BHS relaunched online at the end of September, much to the surprise and scepticism of the British public. After all, the retailer had rather publically fallen into administration in April this year. The demise of BHS was well-documented by the press, but by the end of the summer most people thought that they had heard the end of the whole saga. However, that was not to be. It has been a few weeks since the retailer was revived online as BHS.com, and initial reports suggest that it is thriving in its digital form.
However, BHS.com is launching at a challenging time. Inflation rates have jumped to the highest level in nearly two years, causing retail prices to soar, exacerbating the decline in high street footfall. With this in mind, several of BHS.com’s competitors are focusing heavily on their digital capabilities. John Lewis, amongst others, is investing in omnichannel technology to boost online customer engagement. BHS.com will also be competing against relatively new players on the market, such as Made.com, which has built its entire business model around the online consumer experience.
BHS.com has done well in its first few weeks; however it will have to implement an effective data strategy to build on its initial success. One advantage that BHS.com has over some digital competitors is that it already possesses customer data from its previous high-street incarnation. The retailer should take advantage of this, mining its customer data from the outset to forge an ongoing positive relationship with shoppers. Existing customer data should be used to locate traditional shoppers, and then offline and email marketing should be circulated to leverage a digital connection. Data analysis will enable BHS.com to group shoppers into different customer segments, more effectively targeting and organically growing these segments through offering new products and services.
One of the most significant challenges BHS.com will face in the coming months will centre on managing its growth rate. The retailer has just added a kitchen range to its offering and is set to expand its collection to Christmas hampers and gifts at the end of October. These new products may attract more shoppers, which is great news for the sales team. However it is important to steadily build a volume of customers; ensuring customer service matches the brand promise. In my experience, it is the ability to control this growing scale that often overwhelms online retailers in this phase. Businesses that are successful grow quickly and as a result the customer is sometimes overlooked. The store is in danger of not recognising who these customers are as individuals and therefore not understanding how best to engage with them. Recent research has revealed that 75 per cent of consumers become frustrated when promotions have nothing to do with their interests. These mistakes are easily avoidable with the right data strategy in place. If this is correctly implemented, engaging customers with relevant and useful communication will ultimately enhance the product experience, in turn boosting sales. This can only be a good thing for both shopper and retailer.
BHS.com has made a positive start in its first few weeks, however its ‘iconic British brand’ will not be enough to convince today’s savvy online consumer to keep coming back for more. The customer experience needs to be seamless and if BHS.com harnesses its data in the right way then its move to online may have been its best business decision yet.
By Scott Logie, managing director of REaD Group Insight
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