Retail’s multi-channel challenge

Today we are talking to John Batistich, the general manager for marketing at Westfield Group, the world’s largest listed retail property owner. John will be speaking at the WebForward Conference at Cebit Australia on May 26 on how retailers are using digital channels to engage their customers.

John, can you give us a bit of a preview of your speech.

I’ll be talking about a range of examples such as global retailers like Zappos, Apple, Best Buys, and then more locally Sportsgirl and Dotti, to present the case that shopper journeys are changing as a result of technology enabled kind of activity and the future of retail is not only customer centric but it is also channel agnostic, if you like. And I’ll present a range of case studies and learnings from some global and local retailers and how they are integrating digital channels right across their entire mix, and then summarising some of the learnings and implications.

There are 10 or 11 implications and they are pretty simple. It’s things like:

• Go where your customers are, get mobile.
• Get social and get local.
• Think through the multi-channels that are now part of the new shopper journey.
• Mobilise your staff, harness them.
• Empower your advocates, the people who really love your brand.
• Service your products.
• Create forums for them to be engaged in your business.
• Real experiences are more important than ever, and retailers are stepping up to create the future store environment.
• Joining the conversation in social influence.
• Creating communities of interest.

Westfield’s roots are very much in the physical space, so what is Westfield’s role in encouraging that shift towards multi-channelling?

There are a number of things. We do create shopping experiences, we’re a market maker if you like, bringing buyers and sellers together, and creating an environment for shoppers to get great experiences and retailers to get prosperous retail environments. We are certainly advising our retailers, we have a Westfield study tour that we take key retailers to, that is going on as we speak, to places like Japan, London, Paris and New York, to speak to retailers about the world’s best retailers. We also have an advisory service but I am really not going to talk a great deal about Westfield’s strategy in this space for competitive reasons.

Looking broadly at some of the case studies you are going to cover, are there a few things you can highlight about the companies that manage this multi-channel retailing really well?

I will answer that question with a local and a global example. Sportsgirl are one of the leading specialty fashion brands, I guess catering for fashion-aware young women, that has really upgraded the in-store experience and made it more fun and entertaining, improved the ambience, they have created style rooms that are small private rooms to be styled in, for friends to connect. They are obviously connected on Facebook and Twitter and their website allows for transactions to occur, it has forums and blogs, Sportsgirl TV which is a series of behind-the-scenes, style inspiration and guidance, they also have competitions, they have style tips, they have a community cause and they encourage their shoppers and customers to provide comments, upload photos and they also have a swap meet which is really interesting.

And this is an important trend which is about empowering customers. For example, on dedicated days in selected stores, retailers are now saying “bring your quality used items, we’ll create an environment for you, you swap them with likeminded fashion-aware women, now all we ask is that you pay $10 to enter the store, with every cent going to our community cause, the Butterfly Foundation”. So this is happening but Sportsgirl have chosen to do it in their environment.

The shop becomes a destination, part of your lifestyle.

Yeah exactly, and I think that is really innovative how they have integrated all those elements and brought them into their stores and I think it is a really lovely local example.

There is probably no better global example than Zappos. Zappos is probably one of the most successful footwear and fashion websites in the world, late last year it was bought by Amazon for $1.2 billion. In the last decade, the CEO Tony Hsieh, created a new culture. Seth Godin’s probably one of the leading thinkers in the area of digital brands, said that Zappos “isn’t a shoe store, ‘it is the one, the only, the best there ever was’ place for people who are into shoes to find each other, to talk about their passion, to connect with people who care more about customer service than making a nickel”.

They have an incredible culture, they have got a complete strategy about mobilising their staff, engaging their staff. They are all on Twitter, they have a digital service culture, they have been rated consistently over the past few years as one of America’s best places to work, they’ve had some of the highest growth of any retailer or business in the world and within 10 years created a billion dollar culture. So what they did is they took basic time old principals of customer service but they combined that with eCommerce, social media and at the core of it they put their customers and their staff unlike any other organisation that I have seen.

If you look ahead what are some of the new things that these retailers are doing to merge those two worlds of online and physical retail?

I think the biggest trend that is going to shake Australian organisations is something called social business design. So you think about your own behaviour over the last three years, the way you are consuming media is different, the way communicating with friends is different, the way you get information and scan is all different and yet all the organisations we work with are in structures and designs that were created without the social web.

So what I am going to be arguing, is all organisations, including retailers, will change their design over the next decade. And this social business design is going to be really critical, I argue, because your customers will be the centre of your organisation which is really unusual. It is very different to the current thinking which is to have a structure which could be designed on geography, on function, on product – but the future will be that the customer will be the centre.

And it has huge implications for human resources, how you attract talent and retain talent, which means social networks are going to be an enormous source of recruitment and selection that we have not seen in the past. Researchers, retailers and other businesses will be researching through community networks and there are organisations already doing this now. Customer service will be again through these community networks. The way you design products and stores will be around going to communities to say well, tell me what you want. We used to research that, now the customers will be involved in the complete research of products and services. The whole game has changed for scale, speed and amplification of issues. So I think the social business design piece is going to be the big change in the way all of us operate – retail and businesses – in the next decade or two.

Thanks for having a chat and a great preview for what is coming next week.

CeBIT Australia 2010 runs between 24-26 May 2010 at the Sydney Convention & Exhibition Centre, Darling Harbour. For more information visit www.cebit.com.au