From East to West – the changing dynamics in retail

Have you come across Zozotown yet? It’s an example of a retail phenomenon that is pushing the boundaries of what’s possible in omni-commerce – the dedicated online shopping channel. The business model behind Zozotown – known as Zozo to many of its users – represents a shift towards true unified commerce.

As well as being an online shopping marketplace, it provides both a warehouse and fulfilment for major and minor brands. Sellers ship their products for storage to a Zozotown warehouse. As there is no inventory risk for Zozotown, and since no initial fees are paid, a higher commission rate is charged compared to other marketplace businesses – in some cases, up to a third of the item price.

Getting personal in retail

The Zozo shopping experience is personalised and interactive, with a customer’s size choice remembered from purchase-to-purchase and styling ideas offered. This model, along with other retail innovations, began not with the online retail giants in the West, but in Asia where e-commerce is expanding at record rates. For example, China’s e-commerce sales are set to grow by £180bn in 2018 alone, which is £23bn more than the UK’s entire annual online spend.

This is the topic of a new opinion paper that I’ve recently published, ‘Retailers look East for digital inspiration’. In it I look at how technology is changing the face of retail and how much of the innovation in this sector has traditionally come from the likes of Silicon Valley in the US. That’s all changing. We are increasingly seeing retail innovations stemming from the East, several of which I describe in my paper. There’s a heightened consumer appetite for digital commerce. Even Japan with its ageing population sees 70 per cent of all the fashion sold online purchased via smartphones.

Putting the customer first

What lessons can the East share with the West? Perhaps the key one is the region’s focus on an effortless customer journey, where the experience is quick, seamless and continually improving. Innovations are very much attuned to the customer, for example with easy (mobile) access, multiple payment options and an almost ‘a la carte’ shopping and delivery experience.

As a consulting-led organisation, Sopra Steria retains a lively interest in developments like this. We constantly monitor disruptive new technologies and business models in the market. This enables us to see which ones are evolving and who is innovating at the fastest pace.

We’re also innovating ourselves. I am particularly interested in Sopra Steria’s development of a voice-enabled conversational chatbot proposition, known as Digital Customer Interaction. This ties in neatly with my earlier point about the need to build an effortless customer journey. It’s a trailblazing proposition in which a conversational bot uses real-time insight to provide a highly-tailored and personalised customer journey, regardless of channel used. From responses to frequently asked questions and automated customer identification and verification, to multimedia objects pushed to a smartphone for multi-channel interactions, our solution supports an end-to-end customer journey using natural language processing enabled by digital voice.

This is just one of the many exciting developments we are seeing in the retail sector, where digital is fast creating a level playing field globally. Retail pioneers in the West, such as Amazon and eBay, should now be looking closely at their peers in the East, where being customer centric is di rigueur.

I am looking forward to the next phase in the evolution of retail and feel sure it will have customer centricity at its core.

Download ‘Retailers look East for digital inspiration’’

For more information on Sopra Steria’s approach to delivering real and lasting value in retail, contact me on sylvester.eseigbe@soprasteria.com

A customer is for life; not just for the sales

Black Friday. Cyber Monday. Pre-Christmas & January sales. The cold, winter months are enlivened in the world of retail with a shopping bonanza for the savvy consumer. These high-profile sales see shoppers in a frenzy as they seek out the best bargains, both online and on the high street.

Then what? Once the furore has calmed down and normal service is resumed, how do you nurture these customers to ensure long-term loyalty to your brand?

The key is to keep them happy at every step of their interaction with you. They must receive an effortless service, when they want it and from where. More often than not, today’s customers also want instant gratification: to immediately know that what they’ve bought will be with them faster than ever before.

How to achieve this is the topic of a paper that I have recently published, ‘Rethinking your retail business around the customer journey and experience’. In it I make the case for what’s increasingly referred to as ‘unified commerce’. This is true omnichannel retailing (as opposed to just operating multi channels) that sees retailers delivering a seamless customer experience, regardless of which touchpoints they use. Unified commerce demands the fully integration and alignment of processes, systems and applications across both the back office and customer-facing channels.

Theory v reality

While the theory behind this makes absolute sense, the practical reality is that few retailers are truly achieving omnichannel status. The target is to enable a single enterprise-wide customer view, supported by the alignment of product data, pricing, promotion, procurement and inventory management. So why isn’t this happening?

An obvious reason is the siloed approach many retailers take to their operations. With each customer touchpoint (online, in-store, mobile, B2B sales, customer services, etc.) operated as a standalone entity, it is impossible to achieve a consistent customer experience across them. Even the way retail employees are managed in these siloes is a barrier to omnichannel success. As I point out in my paper, to be truly omnichannel, it’s important that all areas of the business are governed by consistent processes, incentives, measurements and ways of working. This means that decisions on remuneration and incentive schemes should be made at the very highest level of the business.

Technology too

The above is very much about a cultural shift, but technology too is an enabler of unified commerce. To deliver repeatedly and reliably at pace, retailers need to invest in cloud-ready infrastructure and they must automate at every opportunity – infrastructure and environment provisioning, application code build, deployment and promotion of application code and, of course, testing.

While cloud-native retailers are set up for this, the same isn’t true of traditional retailers. They are faced with the challenge of marrying legacy with new disruptive platforms and approaches in a genuinely omnichannel model. There are a number of ways to achieve this and, at Sopra Steria, we’re working with many organisations to help them modernise their IT so that they both unlock the value of current systems and keep pace with disruptive new entrants.

In the end, keeping your customers happy, not just during the sales season, but for the long term, begins with how you create and sustain a seamless customer journey. That’s everything customer facing and everything behind the scenes, such as logistics and fulfilment, as well as in the back office.

Download ‘Rethinking your retail business around the customer journey and experience’

For more information on Sopra Steria’s approach to applications modernisation and unified commerce, contact me on Gary.Ellwood@soprasteria.com