused strategy and an understanding of which elements deliver value to the business and the customer.
And there we are back where we started with the customer.
Whether you’re a pure-play or a traditional retailer, this is always the key to success. What your customers want and how you are best placed to deliver that is the ultimate match.
A big thank you to Danny for sharing his experience at Esprit. It was invaluable to our guests, and everyone left the room inspired to think about the changes they could make in their organisations.
And the future of retail? While digital will play a part in the overall experience, it’s the people who’ll take the lead.
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