Takeaways from Internet Retailing Conference. Emotion in eCommerce, Conrad Electronic, Girl Meets Dress, Schuh, Clarks and more (episode 123-5)

This year the sister conferences eDelivery Conference Internet Retailing Conferences were held on the same day last week in central London. I didn’t make it to any of the eDelivery content – but I have some great updates from IRC for you.

Again this year I was invited to Chair – hosting both the Top 500 knowledge panel in the morning, and the Analyse and Conquer stream for the rest of the day.

The big topic of the day was emotion – how do we get more emotion into eCommerce? So I have a fair bit on that! And a few other updates across the following topics:

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  • internet retailing conference podcast
    State of the industry
    • Focusing on an learning from the customer
    • Daniel Infanger of Conrad Electronics
    • Anna Bance – founder Girl Meets Dress
    • Giles Delafeld of Clarks and my discussion about millennials… and more
  • Emotion
    • key points from our panel
    • Kieron Smith – Digital Director Blackwells – putting the emotional connection online, and the results of doing so
    • Klarna’s emotional eCommerce research results
    • Taking emotion to the next level – sentiment analysis for placing you advertising

Yes, there was a LOT of great content this year – so I’m going to do a good job of editing down my takeaways so I don’t just repeat the whole day for you!

Sorry about the layout and typos below – had just enough time to get it live, not enough to make it pretty!!

o   State of the industry

As always Ian Jindle’s opening remarks provided some great insight into what’s going on in our industry.

Currently that can be summed up as the battle for margin. Big picture margin – as marketing spend is taking up an ever greater percentage of turnover. And that’s not good for anyone.

It seems as though the UK eCommerce land grab is over – we’ve gone hell for leather to attract every bit of new business we can, and now we need to get smart about it.

This is trend that I believe began 2 years ago when we all started talking about the customer, and getting smarter with our spend is just the next stage.

That’s both about WHAT we spend on, and what messages we put out there – which is why I was so pleased emotion was such an important discussion across the day.

o   Daniel Infanger of Conrad Electronic – changing the business to focus on customer segments, and how that’s impacted on the bottom line

Daniels session was about how German international electronics retailer Conrad have approached consolidating the business across it’s systems, and teams to identify and better serve their customer segments.

If you’re not familiar with Conrad (and I wasn’t!) they turnover E1.3bn, have 5,000 employees, 17m customers (split equally between B2B and B2C) and ship 10m parcels per year. 31% of their business is store based, 46% online, and the rest he only described as “other” – sorry!

To set the story of where they were up to 2016 and the disjointed activity he shared a great slide of circles and arrows – a bit of a dashboard of their performance. Each circle represented a key metric (AOV, print response, new customers etc) and under each circle was an arrow showing whether it was improving or getting worse and how fast – steep arrow up improving fast! I’ve added the image to the shownotes (eCommerceMasterPlan.com/123-5) if you want to see it – I thought it was a handy way of making it super clear how a business is doing. Maybe one for the quarterly review[CT1] !

He then went on explain the 2 big sides to how they’d brought about change in the business (change that’s still underway)

–          Identifying their customer groups –

they got really into this, with interviews, focus groups,, motive research, affinity testing and ended up categorising 18 variables in total.

Then they mapped in LOTS of detail the possible customer journeys of each of the identified customer segments.

–          Getting the systems right

It was clear their systems just weren’t cutting it – different images on site for different countries, everyone using their own software choice. So bringing that in line is a huge project taking years that’s underway.

I guess the lesson here is that it’s a great idea to get this sorted first!! Make sure every software decision is made taking into account the full needs of the business, and don’t let people implement their own systems. Plus make sure nothing ever lives on just one persons’ laptop! And certainly not on a USB stick.

o   Anna Bance – founder Girl Meets Dress – impact of constantly adapting to the customers needs

I really enjoyed Anna’s session because again and again she demonstrated how starting simply and then building what the customer needed has enabled her to build her businesses successfully. Throughout which the danger of the assumption was made clear.

I’m hoping to get her on the podcast to talk us through this in more detail next year.

For those of you not familiar with Girl Meets Dress – they are a dress hire company, that operates online. Serving women from 16 who are going to their first prom to ladies in their 90s looking for something to wear to a family wedding. The range customers is diverse and their biggest time of year is Royal Ascot.

Here’s some of the ways Anna’s had to unpredictably build the business based on customer feedback:

–          Giving them the option to buy the dress (remarkably it’s not uncommon for someone to buy a dress after renting it FIVE times)

–          Offering an advance try-on facility – so the product gets delivered and returned TWICE

–          Adding insurance

–          Dealing with the nerves of “will it be here in time” by offering a £10 have-it-for-7-days upgrade for any dress

–          Creating advice guides for the customer who has NEVER worn a dress

–          Opening a showroom so customers who really want to, can come and have a look at the dresses and try them on

–          Then offering free uber rides to the showroom

So the – listen and adapt message was huge!

She also admitted that she had not realised the power of a magazine article – the passing of trust in the magazine onto trust in Girl Meets Dress. That’s why PR can be SO powerful.

o   Giles Delafeld of Clarks and my discussion about millennials… and more

It was great to catch up with Giles – we worked together many years ago on the Alexon brands online offering (Kaliko, Ann Harvey and a few others).

We got to do a nice Q&A session all about millennials and adapting to the new customer types.

We had quite the discussion about millennials and their needs and came to the conclusion that whilst ‘millenials’, ‘genx’, baby boomer are all great phrases to use to get the conversation about customer segments started – no one should go back to their business and say “we need a millennial strategy”.

That’s because there is such variety within each group – millennials is from 1980 to 1995. Those us born in 1980 didn’t get our first mobiles until we were 18, we were to uni before the digital camera (thank god!), and facebook didn’t exist until after we left. That’s hugely different to those born 15 years later.

So rather you need to identify which customer segments are important for YOUR business – look at who’s already buying from you and visiting you. Identify the key core customer who’s responsible for your revenue, and don’t do anything that will discourage them from buying.

Then take a look at the next biggest, the growing, usually the younger, groups – what can you do to keep them happy?

o   Emotion – key points from our panel

OK let’s get stuck in to the emotion side of things.

I was hosting this panel – so I’m just going to give you the bullet point highlights as I couldn’t’ take notes!!

On the panel were:

–          Sean McKee, Director of eCommerce at Schuh

–          Philip Driver, Head of eCommerce EMEA at Canon Europe

–          Simon Bell the founder of Diligent Commerce (a magento agency focused on the power of emotion)

We had a wide ranging discussion about what part emotion should play in eCommerce from which some key points came out:

–          Iin eCommerce we can get too focused on the numbers, and forget our customers are humans – important because…

–          Emotion is one of the most powerful ways to get a human to do anything at all

–          And in retail (as Daniel Kahneman, godfather of behavioural commerce said) “if you make them feel more, they’ll buy more”

–          There are long term/big picture emotions and short term emotional nudges. The big picture is about making sure the customer leaves an interaction with your brand feeling what you want them to – be it excitement, desire, glamourous – whatever it may be. The short term is about emotional tactics like:

o   Scarcity

o   Urgency

o   Social proof

–          All businesses should be using the nudges.

–          How much you invest (time and money) on the big picture emotion depends on:

o   How strong your brand needs to be – more important for Canon than for Schuh (the reseller of brands)

o   How luxury your brand is

o   Price point

o   Product type

–          Best place to start is with the nudges AND get a decent about us page out there

Let’s build on this with the takeaways from these sessions about emotion (in it’s many guises)

o   Kieron Smith – Digital Director Blackwells – putting the emotional connection online, and the results of doing so

I thought Kieron’s session was super interesting.

At Blackwell’s they’ve made the smart decision to ignore their huge competitor (Amazon) and rather focus on what they do well. Which is all about how well their booksellers (store staff) know the product, and how passionate they are about it.

So you’ll now see their individual booksellers all over their website.

They’ve been working on improving this for a few years now – and have now got to the point that the emotional connection to the real people in their stores is such that in geographic areas where the stores are sales across all channels have grown – so rather than channels cannibalising each other, they have become greater than the sum of their parts.

It’s the human connection – live and pushing sales growth.

o   Klarna’s emotional eCommerce research results

Laurel Wolfe is the Marketing Director at Klarna, and she spent her session taking us through research they commissioned from Reading University about Emotional eCommerce – the ups and downs of the online experience.

It’s easy to read and packed with great insight and mainly focused on the quick win nudges side of emotional eCommerce. SO here’s the key takeaways from me:

–          Why do people cancel a transaction – it’s no longer shipping (that’s in 2nd place)!!

o   33% have to register for an account

o   27% High shipping costs / slow checkout processing

o   25% fees for alternative payment methods

o   23% lack of trust in site security

o   15% concerns over entering personal details

–          Millenials like to browse, and 40% of them spontaneously buy when they feel they deserve a treat – so checkout HAS to be easy.

–          Pay later is growing in popularity – literally – buy now, put in your payment details later!

–          To win the order you need to show both the logical and emotional side of the purchase

–          Time is frequently seen as a cost  – so you should keep things quick AND reward customers for spending the time on the task

–          A faster process makes someone more likely to order again – it cost them less time

I highly recommend downloading the report

o   Taking emotion to the next level – sentiment analysis for placing you advertising

This session was by Cliff Crosby of Emrays – who I’m also trying to get on the podcast for next year.

Cliff has worked for many big brands (including Apple and Nike) to get their physical stores just right. So he’s got a head start on the majority of us when it comes to understanding the impact of emotion on customers

From his research he’s learnt that:

–          Rational feelings generate the interest in purchasing, but it’s the emotional feelings that are the ultimate driver for making the buying decision.

As retailers we have a lot more scope to impact the emotional decision than the rational decision. As the rational comes from someone spontaneously thinking “I need a new dishwasher”.

–          Emotional connection is the number one driver of loyalty.

Your customers need to feel loved, appreciated. 91% of unhappy customers take action because of their unhappiness – they buy from someone else.

It’s even harder with millennials as they expect the brands they buy from to be loyal to them – not them to be loyal to us.

Cliff them when on to explain the technology that Emrays have been building and are now deploying – its an AI system that tracks and identifies sentiment in online pages.

Why should we care about that?

Well if there are certain sentiments that work for your brand wouldn’t it be great if you could put your ads next to articles and content that reflect that sentiment? And avoid the articles and content that has the wrong sentiments.

Very cool tech.

However, out of the price range of the majority of us right now – so how can you use this insight?

Well, think about what the right sentiments are for your business – and how can you work them into your marketing activity and your website?

So there’s my updates.

If you want to get stuck into some more conference style content in the meantime then my eCommerce MasterPlan Virtual Summit remains open to registrations (it’s free, and you’ll have access until at least Sept 2018!).

No takeaways episode for you next week as I’m office-bound getting the last bits and piece in place for my new book being published – all about B2B eCommerce, find out more here.

Have a great week everyone and Keep Optimising