Jon Weg – Fortnum & Mason
Fortnum's Chief Transformation Officer explores the importance of the sales associate and the power of connecting online and in store experiences.
This podcast series was underpinned by the findings from our latest research report. We surveyed over 25,000 consumers worldwide to understand how attitudes have changed in the past 18 months. Complete the form to get your copy of the UK findings
Colin: If the events of 2020 have proven anything, it's that necessity is the mother of invention.
Throughout the pandemic we've seen stay-at-home-orders, social distancing, and continuous shifts in consumer behaviour.
As doors closed and the world moved online, adaptation has been key to survival.
But, as we’ll discover today, real retail resilience is about more than just having an ecommerce store.
Jan-Pieter Lips: Customers who shop both online and in stores, they are worth more, they're more loyal and they spend more. And when you realize that, that means that maybe you want to promote your website in your store, whereas, otherwise, you may have felt that that was actually cannibalizing your own sales.
Colin: This is Retail Reawakened; the show that explores how retail and hospitality businesses can rise again in the aftermath of the pandemic.
I’m your host, Colin Neil, Head of Commercial at Adyen UK.
Adyen is a global payments provider for retailers like Hunter, SuperDry and Fortnum & Mason, and food and beverage businesses like LEON, Joe & The Juice, and Hakkasan.
Before working at Adyen, I spent 30 years in the retail industry, including working as Retail Operations Director at Burberry.
In our second episode, Wake Up Call, we'll hear from luxury brands and high street names about the overnight pivot to e-commerce, and how they weathered the hostile business environment caused by the pandemic.
Plus, we’ll discover how transactional data can tell you so much more about your customer-base than just payment volume.
Colin: A website can be a window to a store seen by millions around the world.
But when your store is steeped in heritage and is known for providing a luxury retail experience, how do you continue to reach new and existing customers when your doors are unexpectedly closed?
Here to tell us more about making luxury work online is Fortnum & Mason’s Chief Transformation Officer, Jon Weg.
Jon Weg: Expectations in luxury are always about being about experience. Customers, need a reason to make the effort to come in to store. And I think luxury has been at the forefront of providing great experiences in store. I'm very lucky at the moment to work for Fortnum and Mason, where we have a magical store in Piccadilly that for several hundred years has been a really magical place for people to visit. And, and I think one of the big things that's been evolving over a number of years, but really was expedited through the pandemic last year is customers coming to brands across multiple channels now. You can't have a separate strategy for, for store than you have for online, than you have for other methods for the customer to get to the brand. Particularly in the luxury sector, it's much more about making that a real experience online. Same as going to the store - it's got to be a consistent experience. It's got to be worth the effort of the customer going there, however they come to the brand, including digital.
Colin: When the UK government ordered a national lockdown in March 2020, Fortnum & Mason had to close its flagship store in Piccadilly.
The store is a London landmark in its own right. How easily would its customers switch to an online experience?
Here's Tony Longhurst, former director of IT at Fortnum and Mason:
Tony Longhurst: Quite quickly I think. So, yeah, as soon as people weren't able to get their favorite products by walking through the door, they transitioned quite quickly. So yes, the numbers went up significantly in terms of the customer base and it brought with it a large number of new Fortnums customers. So that was quite a rapid change, probably over a number of maybe two, maybe three months. It transitioned to purely online as, as everything started to slow down and then, and then closed down. And I think one of the benefits of a brand as, as kind of much loved as, as Fortnum's, is that, particularly in times where you can't go out and do your favorite things, and you covet those opportunities to enjoy things that you've never tried before and you know, potentially change your price point. And particularly where, the opportunity of gifting as we started to be a bit more kind to each other and recognise that we're all going through the same thing and enjoying, fine foods or whatever it may be. So the gifting element I think, was another key point of enabling people to get products to places and to people that maybe they hadn't gone to before.
Colin: And that trend of changing price points wasn't unique to Fortnum and Mason.
Adyen’s recent research report found that multi-channel shoppers are actually higher-value customers, spending on average 40% more online than in-store.
Luxury retail is known for its fine products and premium shopping locations, but the icing on the cake comes down to its people: with premium customer service delivered by top-tier sales associates.
vox pop: I want to be treated as an individual. So you can always find the companies out there that are supplying the real quality service.
vox pop: People all want something a bit different. A little bit of personal service, I think, is important.
Colin: Last year, delivering on that service seemed tricky.
After all, how can you go the extra mile when your associates can’t see their own families, let alone your customers?
Jon Weg: I think good sales associates have always had the best knowledge of their customers. And people always remember going into a store and having a magical experience with a sales associate. And I think that's become more true than ever during the pandemic. And I think some of the brands that did best were the ones that were really able to still enable their sales associates to engage with their customers. And luxury brands have always been good at providing wonderful experiences in store. But it's now increasingly the need for them to provide similar experiences online. And in fact, one example I can give you that we've just done very recently at Fortnum and Mason, is we've had a wonderful in-store experience where you can blend your own tea and you can be assisted by the sales associate to create your own personal brand of tea. And we actually now provide that experience online as well. And you can give the tea your own name and receive it through the post. It's not quite the same as being in-store, but it's an example of how you can start to have some, very nice experiences online that perhaps weren't possible in the past.
Colin: Excellent service is imperative if you want to retain your clientele. In fact, 71% of customers say they won’t return to a retailer at all if they have a bad experience online or in-store.
As well as utilising in-store staff to create better online experiences, Fortnum and Mason also took advantage of other ecommerce avenues to maximise its reach - something which Jon Weg recognises as a vital survival factor.
Jon Weg: I think certainly social commerce was hugely successful. People that engaged through a direct selling channel saw those channels massively expand. Fortnum and Mason had seen a huge shift from physical to digital and so many companies, so many retail brands, had the same experience. People made their whole experience frictionless in how they enabled customers to transact. And so those companies that were able to make that whole payment process frictionless and make the customer journey as easy as possible were the ones that were most successful. And, and that's changed forever now. And customers demand a unified experience and brands are increasingly providing that. And then that whole physical digital thing where people talk before about blurring the lines between digital and physical, and that's now really been accelerated. So more fusing between the two. Payment is absolutely a critical part of that. And it really has to be any device anywhere, any time, whether you're transacting physically in store or digitally online. We were already in that journey. I think it just accelerated a little bit last year. But we were already headed down to the customer, wanting a unified experience and I don't think anything new has happened. It's just accelerated. So the companies that weren't on that transformation journey, are now the ones that are finding things most difficult. The ones that were already on the journey, providing a unified experience, enabling their supply chain to operate in both the store and selling to people at home are the ones that are ahead.
Colin: Customers now expect a frictionless, unified experience. And for Tony Longhurst, that also means keeping up to date with and supporting more convenient payment options, for both domestic and foreign customers.
Tony Longhurst: I think certainly over more recent years with the kind of the rise and rise of Apple pay and, uh, and you know, Android pay and particularly for far Eastern markets, you know, the kind of We-Chat pay and those digital wallet elements where that is, that is prevalent. That's the number one, you know, cash is, cash is no longer king in that respect. And we've moved from cards and contactless very quickly onto digital wallets, and there's such variation in there that, for some retailers, it's difficult for them to keep up with the volume of change that's going on in the area. But for certainly for the Far East market and then again, a little bit of experience through opening Fortnums in Hong Kong, the Chinese customers expect to be paying using digital wallet first. It is the prevalent payment method of choice. So again, that variation exists regardless of where you are, but where the customer finds you, they expect it.
Colin: Fortnum and Mason boosted its resilience by enhancing its online presence creating unified experiences during the pandemic, which kept customers engaged.
But what if ecommerce was never part of a brand’s business model?
And what if it didn't even have plans to start a website?
In that case, it had two options: do nothing and risk the survival of the business, or... pivot.
So, from high-end London luxury, we now turn to high street retail.
Saad Usman, Director of Finance and Operations at Miniso UK, tells us how the lifestyle product retailer had to radically rethink its channels in 2020.
Saad Usman: We stock things from household to gym. So we, we sort of have our fingers in a lot of different pies. We came to the UK back in November. 2019 is when we opened our first store in, in Ealing. We had lots of grand plans in 2020. But we've, since then, we've opened a couple of stores, one in Cambridge and Cardiff, and we've also launched a website. We had really grand plans of 30/40 stores in the next five years. Website was not even being considered. As a result of the pandemic, we thought let's look at online, let's see what we can do. Everyone's sitting at home, right? So maybe we have to go to them.
Colin: Pandemics aside, in 2020 a retailer not having a website or ecommerce store is pretty unusual, though not unheard of.
So why didn't Miniso originally opt for an online store?
And how did it eventually come to create a site, effectively pulling a 180 on its business model?
Saad Usman: So to begin with, the idea was stores because our model suggested that stores is the way forward. Whilst we have really good products, we thought, can we afford the additional post and packaging, et cetera? Can we build that into our margins and still be affordable? So, in March, we thought, right, what can we do immediately? Cause first we did look at a website, but we thought, right, you know what? We have to do it properly. So we're not going to just make a website. We need to see if it's actually any interest out there, count our margins. Whilst there will be IP like Marvel, et cetera, and there'll be Miniso own branded really expensive. So, you know, we're already at the lower end of our price point for, for customers. And when we started selling 20, 30, 40, yoga mats a day to all the people in lockdown, we said, right, you know what? There, there might actually be something here we could, we could potentially put in a lot more products. So also to get those products pictured and on the website and eventually get proof of concept really, but that was the real challenge. And it took us a couple of months to really figure it out. And then we understood that yeah, there is a market for this. And so then all this time I've been speaking to Adyen and about how to do it payments and what can we do. And we started off by just saying, right, we're going to add a little link and we're going to post it on Instagram and Facebook and it'll be a payment link and it sort of escalated. And we said, right now, we need to pivot from that to actually having payment processing on a website, we're going to design. So back in June, and two and a half months of trading on Amazon and other platforms, we decided, right, let's make our own website. And, and then it took a couple of months to really tweak it and make it what we want it to be. And, and thus Minisoshop.co.uk was born. What we want is our online store to be a store in its own right? So it is just another, it is a new store for us. And the website and the stores will coexist. They will survive and they will have to thrive together.
Colin: Adapting Miniso's commerce structure so dramatically kept it in business.
And research suggests that adopting a multi-channel approach will reap benefits in the future too - with 73% of shoppers believing that retailers should continue to sell across multiple channels once the pandemic is over.
But Miniso doesn't just plan on just selling through separate channels, it wants to blend them together.
Saad Usman: Click and collect is on the agenda. We do want to be able to integrate our website more with what we do. On our website you'll be able to see addresses for all our stores and timings, et cetera. Social media is geared towards telling people about the store, but also telling people about the website. So it is all about Miniso UK. It's not about either just one store or, or that there are a lot of things we can improve. We know we have to do next day delivery. It's the world in which we live in is currently, "I want it now." And so now might not be possible, but tomorrow must happen. We are nowhere near the finished article. We have a lot to catch up on a lot to do, but, uh, we're just getting started.
Colin: Product retailers aren't the only businesses to benefit from allowing digital technology to compliment their physical stores.
Global coffee chain Joe & The Juice, took advantage of a unified commerce approach to improve customer experience. This incidentally stood the brand in good stead when the pandemic hit.
Senior Vice president of Strategy of Business Development at Joe & The Juice, Thomas Evald, tells us why they decided to develop the Joe app and how it helped them stay open when everything else closed.
Thomas Evald: Joe & The Juice has always been about the our employees and what we saw when we had good employees, we got really really regular customers. We wanted to create an app where we could we could take this loyalty and we wanted to bring that into technology. So that was the first thing. And the second thing was that we are doing every product made to order. It's a fresh-made product which takes time. So that's why the second thing is the convenience part. We wanted to create the pre-order for the app. We have a lot of loyal customers so we were converting the customers in January and February and then unfortunately COVID hit. You know, this contactless pre-order, you could not go into the stores all of that and that just escalated the downloads on the app and really pushed the app forward in a way we've never imagined. I think, we have 700,000 downloads now and I think that the pre-order and the contactless was what's the main driver in the beginning for the app. And then when you get more comfortable into the app, which is what we see now, you can buy our loyalty cards. So we really believe we are adding a lot of value to our customers. And so I think different things are driving in, but convenience and then the personalisation, and and of course the seamless flow and it's very very easy to use.
Colin: Convenience, seamless experiences, and ease of use were key drivers in the Joe App's adoption. In fact, as Thomas explains, it’s all about the personalized customer journey.
Thomas Evald: So, if you just downloaded that view, you will have a, what we call the static journey. So basically from you downloading the app, the communication that comes from one visit to two visits, two, three weeks to four to five visits, and then all the way up to our biggest tiers, we have customised that journey. So it's relevant for you. Let's say you've been there one time, we will tell to you, oh remember to do your first purchase so you get your gift or you can use your loyalty cards here, or you should pre-order here, the menu is here. And when you get more advanced, it's like, have you tried this green juice? Have you tried this challenge about Joe & The Juice? And so on. So we're really trying to make it human, make it personal, the whole journey in depth. In the beginning, of course you're quite new to the app so you normally download it, it's either for the pre-order or for some campaign. We just did a survey and a lot of people are saying, if you didn't have that, I would come less to Joe & The Juice. So we see the frequency is increasing because it's so easy to use, you'll never have to wait, you can see where the stores are, you can bring the app. Let's say you live in London, you land in Denmark, you can use it so on. So we really made it available for our customer to use in the same way. Now, in the US we have added the delivery to the app through Uber Eats. So this means you can sit at home order Joe & The Juice with the app and get it delivered to your doorstep. So we basically want to be available for the customer set at any time. And I think that's in the long run, but what's running the value of the app.
Colin: The app's unified commerce approach not only let's you easily place your order before visiting a store, but it makes payment effortless too.
And in more ways than one.
Thomas Evald: With the payment, having that in the app, basically means that if you are, at least for me, I'm a loyal customer - I ordered the same thing over and over again, so I press reorder on my app, I select the same order and the transaction goes through - it's basically the most frictionless ordering that you can have. So that's why I believe having the payment card integrated in the app is probably the most important thing because if you need to press a code to this, to do that it loses the frictionless ordering flow. And that's what we're here for people is that it's so easy to use. And the different ways of paying with the app is we have an install payment, which is a QR code, so basically you come up like we did in the old days, you order by the register, they put in the order and then you scan your QR code. The second one is the pre-order where you can order on your app and then pick up in the store. Or, you can order on the app and eat in the store. And then the last one is that you can get delivered and basically we're using Uber Eats in the US to, deliver home to you. Further to that, we are now also building on the webpage so you can log into Joeandthejuice.com with your user and use the same payment card and so on, and actually order by your computer if you want to do that for delivery.
Colin: So that's how Joe and the Juice is meeting current consumer needs, but what about in the future?
Thomas saw first-hand how consumer habits changed over the pandemic, and he's preparing for those to transform again as lockdowns ease.
Thomas Evald: I think people are longing for being social. So I definitely think people will go back into the stores and the restaurants and the public spaces as, as much as they can. So I think, you know, what we call ambience, the entertainment, the music, you know, really building on that is super super important . But also I think we cannot miss the convenience people are getting used to getting everything delivered. You have Amazon driving this you have all the delivery groceries you have all the third party deliveries Everything is so seamless now you can get everything delivered So people are of course getting used to that. So I don't think that will disappear. And I think people will select when they want to go to a restaurant for entertainment or when they want to eat at home. But I think this middle segment where you have bad food that you pick up I think that will disappear. I think it will be either super convenience at home or you will go to more restaurants and having a good time.
Colin: Unified commerce offers up some great solutions to allow customers to transact with retailers more easily.
But by consolidating payment channels, brands can also take advantage of some other benefits.
Quirijn Meulenberg, Product Manager for Data at Adyen, explains more.
Quirijn Meulenberg: What we notice is two things. Customers are no longer attached to one single channel. Maybe for their groceries, they go to that specific store that's really nearby in their neighborhood. But for all other experiences, it doesn't really matter where they are if they want to buy something. So, that really means for merchants that they need toprovide unified experiences. So it's really about integrating all the data that you have on those channels to provide the same experience to your shoppers wherever they are, whenever they are. And everything for that experience is powered by data. And because we handle all of the transactions on one platform, it's fairly easy to recognise the same shopper on different touch-points, in different regions, on different channels. Whereas traditional retailers have their data locked up in silos because they have this system for point of sale, that system for ecommerce. That is really hard to basically do cross channel attribution, for instance.
Colin: Over the past decade, the sheer amount of consumer data available has boomed.
For businesses looking for better insights into customer habits, it can be difficult to know where to start.
To find out more about the types of data available and what merchants should be looking for, we spoke to Head of Retail and Hospitality Solutions at Adyen, Jan-Pieter Lips.
Jan-Pieter Lips: So I think most merchants realise that they can't give their customer a better experience unless they really understand their customers. And there's little data around. Google knows what you're searching for, Facebook knows who your friends are. But the most important data is the data of what customers buy, where they buy it, how much they spend. And that's the data that hospitality companies and retailers have, but they can't always combine those different transactions to customers. So if you go into a store and you could go every week or you go to another store, quite often, you are anonymous, and if you then go online, the retailer doesn't know you're the same person. And that's where payment data can come in because payment data can provide that link between transactions and customers. The assumption in many of our retailers is that it's the same customers. It's people who would have come to store are now going online. But what we were able to show in many cases is that the growth of ecommerce disproportionately comes from new customers. So the lesson is that in the disruption, people evaluate their brand, uh, loyalty. Now, once you realise that you then need to look at these disruptions as an opportunity for customer acquisition. And making sure that you have a great online experience that those people who come online that you put your arms around them, that you make them come back, that you get to know them. And those are really actionable insights that only really payments data can provide.
Coin: Tracking transaction data offers many benefits, including customers' purchasing trends and preferred sales channels.
And combining transaction data with loyalty programs can offer great benefits to the customer too, which, in turn, can be a key factor in promoting loyalty.
Jan-Pieter Lips: When somebody joins a loyalty program, what merchants can do (because they can track those transactions through the payment credentials) is give people a running start. They can say, you know, the last five transactions or this year's transaction, they all count. And, you know, you don't start with zero, we already give you credit for what you've done before you joined the loyalty program. That's a really nice one. And another really important one is around measurement. If you look at how we measure marketing effectiveness, we tend to create a control cell. So we have a campaign and then some people we don't give the campaign to and we compare the behavior of the campaign group against the control cell. Well, with loyalty programs, there are no control cells because everybody who was in the program, that's the data you're looking at. Now payments data can provide that control cell. So you can look at what people were doing before you launched a program, what are they doing after you've launched it. And you can compare to people in the program with people outside of the program. And that measurement is really, really important because loyalty programs are big financial commitments.
Colin: Businesses stand to gain a lot from customer data in terms of predicting success of loyalty programs – and we’re going to revisit that in our next episode!
Quirjin says that customer transaction data also plays an important role in personalising marketing campaigns.
Quirijn Meulenberg: There's many different layers of personalisation. Segmentation, that is a form of targeting without becoming too personal because you maintain a fairly large overview of a shopper group. And you can use those insights to really fine-tune specific campaigns in store. So, by using our data and recognising that the certain store is attracting way less new customers than other stores that they're comparable to. Then you might want to say, hey, this store really needs to focus a lot on acquiring new customers. So everything that we do there in store, maybe around the corner should be focused at drawing these new people in. That is something you can fairly easily do without becoming too personal. If you really want to go to the personal level, then you always have to take a look at: Are we going to ask the customer for consent or does this fit with just an update in our terms and conditions? But let's say if we asked a customer for consent and we think in a blue sky scenario where we can do everything that we want then it's really interesting to dig all of those touch-points from all channels to see if there is a natural rhythm, for instance, for a customer in which he makes a purchase. And if we know that rhythm and we know what a merchant really knows, what products this customer is interested in, or they think should be interested in, then you can really come up with a personal cadence of personal campaigns to the specific shopper and make sure that you're relevant for your customer at that time, they also think that you should be relevant to them.
Colin: Showing customers the right marketing material at the right time is an opportunity to get more shoppers into stores.
However, one of the most powerful ways to secure return visits borrows heavily from the oldest practice in the customer service handbook.
Quite simply: know and recognise your customers.
Quirijn Meulenberg: Recognising your shoppers is the most important step here, right? If you don't recognise your shoppers, then your insights will not be as valuable as we think they could be. So what we normally do is we work with merchants to really determine what data fields can we provide with every transaction to make sure that we can find sufficient overlap between payments to make sure that we can link them together. And because we actually have way more data on the ecomm environment. It becomes easier to relate point of sale transactions to ecommerce data as well. And what we actually see is if we're able to recognise shoppers over different channels, we really see that these shoppers actually provide a lot of value to those merchants. And I think also for ecommerce departments it's really interesting to see if their attribution models can also incorporate this point of sale data. And I think traditionally, what I noticed in some talks is that there's a split sometimes in the organisation between point of sale and ecommerce, or you have a specific point of sale department and a specific ecommerce department. Ecommerce has a lot of data. They actually know how to attribute a certain marketing campaign to a sale if it is online. Working with Adyen, you can actually feed in that point of sale data to the ecommerce data as well, and get an even better overview of your of your attribution models.
Colin: Visibility is crucial, and contrary to popular belief, if transaction data is used appropriately, most consumers don’t take issue with it:
Vox pop: It's annoying when you just get loads of ads sent to you and things that you're not interested in. If it's along the same lines, you know, if it's, if it's to do with pizzas, that's what we like then okay.
Vox pop: I think it's part of the world we live in now where, if you buy something you're going to get adverts for things like that. That's perfectly fine with me!
Colin: Businesses that employ their transaction data effectively can access a whole range of insights across their sales channels, which will certainly come in handy. Because, as Jan-Pieter Lips explains, further transformation is just around the corner...
Jan-Pieter Lips: Commerce will get more and more convenient. And I'll give two examples of that. One is that commerce used to be structured around practical considerations. So the store is a way to store products, have people come in, make a transaction, and then of course we could buy from home. It became a little bit more convenient. And then on the road through an app. But still as a customer, you have to go somewhere. You have to go to a store, to a website, to an app. In the future, the store will come to us. Whether we are talking to our friends, whether we are watching TV, maybe you're on a Zoom or chatting with a store to get some advice. Maybe you see a product, you take a picture of it. It's going to be much easier to buy and you don't really have to go somewhere - the store comes to you. And the second is that payments will move more and more to the background. How you would like to pay becomes part of your customer profile. It's part of who you are or how you log in. So buying becomes as easy as arriving somewhere in an Uber. It becomes completely seamless and automatic. And in that combination of payment and identity means that merchants will get a much better and complete review of what customers are doing so they can serve customers better.
Colin: It’s clear that the businesses that consistently perform the best are those that can combine their physical and digital worlds, creating a fluid, channel-agnostic experience which prioritises the customer.
Over the past 18 months, sales channels have been in flux, and unified commerce has proved to be critical for stabilising sales during the pandemic.
For many, the past year has acted as a wake-up call. Digital transformation has gone from a ‘nice to have’ to a matter of survival. With necessity sparking innovations, customers are now enjoying more flexibility and convenience than ever before.
And, as the UK gradually reopens, businesses will be looking to nurture customer loyalty through the entire customer journey.
Quirijn Meulenberg: If you make the loyalty part of just making a regular payment, your recognition goes up,your shoppers use that loyalty program more, the better it is for you as well, because you're maintaining your loyal shopper base.
Colin: That’s next time on Retail Reawakened.
You’ve been listening to Retail Reawakened, I’m your host Colin Neil.
If you want to find out more about unified commerce, head over to www.adyen.coom/ukretailreport to download our latest research.
A big thanks to Jon Weg, Tony Longhurst, Thomas Evald, Saad Usman, Quirijn Meulenberg and Jan-Pieter Lips, for their contributions today.
And join us next time as we explore changes in consumer behaviour, and everything you need to know about customer loyalty.
Thanks for joining us, we’ll see you next time.