Clare Bailey – Retail Champion (BBC)
Clare explores the evolution of the UK high street and shares her thoughts on where it's headed.
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: In good disaster movies, anyone can be a hero. They remind us that only through facing adversity can we reach our full potential.
In many ways, 2020 had all the makings of a Hollywood disaster movie: Empty streets, facemasks, environment suits, closed borders...
For the fortunate among us, it’s the closest we’ll have come to experiencing such drama in real life. For the high street, the impact has been no less dramatic.
From amongst the debris of five-year plans and annual forecasts, businesses are getting to their feet, dusting themselves off, and surveying the world around them.
For some, it might seem bleak. But beyond the initial fallout is the possibility for new beginnings.
The road to retail recovery lies in reinvention.
Clare Bailey: Anybody that wants to talk to me about the death of the high street is going to have an argument on their hands because high streets have been with us for literally hundreds of years and will survive long beyond our existences.
Colin: This is Retail Reawakened; the show that explores how retail and hospitality businesses can rise again in the aftermath of the pandemic.
And 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 this series premiere, we're going to look at the changes that have hit our high streets in recent history to try to better understand what the future might look like.
We'll discover how purchasing habits have changed, and hear how the pioneers of customer experience took their digital transformation projects to the next level.
Over the centuries, pandemics have accelerated changes in human behavior:
And the way consumers shop has shifted dramatically.
Adyen’s latest research found that 34% of UK consumers shop online more now than they did before the pandemic.
vox pop 1: I didn't order anything online, I don't think, 10 years ago!
vox pop 2: We, yeah, definitely went out to the shops more than we do now. I can't remember the last time I went to a shop, to be honest.
vox pop 3: Food shopping? I go out. Clothes shopping, I'm generally doing online.
vox pop 1: Nice things for the house, I wouldn't buy online, but everything else I'll just get it from Amazon and have it there the next day.
Colin: The long-term impact of the coronavirus remains to be seen, but already it’s been a catalyst for change.
To understand what it takes to thrive in uncertain times, we're going to meet at a brand that's been with us since 1856.
To put that into context, this retailer has survived through the fall of an empire, two world wars and a digital revolution.
Here's Steve Ibrahim, former head of operations for Burberry to tell us all about the global fashion brand's secret to survival : adaptation.
Steve - Burberry: I think with Burberry it has always been about customer service. We've always been a global company, but I think it transformed from being, I suppose, sort of fashion outfitters to becoming a global fashion brand. And that happened sort of in the sort of late nineties, 2000s. Sort of, it evolved. And during that period there was a lot of change within the brand. And a lot of the focus was on product development. So product development, customer service the aesthetics of the whole store. So it wasn't just the bad customers coming in and shopping, but it was the whole experience. When we rolled out and you went into the store if you were a great customer, you would be offered champagne. People were completely amazed by that. They'd say "Thank you so much. That is wonderful." And also, I suppose, in terms of you know, logistics, operationally, trying to sort of give the best experience in terms of availability of stock to customers. So we always had things like store to store transfers to make sure that we can get all the products to the customer.
Colin: The rise of ecommerce was nothing short of a revolution.
Although some online-only retail giants may have taken a slice of the brick-and-mortar commerce pie over the years, the internet has also offered an opportunity for high-street retailers to not only take back some of those web sales, but to drive foot traffic through the doors too.
In fact, the Adyen Retail Report showed that in-store shoppers spent 40% more when they moved online.
This means it's never been more important for retailers to learn how to use each channel to their advantage.
Steve - Burberry: I suppose Burberry, we knew, you know, the world was becoming more digitized, there was a lot of opportunity to sell online, but not necessarily to sell online. I always look at online as your window. And windows are 60%, they used to say, of a customer coming into the store. So windows for a lot of retailers was quite important to make them look stunning and also to be enticing, to draw the customers into your workspace so that they can obviously have a look around. but I've always said to, you saw it as a platform as a window. So instead of reaching a couple of thousand people a day that may pass or frequent your store, you now have millions of people clicking on your website, looking at your products And then you couldn't do that before digitalization.
Colin: But for digital transformation strategist, Craig Crawford, the website wasn't just a window into Burberry's physical space - it represented a core part of the brand.
Craig Crawford: We looked at the website as the flagship store. And when you think of the website as your flagship store it's a strategic way of thinking. It shifts the perspective. Brands today will say things to me like "My website is only generating 6% of my revenue, so we're only giving it 6% of our advertising and creative budget." and I said, "are you kidding me? How do you think they get into your store? How do you think they'd become aware of your store? Digital is discovery." You know, 80% of us, or some crazy number, won't go into a store if we haven't been online first, right. And forget the pandemic, forget the fact that now we, we have no choice. This is before the pandemic - the numbers were quite high and we're influenced by what we see online. So we wanted, and we understood that flagship store was our place to tell our message.
Colin: That message would soon become a two-way conversation.
While other luxury brands didn't see the potential, Burberry were early adopters of social media - taking to Facebook and Twitter, as well as creating their very own image-sharing initiative: Art of the Trench.
Craig Crawford: Well, we embarked on social media journey very, very early. We, we had to buy back all of the fan pages that existed on Facebook. Lots of Burberry pages created by fans of the brand. So we didn't start that, the fans of the brand started that. The consumers started that. So we pulled those together and then we did a big announcement. But at the same time, it was early days for Facebook and we didn't know if it was going to stick. And so the, the marketing and the creative media team wanted to create our own social community, our own social platform. So we created Art of the Trench and we hired Roger Schulman, who was a sartorialist, who to do the first 100 photographs. And then we invited people to post pictures of themselves and share them. We, we built this platform so that you could sort them by color, by length, by, by, by weather and region. But you could like them, you could comment on the photos and then you could share them amongst your social media. So at that time, I think it was Twitter and Facebook. And again didn't matter, gender didn't matter age, right? It was, it was about. How you wore the coat, the expression of yourself through the, the Burberry trench coat. And, and, and that was very, very important for us because we weren't sure if Facebook was going to stick.
Colin: To fight back against online competition, Burberry knew they needed to do more than just maintain an online presence.
The stores themselves would have to adapt and upgrade to make them worth visiting during the digital revolution and beyond.
They wanted to create an experience - the likes of which the public had never seen before.
And they decided to go big.
Steve - Burberry: One of the things that we wanted to do was to obviously enhance imagery. Initially in most stores, we had static sort of, posters throughout the stores. But of course you're kind of limited how often you can change those. We felt that we want to do sort of enhance that by putting in large screens. So A - you can have imagery, but also video for the first time. So we, we chose selective stores around the world. It was a very, very large pilot to actually put huge screens, I mean, I'm talking large screens possibly, you know, about 10 foot wide. And lot of that was actually linked linked in with sound. Initially we had no music, music came after, then subsequently we enhanced the music by putting in proper you know, really high quality sound system so that we can play good music. And the music kind of evolved. We used to have at the time, different music for the morning. Different music for the afternoon, a different music for the evening. And then later on, of course we brought in the video screens to the store, which was complete, which was quite revolutionary at the time. I don't remember seeing much of that in any of the stores. We played naturally, obviously, a lot of fashion imagery, but then when we had runway, for instance, we would actually then broadcast the runway clips on there as wel,l or selective. And the range was quite wide. So we would made sure there'd be videos for women's wear ladies wear accessories. And then we opened, Regent Street and it was a lot of work done in setting the new stepping stone as to how Burberry should go forward. And for that, we actually put in screens into fitting rooms. So that, and, and there were RFID tags on the products, and the idea was that when a customer picked the product and wanted to try it on, a video would then start to play with that particular product that you've actually introduced into the fitting room, which was absolutely revolutionary, no one actually ever, ever done that before. And customers found that really, really exciting because we will actually let them go in and they'd come out and then they'll say, "Oh my God, I've just witnessed this." And then we then obviously talk to the client and explain. So they love that.
Colin: The groundbreaking work Burberry was doing to enhance their customer experience wasn't just about introducing flashy tech.
Everything from content creation to logistics needed to be developed in order to support their in-store digital experience.
Craig Crawford: Everything that went into the Regent Street store went through a special process in supply chain. Think about this for a minute. It's all, all operational stuff. People talk about the technology. But if the product didn't have the RFID chip and that wasn't connected to the backbone of technology and there wasn't content, then there'd be nothing to play, right? So the creative media team had to create content for the product that was going into the Regent Street store and the supply chain had to tag that. But when you went in front of mirrors in the dressing room, you would see craftsmanship information. You'd see the runway show, you'd understand aspects of the clothing. There were trays that you could put accessories on to see how things were made. And, and the British craftsmanship that went into that. So all of this immersive interactive experience. But if you think about it, we were still celebrating the product. We were celebrating the heritage of the brand. We were celebrating the craftsmanship. We weren't just showing you some augmented reality technology experience for the sake of having an experience in the store.
Colin: Competitors started to notice Burberry's work and soon followed suit, reimagining their websites and enriching their in-store experience.
Burberry knew that to keep ahead of the competition they wouldn't just have to keep up with emerging trends and technology, they'd have to innovate.
And with their in-store and online practices now at the cutting edge, they looked to how they could enhance the customer experience further by combining the two.
This is where Burberry's foray into unified commerce began.
Steve - Burberry: Burberry has always had a policy a "never out of stock" mindset. When a customer came in, we would train the team, never to say no to a client because the customer will pick up a product and say, well, I'd like this and some customers and then if we didn't, we never had that product, and we have other product we would offer. Now there'll be occasions when the customer will say, well, I need this particular product in my size. Then the staff were trained to actually look elsewhere. So we will look to other stores, including Europe. And if we didn't have that also in other stores, there was an opportunity to see if it's available online and sell it online to the customer. And we can bring the product into the store, or we could deliver it to an address of their choosing. And that was something that was quite revolutionary, so that we were able to sort of maximize your sales. And at the same time, the customer didn't leave the store disappointed because they couldn't get what they wanted. I think it was 2017 where Burberry looked at actually expanding the range again, you know, with a view of "never out of stock" mindset and they consolidated the inventory of select stores with their online, because there were occasions when customers will try to buy something online and it wasn't available. So the idea was that what we will do is that we link the inventory of the select store all to that online. So if the world store had one stock, but there was another six available in different stores, then you'd have seven. And to do that, obviously a lot of work. And so a lot of software was installed, a lot of training with a team. And then eventually it was, it was rolled out. And then the staff would then go around every day on the hour, every hour, and they will go around and look for the stock within the store, pick it. And at the end of the day it will then get shipped out to the world to, to the online store. Then it subsequently went to the, to the customer. Moving forward, was that the actual stores will pack it for the customer so that when you got the order and it came to your store, you would pack it and ship it directly to the customer. So you cut down the actual lead time.
Colin: Enhancing their online presence, updating shop floors and revolutionising the way retailers thought about their sales channels were just a few elements in Burberry's development plan.
And with customer service being prized so highly by the brand, the next logical step was to strengthen it even further and enhance it through their use of technology.
Craig Crawford: Put iPads in store, that was a tool that allowed them to not just show what was online. It became a full concierge service. You know, we can order you a taxi. We could, you know, check on theater tickets or dinner reservations or something for you in the area. Because we have a lot of traveling consumers coming into London. We allow the associates to use those iPads as best they saw fit to allow for a luxury experience with that consumer. And at the same time, we wanted to be able to communicate with them. So we, we, we had what we call Burberry chat, they could talk, they could chat. The executives did the same people created groups. So if someone walked into Regent Street and only spoke Russian, they could put a message up, "I have a native Russian speaker. Can anyone assist?" Another store could call or dial in and say, "Yes, I speak Russian. We can help this consumer." Immediately those things started happening.
Colin: With Craig and the digital transformation team providing the tech and the vision, Steve and other sales managers are able to focus on their core competency: incredible customer service.
Steve - Burberry: It wasn't just about selling. It was a little bit more than that. You have to do all the little extras for the customers. And that's what in-store experience was all about. It wasn't just about making a sale. It's more about the customer. So it was all about enhancing the experience and customer expectation is so much higher these days. If you look at where customers shopped 20, 30 years ago, people's expectations are so much higher because everybody that comes into the store wants to be wowed by the, actually the ambiance of the store, the interior design, for instance. You know, when Burberry Bond Street opened. It was quite, you know, ahead of his time in terms of design. You know, they had, I remember in the store, luggages that were actually fixtures and people will come in and would say, "Oh my God, I absolutely love it. Can I buy it?" "I'm very sorry, it's not for sale". And that was what was actually amazing about it was because you're actually exceeding customer expectation. Now, I think you get that with most stores. A high-end store would be offering you that. And so now the thing, the expectation is, well, how do we exceed that? How do we move on from that? I think one key area I would always say is customer service is actually key. Your team are ambassadors for you. They know your customers. They will go, you know, the extra mile to make sure your customer has a great experience. You can see a sales person or a manager. It goes the extra mile because they care. It's not just a job, but it's a little bit more than that. So, I think a lot of high-end stores offer all these experiences and they're looking for new ways to actually improve on that. I think that should be the fundamental key to giving a great experience to a customer.
Colin: Steve and Craig gave us a great insight into the issues retailers have faced over the last decade and how they've risen to the challenge.
But what have things looked like on a macro level?
Here to give us a brief, recent, history on the high street is Clare Bailey, otherwise known as The Retail Champion:
Clare Bailey: Over the history of the high streets in the UK, it's quite interesting because we've had some major events happen that have transformed momentarily the landscape of the high street, but then it's all stabilized again. I'd go back several hundred years to start with, to say anybody who wants to talk to me about the death of the hight street is going to have an argument on their hands because high streets have been with us for literally hundreds of years and will survive long beyond our existences. We're going through a period of immense change and there's been immense change that's impacted our high streets over those hundreds of years, but they've bounced back reshaped themselves and showed that they offer relevancy to the community that they're there to serve. And I suppose we do look back at just about 11 years ago, I think now, and one of the most significant impacts that ever happened in our lifetimes was the collapse of Woolworths, when some 820 stores all shut within 40 days across the whole of the country. And people thought that there'd be no recovering from that. But 10 years on, it was fascinating because I think only five of the stores were never reoccupied. Some significant percentages were reoccupied with almost exactly the same as Woolworths, really things like B&M or discount stores and so on. Variety retail. Others went to convenience grocery, but then others were more interesting. They went to more social value and community use things like nurseries galleries and event spaces. But what was interesting was that what we thought was a catastrophic moment in time then proved, over time, not to be.
Colin: The global financial crisis and the collapse of one of Britain's high street institutions might not have been a pre-cursor to the fall of in-store retail after all.
Since then, we've seen ecommerce go mainstream, and it hasn't had the devastating effect we might be lead to believe...
Clare Bailey: A lot of people hide behind the ecommerce as those that in its own right has caused some collapse of the high street as a whole. But actually up until January, 2020, ecommerce had stabilized and really only represented 18.6% of all retail sales if you look back at the ONS figures. Now I think that's somewhat understated because it misses things like, if you could call it ecommerce the small independent boutique that maybe sells through Facebook and takes a PayPal payment, but doesn't necessarily have an ecommerce sites of their own, that's still digital retailing, but nonetheless, it had been stable for quite some time and even dropped back a little bit. And then of course, with the impact of COVID it jumped dramatically within the first three months of 2020. By April, it was reported to be over 30% of all retail sales. Now that represented 10 years worth of growth in just three months. Which of course in any industry is difficult to deal with, but the high street was already suffering some challenges at the beginning of the pandemic. So I think that sort of puts ecommerce into its place as it were. It isn't the most significant driver of retail collapse or success and failure, but it is an essential and integral part of what retailers do.
Colin: Clearly, ecommerce isn't the high street assassin it's slated as, and the recent gigantic leaps in digital retail spend isn't due to a nation turning its back on the high street, but rather an international stay-at-home effort to help end a pandemic.
In fact, this could be an unique opportunity for businesses to adopt Burberry's unified commerce approach, using their online channels to complement their brick and mortar stores.
This has the added benefit of improving resilience.
Our research found that 50% of Adyen’s unified commerce customers saw transactions remain stable throughout the pandemic.
Clare Bailey: Well, I must say we've been banging on about digital transformation and a cohesive holistic experience, whether online or offline for about a decade. And in many ways, I'm quite encouraged that the pandemics forced the issue and actually made retailers think this isn't for tinkering with anymore. We've just got to get on with it and make sure that we are offering one brand experience. So whether I talk to you through Facebook or whether I'm looking at your ecommerce or whether I'm in the store being served by a holographic virtual assistant, who knows! The immersive experience that delivers the brand doesn't need to be considerate of channels. It needs to be omni-channel. And that that brand experience has to be consistent, cohesive across all channels, such that the customer can bounce between the different environments and they don't feel any friction in the process. If we look at some of the success stories, one of them is of course, Primark. They don't choose to use ecommerce so they have suffered losses, but what's fascinating is their social engagement and the fact that they are constantly in conversation with their customers. And I think this is the, the, the ingredient of success is really knowing the customer being relevant, being engaging remaining in the conversation. So even though they never had ecommerce, they were the one retailer that sustained queues after the first lockdown reopening throughout the period. Right the way through till September. And I suppose then on the flip side what's failure? Well, it it's Debenhams and Arcadia, unfortunately. For various reasons things were done to those businesses by the owners and the investors that resulted in them not having the financial resource to transform both the customer experience in store and to embrace digital in a rapid enough manner. So that they became very quickly dated in contrast to the competition and they didn't have the resources to transform when they really, really needed to. So it's a bit of a mix of poor financial management, but more importantly, not really sort of looking ahead to the needs and wants their target customer and making sure that every aspect of their business from product to prices, promotions, customer experience, and digital and physical integration, if that wasn't right, they were on, they were going nowhere.
Colin: But the high street isn't all about fashion and luxury retail.
Food and beverage retail has gone through some transformation too, with consumer habits and expectations changing as well.
vox pop 5: When I was a bit younger, I might go out with my wife to the restaurant. Now we're more likely to stay home and perhaps get a takeaway instead.
vox pop 4: Takeaways every so often. Meal kits. We've used Hello Fresh a couple of times.
vox pop 1: With Deliveroo and Uber Eats, you can get everything. So it used to just be pizza or Chinese, maybe an Indian. And now you can have anything from, from all over town. It's fantastic.
Colin: In line with what our consumers on the street are saying, our research found that 27% of UK consumers use takeaway apps more than they did before the pandemic.
But, for Clare Bailey the rise of delivery apps like Deliveroo and Just Eat, and the boom of the boutique food provider is just one part of the story.
She notes that there are a couple of key changes in the way we're choosing to dine.
Clare Bailey: I think that the, the food and beverage side of things has experienced something similar, but slightly later to what retail experienced. So there was this huge growth in casual dining where it was not that expensive, but not like cheap. And then we saw a collapse of a number of those chains, which was an interesting observational factor because we saw similar the middle market getting squeezed out as customers polarized. They'd rather potentially eat out less frequently and do something really special and go for boutique food offerings or celebrity chefs and those kinds of things. But I mean, even Jamie's Italian, perhaps wasn't boutique enough, so people would trade them down to cheaper options or up to more expensive options and left the middle with no customers. And that's been apparent for quite well. The pandemic has seen us grow our love of the "in-sperience" as opposed to the experience. They're having it in. And I think that there was something like a 50% increase in takeaway sales in the UK in 2020, which suggests that we can have the "in-sperience" the Netflix or the download or whatever it may be. And we can have our takeaway, we can actually have quite a nice time at home and pay a modest amount. So I believe that will be quite important going forward. So, so if you're a boutique food provider now, then you might see a massive, massive increase in sales in the coming year. But similarly, the delivery apps, they've underpinned the ability for us to have all these takeaways that we've been having. I think the 50% gross was just me. And I think that was a trend even before we were told we couldn't go out. So I would be quite concerned for anyone stuck in the middle. So for those who are stuck in the middle, who are listening now, either go down and go cheap or go up. Improve your experience and make it as upmarket as possible. And if a restaurant can present to the customer that not only do they offer a really boutique experience, but they try to buy in-season and very local, maybe even from their own allotment, that is something that people will pay more for.
Colin: Clare's given us a snapshot of just how much the retail and food and beverage industries have changed over recent years, and what's immediately apparent is that adaptation is the name of the game - as COVID made only too clear in March last year.
And as commerce becomes ever more unified, it’s time to tear up the traditional playbooks once and for all and prepare for an age in which every interaction is digital and every experience matters.
But what do retailers need to do to update their sales channels and satisfy the expectations of a consumer whose shopping habits have been altered by a pandemic?
And how have businesses had to react and adapt over the last year to get them through lockdowns and prepare them for the future?
Saad: 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.
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 digital transformation and adaptation, visit adyen.com/ukretailreport and download Adyen’s latest research report.
A big thanks to Craig Crawford, Steve Ibrahim and Clare Bailey, for their contributions today.
And join us next time as we discover how the wake up call of the pandemic put sales channels in flux.
We'll dig deeper into unified commerce and learn how sales data can be used to improve customer experiences.
I’ll see you then!