Digital Directors’ Dinner report and interview – Where E-tail is heading, and why…
Ian Jindal knows his retailing inside and out, online and off. He’s the guy in a book store buying the title on Amazon while browsing the shelves. He’s the guy with the online price comparison page getting the discount in PC World. He’s the guy who lines up his Amazon orders so they arrive in the letter box one small box at a time avoiding the trek to the sorting office. He's also the guy who advises retailers on how to make money given guys like him! He talked with us about how retail is really changing, how the smartest retailers are viewing their markets, and why the big changes in pricing are yet to come.
By Danny Meadows-Klue, Publisher, Netimperative.com
In conversation with Ian Jindal
Ecommerce has changed radically in the last few years. Price comparison engines made shoppers loyal to the promotion and not the retailer; search engine battles made some brands far more discoverable than others and email reconnected brands with customers knocking out the expensive middleman of advertising buys.
“Five years ago ecommerce was still a mystery to most” says Jindal, "and focused on the technology and 'how to do it'. Today those aspects are so straight forward that eCommerce Directors must now focus on the 'commerce' and not the 'e'. Every business needs to get this right, and right now - especially in this climate”.
But untangling what 'works' in retail is increasingly tough. Look at your website stats and the last click from Google probably accounts for half the new arrivals, yet ask the right questions and you’ll unravel the real picture. Catalogues drive people to the web and to store in ways far more complex than simply one click in one channel.
PR drives awareness in ways you can’t understate. Now the mobile platforms are taking that web experience into the high street and shaking up the system again. The challenge is to look for the 'unknown unknowns' that shape and influence customer behaviour, to supplement existing measurements.
“Take a business like Ocado: you book your slot, re-reorder your favourites. Job done. But if you go back and change the order time and again then this reduces efficiencies, and it's only right that there be an extra charge. Mobile is creating different, more flexible purchasing behaviour and price needs to be part of the deal.”
Tracking through some of the headlines on Netimperative it’s easy to see that some retailers are rising to the challenge. For catalogue brands like Littlewoods, the majority of orders placed have switched to the online channel. For the department stores like John Lewis, the web is at the heart of a mixed channel shopping experience. Argos have seen integrated ordering models seized upon by customers with people reserving before they visit the store.
But the success of the few should not disguise the difficulties for the many. “Some global players still can’t get their local currency billings right or contend with the local VAT rates, let alone languages and customs,” observes Jindal. “The presentation layer should be easier than physical operations and service, so the lack of activity on this front shows the underlying difficulty for retailers. Doing multi-channel fundamentally well is still on the 'too hard pile'”.
It’s all about data
Jindal argues marketers should be far more creative and take a new look at pricing and promotions in a post-comparison-engine world. For him, there’s a gap between where most companies could be - given open data standards and increases ease of data exchange - and where they really are. Jindal attributes this gap to a lack of will on the part of retailers, rather than inability or technical hurdles.
“One of the big problems we have in ecommerce is that we know many facts to many decimal places, but we know it about things that are totally and utterly irrelevant. Yes, ecommerce is about data, but its’ about the right data.”
“And the battleground in data is moving. It’s the data about data that counts. In the past ‘data’ has been about objects – like the title of a track on a piece of music and the artist who played it. Now things have moved and there’s a new twist: we need meta data which sums up the context of the data. In music that might be the chart position of piece of music at that moment – something that’s far outside of the raw data itself. We need to link behavioural and attitudinal information, not to mention the location, direction and orientation aspects that mobile and tracking devices can provide. Furthermore, this data is no longer solely in web or marketing domains - if retail is cross-channel, then so too are the data requirements of the future.”
Pricing is set for a shake-up
The ideal of a ‘retail price’ is relatively new in the market. “Retail wasn’t always like this: a fixed price with discounts. Pricing can be much more specific and much more complex. ‘Smart pricing’ is about getting a temporary price to the right person at the right time - and with the right discount: a discount they've earned as a result of profitable behaviour. Jindal called this the "Obama-Preedy Pricing Principle" and promised further coverage to come”
Jindal is happy to challenge marketers to be far more creative with price. His radical approach challenges retailers to turn their model on their head.
Engagement: new battleground
Consumers have a portfolio of brands that they like. “Retailers are fighting for attention and they need to find ways to re-engage their consumers. They’ll head there alongside Google as the way that they decide. By the time people get to Google they’ve already decided what they’re buying. Brands are fighting to be upwind of that decision.”
“We need to be thinking about new metrics like ‘profit per engagement second’ across all our channels.”
As for the role of e-commerce departments, Jindal is acerbic and sceptical: “Separate ecommerce divisions? Enjoy it while it lasts. In a multi-channel business the commercial questions are on margin and yield, not simply about single channel growth. There are things that eCommerce can teach the business - metrics, agility, experimentation, direct contact - but all are governed by the imperative for a profitable, sustainable business.”
Since 1991 Ian has operated at Board level, either as director, CEO or investor for some of the biggest e-tailers in the UK. As well as the being the Editor in Chief of Internet Retailing and an in demand speaker Ian works as an executive (leading business transformation at Board level), non-executive (working with Board and CEOs to build businesses) and investor (founding and growing early-stage companies). His clients include House of Fraser, Austin Reed, Couturelab, Otto UK, The British Council, IPC Media, Westfield Shopping Towns and David Morris.
He works with in the board room and on the operational floor to lead firms where they need to get to. He’s has been responsible for P&Ls from £5m to £400m within organisations of up to £3.3bn turnover.
Ian co-founded www.europeanecommerceforum.org as a think tank and private conference for Europe's leading etailers. Take a look at Ian’s blog www.innoparticularorder.com and tweet at @ianjindal.
Directors that attended: AVG, AMC Networks, Aquasutum, BIMA, Criteo, Digital Strategy Consulting, Digital Training Academy, Dotmailer, Ecommera, Harvest, Imagination, Liberty, Invizua, Miss Selfridge, National Rail, Netimperative, NMA, ORM, Pod1, Spectrum, UserVision and several independent consultants.
More about the dinner
Another excellent dinner with a fantastically provocative speaker. Ian's talk challenged the conventions, and got all of us thinking about what it meant for our businesses. Retailers like Miss Selfridge and Liberty were among the directors firing the questions. What we came away with was a sense that the big changes in online retailing are yet to come, because most firms are using models that were five years old and are missing all the new tricks the industry's uncovered. Our Digital Directors’ Dinners have been a great way of relaxing over a glass of wine and networking with other senior industry figures. We bring you top speakers, great food, private dining and ideas you can apply to your own business. You bring yourself and a colleague, and the chance to relax and kick back. They’re intimate affairs, and to help you and to get even more value from them send us your questions in advance!
Directors that attended:AVG, AMC Networks, Aquasutum, BIMA, Criteo, Digital Strategy Consulting, Digital Training Academy, Dotmailer, Ecommera, Harvest, Imagination, Liberty, Invizua, Miss Selfridge, National Rail, Netimperative, NMA, ORM, Pod1, Spectrum, UserVision and several independent consultants.
Netimperative.com - in partnership with BIMA