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The Modern Retailer's Holy Grail

This interview was originally published in the August edition of Inside Retail, creators of Inside Retail Live, APAC's retail conference and expo.

Do you have the right flavour of digital to enable modern retail?

In the competitive and increasingly global retail market, retailers need to have a clear vision and understanding of their competitive advantage when forming their digital and mobile strategies.

That’s the word from Dan McMahon, Head of Retail – APAC at global technology solutions provider, ThoughtWorks. McMahon says that often the first port of call for a retailer considering their digital strategy is to have a broad focus and try a lot of things.

“It's crucial to understand what your particular unique competitive advantage is – those functional and emotional benefits customers get from your brand. And then use those as your anchors and say, ‘What's right for our consumers in that space? How do we experiment, test and prototype things to roll out?’. That could be quite a unique experience, but a unique experience that will resonate with your customers.”

Dan McMahon speaking at the ThoughtWorks Retail loyalty roadshow in Sydney

Above: Dan McMahon, Head of Retail - APAC at ThoughtWorks

ThoughtWorks counsels retailers in creating a modern retail strategy, and specifically how you discover your unique flavour of digital. Rather than throwing up terms like ‘digital strategy’ without any clear vision of what that means in the context of one’s own business, retailers need to be thinking more about how they can deliver relevant technology-enabled products and services.

“The only reason you need to call it ‘digital strategy’ is that your business strategy has fallen out of fit with the way your customers are using technology and the way technology can enable new experiences around your brand,” McMahon explains. “The best retailers globally actually get that there’s not just a single cookie-cutter strategy to open a website, start a social media channel and work on your e-influence. It has to be something that fundamentally reinforces what the brand is about.”

McMahon points to Domino’s Pizza Enterprises as a key example of a local Australian retailer that is leading the way in innovating for the mobile platform. ThoughtWorks worked with Domino’s in the development of its recently launched On-Time Cooking feature.

Domino's is very much about convenience, price, and quality. They've got price sorted. At a quality level, you've got On-Time Cooking, so you know the pizza will be hot when you arrive at the store. They've got convenience sorted by remembering your order and saving all of your details. Feeling impulsive? Then send a pizza emoji to Domino’s to have your regular pizza automatically delivered.”

Domino's on time cooking step-by-step process
Above: Dominos' On-Time cooking feature helps customers pick up pizza at the perfect time.

McMahon also believes Australian retailers need to move beyond mere transactional functionality - mobile is about content, consumers, commerce & community - it’s a bridge across all these things. “Retailers need to do more on mobile to understand their customer's context and give them utility and inspiration in a way that leads them to the store.”

It’s all about understanding what your customers want and delivering the convenience that they demand. And the mobile platform is a key enabler in achieving this, according to McMahon. “Domino's is great at understanding the context of their customers which creates an added level of convenience,” he explains. “It’s that ultimate convenience which creates impulsiveness and captures the sale.”

As well as Domino’s, McMahon points to US supermarket and department store giant, Kroger, as understanding how to utilise customer data, which has strategically informed Kroger’s click and collect and a digital grocery offer. Kroger’s ‘Savings Center’ is a one-stop shop that allows customers to visualise the value of shopping at Kroger. This lets customers see total money saved, access new personalised savings, and gives Kroger the opportunity to influence shopper spend by creating serendipity with new flavours.

Kroger’s ‘ClickList’ then added a layer of convenience - letting customers choose a preferred pickup time from a designated bay so groceries can be loaded into the car by a Kroger team member. There are 60-70 products in the average grocery shop so making it so convenient to rapidly add items - ensuring they capture the profit of a full customer basket.

This ability to rapidly learn a consumers’ taste preferences and serve up the right items from your vast range is where the future of digital retail is. McMahon believes “Text-based search is dead. Visual search and utilising artificial intelligence to quickly grasp your customers taste profile leaves customers with a positive emotional experience rather than the current technology which leaves customers feeling like a brand just doesn’t understand them online.” He praises Shop Direct Group, a large online retailer in the UK for how it uses visual search to help their customers uncover the right fashion choices for their wardrobe.

“If the modern retailer is continuing to innovate their business model, if they recognise that customer loyalty is actually created through experiences and not rewards programs, if they're bringing customer data together across channels, if they've got the right product insights and inspiration being delivered to customers, if it's a seamless journey and they understand all their inventory, well that's the holy grail for retailers.”

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