Accent Group, which operates 445 stores across nine different retail brands in Australia has recent and wide-ranging experience of digital transformation.
Mark Teperson, Chief Digital Officer of Accent Group shared many details of their journey in a recent interview with Econsultancy and revealed the challenges the group encountered along the way.
This is the third and final part in this series (after one and two) and in it we discuss the group’s ongoing digital transformation initiatives and the future of retail in a rapidly-changing and increasingly digital world.
We’ve talked about franchisees, but I wanted to ask Teperson how much the group’s global brands a part of this (predominantly Hype DC and Platypus) – do they have their own digital transformation going on?
“About 6 months ago,” said Teperson, “we built a digital hub or centre of excellence in Melbourne. It is a purpose-built facility that concentrates our digital expertise under one roof.
“The way that we run the business model here is that there are two different streams. The first one is the dedicated resources that sit at each of the brands, a Sketchers ecommerce manager and a Platypus ecommerce manager, and they align completely with the business unit. So, they are part and parcel of the operational cadence of that business.
“To complement that and leveraging the size and scale of the business, I introduced effectively a shared service layer which is where we bring in more senior and very competent resources in different specialties. So, performance marketing, digital marketing, project management, omnichannel managers and strategists. We support each of the businesses with a shared service, recruit the very best talent in the market and share those resources across the business where the individual business unit would not be able to afford them.
“In a lot of instances, we would certainly look to follow and look to align to a global initiative and directive. Our brand partners have been fantastic and collaborative with us in working with us because they acknowledge that in some areas we are ahead of where they are and there are learnings to be had to them by enabling us to do it.
“And so, that has created a wonderful opportunity for us to get closer to our brands, but also feel like we are giving some value back at the same time.”
Marketplaces – are they right for the brand?
I asked Teperson about the Accent Group’s relationship with marketplaces. He replied that they “actually are not participants in any marketplaces”, and elaborated on why.
“We are looking very closely at the space and I think for us it is just a matter of time – not if, but when – and how we decide to go about executing that.
“I think that marketplaces are an important part of the new paradigm and certainly where you find and reach consumers especially new consumers. But the mechanics around that and the brand protection that you look for insofar as just making sure that your brand isn’t the piñata of the marketplace – as a loss leader for the marketplace to attract customers to their brand.
“We are still really sensitive and mindful about first and foremost wanting to create brilliant consumer experiences. Making sure that we are doing the right thing by the brand so that we have longevity in the market.
“Our CEO, at the moment, is really focused on what is called ‘lazy retailing’. In Australia, you can walk into a shopping centre 365 days a year and see sale and promotional signage up. Anyone can sell something when its discounted (i.e. ‘lazy retailing’), it’s when you can sell things when they are not discounted that really speaks well for your brand.
“And particularly in our younger and more fashion and trend related business, sales and promotion are often seen as things that aren’t on trend or cool. Because if it is discounted then, clearly it can’t be popular or on trend.
“And so, there are really interesting nuances taking place. In the context of the marketplace, it is about giving us an opportunity to reach more customers without devaluing our brand through a price model that is really about a race to the bottom. That is inconsistent with our brand ethos.”
When asked about the most important factor for driving growth, Teperson talks about making more of the inventory they already have.
“I go back to all the things that we spoke about – click-and-collect – where we are taking demand that existed on the website and improving conversion and sales through supplying the product in that market.
“What was wonderful about that was that we did that without investing a dime more in stock. We just plugged in inventory that we already owned. Omnichannel retailers really do have a competitive advantage if they just rethink how they flex their muscle.
“And that has been the most profound change. So, it’s all the things that we have been able to execute because we are a physical retailer, because we have stores, because we own stock – that has given us the biggest increase and the biggest lift in sales.
As opposed to a fantastic new merchandising tool – yes, those things give you efficiencies and drive improvement but not at the scale we have seen.
But is there any particular channel which drives the most revenue – digital, traditional?
“It is a combination of factors,” remarks Teperson.
“I think great retail will always remain those things. Everyone looks for the silver bullet, but I don’t think it exists.
“A retailer is a conductor of a very complex symphony. All of the instruments have to be playing in order to make that music loud, emotive and connect with the audience.
“I feel like because we are an omnichannel retailer we have more opportunities to influence that. As an example, if we were to have 40 million visits to our store in a 12-month period we will have a similar number coming to our digital assets.
“You have twice as much opportunity as a pure play online merchant to reach customers, connect with them, and deliver those experiences.
“It’s not one single thing – it’s about being mindful of all your assets.”
So, what about conversion rate optimization, does the group have an A/B testing lab? “Yes,” says Teperson.
“I think those things are table stakes. That is, they are mandatory to see improvement. We work with an external partner who is a specialist in this space. Working on A/B testing and site optimization.
“We run a series of tests every month across of our assets. It’s an important part of a strategy, but in today’s market, it feels like that is the cost of entry.
The future of ecommerce
The big question for Teperson is what will the future look like. He is aware of profound changes to come…
“There was a video which crept into my LinkedIn feed about Google’s foray into AI and conversational commerce. If I think about that work we did around demographics and behaviours, what does the future look like?
“It’s quite possible that my children and grandchildren will never use a keyboard. Everything will be done by voice command.
“So, when you think about commerce experiences at that level, that will bring profound change to the market. If you think about how powerful mobile has been in consumption – that didn’t exist 10 years ago – and now it’s the most influential part of the consumer journey. I don’t think we are going to need to wait 10 years for the next technology to make a dent on the market and I think voice and AI is one of those things.
“I’ve watched with much interest over the last three years the maturation of AI, but now it is combined with voice and what that enables brands to do – namely create experiences for consumers.
“Retail has always been about exciting the customer, creating an emotional connection and then removing friction points with consumers. So, if AI and voice go some way to being able to eliminate more friction points, it can only be a more powerful thing for retail.
“What that means from a DT perspective is that we have come a long way, but we have a long way to go to make a seamless experience for consumers.
“That’s what keeps it interesting and that’s what keeps me motivated.”
If you are interested in how Econsultancy can help you with your own digital transformation journey, get in touch.