Retail Connections attended a retail evening hosted by Klarna, to hear expert consumer insights from the industry.
Klarna the payment solutions company, hosted an evening of expert consumer insights last night in London and it quickly became clear that the people who really understand what is going on in retail today will be the winners. The pundits have been saying for more than five years now that Britain is overstocked and overspaced; something had to give. And so it has; several retailers have gone this year and others are on the ropes, and still others are having a long dark night of the soul rethink about what they stand for; and I predict that some of them will never make it back.
And now, smart retailers are pushing ahead by understanding some fundamental truths about retailing today – we need to be able to see all the points where consumers touch the retailer, and then join the dots.
The panel of retailers, celebrity bloggers and brand owners at the Klarna event, agreed, “We need to know how we got conversion in the store, where customers browse, shop and buy, and right now, we can’t see it.” David Sandstrom, Klarna’s CMO added, “Retailers have no shortage of data, but no one is putting a structure on it.”
This led to a discussion about the increasing irrelevance of the current KPIs of retail, which in store are sales per square foot. Given falling store footfall and the importance of delivering experiences that might lead to conversion on line, Sandstrom suggested that it might be more valuable to measure laughter in store – are people having a good time. JD in China is already measuring customer smiles as they pick up garments. And Apple in New York has a store which is really just a place for millennials to hang out and drink coffee. Supporters of the online content creators suggested that retailers need to ask, “Is my store Instagrammable?” and referenced Charlotte Tilbury at being good at showing the look online and then delivering it in store.
The bloggers at the Klarna event also made an interesting distinction between celebrities and themselves. “I know my audience and I have the metrics to back it up, in terms of traffic, comments, content seen. Influencers validate brands.” Interestingly in China, the brands don’t advertise now but go directly to the influencers for validation and promotion.
This view contrasted neatly with the falling credibility of traditional advertising and the fact that retailers have a glut of data and a dearth of insight. The goal is personalisation at scale as the key to profit and everyone agreed, there is a long way to go. The panel added, “Never mind AI, we still need to fix the basics. During the week, I’m transactional in my shopping habits, but at the weekend I want to explore. Retailers and brands need to know this.”
The challenge now for retailers is to work out how to read and analyse a much wider range of inputs to create more meaningful KPIs. The Klarna event panel provided three calls to action :
- Use data not to advertise more products but to provide customers with new services
- Stop using boring surveys and actually get out and talk to customers to understand what they really want
- Tune into the miniscule overlap between what retailers say and what consumers actually want to hear.