It can be a real challenge to read about the retail sector these days, with so many high street names struggling to adapt to the new digital landscape. So, when a retailer reports vigorous sales growth and profitability everyone wants to know about their secret sauce.
Increasingly, the answer is amazing customer service, backed by reliable, fit-for-purpose infrastructure and technology.
A case in point is Mountain Warehouse. Opening its first store in Swindon in 1997, the outdoor retailer now trades from 340 stores, employs over 3,000 staff, and plans to open 60 new sites over the next 18 months.
At the start of this year the company announced it was on course for record annual profits, with an impressive 12% rise in sales to £84.7m during the 13 weeks to 6 January. This followed a bumper Black Friday 2018 – with online sales of over £1m for the first time in a single day – and strong sales growth over the Christmas trading period.
Overall, online sales grew by 25% in this period, made possible because the Mountain Warehouse had the systems and resources in place to cope with a surge in demand for its socks, fleeces, and winter jackets.
Mountain Warehouse founder, Mark Neale, recently sold 20% of his business for £45m.
"We are building our infrastructure with new customer service and distribution centres to make sure we keep delivering for the over 10 million people who shop with us each year," said Mark Neale, founder and CEO. This includes new customer services and supply chain facilities in Coventry, opened in November to support this phenomenal period of online and offline growth.
With this investment the company has ensured sales are not lost during peak trading events due to problems such as website downtime, infrastructure overload, and supply chain limitations. Good customer care at their call centres has also have kept customers on board whenever order and delivery issues arise.
Flexible, scalable technologies
Leading retailers like Mountain Warehouse know future success relies on the systems they have in place, and the valuable data insight that feeds through as a result. Many are investing in next generation networking infrastructure, scalable cloud-based storage, and web platforms that allow integration and visibility of stock and customer information across all channels, so that customer service is second to none.
British clothing brand Joules says the group’s recent performance was underpinned by the strength of the brand but also the flexibility of its Total Retail model which enables the company to take a joined up approach to customer interaction, and adapt to changing customer shopping behaviours in-store and online.
Similarly homewares and furniture retailer Dunelm traded well through its key Winter Sale period and now plans to deliver a multichannel customer experience with new, flexible, scalable technologies that enable services such as click and collect.
Understanding customers still a work in progress
This best practice is great to see but not all retailers are there yet. To find out what shoppers want, and whether retailers think they are delivering it, Oracle NetSuite partnered with Wakefield Research, to survey consumers and retail executives in the US, UK, and Australia.
What the research confirmed is a huge disconnect between consumer expectations and what retailers deliver in a range of areas. "The disconnect between what retailers thought they were delivering to the consumer and what the consumers thought they were getting back is eye-opening," said Jason Maynard, NetSuite senior vice president. "Retailers’ view of the overall customer experience is surprisingly rosy—probably too rosy."
For Maynard, this disconnect very often comes back to how retail businesses have grown over the years. When growth kicks in, he says, the temptation is frequently to resort to "cobbling together a series of siloed systems". It’s easy for fast-growing retailers to opt for quick fixes and fail to carry out the total upgrades or at least back-end clean-ups that the systems need. What’s really required is for retailers to simplify processes, consolidate systems, and ensure infrastructure underpinning growth is reliable, secure, and scaleable.
Caring and sharing
In other words, retailers need the right technology and network infrastructure to make brilliant customer service possible. This might sound like a big challenge, but planned, iterative change can make it happen.
With this in mind, retail technology specialists are increasingly aware of retailers’ frustrations around legacy and network limitations, and are working in collaboration to offer the best possible tailored solutions. Together, retailers and their IT partners are finding the most cost-effective ways to keep up with the pace of change, improve security and compliance, and meet the changing demands of today’s consumers.
- Retail tech investment is rising to mitigate website downtime, infrastructure overload, and supply chain limitations.
- The correlation between the right technology and exceptional customer service is firmly established.
- Leading retailers prioritise infrastructure that is reliable and secure for peak trading.
- Flexible, scalable technologies that enable innovation are essential ingredients in retail.