Fighting Cultural Resistance: Moving From Brick&Mortar To Click&Mortar
In Episode 14 of MING Labs’ podcast Lost In Transformation, we talk to Rod Strother, former VP of Digital Transformation at StarHub and former Director of the Digital and Social Centre of Excellence at Lenovo about transforming e-commerce to improve customer experiences.
Tune into this episode for the full story on overcoming cultural resistance and transforming customer journeys across organizational silos to help businesses thrive:
The First (Imperfect) Mover Advantage
When Rod started at StarHub, he brought an attitude that he calls the Lenovo way:
“If we sit around and wait to get it absolutely right, the competition will already have moved ahead.”
“If we do it to what we think is the right way to do something and then we tweak it along the way to make it even better, we have a first-mover advantage.”
Tackle Inertia In An Established Company By Probing Negative Assumptions About Transformation
“To be honest, trying to transform within a company that had been incredibly successful doing what it did in the way that it did things was difficult.”
Rod explains that his team wanted to transform e-commerce. However, “If you were responsible for the retail shops, the physical shops, then there was an attitude that something like e-commerce was taking away the rice bowl.”
In fact, “(e-commerce) is another critical area in order for us to drive in sales. Because the person that wants to go online and wants to buy through your online shop is not necessarily the same person that’s going to go all the way to NEX mall to go into the retail shop anyway. Quite a different audience.”
“So rather than carve up the pie, actually there could be increase in the pie. That was the sort of attitude change that we needed to make.”
Retail Transformation: Showing Profitability With Data
On the topic of mindset shift among StarHub’s retail, Rod says that a big part in there is data. He discussed with the analytics team about Hub IDs. Each customer going on starhub.com’s online shop has a Hub ID. At the end of the journey, “there’s only one or two outcomes: you buy or you abandoned the cart at some point.”
In another case, a customer purchases from a retail shop, and gets another Hub ID. If that customer browses online but then goes into the retail shop and finds the product they’re looking for, this journey is all captured in the data.
“This is where the light bulb moment was for everybody. I said, can we just dedupe all the people that started (online and abandoned cart) against the hub ID’s of everybody who bought in the shop. And everybody kind of looked at me when I said, don’t we do this anyway? Have we never done it?”
“So, essentially (we were able) to look at the percentage of people who started the journey and either complete or finish in the shop. So, over a hundred of people we could see the percentage that started in online shop and finished in the physical shop. So, rather than taking away your rice bowl, I’m actually feeding you.”
“From a profitability point of view it’s more profitable if you finish the journey in the online shop, because I’m not then paying sales commissions, et cetera.”
“One of our big targets was around online sales. What we did was we looked at that percentage split of online and offline. The percentage that bought at the actual online shop and how many that started the journey in the online shop, bought at the physical shop. And our aim was over a year to change the ratio, so that we could change the ratio that was to really try and get as many people to complete the journey in the online shop.”
“There was a couple of ways that we did that. One was in changing the user experience.”
Streamlining Policies To Improve The E-Commerce Experience
“(At the start), the online shop had just been a case of almost a necessary evil. And so the online shop was put together around exactly the same processes that the physical shop was.” This included the documentation and forms that a retail customer would do.
“What a bloody awful online experience that leads to. So we had processes in there that would take, you know, 25 minutes. And really for something that you should be done between four to six minutes.” This resulted in people starting the journey online, but choosing to complete it in the shop.
“So what we did was we sat down with all the compliance team, with finance, et cetera, and got everybody round the table (to discuss the steps we didn’t need).” Aside from the frontend, “If we can take away all the policies and processes, that are required and you get it right down to the absolute core things, that are needed from the customer.”
“Then you’ve improved the experience a hundred fold and that showed on the results and the increase in sales for online and the ratio between online to offline.”
Changing The Role Of The Brick & Mortar Shops
“I think one of the key things that happened was to relook at the role of the shops. For any business there are things that you can do in a shop that are just really difficult online. Just because of the very nature of the product and the buying process.”
For example, service staff usually fill out everything for the customer, discussing the plans and products that they want in the shop. “When I’m doing that online, it’s a long process and customers get bored with it. So there are certain processes that are better placed within the shop. And I think you then start to change the role of the shop.”
So, the shops became much more experiential. So rather than be about necessarily about commissions at a more strategic level was to change the role of the shop.
“If you have a look at a brand like Nespresso, of how they changed their retail shops. Their retail shops became far more about the experience in the shop, rather than stacking them high with products and you know, having boxes all over the place. They were much more about the retail experience around a really great cup of coffee and all of that sort of side of it. And that’s what you were getting in the shops. That then transferred over to the online. So it was a very seamless experience between the offline and the online.”
“And I think that was probably more what was happening over on the Telco side, was just re-imagining the positioning of the shops.”
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