Retail is rife with change thanks to the impact of Covid19 on the sector. Unfortunately, in recent months we’ve seen many retailers go into administration or become acquired. One notable example is Arcadia Group. Boohoo recently acquired its Debenhams, Dorothy Perkins, Wallis and Burton brands – and ASOS acquired Topshop, Topman and Miss Selfridges.
Broadly, across these acquisitions, between Boohoo and ASOS these pureplay online retailers are only acquiring the retailers’ respective brands (online and digital propositions); their stock; important customer data; but not their traditional bricks n’ mortar stores.
As Boohoo and ASOS make these acquisitions, what will they, and other eCommerce vendors, need to consider as they integrate new brands into their existing portfolio? What steps can these eCommerce firms take to optimise profitable customer relationships long-term? The key lies in understanding a shopper’s individual customer identity and putting that identity at the heart of a seamless and relevant online experience across the entire brand portfolio.
Step 1: Learn from Arcadia’s past mistakes
It is no secret that all the Arcadia brands, from Topman to Burtons and Miss Selfridge, lagged behind when it came to eCommerce investment. The online offer, when it eventually appeared, was a world apart from operational excellence provided by online-only retailers – and the business suffered as a result.
This was not the management’s biggest failing. For the past two decades, retailers have been falling over themselves in a bid to collect customer data, to use that information to deliver retention and maximise customer lifetime value. This is a massive business cost, especially for fashion chains which have to manage a constantly changing customer base because tastes change as customers age.
Yet, despite having a brand portfolio that appealed to customers across many different age groups, Arcadia did none of that – at least not at anything more than brand level. Instead, it insisted its brands competed online, rather than maximising their value to provide customers with an integrated shopping experience, all the way from teen to middle age.
Step 2: Reduce intercompany competition – take customers on a cross-brand journey
Assuming that, because its brands competed on the high street, the same model should be applied online was an extraordinary, wasted opportunity, and a bizarre misunderstanding of the way successful online retail works. On the high street, competition is inevitable, but online retail provides a chance for inter-brand collaboration that transforms customer retention and builds strong brand loyalty.
Under the umbrella of the Arcadia holding company, brands such as Miss Selfridge, Topshop, Dorothy Perkins and Wallis went head to head to win consumers rather than maximising their market position to build engagement throughout a customer’s life. By running each brand separately, there was no attempt to maximise customer lifetime value, to move them between brands as they matured.
Just imagine how much more successful every brand would have been if the model had changed, if individuals had been encouraged to view themselves as an ‘Arcadia’ customer, as well as a Miss Selfridge advocate. Of course, the retailer should have been asking questions to discover a customer’s gender, age and preferences and used that information to personalise their immediate experience and create loyalty. It didn’t. That was another failure and learning.
By building a profile for each customer across the entire retail estate, Arcadia could have followed customers as they moved through teen fashion and started to look for something more sophisticated. Rather than losing customers to the competition at this point, it could have captured those individuals and provided offers that nudged them across the brand portfolio, and, critically, retained them within the overall Arcadia business.
That never happened. No one at Arcadia woke up to the value of this amazing online customer asset. No one attempted to build a personalised experience that encompassed all the relevant brands. Instead, the model was inter-company competition – just like on the high street. It didn’t work.
This will be another key learnings for Boohoo and ASOS. As they integrate the brands they’ve just acquired into their portfolio, they must ensure new customers become seamlessly integrated into their wider community and that they nurture profitability from them across brands.
Step 3: Make products findable and use data to personalise marketing
Boohoo and ASOS will need to review the online store experience as they integrate Arcadia’s brands into their organisations. The online shopping experience is almost the same as visiting Primark’s brick’s n’ mortar stores, where people scrummage around for goods to buy, hoping that the garment they finally find is available in their size and preferred colour.
As Boohoo and ASOS integrate these brands into their online stores, what steps are they putting in place to make products more findable for shoppers – how are they using data to nurture customers through various landing pages and across various products and brands?
This is where new technologies like customer identification and access management (CIAM) become key. It enables the brand to welcome customers to their website(s) knowing in advance what their preferences may be, allowing the online retailer to personalise the customer’s shopping experience. What if, after logging into Boohoo or ASOS’ website, these retailers could provide product recommendations and specific offers to individual customers, to drive more sales and generate loyalty? The technology exists to make shopping online easier for consumers – while enabling retailers to build meaningful customer relationships.
As for the recent landgrab for Arcadia – and other failing high street brands – continues, the prevailing questions are ‘Who’s got it right?’ and ‘What do ASOS and Boohoo respectively need to do to make these acquisitions work?’ ASOS buying the Arcadia brands that are aimed squarely at their existing target audience is clearly a defensive purchase due to the wholesale business they already have selling Arcadia brands. Boohoo, on the other hand, has bought brands that are complementary to their existing demographic.
In ASOS’s case, it will need to provide existing customers with the ability to seamlessly shop unhindered at their other, complementary sites, through customer identity and access management technologies such as Single Sign-On.
Boohoo has the challenge of fostering the ‘cradle to grave’ relationship by encouraging customers to create and update their ‘MyBoohoo’ profile, to enable the different brands and services in its portfolio to be offered at the right time to the right customer.
In both scenarios, understanding a shopper’s individual customer identity is key, and requires a change in mindset away from the transactional to deliver a personalised online customer experience that rivals the in-store experience.
By Russell Loarridge, director at ReachFive