Booksellers NZ Succeeding in the Digital Age

1. Booksellers NZ Succeeding in the Digital Age

2. House Keeping • Sit back and relax! • This presentation has been written in article format • My apologies for the “wordy” slides • “Digital” = all things web • eCommerce • Mobile • Social

3. Don’t worry…Be Happy!These are exciting times!

4. About Greg Randall • 15 years in retail, senior ops, pm, and logistics • Last 10 years specialised in • eCommerce/Digital strategic planning • Digital marketing strategy • Execution of strategic plans • Scalable operations and supply chain • Technology and services agnostic

5. Some Clients

6. The NZ Digital Environment • Source: BNZ Online Retail Sales index • 2013 • Total online purchases $2.8 billion • Comprises 6.2% of retail sales (9.7% if you remove grocery and liquor) • Online growth increasing 3x that of physical retail (3.7% vs 13.1%) • By 2016 online spending to hit $5.4 billion

7. The NZ Digital Environment • Share of spend by sector: • 26% Department, Variety, Other • 17% Recreation, Books, Entertainment, Toys, Games • 13% Electrical and Electronics • 13% Groceries and Liquor • 12% Fashion, Footwear, and Accessories • 8% Furniture, Housewares, Hardware • 6% Pharmacy, Cosmetics, Stationary, Flowers • 6% Daily Sales

8. The NZ Digital Environment • International retail competition • NZ retailers are losing market share • 42% of online sales ($1.18 billion in 2013) came from overseas retailers • Overseas online sales growth shows 24% year on year • Domestic online sales growth shows 10% year on year

9. The NZ Digital Environment • We are going mobile (as of 2013) • 74% of online users researched product/service on their phone • 33% purchased on their phone • 13% have purchased tablets (and growing rapidly)

10. The New Multi Screen World • We are becoming a “multi screen” nation • Google study in August 2012 found: • 90% of all daily media interactions are screen based: Laptop/PC, Tablet, Smartphone, TV

11. The New Multi Screen World • Two forms of multi screening: • Sequential: • moving from one device to another to complete a single task • 90% of those who use the internet use multiple screens to complete a task • 98% move between devices to complete a task within the same day

12. The New Multi Screen World • Two forms of multi screening: • Simultaneous: • Using more than one device at a time • Can be related (watching TV and commercial prompts a search) – TV is a major catalyst for search • Or unrelated (ie watching TV and on Facebook/gaming)

13. The New Multi Screen World • Context drives device choice • PC Laptop keeps us productive and informed • Office use, task orientated, serious researching • Smartphones keep us connected • Used on the go, communicate and connect, need info quickly • Tablets keep us entertained • Entertaining and browsing, relaxed and leisurely approach

14. The Consumer is in complete control • He/she consumes media, purchases, engages with brands/retailers, socialises, gathers information on his/her terms • TV is not safe…Nielson: Youtube reaches more US adults 18-34 than any cable network • Compare your tolerance for TV ads now vs 5 years ago

15. IMPORTANT • The retailers who are winning are those who are connecting with their target market on the consumers terms. • “Established in 1906” used to be important, now it’s a liability. • The days of retailers with big marketing budgets winning market share are now over

16. What are NZ Retailers doing? • Many struggle with this shift in power • Resulting in failure of their digital channels to perform • We can learn from failures to advance growth • 6 major failures • Source: PWC, Econsultancy, My Experience

17. The 6 Failures - Strategy

18. Strategy • Retailers do not understand how to create a digital strategy • Since you have monetary goals for Digital it should be considered a business channel • Therefore the true definition of strategy still holds for all Digital activities • Strategy is a unified plan of action designed to achieve long term goals for a business • The only difference is you have different tools to enable the plan

19. The 6 Failures - Strategy • Retailers revert to what works for them in the physical retail world • Example: one stop shop • “convenience” in physical retail could mean offering a “one stop shop” • “convenience” online has a completely different meaning • For Booksellers NZ the critical first step in Strategy is understanding your customer

20. The 6 Failures - Resource • Lack of budget and resource • Both time and money is needed • The issue is more about time and the right resource • “Once I put my website live, my job is done”

21. The 6 Failures - Technology • Technology limitations of current platform • Poor technical set up will stifle growth • Inflexible front end – your storefront • Limited functionality available • Cannot connect to other critical 3rd party systems (CRM to drive personalisation) • Slow loading site • Booksellers site takes 5.3 seconds to load

22. The 6 Failures – Vendor Relationships • Web Development companies • Adwords/SEO Agencies • Agencies • PWC identified this as a reason Retailers are slow to adopt eCommerce/Digital • eCommerce is a long term strategic business channel • Agencies are short term campaign focused • You need to align to specialists

23. The 6 Failures – Silo • Digital channel operates in a silo • Separated from other departments including the bricks and mortar store(s) • Digital staff shoved in a corner of the office with no positional power • reports to Marketing • There should not be a distinction between digital retail and physical retail……its just Retail.

24. The 6 Failures - Culture • Culture • Having true belief in digital and backing it • Econsultancy says 90% of NZ fully buy in • Not True….more like 20% to 30% • They say the right things but still struggle to see the opportunity • Very common with large retailers

25. The 6 Pillars of growing a Digital channel for Booksellers NZ To be successful in the early days is doing a very good job of the basics – you are foundation laying

26. #1 Strategy • The unified plan feeds the other pillars • Because the plan aligns to business needs, decision making around the other pillars becomes straight forward • Strategy also defines specific activities (tactics) • Strategy is the blueprint to your business growth

27. #2 Technology • Make sure the technology: • Supports the current business and the future direction • Technology is a business enabling tool…it requires strategic planning • Example of retailers complaining about certain digital technologies • If you don’t plan you end up with this……

29. #3 Usability and User Experience • Most consider these two terms synonymous • They are two distinct disciplines • Usability: goal focused, ensuring customer gets from A to B as quickly and “frictionless” as possible • User Experience: emotional, delivering positive interactions to develop affinity with the retailer

30. #3 Usability and User Experience • Usability is motorway

31. #3 Usability and User Experience • User Experience is a coastal mountain road

32. IMPORTANT • The goal and challenge of all retailers is to blend the two disciplines together

33. Usability Tips • Using Jakob Nielson’s “F” pattern we can strategically place content

34. Usability Tips • Best practice navigation • Every page just have obvious call to action(s) • Answer this question for every page of your site: “What action do I want visitors to take on this page?” • Usability drives a consumer’s non linear buying/information gathering process….

36. User Experience Tips • Blend copy, images, and video to enhance the consumer journey • Develop a high standard of merchandising content • Develop and drive Social Proof • Consumers look to peer opinions and actions for assurances they are making the right decision • Peer opinion is more powerful than celebrity endorsement

37. Why is User Experience important? • Enhances the relationship between retailer and consumer • Caution!!! Do not create “eye candy” • User experience is ruined when the site is “un usable” • The challenge is to bring usability and user experience together

38. Before and After

47. Usability and User Experience • Why is this process important? • Physical retail converts around 20% to 40% • eCommerce websites convert between 1% to 5% • Why such a big gap?

48. Usability and User Experience • Physical sales people react to verbal and visual cues • Achieve a sale if they adjust their sales pitch to align to the consumer’s buying process • A website cannot react to cues so it must anticipate how consumers want to buy • Sales will happen when the way a website sells is aligned to how consumers want to buy • Usability and user experience is a big part of this alignment

49. 6 Pillars • 1 – Strategy • 2 – Technology • 3 – Usability and User Experience • 4 – Digital marketing

50. Digital Marketing • Digital Marketing for acquisition and retention • Acquisition: acquiring new customers • Retention: building loyalty and lifetime value • Most struggle to acquire new customers