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ECEW 2013 Jo Moran - Shop Your Way
The document discusses the multi-channel customer experience at M&S, highlighting a significant growth in online and multi-channel shopping, with a revenue CAGR of 25%. It emphasizes the importance of enhancing customer experience, investment priorities, and integrating campaigns to inspire customers. Additionally, it notes the increasing technology adoption among affluent customers aged 55-65 and the opportunities for M&S in the evolving retail landscape.
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ECEW 2013 Jo Moran - Shop Your Way
- 1. 1 The Multi-Channel CustomerExperience Jo Moran Head of Customer Service 1
- 2.
- 3. Multi-channel business today £560mrevenue CAGR 25% Over 12% of GM sales (4% 4 yrs ago) 2% of food sales High proportion of orders touch a store Profitable business 3
- 4. We are No.3 in online clothing & footwear... 4 6% v 11% in store 6% share online, 11% share in total6% share online, 11% share in total Source: Kantar Worldpanel data to 2nd September 2012
- 5. Customers’ experience ofM&S online reflects this heritage Customers rate as excellent 5 This has determined our investment & improvement prioritiesThis has determined our investment & improvement priorities Source: ABA
- 6. 6 8%8% 16%16% 2009 2012 We’ve seengood growth in the % of multi-channel shoppers M&S online customers M&S multi-channel customers Total customer base
- 7. Owns lots of technology Laptop 79% Smartphone 52% Tablet 35% Affluentfemale Typically aged 55 - 65 The multi-channel customer at M&S 7 Banking 67% Ticket/Travel 65% Uploading photos 46% Facebook 42% Downloading music 22%
- 8. Pace of changewill continue to grow
- 9. Multi-channel is ahuge opportunity for M&S More reach More spend per customer New points of entry to the brand Only at M&S Work our store estate harder
- 10. Seizing the opportunity Aworld class infrastructure Multi-channel thinking Embracing experimentation Shown the way by “Shop Your Way”
- 11. Re-inventing shopping More dialogueand inspiration More choice and better availability Easier and more convenient New opportunities for employees 11
- 12.
- 13. Inspiring through integratedcampaigns First integrated campaign Product plus editorial view Reacting to customer lifestyle 13 50% increase in online coat sales50% increase in online coat sales
- 14. More inspiration instore
- 15. More choice andbetter availability
- 16. Easier and moreconvenient Lead time down from 4 days to 1 468 stores including Simply Foods More to come as we launch EDC 16
- 17. Easier and moreconvenient
- 18. Helping employees offerbetter service Engaging Training Tools for the job Updating
- 19. Joining it upfor the customer
- 20.
Editor's Notes
- #2 Explain background and role Want to talk today about creating a multi channel customer experience at M&S First thing is to start with understanding how customers are changing and that pace of change – show a short clip
- #3 Quite simply our customers are changing and we have to change with them (if not be half a step ahead of them.) The pace of change is getting ever faster I want to play a short video to give you some context
- #4 You can see how our customer has changed – I want to give you some context about the change we’ve seen as a business during that time. So what does our business look like today – or rather at our last year end in 2012. We had £560m of [ex/inc] VAT revenue last year. Over the last 5 years the business has doubled in size. UK represents 95% of this, but we do business from the UK website with over 80 countries worldwide. Biggest growth has come from General Merchandise which is now represents over 12% of overall GM sales, compared to just [4]% four years ago. We do have a food business online – this is effectively flowers, wine and a food entertainment offer orderable online but picked up in store. These are all good businesses, growing steadily as a result of us launching several initiatives in the last year. We don’t do groceries on-line, and we’ve have said before that is not on our agenda. What is really encouraging is the high percentage of orders which touch a store – around [60% of orders, 40% of sales]. By touch i mean are either ordered or collected in a store. We find this encouraging because it shows us the customer appeal of a multichannel approach The result of all this growth is that some of our key categories are becoming pretty big in their own right eg: Back To School online take 26% UK sales With dresses – its an amazing 1 in 3 M&S dresses is sold online, and womens shoes is another amazing 1 in 3 pairs are sold online Suits, another area where its quite a big ticket purchase taking consideration – 18% of sales come online New flatter me bra – 20% coming from online own rapidly – both as a result of channel shift and the investment we have been making in new initiatives The multi-channel business today is profitable on a fully costed basis, which as you know cannot be said for many online retail business, and I should know...But we’re not going to talk numbers today, as you know we’re in closed period.
- #5 Today we are number 3 in the online clothing and footwear market and that's up from number 4 two years ago. Its worth dwelling a little on who is in this top group of online clothing & footwear retailers. The top six consist of: Reformed traditional catalogue operators – who have been losing share as struggled to stay relevant New pureplays who have generally been gaining share, tho in the last couple of years actually only holding share And two bricks & click operators – Next with its catalogue heritage , and ourselves – both of whom have been growing. But arguably we are the only ordinary (in the sense of no catalogue heritage) bricks and clicks retailer who has made it into this top group As i’ve said, there have been winners and losers over the last few years – for me, its pleasing that we have grown share in a rapidly growing market, and have 6% today. This compares to an 11% overall share, so we’ve got a big opportunity to close the gap and see good growth. As you know a competitors has it the other way around. We have recently taken over the no 1 spot in the 55+ market which is really important given our customer base.
- #6 This is our customers’ measure of our online service which they rate as excellent. Amazon does a good job but the existing infrastructure doesn’t help deliver an inspiring shop and restricts our availability. To improve customer satisfaction and grow sales we have to work on what our customer is telling us. And our customer is telling us that we can do better. This has informed how we’re thinking about and developing the business By improving our availability By enhancing our delivery proposition improve our shopping journey and make our website more inspirational (today customers see it as more functional than inspirational)
- #7 Whilst front and back end not market leading, we have benefitted from the channel shift which has been happening in the market, and the initiatives we have been working on have delivered. Back in October 09 we showed you this chart. At the time 2.3m of our 32m customers shopped with us on line. 3 yeas on and this number has grown by over 90% to 4.4m Introduction of Multichannel has since added another 1m customers
- #8 If we want to create the right customer experience that fits with the brand we need to know who our customers is: There’s sometimes a misconception that the slightly older, more affluent UK customer (i.e. the core M&S customer) is not moving with pace online But you can see from the film I showed earlier –the biggest online usage is amongst women aged 45-55 and over 80% of over 55s are online . Let’s look at one of our core customer groups – female, typically aged 55-65. 80% of this group own a laptop 52% own a smart phone One in three has an iPad/tablet device They are embracing and using technology – she sees online as a fun, inspiring and informative experience. Around 70% of this group bank online, 65% regularly use it to book tickets and travel, around half uploading photos, 42% using social networks and a quarter downloading music And they are using M&S Our customers are already increasingly relying on the convenience of online – 1 in 3 dresses, 20% of suits, 1 in 3 footwear are bought online
- #9 This rate of change will only continue The drivers being: Demographics and economy Supply side improvements Impact of known technology Unknown technology? We’re expecting online’s growth to continue strongly – today e-comm is what around 9% of total retail (depending on which source you use) and all the various industry pundits are producing forecasts which show it continuing to grow at a steady pace over the next five years or more. This particular graph is based on some amalgam of industry pundits. I’d have no reason to disagree. For me the factors that will drive it include: Customer lifestyles are increasingly time pressurised – convenience is the biggest single reason cited for buying online Over the next ten years, teenagers, who are digital natives, will become consumers of our products, and our core older customer will become less mobile finding remote shopping more appealing Tough economic times are forcing customers to shop around – the internet is an easy way to identify bargains, plus there is a huge market for online discount codes
- #10 While we have a national network of stores, there are plenty of places where an M&S with a strong clothing offer is not exactly around the corner. With our well known brand, customers trust us to shop online. We know customers who shop in more than one channel are worth more to us – and this relationship appears to hold true as they add more channels to their repertoire. We attribute this simply to making M&S more available and more accessible – giving customers more opportunity to spend with us. We also know that online has a slightly different customer base to our stores – a little bit younger – which is clearly helpful in terms of giving us more entry points for customers to start shopping with us. Our overall proposition is well suited to a world of the web and multichannel because the vast majority of what we sell are products that are only available at M&S. We work very hard to ensure that our products represent unique quality, value and innovation – and by their nature they are significantly less comparable or commoditisable than certain other categories. This is a substantially better place than if we were selling branded commodities
- #11 All of us in the room know the value of multi-channel - whether you’re a start up, a listed business or a pure play retailer - but I want to give you some quick context about M&S: We’ve made ‘multi-channel ‘ a strategic priority – with a commitment to become a leading , international multi-channel retailer by 2015 But to achieve this we have to move from it being just a strategic priority and make multi-channel ‘how we do business’ at M&S The good news is that being multi-channel requires us to continue doing the things we do really well – really well. Delivering first rate customer service Creating great products And having stores in the right locations But it also requires us to think and behave differently - And make significant changes to our infrastructure: We’re a business with a 129 year history in store trading And our current online offer is built on the Amazon platform. Our supply chain and logistics operations are built to support our large scale UK network of 700+ stores And we have over 70,000 UK employees – across store and office locations - each of who need to understand and embrace this changing customer behaviour into their ways of working - be it a marketer changing their production schedule to a warehouse manager moving to single line accuracy .
- #12 By reinventing shopping - we believe we are creating a better shopping experience at M&S. Better in four ways - More dialogue and inspiration because we know customers are turning to retailers (as well as their fellow customers) to get more inspiration and ideas about outfits and trends. More choice and better availability – because we know online has fuelled customers growing expectation to find a retailer’s full catalogue and get exactly what they want – when they want it. Making it easier/convenient to shop - as we know customers want to shop with us in a way that suits their lifestyle New roles for employees - multi-channel means more opportunities and empowers employees to become more knowledgeable and helpful for customers. Important because know that great customer service is even more important when budgets are under pressure
- #13 More Dialogue & inspiration In the past – our methods of communication with customers has been a one way projection - be it an ad or piece of direct marketing – it presented customers with an image of M&S that was controlled by us. Social media has changed all of that - today our customers expect to be able engage and interact with M&S in a two way conversation Our Facebook page has over 1.2million fans and over 100,000 followers on Twitter It’s not just a news feed for customers – these live interactions are helping shape our product development, revolutionising customer service and delivering more topical, agile promotions, which can be applied for short windows of time. Percy Pig and Penny’s Flavour of Love campaign – In the run up to Valentine’s Day we asked M&S and Percy Pig Facebook fans to pick the flavour of the heart-shaped sweet that will go into the new Percy and Penny Together At Last bags. Over 26k fans voted and hotly debated what their flavour of love should be. The winning flavour was “Strawberry Fields” with 9.7k votes and the product is now going into production to be sold in the summer. Due to the popularity of all our Valentine’s Day campaigns on Facebook our page content reach grew exponentially week on week - 2.9M people were reached (+360% WoW) and 77k people are actively talking about us (+227% WoW), and our Twitter share of voice increased on the week from 6% to 9% versus food competitors.
- #14 In Autumn 2012 we launched our first ever truly integrated campaign The campaign had a new look and feel – using models who demonstrated a greater diversity in terms of age and shape – better reflecting our broad customer base The new look was a response to customer desire to see how they could wear the latest styles & trends Integrating technology helped us to really bring this to life for customers Our mobile app – has a built in function called M&S live – which effectively utilises a technology called Aurasma – where by you can simply hold your phone over an image and it will spark a video to come to life on your smart phone screen. In the case of our campaign – the product shot generated a catwalk style demonstration of the clothes – so customers can really see how the garment moves and fits. This editorial elements gives the customer a reason to engage using the device they have in hand The result was a 50% increase in online coat sales
- #15 The appetite for inspiration extends into store shopping experience too - as we know customers are turning to retailers to get more ideas and insight into the latest trends. Here is just a selection of the new initiatives we’ve introduced to help excite our customers in store. We have introduced Digital Inspiration screens - 70 inch screens with the latest catwalk trends in womenswear and the current looks in Home. A Virtual makeover - ‘a virtual try before you buy’ allowing customers to experiment and play with dramatic make up looks. (10% of cosmetic sales via virtual makeover) This is now in 5 stores as well as available online A home multi-channel hub which includes ‘How to get your perfect night’s sleep’ – personalised online questionnaire to find perfect pillow and duvet combinations for you and your partner (taking into account sleeping position, allergies etc). - Style Online – trialled in 3 stores last year we’ve extended our trial into 15 stores .This dedicated boutique area uses multi-media technology to provide customers with style inspiration and allows them to browse and order from the full M&S fashion range. Using large interactive touchscreens, shoppers can browse the seasons’ key trends; picking out their favourite items to create complete outfits. Catwalk style videos provide further inspiration, with product samples of the latest Limited Collection, per una and Autograph ranges available for customers to see and feel before they buy
- #16 2 . Improving choice and availability across our store network. Whilst Style Online helps us up weight the style offer within our smaller stores – across the network we’re introducing technology that enables us provide customers with access to our entire product catalogue. This includes our browse and order points. With over 150, across around 60 stores the points are designed to look & feel like technology our customers are familiar with (giant ipads on a stick). Signage encourages customers to ‘discover more’ be that wider colour, cut or sizing options - at these order points. Customers can then place their order for delivery back to the store or home. At our flagship multi-channel store at Cheshire Oaks these are used over 3,000 times each week on average We’ve also introduced around 1,500 iPad-equipped customer assistants within our stores. The equipment enables us to offer greater assistance in size complex areas such as tailoring or lingerie and engage with customers to offer a solution when they may have walked away from the store.
- #17 3 . We’re making it easier & more convenient for our customers to shop with us in a way that suits your lifestyle. Or put simply – helping customers get what they want , when they want it. wherever they are! I think this boils down to two areas - delivery & devices Shop your Way – is our delivery service - which I’ve told you about already. Now in over 450 stores we’re supporting the service with better signage throughout our stores. We’ve also introduced new branding into our order & collection desks as we’ve rolled out our new store format to make it more prominent for customers. With Christmas fast approaching - we have vastly improved the service –and this week we’ve launched free next day delivery to store. Customers can now order by 12pm and will be able to collect in store from midday the next day
- #18 As I mentioned – it’s also about devices – particularly mobile & tablet: M&S was the first major UK high street retailer to launch a fully transactional mobile website when we went live in May 2010 Since then we are continuing to grow at over 300% year on year in terms of traffic and the revenue is also in very strong growth – accounting for a disproportionate share of our online growth relative to the traffic represented by the channel. Mobile and tablet combined now account for around 17% of our e-commerce sales. So clearly we are reaching new customers and enabling new, just in time or more frequent shopping moments for customers on the go. The top 5 products on mobile are different from those of the full website: Flowers, TVs, School Trousers and Tummy Tuck swimming costumes are just some we have seen. Why? Flowers are the ultimate ‘gift on the go’/’last minute purchase’ and mobile makes this very easy when you have forgotten a key date or need to get back into someone’s good books! We often have TVs on our deal of the day – and this is one of the most frequently visited pages after the Store Finder. Boys school trousers – well, for a busy mum, her mobile is her saviour and her key tool – why not order trousers while waiting outside the school gates for little Jamie? However, she is also buying for herself, and we ran many full page ads and posted frequently on Facebook about our miracle swimsuit, which has over 250 mainly 5 star reviews – shopping for this key item on the most personal and immediate of devices means she will look great when she finally gets her well deserved break.
- #19 Multi-channel means more opportunities for employees, empowering them to become more knowledgeable & helpful for customers. For example: We’re making it easier for them to provide on the spot assistance to customers: We’ve also put ipads into some of our bigger stores to help our assisted sellers give a better service – so for example we have staff who are focused in our mens suiting. Here they’ve found i-pads of enormous benefit – as part of the overall journey, helping a customer find exactly what they want, tracking down particular sizes or trouser lengths, and then closing the sale. We’re giving employees bespoke training: This includes more access to trends information . We’re also using technology to make it easier for employees to access information, particularly about products and trends. Our product developers record short videos about new products – called “knowledge to share”. Employees in stores love this but it meant they had to go off the sales floor to view it. Now we’ve put it onto an app, which means it can be passed around on an iphone amongst dozens of staff, without them ever needing to leave the shop floor.
- #20 Of course - being truly Multi-channel is not about launching new technologies as an ‘add on’ to the existing business. We have to join up all of our channels – from social media to in-store order – so that customers experience one M&S. Currently around 35% of our customers shop with M&S via more than channel – and this will only continue to grow As we provide more options the customer does not simply replace shopping via the old channel with a new channel – they simply shop more I think it’s a bit like the old Coke slogan – ‘Always in arms reach’ – we’re making just made ourselves more available/accessible – where customers now have the whole store in their pocket 24/7. Being truly multi-channel is not simple – but it’s necessary Every retailer has to flexible, agile and keep an eye out of the window – ensuring we in touch with the world that we and our customers are operating in. That’s one of the reason we’ve sponsored the Institute of Customer Service research into the future of customer service (A blueprint for 2020) – forcing us to keep asking the questions about the scenarios we face – be it the future skills we will need or the technology & mobility required. It’s a journey we’re firmly on and we’re accelerating with pace. With strong foundations for a multi-channel future And by putting our customer at the centre of that journey - we’re learning more and more about them on the way, making sure that we continue to develop a customer experience that’s not just in line with the M&S brand but more importantly our customers. THANK YOU