The man who wants to arrest the headlong rush to the bottom

Robin Coles is on a mission to break retailers’ current defensive strategy of reducing price to drive sales.

Robin Coles got his first IT job by mistake. He was only driving to London to see his girlfriend and gave a friend a lift so he could get to a job interview at APT , a small software house based in the City of London. The APT executive ended up offering them both a job. It was a happy accident though, when only a few years later, Robin designed and developed a retail system at a time when there weren’t any. He has been in retail tech ever since and his original retail system still acts as the ERP for retailers who trade all over the world.

Choosing to act as a consultant for the last few years, a role that has enabled him to guide both development and strategic direction for a number of businesses, Robin has now agreed to run the European operation of specialist promotions management company, XCCommerce. “I liked that fact that their products are technically agile, robust, constantly being developed and able to boast a strong set of retail users. I can drive the sales effort with confidence that these products deliver.”

Low expectations hold retailers back

He was also attracted to the opportunity to provide a solution into an area that is not at all well served by any incumbents. “Even so-called promotions management capabilities within large ERP and commerce products don’t really do this well so retailers are just assuming that this is the best they can do.”

The problem is easy to describe but clearly has not been easy to solve. Retailers are more dependent than they have ever been on promotions, but construct and manage them defensively. They expect to give away margin by offering lower prices across the board on the basis that stock just needs to be shifted more quickly and that lower prices are the only way. In Robin’s view this is simply a race to the bottom, with inevitable consequences for the retailer.

“The last person to be considered or consulted in the promotions life cycle is the customer; retailers are simply not using their data to give them insight into the customer that they can use to drive better promotions.” The obvious questions to ask go unanswered because the data to support is not being used.

Data answers big questions

How can I create excitement and woo the customer, without appearing to simply offer price reductions?

How can I offer promotions that change regularly, encouraging repeat visits and further purchases?

Do I know if  the customer is happy to pay more if the additional rewards through, say, a loyalty scheme are compelling?

What are the relative values of each customer who bought into the promotion? Am I lumping cherry pickers in with high life-time value customers?

Coles is quick to stress, “We don’t design promotions or tell retailers what types they should use, we simply enable this business staff to manage and execute their chosen promotions better across channels, in the belief that consistency and dynamic promotions represent better value for the retailer and the customer alike”.

Consistency across channel is key. Consumers hop seamlessly across channels, often using multiple channels for a single purchase, but promotions are still largely managed channel by channel. XCCommerce enables retailers to deliver promotions consistently across all channels, without attendant cost and risk.

Commercial KPIs all boosted

This boosts the returns on the promotions, lowers the cost of executing them and has a significant additional benefit, one that retailers have been chasing for some years – by promoting across channels around customer preferences, retailers can personalise over time, giving customers a better service while improving their own commercial KPIs around basket size and value, conversion and lifetime vale

Customers feel a sense of community, as they can  interact with their offers, rather than feel they are simply pushed at them. Additionally,  these interactions give retailers even more valuable data with which they can further personalise their offers and drive long term loyalty.

The result is that retailers can jump off the price reduction merry-go-round that has seen some of them promote every single item, 365 days a year, as if RRP can never again be regained, when in fact, as Coles says, “Promotions executed in the right way represent a personal pact between retailers and their customers, namely that the offers they are making are fair, honest and responsive to their needs. And that’s very different than simply reducing the price.”

Looking ahead to 2021, Coles says that one of the challenges for retailers is the proliferation of channels. “It was a bit easier when it was just store, catalogue and email, but now with kiosk, self-checkout, social and TV shopping, marketplaces and affiliates, the danger is that retailers simply bombard the customer who then ends up zoning out. Retailers should avoid getting panicked into going into promotional overdrive to shift stockpiles, and start making use of their customer data.”

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