Monday 24th Oct 2016 - Logistics Manager

How M&S is improving the multi-channel process

Marks & Spencer’s strategy for building its multi-channel offering came under scrutiny at the Omni-Channel Conference on Thursday, in a presentation by Ricky Wilson, head of operations for M&

Wilson has worked with the M&S web site since 1999, and explained out the retailer has been investing in both the front and back end systems.

Omni-Channel ConferenceIt has opened up new doors with the introduction of the Sparks Card, which was launched last November. 40 per cent of sales are now made via the Sparks Card. The retailer also introduced its stock finder last year, an online outlet which enables customers to check if certain items are in stock in their local stores.

An investment in a 900,000 sq ft distribution centre at Castle Donington, Leicestershire, three years ago, has been a turning point for the retailer. 1.4million electronically tagged items are received from suppliers every week at the warehouse. The heavily automated facility includes an 82 ft high automated storage shed, a cross sorting conveyor belt, boxed picking, hanging picking. Some 1,200 people work at the site during peak times.

But in-store fulfilment has also been a big development for the business. Wilson gave the example of a shopper who would normally purchase from store, but who wants to know if a clothing item is available in their size in their local store. It’s in stock, so they’ve decided to buy the item. With the Sparks Card system Marks & Spencer is able to track the item – find out exactly what the customer looked at, whether the customer bought the item that day, or over the next few weeks.

The Shop Your Way Click-and-Collect service is a fundamental way customers shop with us now, said Wilson. And Marks & Spencer are exploring different ways of improving and transforming this side of the business.

“We’re redesigning collection tools, we’ve got rid of computers and changed these to hand held devices,” said Wilson.

The handheld devices take up little to no space, and enable employees to multi-task while finding click-and-collect orders.

“It’s now quicker to actually go and find the order,” said Wilson. “We used to do it by surname – gave it a really odd set up.” Now the company asks for the last three digits of the booking number. “The speed of service is far improved,” said Wilson.

One particularly innovative new development is the implementation of fitting rooms near where they pick up their items. This means customers can try on their items straight away, and pop the item straight into the returns box if it doesn’t fit.

“We get that item back into stock quicker,” said Wilson.


Four uses of data

Data is changing quite dramatically, Andrew Mann, vice president of insight and CRM at Asda Walmart told delegates at the Omni-Channel Conference. “Data and how it flows around organisations and becoming more open is going to be a challenge we are all going to have to think about.”

Mann has only been at Asda for a month – but has worked at a range of big supermarket retailers over the last 15years, including The Co-operative and Tesco. His focus is on use data to improve an organisation’s omni-channel operation.

He identified four key uses of data:

  1. Transformational understanding of the business – better for customers and simpler for colleagues, as well as making things cheaper.
  2. Delivering the most relevant, inspirational messaging – in a segmented and targeted way. Right time and person is critical.
  3. Creation of new services.
  4. Creation of stronger communities – more and more organisations are starting to build communities.

But he emphasised the fact that data is not the be all and end all. He said that a company needs to start by understanding commercial goals – is it sales? Profitability? And answer the question – how are you going to provide solutions for customers? As well as aligning technology, and identifying the role of data in this alignment.

He used a number of examples of companies that have used data in innovative way, including Disneyland using multi-use RFID badges which track customers and enable them to open hotel room doors, work out where they are going or need to be, UPS tracking their drivers, lorries and packages, and Sainsbury’s ability to measure and adjust the temperature of every chiller or freezer.

He also spoke about Starbucks, which he said was one of the businesses with the most successful in using data, and had a sophisticated segmentation scheme – resulting in a phone app that enables customers to buy a coffee before they reach a store, and have it waiting for them when they get there. British Gas and City mapper were also cited as companies use data in innovative ways.

Solving the problem of returns

Returns was a particularly popular theme on the second day of the Omni-Channel Conference. Kicking off the returns conversation was Alistair Sercombe, who has been head of returns at Debenhams for just a year. He previously worked for Argos for 14 years, the last four in returns.

“Is returns prevention manageable?” asked Sercombe. “Absolutely”. He wasn’t shy in revealing that returns handling at the retailer wasn’t up to scratch before. Since bringing in Clear Returns, a software company, and spending time analysing its healthy online database, it has improved.

Prior to the investigation into why customers were returning products, Debenhams thought the problem may have been to do with the sizing and/or images of clothes/products on its website.

But it found that there was a segmentation in the customers that are returning items, the company realised it was far more complex than this.

Sercombe highlighted a number of different customer groups:

* Keepers – customers who don’t like to return.

* High risk returners – consumers that have a very clear expectation of what they want so won’t buy with a retailer again if it goes wrong.

* Bad returners – consumers that buy lots while sending most of the products back. Sercombe said that there is a lot of work that needs to be done around finding out why

* Good returners – average customer that would return some items, but mainly kept them.

Sercombe looked as ways minimise returns including tailored marketing campaigns which would involve being more selective, stopping the over promotion to “bad returners”, trying to align customers with products they will buy and keep, improving the customer experience by proactively contacting high risk customers, and triggering automated responses, specific scripts and messages.

Gary Winter, business development director at UTL, pointed out that returns are growing and customer behaviour is changing.

He thinks that the distinction of omni-channel platforms is blurring, and that people often don’t see the difference between store based, click and collect and online shopping.

“The cost is growing hugely – if don’t have an effective strategy it will start eating into your bottom line,” said Winter. “It’s about moving it along while protecting the brand.”

He said that a key way to deal with returns, like Sercombe, is using data. But he focussed on the importance of forecasting returns via data. Finding out the probable rates to prepare.

UTL looks at geographical trends, asking the question: do we see a certain propensity in this area? And, said Winter, this can effect where you put your warehouses and logistics.

Monitoring consumer buying patterns and the creation of operational plans has proven to work at UTL, said Winter. He also said that better information and instructions pre-sale, as well as appropriate selling, can be a good way to prevent the return from happening