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Oliver Banks of OB&Co

Retail Transformation Briefing – 22nd November

Published 3 months agoΒ β€’Β 5 min read


Hi Reader,

"The digital business is really what's bringing us down"

An extraordinary statement from US-based Kohl's CEO, Tom Kingsbury, as they look to pull back on their investment and costs into ecommerce and digital commerce. He claims that the online site is undermining their total performance and is dragging down the store results.

Following a set of disappointing Q3 results, there was clearly a case for pulling back with online sales down but positive news from stores. But this feels like a mistake. In the omnichannel world, all channels serve a greater purpose than their direct sales results. Channels should align together to form a unified shopping experience, and any given channel may play a part in building brand awareness, serving inspiration, offering expert advice, presenting convenient shopping access and many more opportunities.

We've been talking about aligning channels for years (seamless, integrated, connected, unified, harmonised, hybrid.....etc), yet we still have instances where "simple" opportunities exist, for example, misaligned prices and promotions between channels or an inability to process cross-channel returns. There will of course be a specific set of reasons behind any particular challenge, but customers aren't interested in the reasons, only the end results.

Unifying the channels remains a key opportunity for many retailers. To unify the channels, the first two stages are about (1) recognising the actual experience and purpose and (2) aligning the vision and priorities across the organisation.

Solving these issues means you're naturally going to be a significant way towards delivering a transformative effect for your customers, colleagues and the business.


Retail transformation news headlines

🍫 Mars acquired Hotel Chocolat to fund international expansion. The deal, worth £534 GBP / $662 USD, provides an attractive DTC opportunity for the broader Mars group and will provide the necessary support and resources to expand the Hotel Chocolat brand internationally. The deal caught attention due to the inflated price that Mars agreed to, but this suggests that it's a strategic move with much greater rewards than just acquiring a bargain in the moment.

πŸš— Amazon will start selling cars over the next year and Alexa will be available in cars soon. Hyundai and Amazon have agreed for new cars to be listed on the ecommerce site and fulfilled through a local dealership. Part of the deal is for Amazon's voice assistant, Alexa, to be pre-installed into new Hyundai cars starting in 2025. Dubbed the "everything store", this seems like a strange category expansion. While innovations like car vending machines suggest there is a market for non-traditional car sales, it feels like more of a PR stunt. However, installing Alexa into the car is another vital source of data for Amazon and helps to embed the Amazon ecosystem more deeply into a customer's life.

πŸ’ͺ Amazon also announced a new robot which is capable of carrying heavy and bulky items such as home appliances and pallets. Named Titan, the new robot uses several Amazon Robotics's innovations such as computer vision and battery technology. This move is the latest in a stream of warehouse innovations that Amazon have recently announced, indicating they're creating the next significant evolution in their warehouse automation capabilities. Famed for their AMR warehouses after acquiring Kiva systems 11 years ago, other retailers have been catching up with Amazon and the ecommerce powerhouse are now looking to stay ahead with new ways to drive efficiencies, effectiveness and new categories.

πŸ‘€ Tesco's latest GetGo store allows customers to arrive at the checkout and instantly have their products "scanned" and ready for payment. The store in London uses Trigo technology and can also allow app users to simply walk out with their shopping. However, this new development means customers don't need to scan in or check in first which dramatically reduces the barriers to entry. Cameras will monitor their shopping trip and when they arrive at checkout, purchases will be automatically displayed on screen.

πŸ’³ Tesco are deepening their partnership with the courier Evri as they will allow customers to collect Tesco Clubcard points for sending parcels through Evri. The primary benefit for Tesco's Clubcard has changed in recent years as Clubcard Prices now offer customers the chance for deep discounts at the point of payment. This has proven particularly valuable for customers in the face of the cost of living crisis. Traditionally, the benefit for customers was to collect points, which could be exchanged for various rewards or money-off vouchers. Will we start to see a swing back to collecting points, or perhaps extending the opportunities for earning points?

🎁 A number of retailers and brands are launching a virtual store for the peak trading season. Crate & Barrel, J.Crew, L'Occitane and Corona have announced new virtual stores for Christmas trading are using these digital environments to attract attention as well as engage customers through gaming and personalisation. Whilst technically advanced, we're still waiting on a mass movement towards metaverse opportunities, although the experience learned and exposure gained in these early days will be invaluable as more digitally savvy younger consumers grow up and account for a greater share of the retail market.


Driving Retail Transformation: Book spotlight

My first book, "Driving Retail Transformation: How to navigate disruption and change" is out on 5th March and is available for pre-order now in bookstores and online.

In this new element of the Briefing, I aim to highlight aspects of the book and give you something to reflect on.

So, to get started, I wanted to touch on the broader context that we find ourselves in right now - and that's precisely where the book starts too by the way! There are several elements at play in the retail setting. I believe there are five important catalysts contributing to the ever-evolving world.

  1. Generation-based life experience - a recognition that global events continue to shape our outlook and consumer shopping behaviours.
  2. How we live - consumer and colleague lifestyles and patterns continue to shift, with elements like WFH and job patterns impacting the future of retail.
  3. How we relate to each other - we're more connected than ever and are increasingly bombarded by more opportunities to "connect" with the world.
  4. The rise of technology - this is well publicised and impacts both consumers and businesses, independently and together.
  5. Focus on caring more - we're more aware of aspects like wellbeing, ethics and sustainability.

These elements play out simultaneously. But which do you think will impact you and your organisation the most? Does this change as you compare the short, medium and long-term views?

Ultimately, every company will have a different perspective, but either way, these five elements combine to drive our world forward. In response, we face a simple, and well-publicised choice: Transform or die.

This choice feels simple, but it's just the beginning - for the whole journey of transformation as well as the rest of the book. As you venture through the rest of the book, you'll find practical tips and techniques about how you and your organisation can transform, from start to finish, and for big and small changes.

Next time, I'm going to share the metaphor that runs through the book and how it's made me think differently.


New podcast episode: The challenges of unified commerce - #265

Unified commerce plays a crucial role in retail, helping customers shop seamlessly and enabling the business and operations to flow accordingly. In this episode, I welcome Bala Parameshwaran from Bain & Company and Nikki Baird from Aptos as we tackle the complexities of unified commerce. From integrating digital and physical shopping experiences, to addressing challenges from legacy systems to customer experience design. The discussion reveals insights from the latest unified commerce report from Bain and Aptos, highlighting the industry’s readiness for this transition. Tune in for expert perspectives on orchestrating technology and customer experience in retail, and learn how to access valuable resources for your unified commerce journey

Take a listen to episode 265 of the Retail Transformation Show podcast and discover:

  • Key learnings from the latest unified commerce research by Bain and Aptos.
  • Which area of unified commerce causes the greatest headaches for retail.
  • How customer expectations are evolving as unified commerce becomes more commonplace.

Check out these recent episodes too:

​#264: Golden nuggets from the fifth year of the podcast (part 2)​

​#263: Golden nuggets from the fifth year of the podcast (part 1)​

​#262: Omnichannel vs unified commerce​


Keep transforming better,

Oliver

Oliver Banks of OB&Co

Oliver helps retailers to change and transform their operating models. He's the host of the Retail Transformation Show podcast and founder of the RetailTransformation.Live virtual event

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