Brian McBride is the former UK managing director of Amazon and now chairman of online fashion house ASOS. Speaking at RBTE on 3 May, he had plenty of advice for UK retail companies looking for answers in a business world defined by disruption.
“Evolve or die” was the message to retail businesses building their strategies in a digital era from ex-Amazon UK CEO and current ASOS chairman Brian McBride, who was one of the keynote speakers on day two of RBTE 2018.
Having spent six years working under Amazon managing director Jeff Bezos and now holding chairman roles at ASOS and Wiggle, and a non-executive position on the AO.com board, there are few figures in the industry with online retail experience like his. Retail Connections picks out ten top tips for UK retail based on McBride’s colourful, whirlwind of a presentation at London’s Olympia.
Be customer centric
Brian McBride worked under business innovator Bezos when leading Amazon’s charge in the UK between 2005 and 2011, and describes him as “the most visionary, the most strategic person I’ve ever worked with”.
Yet, Bezos apparently was – and presumably still is – customer centric at every turn.
“Jeff’s mantra was start with the customer and work backwards,” noted McBride.
“He would never dream of changing a pixel, a button, a place on the checkout or anything on that website unless you articulated to Jeff what it was going to do to the customer. Unless there was something in it for the customer, why do it?”
Personalise using data
McBride explained that personalisation techniques are different for every business, but he said one of the key factors behind Asos’s success of late is its ability to get close to its customer, and tailor what they see online.
It comes down to data management and data processing, and ASOS has a large team of technologists and engineers that understand how to use this information for the greater good of the business,
“The e-commerce companies and pureplays don’t have that many assets – they don’t have a bunch of stores, hundreds of thousands of employees or lots of physical presence, but probably our richest asset is or data – we’ve known that for a long time so we value that data and that’s why tend to be better at using it and exploiting it.”
He commended the likes of Miss Selfridge, Topshop, River Island and Zara as “phenomenal competitors” in UK retail, but said the biggest difference between them and an online player such as ASOS is the larger amount of data the latter holds.
Embrace tech where it makes a difference
Of course, with around 100,000 SKUs and 20 million customers – who, in the case of ASOS’s mobile app users might interact with the website over 80 hours a month – data needs to be analysed using new technology.
ASOS is a proponent of machine learning, and McBride said these techniques provide the support for its personalisation power.
“We’re trying to estimate the likelihood of any given customer, when presented with a product, will either view it, save it, add it to a bag or buy it – and we use machine learning to come up with the characteristics that will synthesise those characteristics and put them together.
“We will ask for that calculation every 30 milliseconds – about half the time to blink your eyes.”
He added: “The great thing about machine learning is that if we serve up five or six recommendations to you on a smartphone and you don’t do anything with it, we’ve learnt something – we’ve learnt we’ve offered the wrong recommendations.
“There’s no such thing as a bad result from machine learning because you are always able to improve the algorithm for the next step. We’ll marry that up with your browsing history […] and what you added to your basket last, and we’ll bring it down to a small number of recommendations.”
The advent of mobile has even impacted technology giants like Google, with so many more web searches now starting on Amazon partly thanks to the way the online titan has embraced mobile commerce.
Emphasising the challenge to stand out in mobile, McBride said: “There are about five million apps out there to choose from, the average youngster will have about 30 apps on their phone.”
Of those apps around five may be shopping related, and McBride noted: “If I want to build a relationship with them, I have to make sure I’m one of those five shopping apps.”
McBride stated the obvious by suggesting the growth of the digital era is undoubtedly going to disrupt UK retail and those operating internationally. But he said awareness of trends, and building in operational agility can ensure survival for retailers.
“It’s about observing what’s going on around you, and it’s about doing something about it.”
Be where your audience are
ASOS constantly keeps tabs on the evolution of social media, as so many of its key 18-34-year-old demographic are on these channels for multiple hours a day.
“We have about 20 million social followers, and we try and be where our customers are,” explained McBride.
“You have to move pretty nimbly to get to the new platforms and try them out […]. It’s understanding the importance of content.”
Younger generations don’t trust TV adverts, businesses, or politicians, argued McBride, so brands must learn how to talk to their audience in the relevant manner.
“Tone of voice is important,” he said, adding that at ASOS “it’s about providing value”. One way the retailer has conveyed its message of late is through the launch of a magazine.
The publication has a circulation of 453,000. “It’s the only analogue or printing thing we do, and again it’s hit the spot with our customers and that’s how we get messages across to them,” said the chairman.
McBride predicted that e-commerce will ultimately grow to become around 50% of retail sales, but he said that shouldn’t be seen as the death knell for the high street. Good retailers will survive, and that comes with staying close to customers and being able to adapt.
“There are some great retailers out there that will redefine themselves,” he noted but warned that “mediocre, me too businesses” – similar to the UK retail models run by the likes of Bhs and Comet – don’t have a chance of survival.
Optimise the opportunity
McBride said Asos’s marketing team is often quick to spot free promotional opportunities when they arise.
Items have flown off the digital shelves after ASOS has, via its social media channels, acknowledged these products being worn by the likes of Kate Middleton, Taylor Swift or cast members from reality TV series Geordie Shore.
“Taylor Swift is an excellent icon – she loves the [ASOS] gear and just buys the stuff,” McBride commented.
UK retail: stop moaning
When asked about GDPR, the new data protection legislation businesses must conform to by 25 May 2018, McBride joked that the new rules are being blamed for everything from the weather to the latest Chelsea defeat.
He urged retailers to accept it, and not to moan about GDPR.
“Just get on with it, it’s happening – I think it’s actually a positive thing,” he noted.
“It’s another chance to reach out to the customer and explain [your proposition]. GDPR is good, not bad – if you see the bureaucracy as burdensome, you’ve got a problem.”
And that, in ten simple soundbites, should give retailers a model to follow in an ever-changing commerce landscape.