Recently, e-commerce specialist - Andy Powell - sat down for a chat with Heidi Armstrong on Sky News. They discussed some of the most pressing issues for online retailers today, including how to deal with cart abandonment, how to create a great omni-channel retailer and the keys to successfully personalising an online experience. You can find the full video and transcript below.
Heidi Armstrong (HA): Have you ever spent time shopping online only to decide at the last minute that you're not going through with purchase. I know I have. In the retail industry this is called 'cart abandonment' and according to retail operations expert, Andy Powell, it is happening a lot more than retailers actually want. Andy works with businesses - both big and small - to help them combat this problem. He joins me now to enlighten us all. Welcome Andy to the program.
Andy Powell (AP): Thank you very much for the introduction Heidi, it's a pleasure to be here.
HA: Great. Well I should say, you're a judge at the online retail awards and you've been doing that for how long now?
AP: It will be five years out of seven this year. I started in 2010 by chairing the awards panel.
HA: So you know a little bit about retail, you've been in retail for about 12-13 years prior to going into consulting, is that correct?
AP: Yes. About half of my career has been in retail - line management, operations and supply chain and IT - and the other half consulting to retailers.
HA: So now you tell everybody what to do and what not to do and I'm sure you get some great insights from the awards submissions?
AP: Judging the awards every year is a wonderful way to keep in touch with the best of Australian online and omni-channel retail. By omni-channel I mean, of course, those retailers that have both a physical presence and an online presence. It's really a joy to do: you really see some wonderful things and it allows you to understand the trends in the industry.
HA: I mean that is a trend, isn't it? We used to all talk about digital, but now we all talk about this omni-channel where we know that consumers are having an experience online and offline and want it all to be quite seemless, so what are the tricks to making sure it's a good one?
AP: Retail customers don't see a channel. They just see a brand and they want to engage. So the trick is really to view it from the consumer's perspective, rather than set up these distinctive and distinct channels because that just gets in the way of the experience. If you're a high fashion retailer, you need to have a high-fashion sensibility on your website...
HA: A high fashion sensibility - what does that mean?
AP: If your brand and your products are beautifully merchandised in the store, they need to be beautifully merchandised online. If you have a high service model in the store, whereby you have a lot of customer service staff and they're really able to engage with the consumer, you have to try to find ways to take that online and there are lots of digital tools and techniques that retailers use to really get that deep, immersive engagement with their consumers, even though it's online and the sales assistant isn't there. Of course, if something goes wrong with the sales assistant present, he or she can rectify that and help you proceed to purchase. Online, it's harder and once you've annoyed the consumer or lost them, that's when cart abandonment occurs.
HA: So, it's an interesting concept that when you're in, let's take fashion as an example, you get that personalised experience where someone says: "Oh you look fabulous in that" and they go "No, your bottom doesn't look too big at all". So how do you get that experience happening online? How do you create that experience online?
AP: There are some great retailers out there and I'll try to infuse this with a few examples. One of my favourite retailers is Birdsnest and Jane Kay and her team. They're an online retailer and they also have a small store in Cooma in the Southern Highlands of New South Wales. What they've done is they have a 'configurater' online which is a tool that in which you can put your preferences, your style, your body shape. If you remember a few years back there were two ladies called Trinny and Susannah who talk about how you dress for your shape and not your size...
HA: For your body type, or something.
AP: Correct. They've taken that and they've allowed their consumers to configure their profile online, not only in terms of social but also their physical profile and their preferences and that is the template against which they can shop the site. So they won't be brought items that are irrelevant to them because they've really deeply identified their preferences online.
HA: That's really interesting. So is it about going "well my preference is for..." - and I don't know a lot about fashion, Andy I'm just saying that now - but my preference might be for handbags that are a label name, for example. So you'll only be shown high-end hand bags?
AP: Yep. You might have Gypsy style or you might have city-chic style...
HA: You know more about this than I do (laughs).
AP: A bloke shouldn't know this really, but I just love good retailers and Birdsnest are a great retailer. They really invest in the time and the tools online to get to know their consumer as though they were talking to them in the store. That's what makes a good omni-channel retailer.
HA: So this concept of treating your customers as friends. Does that go beyond what you've just explained there?
AP: I think it does, if you think about the change in the nature of retail over the last 20 years. 20 years ago the retailer had control. They controlled the merchandise, they put it in a place they controlled and they knew all the information about that. Now, all of those things have disappeared. As a consumer, I can access any merchandise from anywhere in the world, I don't need a store to do it and I probably know more about the merchandise when I walk into the store - certainly if it's a complex purchase because I've researched it online. In that vacuum of power, the retailer has to redefine their role and their role is to be a friend to the consumer and help them in their whole purchase journey. One of the key things we're seeing is it's not just around the right products merchandised well online, it really is the whole delivery and experience, including the fulfillment. In a sense, fulfillment used to be - 20 years ago - back of house, nobody ever saw it, it was delivered in bulk to the back of the store. Now it's delivered in penny-packets to my house, in a parcel, with a hand-written note and almost sealed in a bow.
HA: Really? Where do you shop? (laughs)
AP: Well, it just depends what I buy. Birdsnest are again, brilliant at doing that. T2 is another retailer that really does that. So what they're doing is crafting or curating the delivery experience to give you a moment of delight when you open that parcel.
HA: So you're talking about, not just cart-abandonment - which I do want to understand and get some key tips to make sure you get more success pages - but you're also talking about once they've paid their money and delivering the product to the door?
AP: Yes. Cart abandonment occurs because when you're online you really can't see how it's going to be delivered, I don't know how much it's going to cost, is it available in my local store if I want to pay and collect later, and it gets in the way. Once I've made that purchase, then I've making a direct contract with you to deliver to my house. On that basis, it gives the retailer the opportunity to engage in the process of that delivery, its arrival and the opening of the box. Another example here is the retailer, T2. They're a specialty tea retailer. They sell tea and tea-wares. Now, the price point is below $20 for the item but it arrives beautifully crafted and in a beautiful box with one or two sachets and free samples and whatnot. It is almost as though it is opening a jewelry box when you open the package, because it's beautifully thick, black embossed card with T2 on it and a magnet fastening. What they're doing is they're imbuing the act of receiving this as though it were a really high-luxury item and that makes a difference in the perception of their product and customer loyalty.
HA: What about in terms of just getting greater conversion on the website, so reducing the cart abandonment numbers? What are a couple of tips that you've got for people as to what they should do?
AP: So I'd start by calling out a few metrics here. If you're not getting 2% conversion, if 2 out of every 100 customers is not shopping with you, then you're not even getting your fair share. If you're getting between 3-4 then you're doing pretty well. North of 4 you're doing fantastically.
HA: So that's visitors, that's not even people who enter the cart?
AP: That's visitors. So if you're getting 3-4 converted out of 100, then you're doing well. I tend to work with retailers who are in that low 2s area, to try to move them up the conversion scale to 3 and beyond 3 [per cent]. There are four or five things, but I'll point out three [that retailers can do to improve conversions]. The first thing is confusing information. I was checking out a retailer's website two nights ago. I went and clicked on delivery down at the bottom of the page, because often you'll find the delivery details buried on the page, which is almost a secondary consideration in itself. I clicked on that and I got two pages of a legal contract and it was T&Cs and somewhere buried in there was how much the delivery would cost. So, the way in which you show your information can really get in the way of conversion, who's going to wade through that? Now, that's the sort of thing you can fix at no cost by just reorganising the information on your website. Things like having: here's the product; this is how much it costs to ship; this is when it ships; is it available in my local store if you have stores, actually in the product view. Then, if I do click on something like delivery, just give me some nice basic information about when I'll get it.
HA: So dumbing it down?
AP: Making it simple and clear and not hiding behind legal jargon around T&Cs.
HA: So another tip?
AP: [Another tip] would be really thinking about options. Dan Murphy's is a good one, by the way on information I would point to Appliances Online I think they're doing great things in terms of how they array their delivery information. I think Dan Murphy's are doing great in terms of the number of options they have for their consumers. If I'm a metro consumer with Dan's I have 6 options for delivery from: a week's time, 3-4 days, next day, I can have it at a weekend or an evening or out of hours, I can have it delivered to a different address. Some of them cost, some of them are free, but I have a range of options available that suit me.
HA: So more options?
AP: Options that suit me. I can self-manage within that - I don't need somebody to do that, so that will help.
HA: Well, I think you've certainly given us a lot to think about and lots of different ideas as to how we can improve the experience that we're offering our customers online. So, thank you very much for joining me, Andy.
AP: You're welcome, it's been a pleasure.
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