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Q&A with Big Red Group: On Heeding Stark Warnings and Sticking Together
Brett Raven, CIO of Big Red Group, tells us why online retail is harder now than it has ever been and what we can do about it.
How do you stay ahead of the game in such a shifting landscape? What’s the key for staying agile?
Overall, its quite a challenge! I am driven by learning new things and digging into innovative ways to ‘move the needle’ in a positive direction. Having said that, I am not sure anyone is ‘ahead of the game’. We are all doing our best to filter through the noise and myriad of systems, services and trends. Online retail is harder than it’s ever been – finding and keeping customers is a daily battle. My key suggestion however is, look for incremental wins, rather than a big-bang approach. Always.
What has been the biggest disruptor for you in the last year?
Two main things – the shift to mobile (lower conversion rates) and the growing customer demand for discounts and ‘always on’ sales events – for example, the discounting season now starts pre Christmas, through to the New Year (Black Friday, Cyber Monday, early boxing day sales, ClickFrenzy). This really puts pressure on how to eke out fractions of a percent in volume uplift, to offset the margin losses.
What are the biggest trends now that retailers need to stay on top of?
Retailers need to (continue to) focus on what the customer wants. Everything from features, to site speed, merchandising relevant product and personalisation. It’s a broad thing to consider, but we are placing bets on site optimisation and AI to achieve this more optimally. That’s why we invested early and heavily in the AI marketing technology Albert – the Big Red Group are the exclusive distributors of this technology in ANZ and it has been a game changer for us and our small experience business partners who are struggling to afford to reach more and diverse customer groups to stay competitive in the face of the big global Experience Economy players.
How do you separate the panic / hype from what actually needs your attention? When should you jump on a new technology or head in a certain direction, and when should you wait and see how things play out?
Always question if you really need something and what the likely payoff will be, rather than racing to grab the shiny new toy on the shelf just because it’s new. I pride myself on being incredibly pragmatic when it comes to technology solutions and I would rarely be an early adopter for new technologies when it comes to what we put on the website or use in emails and customer journeys. Version one is going to cost you. Wait until Version two, unless you are willing to take an educated risk like we did with Albert, But please limit your risk commercially!
Can you tell us a mistake you made or a different direction you had to take when things weren’t turning out how you had planned / expected?
Mistakes are just opportunities to learn! We as a business applaud people taking measured risks, and failing/learning fast. They probably happen weekly to be honest. It’s a great culture component to have within an organisation and will free up creativity in your teams. As long as you don’t make the same mistake twice.
What is the biggest challenge for those in e-commerce at the moment? And how can it be overcome?
Mobile conversion rate, and SEO competition. These go hand-in-hand. Experiment with your mobile experience to optimise to its fullest extent. Otherwise, you’ll be competing blind in the fickle retail market and competitive ‘race to the bottom’ due to heavy discounting seasons.
NAB recently announced that the retail sector is in recession in Australia. As an industry, we need to pull together more, to ensure we help protect ourselves from massive international competitors, who have deep pockets and can heavily discount to erode our margins (and effectively squeeze us out of the market). We also need to send a message to those businesses that profit from our need to ‘buy’ more customers. It’s getting harder by the day to compete in SEO, and online advertising costs are continuing to increase. Driving our prices down and paying more to acquire a customer will be unsustainable for a lot of us in the coming 12 to 24 months. The retail landscape in the US is a stark warning for our small ANZ market. We have a better chance of fending this off by cooperating more; sharing data, insights and techniques.
What are your top 3 tips for retailers to achieve long-term success?
- Look for incremental wins. Experiment and see how can move the needle in the right direction, even if it’s 0.5 percent . Have a good A/B testing strategy.
- Do not underestimate how poor site performance can affect your business, revenue and brand reputation, especially on mobile (as traffic split tends to be only 30 per cent desktop these days)
- Build cooperative relationships with industry peers. You can avoid competitors if you wish, but in general in retail, we are all in this together and have the same issues. Why not learn and adapt as a community, if you are not competing for the same share of wallet and/or voice?
Investing in new tech is obviously a huge cost for a business of any size. How should retailers work out what’s right for them and their needs?
Take the time to do a business case that is ‘just good enough’. You do not want to get into being paralysed by analysis, but you need a minimum amount of information to make the right decision at the time and back yourself. If you are buying a product, spend more time than usual talking to existing customers (not just the references provided by the supplier). Ask the harder questions such as:
- What went wrong?
- What are the real costs?
- What was the benefit and how long did it take to be realised?
- What are the resourcing requirements that it took to make this happen?
What are the most important elements behind online retail success?
Focusing on the customer. I know it sounds cliché’, however, if you focus on what the customer wants, everything will pay better dividends.
Brett Raven will be a Panellist on the topic: Disruptive technologies: From discovery to delivery – leveraging tech to best facilitate the customer journey. To see the full agenda for Online Retailer Conference & Expo (to be held 24-25 July at the ICC Sydney) or to buy tickets, click here.