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Michael Lonnon – 00:00
Today I’m joined by Microsoft’s business applications industry lead Martin Shave. In this edition, we chat about some of the latest innovations that Microsoft is bringing through to enable retailers to engage more closely with their customers, and how data is being used to serve up some pretty interesting innovations. And when the washing machine you’re standing next to the next time we were in store starts tracking and sending you information, you’ll soon know why. And this all leads to some really interesting developments as you’ll later discover. So grab a brew, sit back, relax and enjoy the show.
Michael Lonnon – 00:43
To shop in-store or buy online?
Martin Shave – 00:47
Michael Lonnon – 00:48
Ok. Have you always been a buy online type person or do you think that’s changed as well?
Martin Shave – 00:54
Yes I have particularly yes and it’s even like booking taxis and stuff like that, I’d always use an App if I can, just purely down to the fact that I don’t particularly like talking to people.
Michael Lonnon – 01:07
This podcast is going to go well then.
Martin Shave – 01:09
It’s fine. It’s just a personal preference that, you know, I just prefer to book online, it’s so much easier.
Michael Lonnon – 01:17
Yeah, life has become easier I’ve found. Complicated in some ways, but easier in lots of others. As a customer who’s buying things, the experience has changed through the apps that have been developed and the technology as it’s evolved. In your opinion, what do you think, particularly from a retail perspective, how’s the buying experience changed? Not necessarily just during the pandemic but generally, how do you think things have evolved?
Martin Shave – 01:44
Yeah, so that shift to online obviously accelerated down to the fact that shops weren’t open. But with that had to come a little bit of innovation as well, because, quite frankly, you know, a lot of retailers are specialist retailers and to be able to provide a service or a specialist retail experience just through doing an e-commerce site is almost impossible. So we’ve had quite a few instances where that’s been wrapped around with other technologies to try and make the experience slightly different. If you think about a car dealership, as an example, that is essentially retail. You can buy a car online, but you want to get a feeling of the experience and the trim, and all that kind of thing. And we’ve started to see mixed reality come into these kind of organisations where you can see the car with your trim that you selected on your desktop, on your desk, maybe through your mobile phone, or whatever the mechanism is that you’ve got at home. And it’s just that kind of technology’s changed the experience slightly from just being an e-commerce site to something a little bit more interactive.
Michael Lonnon – 02:56
There’s a lot of talk about gearing towards this whole online experience; it’s been exasperated by COVID. But you think there’s always going to be that need for kind of a mix of things. You talked about that mixed reality, but people do actually still want to touch, feel and sometimes smell the things before they buy them.
Martin Shave – 03:19
Yeah they do and I think one of the benefits for a retailer, not necessarily the customer, for the retailer of transacting online is you get much more of a footprint about the customer as well. And then you’re able to know a little bit more about them, be able to personalise more of the experience as well for them and personalisation is quite critical to that. And I think one of the things when we start going back into stores is we’re going to need to work out how to help our customers, the retailer’s, not the end customer. How to capture insight into their customers who actually step into the stores themselves. And we’re seeing like beacon technology and things like that and apps on your phone. So you’re pretty much opting in as soon as you get the retailer’s app on your phone to capturing this kind of information now being stored against a unified customer profile. And that is the biggest change actually in the last year to 18 months is capturing everything that we know about the customer and then actually doing something with it.
Michael Lonnon – 04:23
Is that still one of the challenges? Is that a big challenge for retailers still; trying to get hold of that, trying to capture information and use it?
Martin Shave – 04:32
Yeah. Getting hold of it’s a big challenge but actually making it usable is another big challenge. I think a lot of retailers are now coming around to the fact that they need to have a unified customer profile. But it’s actually the information that they capture in it, the vision of what they’re able to capture or able to do with it is still quite limited. So web activity is the common one, Adobe has been doing this for years, of course, you know, that kind of capturing of where you browse what you look at all that kind of stuff. And what you bought transactional stuffs really easy.
But then, you know, is there the ability if you’ve got an app on the phone for a fashion retailer, and you go into their store, and if you stand looking at a particular row of clothes, can you capture proximity data about this customer stood here for five minutes looking at, you know, this particular fashion item, whatever it is. That’s where the real gold dust comes into it.
Michael Lonnon – 05:32
How far away do you think we are from that? That all sounds amazing and we do read about that kind of being the future step for retailers but how far away do you think we are from that becoming an everyday reality?
Martin Shave – 05:45
Yeah. I guess it’s down to how innovative the customers are and COVID won’t help with this. Because you see a lot of desire within CIO CTOs of retailers to want to transform, want to do this kind of thing. But there’s always the risk of investing now, and especially when your stores haven’t been open. And, the future outlook over the next 18 months is pretty uncertain as well. I guess it’s more about the investment. I think that the technology’s there, we could do it today, you know. But I guess it’s how innovative the retailers want to get. You can imagine, you know the behaviours though, now that you see with customers and I think about if I go to a an appliance store, like a white good store, and you walk down a row of washing machines or something like that, and you need to buy a washing machine, and you see this wonderful model there which looks great. The first thing I’d do is search for that on my phone while standing in the store to see if I can get a better offer from one of the online white goods suppliers. And then you look at it and think, well yeah maybe well this is the version or the, you know, the version previous to the one I’m looking at, but actually, it’s a washing machine so I don’t really care that I’m going to spend 60 quid less on last year’s model.
Michael Lonnon – 07:09
How do you think retailers can combat that? Because I think that’s most of people listening to this podcast probably do exactly the same? I know I do. How can they combat that kind of activity?
Martin Shave – 07:19
Yeah. That’s interesting. I was talking to our Head of Engineering for marketing the marketing solution and we’ve got quite an aggressive roadmap around this. And some releases now which are coming out to augment our current capability. And there’s basically three stages to marketing. The first one, is that kind of traditional just scattergun everybody. The second one is, you know a bit about the customer so kind of nurture them a little bit, but where we’re going to in the future marketing is what they call in the moment marketing? So you have this principle that at the point of engagement, whatever that engagement is, you should know exactly how to target and offer something personalised to that exact customer. So you can imagine if you’re loitering in front of a Zanussi washing machine, and you’ve been stood there searching on your phone for a few minutes, but you’re still stood there, the proximity data knows you’re there. That can trigger an action to say this customer normally spends time in our store but actually hasn’t bought anything from us in a long time. So perhaps you’d buy it from somewhere else, just predicting behaviour.
And then within seconds, and literally seconds, it can pump out a personalised offer to that particular customer whilst they’re standing in store to treat them or that invitation to treat to actually make the purchase there and then. So that’s the kind of thing that you could do to combat it.
Michael Lonnon – 08:48
That sounds really advanced and that sounds really clever. What tools are Microsoft bringing out to facilitate that? Is it the part of the commerce platform now or are there other things that are supporting it?
Martin Shave – 09:02
There’s multiple aspects to it. We’ve gone down the route of providing micro services so you don’t need to use everything from Microsoft. Of course, we want you to but you don’t need to. So the top end we have our customer data platform which is called Customer Insight. That takes in all that data about the customer and makes that unified profile and predictions of behaviour etc. that you need to be able to make the decision of how to communicate with them. And at the bottom, then you’ve got the multiple channels which could be marketing, it could be push notifications, it could be commerce, their point of sale device or client telling device, that kind of thing. The key bit’s the middle bit and this is what engineering have announced recently at our Ignite conferences, customer journey orchestration, which then basically makes that intelligent decision of how to tackle or how to connect with that customer at that particular point in time. So it uses the intelligence of the Microsoft platform to make those decisions in an automated way within seconds to get our message out to the customer.
Michael Lonnon – 10:09
The focus for retail technology is being able to easily capture everything we know about the customer, and then do something with it. By capturing the information in the first instance is hurdle one and this in itself remains a barrier for many retailers and organisations in general. But then you have the second challenge, which is once you have this information, once you have the data, what are you going to do with it, how do you get value from it? And many retailers are coming round to the need to create what’s called a unified customer profile. Because this then allows them to make use of some of the more advanced technologies such as beacons and proximity apps, which then use information they know about the customer to trigger online engagements such as special offers. Now, the focus is not on improving store engagement. And it’s not really about improving your e-commerce platform and the experience. It’s about thinking about these things together as a unified strategy. Because in thinking about these things together, that’s where a retailer can give value to the customer.
I hope you enjoyed the podcast. You can find out more interesting conversations at www.hso.com/dynamics-matters. Do check it out. And until next time, take care of yourselves.