Shopping was never like this before

Returned goods can be the bane of a retailer’s day, a pro­cess­ing cost with no sale to bal­ance the out­lay. And thanks to the anonymi­ty of online shop­ping, goods often come back scuffed, marked or obvi­ous­ly used. Research by retail ana­lyst Con­lu­mi­no found that returns cost retail­ers £95.8 mil­lion in 2013, a fig­ure that will only rise.

But on anoth­er lev­el returns are an untapped oppor­tu­ni­ty. A recent YouGov report revealed that 63 per cent of cus­tomers say the ease of the returns process influ­ences where they shop.

“In today’s omnichan­nel envi­ron­ment, cus­tomers are mak­ing more demands on how they return prod­ucts,” says Niklas Hedin, chief exec­u­tive of deliv­ery man­age­ment soft­ware com­pa­ny Cen­tiro. “This means return­ing a wider vari­ety of goods from any num­ber of loca­tions.”

Simplifying returns

Can­ny retail­ers are going fur­ther. Online fash­ion retail­er ASOS pos­i­tive­ly embraces returns, part­ly out of neces­si­ty as returns make up 37 per cent of total orders, but also in the belief that being able to eas­i­ly return items is an inte­gral part of a pos­i­tive cus­tomer expe­ri­ence. An easy return helps ensure a sale next time round.

Retail­ers must con­stant­ly strive to deliv­er a bet­ter expe­ri­ence than the next avail­able list­ing on Google

But experts say returns can work even hard­er for retail­ers, fur­ther enshrin­ing cus­tomer loy­al­ty. “For exam­ple, a retail­er could pro­vide reg­u­lar high-net-worth cus­tomers with dif­fer­ent returns options,” says Mr Hedin.

“This could take the form of a cer­tain num­ber of free home pick-ups through­out the year or the abil­i­ty to select more pre­cise col­lec­tion win­dows. Ulti­mate­ly, in an increas­ing­ly com­pet­i­tive mar­ket, a more per­son­alised approach to returns could help retail­ers dif­fer­en­ti­ate their ser­vice.”

Returns is a small but increas­ing­ly vital part of the cus­tomer jour­ney and exem­pli­fies the new retail real­i­ty that no part of the cus­tomer expe­ri­ence can be left to chance. In a world of infi­nite choice, a dis­ap­point­ed cus­tomer is one who may be lost for­ev­er.

“A retail­er which deliv­ers a bad expe­ri­ence is instant­ly replace­able with one that pro­vides some­thing incre­men­tal­ly bet­ter. Retail­ers must con­stant­ly strive to deliv­er a bet­ter expe­ri­ence than the next avail­able list­ing on Google,” says James Gam­brell, chief exec­u­tive of appar­el cus­tomer engage­ment com­pa­ny Fits.me.

The digital world of retail

A new gen­er­a­tion of cus­tomers, expect flaw­less back-end oper­a­tions, such as returns and stock con­trol, along­side a seam­less dig­i­tal expe­ri­ence, includ­ing a respon­sive, user-friend­ly web­site that works as well on a smart­phone as it does on a lap­top. In 2015, these fac­tors qual­i­fy as absolute basics.

But savvy cus­tomers, aware of a glut of options, increas­ing­ly look for points of dif­fer­ence beyond this base lev­el. The past year has final­ly laid to rest the once wide­spread belief that online shop­ping meant the inevitable demise of the high street. Instead, for­ward-think­ing retail­ers have dif­fer­en­ti­at­ed them­selves by com­bin­ing the two in sur­pris­ing ways, mak­ing for a con­sis­tent and con­sis­tent­ly com­pelling cus­tomer expe­ri­ence.

“Cus­tomers expect to expe­ri­ence ele­ments of a brand’s online pres­ence with­in its phys­i­cal stores, and vice ver­sa, with the phys­i­cal store expe­ri­ence influ­enc­ing the online expe­ri­ence,” says Adam Goran, divi­sion­al direc­tor of cus­tomer engage­ment at Grass Roots Group. Burber­ry is a prime exam­ple, bring­ing ele­ments of its online Burber­ry World into the excit­ing, dig­i­tal­ly-dri­ven phys­i­cal space of its flag­ship Lon­don store.

Click and collect

The imag­i­na­tive com­bi­na­tion of dig­i­tal and phys­i­cal retail has trans­formed the for­tunes of cat­a­logue retail­er Argos, which not long ago was con­sid­ered dead in the water. This sum­mer it became the first British retail­er to notch up £1 bil­lion in mobile sales, thanks to its enthu­si­as­tic adop­tion of click and col­lect. Cus­tomers order online and pick up in store, side-step­ping the one frus­trat­ing ele­ment of inter­net shop­ping of wait­ing for a par­cel to arrive and hav­ing to be in when it does.

“The tech­nol­o­gy now exists to make the dis­tinc­tion between dig­i­tal and phys­i­cal pur­chas­ing increas­ing­ly moot,” says Hen­ning Ogberg, gen­er­al man­ag­er for Europe, the Mid­dle East and Africa at Sug­ar­CRM, which pro­vides cus­tomer rela­tion­ship man­age­ment solu­tions. “The recent explo­sion of click and col­lect serves as an excel­lent exam­ple of two pre­vi­ous­ly sep­a­rate areas of retail work­ing as one.”

Click and col­lect is one part of the seam­less omnichan­nel retail expe­ri­ence cus­tomers demand, but it’s also recog­ni­tion of the need to human­ise the poten­tial­ly anony­mous world of dig­i­tal shop­ping. Cus­tomers want to be treat­ed as indi­vid­u­als and offered choic­es rel­e­vant to their needs. Tech­nol­o­gy can dri­ve a slick­er expe­ri­ence, but also a more tai­lored one.

“Cus­tomers are con­stant­ly chang­ing their pref­er­ences and habits,” says Jed Mole, Euro­pean mar­ket­ing direc­tor at data ana­lyt­ics com­pa­ny Acx­iom. “Cus­tomers’ lives and focus­es can change instant­ly as they change jobs, move house, get mar­ried or have a child. Retail­ers need to under­stand at which life-stage the cus­tomer is at and respond accord­ing­ly.”

Customer data analytics

Data can help them do that and data from social media is an increas­ing­ly key ingre­di­ent, giv­ing retail­ers the oppor­tu­ni­ty to iden­ti­fy not just what cus­tomers buy or browse, but what they like, how they live and what they aspire to. It can help retail­ers tar­get cus­tomers with use­ful, per­son­alised pro­mo­tions, rather than irri­tat­ing gener­ic offers.

There is dan­ger in social media too, of course. A dis­grun­tled cus­tomer tak­ing his gripe to Twit­ter can do con­sid­er­able dam­age, but a quick res­o­lu­tion to a com­plaint made over social media or a humor­ous response to a cus­tomer com­ment can help to human­ise a brand.

Indeed, the depth of infor­ma­tion now avail­able gives retail­ers the chance tru­ly to indi­vid­u­alise com­mu­ni­ca­tion with the cus­tomer, says Mr Ogberg. “These ever-evolv­ing tech­nolo­gies allow retail­ers to be less big broth­er and more like a real­ly good friend, car­ing, know­ing and dis­creet.”

And that, per­haps, is the key to good cus­tomer expe­ri­ence. Data can per­son­alise the shop­ping expe­ri­ence on and offline, whether help­ing cus­tomers find a prod­uct eas­i­ly, ping­ing a per­son­alised offer to their smart­phone in-store or sug­gest­ing rel­e­vant com­pan­ion pur­chas­es. Inno­v­a­tive col­lec­tion and returns process­es recog­nise the com­plex­i­ties of their lives and give them one less thing to wor­ry about. In-store envi­ron­ments don’t just pro­mote, in the best cas­es they also inspire and delight.

What it all rep­re­sents is a new recog­ni­tion of retail’s human core. “Like music, shop­ping is in our DNA,” says David Lawrence, direc­tor of plan­ning and insight at retail mar­keters TCC. “It’s not just about doing the chores, it’s about social­is­ing, explor­ing and try­ing new things. Retail­ers must respond to this need.”

Case Study: Burberry cuts a digital dash

Burberry’s decade-long trans­for­ma­tion to the epit­o­me of lux­u­ry chic has been achieved by iden­ti­fy­ing a new, young cus­tomer base and giv­ing them the dig­i­tal­ly dri­ven expe­ri­ence they recog­nise and appre­ci­ate.

Take the company’s flag­ship Regent Street store, dubbed “Burber­ry World Live”, which aims to blur the dis­tinc­tion between Burberry’s on and offline pres­ence. The store fea­tures a series of full-length mag­ic mir­rors that dou­ble as video screens and play appro­pri­ate mul­ti­me­dia con­tent when an item chipped with a radio-fre­quen­cy iden­ti­fi­ca­tion or RFID tag comes close.

Shop­pers can pick up a coat or hand­bag and watch a video of it draped around the ele­gant frame of a super­mod­el or being lov­ing­ly cre­at­ed by a mas­ter crafts­man, just as they might if they were brows­ing Burberry’s online store.

Burber­ry start­ed out as a rain­coat com­pa­ny, of course, and dig­i­tal rain show­ers occa­sion­al­ly sweep through the store, using the mag­ic mir­rors as their back­drop.

It’s all dif­fer­ent, play­ful and, giv­en Burberry’s recent his­to­ry, not all that sur­pris­ing. Burber­ry got the point of dig­i­tal before most and cur­rent­ly boasts near­ly 17 mil­lion fans on Face­book and 4.5 mil­lion Twit­ter fol­low­ers, giv­ing it a huge com­mu­ni­ty of online advo­cates. By lis­ten­ing close­ly to all that social media buzz, Burber­ry gets a real insight into the minds of its cus­tomers.

This infor­ma­tion is used to dri­ve inno­v­a­tive dig­i­tal cam­paigns and stunts. Ear­li­er this year the com­pa­ny let fol­low­ers take pho­tos of one of its fash­ion shows from any­where in the world via a tweet-acti­vat­ed cam­era.

Dig­i­tal is at the heart of Burberry’s cus­tomer engage­ment strat­e­gy. It might feel like con­tent cre­ation has become almost as impor­tant to the brand as sell­ing clothes – Art of the Trench, for instance, lets cus­tomers down­load pic­tures of them­selves in the icon­ic Burber­ry trench coat – but Burber­ry doesn’t make the dis­tinc­tion. It thinks cus­tomers derive moments of plea­sure from all the dif­fer­ent ways they inter­act with the brand, con­tribut­ing to a unique­ly pos­i­tive cus­tomer expe­ri­ence and a decade of suc­cess.