Multichannel Success Podcast Season 4 Episode 1 - Transcript

The Retail Challenge - with Ian Scott

Mark [00:00:05 - 00:00:10]

Hello, and welcome to this episode in season four of the multi channel success podcast.

David Worby [00:00:12 - 00:00:47]

In today's episode, we're delighted to have with us Ian Scott, a well-known independent retail consultant who's focused on customer experience and the physical store. Many of you will know Ian from his retail safaris and other things. Welcome, Ian. Thank you for having me, guys. I'm also joined today, as always, by my co-host, Mark Pinkerton. Hello. And I think we're going to start with the challenges, some of the challenges that we can see right now. So Ian, give us a sense of what's going on in a kind of post-COVID physical retail world.

Ian Scott [00:00:48 - 00:01:53]

Well, I often start a lot of my presentations by looking briefly at COVID. I mean, I know it was three or four years ago, but I think it was a massive wake-up call in a number of ways. We obviously saw the physical retail estate temporarily halted or closed in a number of sectors, but what I love seeing is how the human nature of shoppers has meant that things have returned back to normal. We had a phrase that came up during lockdown, new normal, we're all online now. And I always thought it was a fallacy because it wasn't a behavioral shift, it was legislation and a fear of a global pandemic. And I've seen some fabulous charts, particularly one from the Office of National Statistic that plots the growth of digital as a percentage of retail sales. And it's been steadily growing, since the invention of the internet, the digital share has not matured. And we saw an obvious spike in 2020. But what's fascinating now is the share of digital has dropped back to where it would have been on the ground. And you can take that chart, draw a line right through COVID and it's back where it would have been.

Mark [00:01:53 - 00:01:58]

So it's meant a couple of very rough years. Yes. Post-Covid. But we went back and I say,

Ian Scott [00:01:56 - 00:02:01]

Yes, post COVID. But we went back and I say, you know, we're back to normal. And I think it was,

Mark [00:01:58 - 00:01:59]

you know, we're back to normal now.

Ian Scott [00:02:02 - 00:02:38]

I think COVID will be a wonderful case study, hopefully a one off. But it will demonstrate the power of human behaviour that things never change as much as we think. So it's matured the innovation drive. But also it's had the same effects on physical because now people are coming about stores, we still have 75% of global retail sales happening in store. So it is by far the biggest channel, you know, 10 times bigger than most of the channels. And it will be here for a long time to stay. So what I love is that it's demonstrated the human social interaction element.

Mark Pinkerton [00:02:32 - 00:02:33]

So what I love.

Ian Scott [00:02:38 - 00:03:12]

You know, we were deprived, we couldn't go to restaurants, cinemas, go on holiday. So it wasn't just shopping. And I think the progressive brands have recognised this and they've turned their stores into the central hub of their retail ecosystem. But also a much better understanding of how it interacts with the digital channels. Because the digital channels went, whoa, this is our time. And they came forward and they matured very quickly. But the clever ones now integrate. And the other thing I would add as well as a lot of people go, oh, physical is all about experience now. And I'm like, yeah, but you still sell a lot of shit in stores as well. So by all

Mark [00:03:08 - 00:03:09]

Yeah.

Ian Scott [00:03:12 - 00:03:18]

means have experience and integrate your digital. Stick products on the shelf as well, because it's still the biggest channel for sales.

David Worby [00:03:19 - 00:04:09]

Before we come on to the physical and virtual kind of comparison in a moment, I'm just interested in your perspective on how physical retail may have learned something from digital retail in terms of how you make that experience better. Because we all know that the virtual experience is kind of browsing right through to refunding and whilst the same activities occur in a physical environment as well, we know that we've got so much more data points and we know probably therefore how people are feeling a lot more when we look at virtual data or kind of transactional data. How do you kind of get your head around that? What's the lasting legacy of, if you like, the COVID bubble for physical retail?

Ian Scott [00:04:07 - 00:04:10]

Subs by www.zeoranger.co.uk

David Worby [00:04:09 - 00:04:09]

What have they learned?

Ian Scott [00:04:10 - 00:04:25]

I think what you have, and primarily a lot of the digital channels are about speed and efficiency, it's quite a binary process. There's a laid out path, you go on a website, you get a homepage, you click on the category, you find the product, you go to checkout, it's very linear.

Mark [00:04:25 - 00:04:28]

Yeah, it's all built around the customer journeys. It is.

Ian Scott [00:04:27 - 00:05:07]

It is, but also it leaves a digital footprint, so you know how long someone's been on the website, what pages they're looked at, when they return, and you can connect it to a sale. A physical store, the worst scenario for the Insights team of retailers, if someone wanders into a store, pays cash and leaves. Because you go, oh, we made a sale, who was it? Haven't got a clue, what did they do? No idea, because there's no connection. And then also, it is quite hard to connect someone who goes on the website and has a look, and then goes into the store and buys. Because unless they're leaving these fingerprints and connecting them to the physical store. So your biggest channel is the hardest one to track, which does create a dilemma.

Mark [00:05:07 - 00:05:17]

I would challenge that with saying some retailers, certainly at the upper echelons, will now always ask you for your email to make sure that they

David Worby [00:05:17 - 00:05:18]

Yeah.

Mark [00:05:17 - 00:05:21]

allocate things to your profile. I mean you've always had Liberty or Self

Mark [00:05:21 - 00:05:33]

Advocates or Harrods doing that sort of thing, have you got a card sir, and achieving the link that way. But certainly, you know, ESOP, Paul Smith, they all now ask for your email address when they phone you back.

Ian Scott [00:05:31 - 00:06:05]

Would you like me to email your address? Yeah, help us do it. Would you like me to email your receipt to you? And it's a very clever way of getting by. Not nasty or devious, it's a clever way. Because unless you have a loyalty card or you're using the app in store, you can't make that connection. And that's still the weak link in tracking customers. Because customers will seamlessly flip across all the channels. You know, we'll have a look on the website before we go into town to the physical store. We're in the store and we'll open the app to compare prices or check competition. You know, and it's constant flitting across the channel.

Mark [00:06:04 - 00:06:13]

But then you get that ridiculous scenario with Boots for example, where if you buy something online and have it delivered to the store, it's actually cheaper than going to the store.

Ian Scott [00:06:13 - 00:06:14]

Yes.

Mark [00:06:13 - 00:06:14]

Yes.

Ian Scott [00:06:14 - 00:06:15]

And that is just complete.

Mark [00:06:14 - 00:06:15]

And that is just completely nuts from my point of view.

Ian Scott [00:06:15 - 00:06:17]

It's one of the book bears I have.

Mark [00:06:15 - 00:06:20]

It's one of the book bears I have. It dissolves the customer trust levels that you have with that retail.

Ian Scott [00:06:20 - 00:07:13]

I think the only scenario someone ever gave to me where it is worth considering that is if a competitor is opening on your doorstep and you need to respond and that may be cheaper in the store because your biggest competitor is over the road, but that's a temporary thing. There is nothing more annoying than getting up in the morning, checking the price on your phone, going in the store, having driven 10 miles and paid £5 to park your car to walk in to find it's £10 more expensive and it's one of those great examples where I just say to people, just put yourself in your customer's shoes, you know, and I say, and in retail you've got no excuse. Like the phrase I often say, you know, take your Tuesday morning head off and put your Saturday afternoon head on. We are all shoppers and it's so difficult. You're sat there in the meeting with your boss and deadlines and KPIs and budgets and you go like this and then you yourself will act like your customer.

Mark [00:07:11 - 00:07:16]

We just have to get over that people like us bias that inevitably one has.

David Worby [00:07:14 - 00:07:34]

Bye. I know you do a lot of work with a lot of independent brands in your retail safaris and other things, Ian. Tell us a little bit how you see retailers tackling the physical and the virtual. I know there are a couple of examples we're talking about off-air here, but I think that'd be interesting to unpack a bit of that.

Ian Scott [00:07:35 - 00:09:57]

It is and there are still siloed departments. I remember a few years ago Peter proudly announcing they've got a digital marketing team and the whole of LinkedIn groaned going you shouldn't have a digital marketing team, you should have a marketing team and de-siloing that and so the challenge is when you get that connection really well. Nike, they're struggling with a few things that made a lot of very good experienced people redundant recently and I'm seeing it in the store but one thing they do brilliantly is the way they will connect that physical and virtual. You know when you go to their flagship stores the app adds to the experience and it's a great example. I went to check out the Nike store that opened in Westfield in West London and when I arrived at Westfield there was a buzz on my phone it was the Nike app going hi Ian, welcome to Westfield we look forward to seeing you in the store. So the geofencing captured me what a wonderful way of driving because while my mission was to go to the store it might not have been. So when you go into this some of these stores and particularly flagships like the House of Innovation stores in Paris and New York you can scan products learn about them and buy using the app and there was an interactive what called minority report table one of those touch tables in the store in Westfield London and you activate your app and you scanned a QR code and all the content on the table was relevant to your browsing activity on your app. So suddenly the in-store technology was personalizing to my history and if you want to try something That's very powerful. It is it's very very powerful it didn't work when I went in which is a little frustrating but I'm not going to put people down for temporary glitches in technology the principle is really sound but also you know if you want to try something on in the changing room you want to try on those Air Max if they already know your size from your buying history so they know you're a size 9 or a 42 inch or a medium or a large and it's there so so this is a wonderful example of how the technology enhances the physical interaction and that is a great example of how you do that and it's really important for stores to recognize this the customer has a phone in their hand and as my friend Jack Stratton says that is the most powerful and influential screen you know we're putting lots of screens into stores but the one in our hand is what we constantly defer to

David Worby [00:09:56 - 00:10:30]

So I think what you're talking about there, if I kind of unpick those great examples, is how does physical stores use that online data to make informed in-store decisions based upon a customer who is about to enter the store or potentially might be visiting the store. Just thinking through that, Mr. Smith has walked in the door, he's a size nine, he asked for trainers, you know he's a size nine. That sounds fantastic. In theory, in

Ian Scott [00:10:28 - 00:10:29]

Yeah. In theory.

David Worby [00:10:30 - 00:10:40]

practice, how do you actually do that with a hundred people walking in the door simultaneously? How have you got the staff capacity to get there?

Mark [00:10:36 - 00:10:39]

How have you got the staff capacity to get the right shoes for them?

David Worby [00:10:39 - 00:10:43]

It's almost like the data is amazing, but actually synthesising it in a way that makes

Mark [00:10:39 - 00:10:41]

It's almost like the data is amazing.

David Worby [00:10:43 - 00:10:51]

some sense, so you can have, in that one moment, you can make the right decision to find that customer too.

Ian Scott [00:10:51 - 00:11:32]

But this is where, you know, the physical, the power of the physical store, it is a potential strength or weakness, is the people. So you recruit and train well, the people can take the data and interpret it. I was in Chicago in June and I was doing a store tour and we went into Sephora, one of those really fast growing beauty wholesalers who are opening stores finally in the UK. And they had a skin tone scanning technology, it wasn't on an iPhone, it's bespoke technology because of the quality of the camera. And it scans your skin, it's quite chastening, you know, when you have these images, deep scans of your skin. It's just got, you have wrinkles and it's dry and go and see your doctor now, you know.

Mark Pinkerton [00:11:28 - 00:11:29]

That's all.

Ian Scott [00:11:32 - 00:12:11]

But what I love is, there's a bit of fun and theatre, but then what it does is it makes judgments and the member of staff interprets that and recommends sales. So you get the best of both, you get technology, which is fun and theatre and analysis, and then a human that engages you. And the staff were incredible, they were going, right, looking at this, I think you need this or this. Now, I use this cream myself, it's absolutely fantastic, it's coming, you know, a 20-year-old telling me, you know, what I'm getting, yeah, I think mine needs a little different to yours. But what I loved was, there was recommendation authority interaction, human interaction that add that extra layer of reassurance and recommendation that drove through the sale.

Mark [00:12:10 - 00:12:11]

Mmm.

Ian Scott [00:12:12 - 00:13:14]

And that's, to me, it's the best combination of both because we're very excited about technology, but I'm like, it needs to be relevant. And also, you know, I say a physical store has three unique characteristics, okay. One of them is you can touch and feel product. And there are certain categories where that's really useful, you know, trying on clothes minimises returns, sitting on a sofa, see how comfortable it is in your house. And then, you know, picking fresh fruit and vegetables, for example, you know, some of these are quite unique. And then a second one is peripheral vision, because it is a very linear process. If you go onto the website, you go onto Nike's website, and you look at the Air Max trainer, and it will show you in the different colourways and let you know what's available. And maybe at the bottom, there'll be three or four other recommendations to upsell you. Now, you go in the store, and there are 1000 things in front of you. You know, humans are like magpies, we like shiny new things. So the ability to upsell is exponentially bigger in the physical store. And then the third unique thing is face-to-face contact with a human, which digital cannot

Mark [00:13:09 - 00:13:10]

Food.

Ian Scott [00:13:14 - 00:14:15]

do. Despite virtual and camera links, it's not the same as a customer and a good member of staff interacting. You know, you see stores like Lush, who are hands down market leaders in how to do this. You know, they will put something in your hand, they will rub things on your arm and your hand and show you how good it is. When they interview potential new members of staff, part of the test is you sit someone down and you have to give them a facial and things like that to understand how comfortable this person is interacting and touching another human being. So you get those unique characteristics, but it's like the technology should enhance those, not replace them. You know, I read about a store in Dubai on LinkedIn, where everything was screened, so there's no product, and it was unmanned. And I'm like, why are you paying rent for a store, for a website? So, you know, it's literally you've created a physical version of your website and taken away all of the benefit of the store. It may as well be a website. But that's that's Middle East where they love doing that.

David Worby [00:14:13 - 00:15:15]

That's Middle East where they love to be live, artistic pushing boundaries. Just listening to you talk about that, one of the things that's jumped into my mind was how it's almost like the next generation of shoppers coming through are going to be so mobile phone focused that the limit of their understanding of upsells and cross-sells is how many they can get on a physical virtual page. Yeah. Therefore, your point about the fact that the upsell and not cross-sell opportunities in the shop are so much broader because there's a much bigger canvas out there. Yeah. I wonder how many of them coming in actually increasingly going, I'm not interested in all that. I'm interested in this. And therefore, the role of the shop assistant is to say, we have so much more here. Yes. The experience is so different. To his heart's content. Let's broaden your mind a bit. Whoa, blimey. I possibly didn't realise that there was a broader set of stuff. Now, a virtual store in a physical environment in Dubai makes me think that someone is appealing to that generation of people who only want the virtual stuff presented to them.

Mark [00:15:10 - 00:15:17]

Yeah. and they may not be as comfortable with it.

David Worby [00:15:15 - 00:15:19]

And they may not be as comfortable. Whether they're in a physical environment or whether they're not. Now, that's quite challenging.

Ian Scott [00:15:19 - 00:16:03]

It is, but I think the clever retailer, and you know the words, my head sinks when I'm in meetings and people go, this is our customer and this is how they buy, and I go, by identifying that person you've alienated all the others, and by describing that one customer journey you're ignoring all the others. There's a company called Uncrowd who do amazing stuff in understanding what they call relative attractiveness. They've worked with a supermarket, and I think if I remember the founder Richard told me 400 different missions and reasons why someone is coming to the store. Supermarket's a great example, you know, lunch time you're coming for your meal deal in and out quick, you know, then two days later you're doing your weekly shop where you're trying to get best value, and then you're hosting a dinner party and you want quality.

Mark Pinkerton [00:16:03 - 00:16:03]

Same.

Ian Scott [00:16:03 - 00:16:43]

Same store, same customer, three completely different missions, speed, value, quality. And there are a myriad of reasons, so you've got to understand that, and I think the clever ones will, I often say there is a simple formula which is hard to achieve. Recognise all these missions, find the most cost effective way of delivering solutions for as many of them while you make money. Now I walk off into the sunset while retailers go, that's about five million pounds worth of research and four years' work, and I appreciate that, but that's the potential formula for successful retail. The challenge then is how does the technology and the people and the communication and the product stay, work, to let them buy as they want.

Mark [00:16:43 - 00:16:57]

So, trying to apply those principles is great if you're a multi-billion pound organisation. How do you apply those principles when you're a smaller, mid- sized retailer?

Ian Scott [00:16:56 - 00:17:42]

90% of it comes down to understanding your customers, who are they, why might they want to buy from you. And I've often showcased Nike and people go, well, they're a $38 billion company, I've got a Facebook account on Marketplace. But the principle is the same, they're scaling their theatre and investment based on their turnover and their ability to spend money. But they understand their customer, well they did. And if you understand your customer, you tailor it. A lot of it, I think, is coming down to an empathy and understanding of your customer. Engaging them, talking to them in a way that they understand and relate to. And that is a universal thing. If you're on Marketplace and the way you talk about your product, that demonstrates an understanding of why someone might need it.

Mark Pinkerton [00:17:43 - 00:17:48]

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Ian Scott [00:17:43 - 00:17:44]

Maybe we should take.

Mark Pinkerton [00:17:48 - 00:18:11]

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David Worby [00:18:14 - 00:18:36]

One of the things we talked about briefly earlier on was a digital marketing function versus a marketing function. I know you're quite passionate about internal collaboration within organisations and possibly how in some cases that hasn't evolved in the way maybe it could or should. Talk to us a little bit about what you're seeing and kind of what you're observing people are doing that they maybe shouldn't be doing.

Ian Scott [00:18:36 - 00:19:43]

I think one of the challenges is, part of that, is internal change. And internal communications are critical to get people to stop thinking like they used to. Getting everyone working together and de-siloing. I've run innovation workshops for about five years and I've found the ones that work best start with the CEO not only endorsing but actively encouraging the change. So if you're doing it in the mid-level you get a lot of people going, is this what we really want to do? And then the process of change needs to be properly allocated. Too many people go, we'll do innovation when we've got time. And you never have time. Or you have time today to start but then you're busy tomorrow so you can't finish it. So it needs to become part of every day, not an add-on extra. So many companies, it's like a little skunk work shed out the back. It has to be a fundamental shift. But also, that process of change, you have to understand innovation is new territory. So the failure rate is higher. Failure is good as well. And it's a cliche but it's absolutely true. If you do something and it works, everyone goes, brilliant!

Mark [00:19:42 - 00:19:44]

Some good boonies!

Mark Pinkerton [00:19:42 - 00:19:43]

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Ian Scott [00:19:43 - 00:20:19]

You have no idea whether you've maximised 10% or 100% of the potential. The only way you know the limit is when you go one step too far. And I'm not advocating failure but when you try and things don't work, so many times you learn more from a failure than you do. There's that wonderful story that often appears on LinkedIn about the Second World War where they were analysing the aeroplanes that came back to work out where to offer more armour. So they were looking at where all the bullet holes were and going, well there's more bullet holes here so we need more armour. What they didn't analyse was the planes that got shot down, that's the critical area because that's where the failure happened.

Mark Pinkerton [00:20:19 - 00:20:22]

The ones that came back succeeded, you know.

Ian Scott [00:20:19 - 00:22:04]

The ones that came back succeeded. And it's often that mentality is, look at the failure. The failure were the planes that crashed. Success were the ones that came back in one piece or several pieces, but they came back, that's the success. So that mentality of really pushing and understanding. So you've got to try and learn. And one of my favourite companies for this has been Gymshark. They opened a store two years ago on Regent Street and one of the most successful online brands. Wonderful story about how Ben Francis has grown this business, he's still only in his early 30s, they're worth over a billion dollars. Workoutwear. So they went to this store and I went in and my heart sank because it was the classic example of an online retailer having a go at physical and then learning the differences between them. And I wrote a 30 page quite critical report analysing what I thought worked, what didn't, why it didn't and examples. And a lot of people in the retail design industry were the same. The window displays were just bland, there was no way finding the communication, the product present, even how you pay. Content on the screens, which really surprised me, was not strong. They're now one of my favourite retailers. Every time I've been in the store, the window's improved. I do a global Christmas window order every year. Last year, I put their window in the top five and a thousand windows in this report. And I was like, wow, this is really engaging. But where they've really driven it is their staff. Because they really engage with their customers online and they do amazing events and thousands of people to these lifting events. Around 10,000 people will turn up. So in the store, the staff are incredible. They are so engaged and they're recognised as a flagship store. It's not all about selling.

David Worby [00:22:04 - 00:22:04]

This is.

Ian Scott [00:22:04 - 00:23:02]

Until Stratford opened a couple of weeks ago, it was the only physical permanent touch point for the brand. So they have people there who are there to engage and have fun. And I've run store tours and the people in that store are stunning. And I've always raved about Lush staff. Jim Sharper up there with them. The fun and engagement and how they use, you know, there's workout- ready places, a sweat room, a one-to-one shopping room. You know, they were telling me, I'm not going to get in trouble for this, but you can book free on the app one-to-one shopping in a personalised shopping room. The sort of thing that Harrods and premium luxury companies do. No obligation to bribe. They'll come in and shout and they'll give you a load of stuff. Average transaction value, 640. That room and that experience contributes 12% of the turnover in that store.

Mark [00:22:55 - 00:22:56]

Yeah.

Ian Scott [00:23:02 - 00:23:10]

It's incredible to understand and that sense of engagement and there's a Joe the Juice bar and you can book free workouts.

Mark [00:23:09 - 00:23:15]

And are they following exactly the same pattern in Stratford or are they actually going to modify it because it's a different audience group?

Ian Scott [00:23:15 - 00:23:17]

It is a different, it's not the brand flag.

Mark [00:23:15 - 00:23:18]

It is a different, it's not the brand flagship as much as...

Ian Scott [00:23:18 - 00:24:06]

It's what they call a core store, which is about product sales. I'm hopefully going in there next week, as I'm really interested to see the difference. But that recognised, the recognition of how a flagship store, it's the experiential bit. And I brought 30 retailers from Brazil, and their assistant manager, Peter, was incredibly arranged it, and there were four people. They brought a member of staff who was Portuguese, who could sport directly to the Brazilians, split them into groups. They had headsets on, and they're all, right, you ready, right, we'll move to the next room, and they're all rotating, like a military precision. And afterwards, I said to Peter, this is awesome, thank you so much. I said, you do realise now that I'm going to be expecting this for every store? And he goes, bring it on, I said, he goes, you're not interfering with our day, this is part of our day. We love to show people what we do. So it's like...

Mark [00:24:05 - 00:24:09]

It all helps brand recognition and brand awareness, doesn't it?

Ian Scott [00:24:06 - 00:24:07]

It all helps brand recognition.

David Worby [00:24:07 - 00:24:19]

That's a great segue into maybe giving some of our listeners a sense of kind of how you help businesses, which we'll come to in a minute, but I know Mark you had a question about retail tech that you wanted to share.

Mark [00:24:18 - 00:24:33]

Yeah, I just wanted to ask, Ian, in terms of interesting technology that you have seen that maybe people haven't thought about, that retailers are putting in play now, what's piqued your interest in terms of new technology?

Ian Scott [00:24:32 - 00:24:58]

It's important to recognise how you can use the technology to add value to what's going on. We've often seen in the return side, recognising when people are coming back into store, how you can encourage the combination of the two pieces. Online returns, for example, in fashion, wipes out a third of gross profit within the fashion industry. Next are able to get 80% of their online returns back into store,

Mark Pinkerton [00:24:54 - 00:24:54]

Next!

Ian Scott [00:24:58 - 00:26:00]

which is a statistic that most fashion retailers would love to do. They build that and they elevate and leverage the store as a great way of encouraging the return to come back in, and likewise click and collect activities. So what you see there is their online activity encourages people to come back to the store. While people are in the store, it's a footfall driver. John Lewis has said every click and collect customer spends another £20 in store. So you leverage that store in a number of different ways. There's a page on Next's annual report from two years ago, which I often use in a presentation. There were 330 stores at the time. 190 of them were loss-making based on money in the till. But 80% online returns coming into stores of footfall driver, the click and collect footfall driver. And they've actually said the cost of those loss making stores was £35 million, which equates to 0.4% of their online business. And again, these stores earn their keep through the way they connect with online.

Mark Pinkerton [00:25:59 - 00:26:01]

with online and I think those sort of.

Ian Scott [00:26:00 - 00:26:06]

And I think those sort of things are wonderful because it showed a great understanding of that whole ecosystem I was talking about before. A lot of companies would close down their.

David Worby [00:26:06 - 00:26:16]

So maybe what you're kind of saying in that sense is that, quite apart from the technical discussion and debate, the way in which we value real estate may need to change in the future.

Mark [00:26:16 - 00:26:17]

Absolutely.

Ian Scott [00:26:21 - 00:26:48]

Going back to someone like Gymshark or Nike Town, you go along to Regent Street or Oxford Street, for a lot of people it's a day out. You come down from Huddersfield for the day and you come out with the kids and you go to Nike Town and you try everything on and you play. You don't necessarily buy, but you go home and maybe a week, two months, six months later you buy something as a result. And that's where flagship stores, flagship stores can be an influence to purchase a long time in the future.

Mark [00:26:47 - 00:26:52]

Yeah, which of course you will massively struggle to track.

Mark Pinkerton [00:26:52 - 00:26:54]

Yes, very, very dearly.

Mark [00:26:52 - 00:27:03]

Yes, very, very difficult. I also wanted to bring up the other topic that we talked about, which was in terms of shrinkage and the way that retailers are addressing, well, theft, for want of a better word.

Ian Scott [00:27:02 - 00:27:37]

Yes. Yeah, that is a massive problem. I think the National Retail Federation in the US are talking about 1.16 billion in theft last year from US stores alone. It's like 1% of turnover or something. Talk to loss prevention people and they go, there is no obvious answer. But there's some wonderful stuff around AI to come in and help try and prevent. And I love this because the moment someone's stolen, you're in a loss situation because confrontation is difficult, police engagement, if they're busy, the opportunity of prosecution and return is minimal.

Mark [00:27:36 - 00:27:37]

It's minimal.

Ian Scott [00:27:37 - 00:28:11]

So prevention is really important. So we're seeing a lot of AI coming through, self-checkout, but also in camera analysis in security cameras, where they're looking at body language. And if the body language is unusual, they're predicting the chance they might steal. And so what you can then do is notify staff who then intervene before the theft happens, which is a much better way of doing things because you're not in a rearguard action, you're trying to mend a problem, you're preventing it. Waitrose combine it really well. They have this phrase of love bombing. So the staff will smother people with kindness and offers to help and create an environment where they just

David Worby [00:28:09 - 00:28:10]

Ha, ha, ha.

Ian Scott [00:28:11 - 00:28:13]

can't steal. I think Waitrose have another story.

David Worby [00:28:12 - 00:28:19]

I think Waitrose have another strategy which is not to put stuff on the shelves anyway. That kind of helps shoplifting, doesn't it?

Mark Pinkerton [00:28:17 - 00:28:19]

It helps shoplifting, doesn't it?

David Worby [00:28:19 - 00:28:45]

Look, we're running out of time and I think we need to wrap up. But just one kind of final thought which I think might be useful to our listeners. Using your vast experience of the good and the bad and the great experiences you've seen and some maybe not so great experiences, who would you encourage our listeners to go and check out? Give them a sense of if they've got a spare hour and they've got a high street nearby, who should they head to and give them a sense of why. That would be really useful.

Ian Scott [00:28:46 - 00:30:03]

Anyone that knows me knows my first answer is going to be Lush. I've visited their stores around the world. They are the best at doing the basics in retail. Amazing staff, well-trained, engaging, great product display, the merchandising is strong, the communication hierarchy is brilliant, they're sustainable, it's hands-on, it's fun. I come back to Gymshark again, who really leveraged a sense of proper engagement, embodying your perception of the brand. They do brilliantly as well. But then there are other companies like Raffer, the high-end cycle clothing company, they build community in their stores that they call clubhouses, leveraging it around the coffee shop, which culturally aligns with cycling activity as well. And it's a real fun environment as well. So yeah, they're the sort of places, I mean, if you're in London, walk along the street, go and see Outernet at the corner of Chancross Road and Oxford Street, a visual experience which is stunning. Lush, the fragrance shop have an amazing AI machine that you do a questionnaire and they'll do your bespoke fragrances. Glossier in Covent Garden is an amazing experience with Fragrance Health and Beauty. Beautiful store, everything's a sample and there's a real sense of Willy Wonka visual theatre when your order comes up on a conveyor belt and things like that as well. Plenty to see.

David Worby [00:30:03 - 00:30:34]

Plenty to look out for, okay. And also people ought to just sign up to some of your comms because you do these great retail safaris and a variety of other things that are at the very least entertaining and probably also very valuable for businesses to sign up to. So we encourage people to do that as well. Right, we've run out of time so I'm going to say thank you to Ian for your insights and your time and a fantastic conversation. Thank you very much. Thank you for having me, I really enjoyed it. And thanks as always to my co- host Mark. Thank you. And we'll see you all again on the next one.

Mark Pinkerton [00:30:39 - 00:30:49]

Thanks to our sponsor, Shopline. Trusted by over 600,000 merchants worldwide to unlock the power of modern commerce. Find out more at shopline.com.

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