Retailers cite the separation between their digital and physical offerings among their top challenges.
But for Mark Teperson, chief digital officer at ANZ footwear retail conglomerate Accent Group, the real issue is breaking silos within the physical realm and building a back-end omnichannel experience that can meet the promises the company makes to its consumers.
Melbourne-based Accent Group, founded in 1981, has exclusive distribution rights for 10 international brands across the region, including Timberland, Vans, and Dr. Martens, and owns retailers including The Athletes Foot, Hype DC, and Platypus Shoes. Just a few years ago, Teperson realised the company’s proposed customer experience and inventory capabilities were out of sync.
“If you think about it, our regional store in Ballarat [Australia] has a lower inventory count and a third of the range that our flagship city store has, but these customers are still seeing the same social media, the same omnichannel experience campaigns that we’re creating in market because we want to treat everybody the same,” Teperson told CMO.com. “If you don’t have the alignment of that in your business, you’ve got these silos and experiential differentiation.”
This insight helped Teperson realise his business needed to change. Over the past 18 months, he has kept a laser focus on developing a hybrid digital-physical model that has influenced several service innovations. The results speak for themselves: Total digital sales have increased by 170% in the six months ending December 2017, Teperson said. And with 445 stores across ANZ and an online audience that is equal to the amount of in-store foot traffic, the opportunity for Accent Group to grow even further is there for the taking.
Teperson spoke with CMO.com about creating an omnichannel retail experience, transformations within the company, and his take on the most valuable type of transaction.
CMO.com: What was the catalyst for Accent Group’s digital transformation?
Teperson: It was instinctive. About six years ago we recognised a changing of the guard in terms of the way retail businesses were being run. We saw the way that consumer behaviour was starting to shift toward more digitally led experience, both social and e-commerce, and so we decided that we needed to invest in digital to pave the way for the next generation of consumers coming through the market.
I became the director of multichannel and took this transformation on with the full support of the board. Our journey has, at times, taken a slightly different course from our initial expectations, but I think we’re fortunate that we had the foresight to create this structure early on, which has certainly paid strong dividends for the business as the retail landscape has evolved over the last few years.
CMO.com: From an operational perspective, what makes for a fluid customer experience?
Teperson: There’s this idea around what completely seamless, orchestrated, customer experiences should look like, and then there’s the reality of how you actually go about delivering on that idea. You have to transform your organisation to be able to deliver experiences in a seamless fashion through omnichannel.
It’s one of the big challenges we face in retail; we do a lot on the front end because that’s what we think people are seeing. [But] if the engine room, or back end of your business, is not operating to support what your front end is doing, then the consumer experience you create with your brand can be disjointed or not as fluid as you’d like.
CMO.com: What transformations have happened within Accent Group to forge a better connection in terms of reaching your customers?
Teperson: There’s probably three areas that we’ve really concentrated on. The first one is content; it starts and ends with that, in terms of the structure. To complement content, we think about delivery in terms of the channels that we need to deliver that content through. Then, lastly, we bring data and insights.
Retailers have more data at their disposal than any other business in market, but we’ve got to find ways to codify it so that we become smarter with each interaction, with each time we run a campaign–that’s what we’re hoping to achieve with our ecosystem.
CMO.com: Would you say that Accent Group has both an in-store channel and an online channel or a combined retail channel? How important is it to make that distinction?
Teperson: I find that more and more we’re thinking about Accent Group as a channel-less ecosystem where the consumer doesn’t actually see us as an online business or an in-store business, but one where their touch points are secondary to the overall experience they have with our brand.
Internally, we still face some challenges in that businesses are operated in teams, and silos sometimes exist within those teams. It’s working out a way to break those silos down to create great experiences that can be tricky.
CMO.com: Your Click and Collect and Ship From Store services are good examples of breaking down silos and delivering that hybrid retail experience. Can you talk a little bit about how those came about?
Teperson: There’s a great quote on my office wall from the former Tesco CEO, Terry Leahy: “Follow the customer and you’ll never have to look for growth.” That’s something that really drives what we do at Accent Group.
Click and Collect came about because our customers told us that they wanted it. But they wanted true click and collect … [which] is about immediacy, instant gratification, and being able to do it in close to real time.
Ship From Store came about after seeing the impressive uptake of Click and Collect services. We said to ourselves, “How good is this? What else does that customer want?” Ship From Store mobilises our inventory and eliminates those silos that exist between physical stores and digital with regard to inventory. Across our business, we can see and sell $110 million worth of inventory across 445 touch points with the consumer.
That in and of itself is the single most transformative thing that has led to the success that we have been driving in market. We doubled our digital sales without investing any more in stock. We just repurposed and utilised what we already had.
CMO.com: How have you seen Click and Collect and Ship from Store impact sales targets for individual stores?
Teperson: Click and Collect is interesting because that’s the one that the whole market talks about. It had a great impact for us. It was a 10% to 20% increase in digital sales that we generated once we launched it.
Ship from Store has had a far more profound impact in that it’s contributed nearly 30% to 50% of our total digital sales. The other way of thinking about it is that we’ve doubled our conversion rates.
CMO.com: What’s coming up next for Accent Group?
Teperson: We’ve just released our Same Day Delivery service and about to launch our Endless Aisle service, which are another extension of the omnichannel infrastructure we’ve built. Endless Aisle is an effort to ensure that we maximise the experience of customers when they come in store so that if they want something we don’t have in stock in that store, we can ship it to them free of charge within one to three days.
If you think about that auto orchestration, we allocate the order to the closest delivery point to the customer. We’ve got 445 of them across the country. We believe we can cover somewhere between 70% and 80% of the Australia population with our store coverage with the same-day delivery proposition, which is fantastic for the diversity of the products and the category that we work in.
CMO.com: In terms of customer behaviour, what’s the most valuable transaction to Accent Group?
Teperson: The most valuable transaction is the customer who chooses to click and collect. I’ll tell you why: Because in order to do that, they have had our online experience. They’ve experienced the digital touch point with our brand, and they have enjoyed it enough to say, “I want to buy from you.”
Not only that, they’ve also elected to go and visit one of our stores to pick that up. In doing so, particularly for new customers, online and digital is a fantastic acquisition channel for us to bring new consumers into our brand.
When they go and pick up a product in store, we don’t just treat it like a post box. We create an experience for that customer who comes in. In our most recent Platypus store in Sydney’s Bondi Junction, we’ve actually created click collection portals [that are] very visible for consumers. It’s not just, “Here’s my receipt. I’m here to pick up the order.” We give them an in-store experience.
By doing that, you [offer] the best of both worlds. What do we know about people who shop across multiple touch points, multiple channels? That they’re more valuable to you, they’re more loyal, and they spend more with you.