By thinking of digital and ecommerce as a distinct business unit, traditional retailers are failing to leverage their assets to deliver better services and experiences to their consumers, argues Mark Teperson, Chief Digital Officer, Accent Group.
For the ASX-list footwear retailer, challenging the way it thinks about its stores helped Accent lift its digital sales 170 per cent in the six months to December 31.
“We wanted to create the digital arm to our business that was an extension of what we were creating in our stores,” Teperson told Which-50.
Five years ago the ASX-list footwear retailer embarked on what is today referred to as digital transformation, developing a strategy that would ensure they stayed relevant to shoppers in the future. Over the same period the business has grown rapidly, finalising a merger between Accent Group and RCG and acquiring Hype DC.
Accent now operates more than 445 stores across 10 different retail formats — most notably the Athlete’s Foot, Platypus shoes and Hype DC — in Australia and New Zealand.
Over the last three years the retailer has built out its digital marketing and ecommerce capabilities, and in the last 12 months turned 350 of their stores into distribution centres to better connect the digital and physical shopping journey.
“While it’s true that our stores are our most important asset for creating an experience for customers, they also happen to be fantastic distribution centres to get products to customers faster,” Teperson said.
A year ago the business launched “true” click and collect, which made products available in real time at local stores, rather than sending it from a warehouse to the store to be collected by the customer.
Creating that real time inventory hook up led to the launch of ship from store, which allowed products to be delivered to customers more quickly. It also means Accent can make its entire inventory available to purchase online – not just the stock sitting in a warehouse.
“By turning stores into distribution centres, we have effectively published one of the largest catalogues of footwear in Australia online to be purchased at any given time. That had a really transformational impact on our business. We doubled our conversion rate overnight just by switching that functionality on,” Teperson.
Accent’s digital sales were up 170 per cent in the six months to December 31, on top of 100 per cent growth achieved in FY17.
Its share price has fared better than most Australian retailers over the last six months, as the chart below illustrates.
In July the company plans to launch same day delivery, followed by three and four hour delivery.
“By using our stores as distribution centres we are going to be able to make product available same day to 70 – 80 per cent of the Australian population. For those services we’ve engaged with several same day courier freight providers that enable us to access all of our markets in metropolitan or capital cities.”
Accent also plans to launch endless aisle to give store associates the ability to have products that aren’t in-store when the customer wants them delivered to them free of charge the next day.
“We think endless aisle will be another powerful innovation for us that further strengthens the link between how digital and physical really come together to create better experiences,” Teperson said.
A Single Stack
Alongside its investments in logistics, Accent Group has implemented several products from the Adobe experience cloud. Teperson said investing a single platform, rather than multiple best of breed solutions, enables retailers to deliver seamless customer experiences.
“I think in today’s day and age there is a big difference between vision and execution. Lots of people sell a dream on what you can do but to be able to fulfil that is something altogether quite different.”
“I’m a huge supporter of simplifying digital ecosystems because the more complexity and different disparate systems that you have, the harder it is to orchestrate those brilliant experiences in real time.”
Accent also uses Magento, which was recently bought by Adobe, as its ecommerce platform. Teperson said his view of the acquisition is “overwhelming positive.”
“It as a fantastic strengthening of our digital ecosystem where both our commerce platform and our digital marketing platform now come together under one banner. We see a huge opportunity both strategically and operationally in that kind of new world.”