Kait Borsay

Hello and welcome to Transforming Retail, the podcast series from EY for leaders in the retail industry around the world. 

I'm Kait Borsay, and yes, I'm a bit husky getting over a cold. This is our second episode, and we'll be discussing whether data really holds the key to capturing the voice of the customer and enhancing their shopping experience.

Let's welcome back our expert panel. In Germany is Thomas Harms, EY’s Global Retail Leader. Hello, Thomas.  

Thomas Harms

Good to see you, Kait. 

Borsay

Really good to have you back again. And Nicole Srock Stanley, CEO of dan pearlman group. Hi Nicole.

Nicole Srock Stanley

Hi, Kait. 

Borsay

Hello again. In the UK Ian Johnston, the Founder at Quinine. Hi Ian.

Ian Johnston

Hi there, guys. How you doing? 

Borsay

And joining us for the first time is John Dubois, Consumer and Retail AI Leader for EY and he joins us from Texas in the US. Hi, John and welcome. 

John Dubois

Thank you. Good to be here. 

Borsay

In our previous episode, we took a store tour of different retail locations in London. Most of our panel commented on the missed opportunities to make better use of consumer data. Thomas, can you elaborate on what you noticed? 

Harms

What actually surprisingly we found that the stores that delivered the best shopper experience and that had the highest engagement with us, didn't use any data. So, when we ask the people on the floor, so how do you do that? They said, yeah, we do that with empathy, with engagement. We are curious about our customers. But all that data, we don't like it. 

The company may provide it or not, but we don't actually use it. And when we kind of came home we discussed that and John said, well that's a mess. There's a lot of opportunity here. And on the flight back, Nicole said, yeah, Thomas it's clear, because the retailers use the data for the product centric business model they have always done. 

So, and then maybe Nicole, you can do us a favor and a elude a little bit on that. So, what do you actually mean by that? You actually said, it's making it worse, using data.

Srock Stanley

Yeah, and I strongly believe that it's making it worse because if you're just measuring productivity based on revenue per square meter, you just build on the same business model all the time. But what we really need at the moment is experience everywhere. We need a wonderful customer experience, product experience, service experience.  

People want not just buy things, they want to find wonderful stories. And how do you measure stories? How do you measure, like joy and entertainment and stuff? And it's really difficult to do. 

So that's why most of the retailers don't do it. And that's why they have stuck in their old business case of revenue per square meter and they're not gradually transforming to experience of a square meter. 

Borsay

John, I feel like it's time to bring you in. What type of technology and data analytics do retailers and consumer product companies need to invest in? How do they capture the voice of the consumer?

Dubois

Yeah, it's a great question and you know I think we can borrow some exploration from previous digital worlds where we were getting really creative, building great experience and technologies that probably no longer exist. But we were using data to measure how well those experiences were being accepted. 

So, we had eye tracking. We had people looking at where the mouse was moving on a page so we could optimize things. I think we can take some of those same patterns that we've been using from a design thinking and an engineering background and apply those in real life and in store.

And so, you know, there's a lot of different ways to measure things like consumer emotion. But you can get more fine-grained. You can understand like why someone visited the store in the first place and what was it about that store that brought them joy. And these are the sort of things we can instrument and start to learn from and so I feel that there's an untapped gold mine of things that can provide folks that lean into the experience, but provide them with some, make some data to underpin some of their instinct or experience. 

Borsay

Okay. Ian, broadly if we look at digital insights into consumer preferences, how can we connect that with a better instore experience? 

Johnston

So Kait, I come from obviously the design worlds and the design research world in many ways, right. And we think of, not of data, but of research and of findings, right. We're actually talking about the wrong thing. Data is not the important thing, insight is, right. 

And as John talks there, you know the aspects of digital collection of data or findings and how they use algorithms to interpret those patterns, right, it does lack a little bit of human intuition. It lacks empathy.

And so inevitably you know, through the same algorithms you get to the same kind of conclusions. We like to use design research where you gather insights first hand. You use multiple types of collections or gathering of information so that you build up a much broader picture, we try to say that we look for the things that no one is telling you.

A much broader scope of where we look needs to be used, for sure. It's not just a singular point of what they bought, what they put back. This is a very isolated way to look at things and it really just drives one solution in the end. 

Harms

Ian in my experience the humans that are driving the data generation process are very analytical. So, they like numbers, data, crunch it. If they see an Excel file, they get tears in their eyes because they are so happy. 

Dubois

And in the past, I had done some work where we were learning about high transaction consumers, what they had bought in the past. And we were also learning about what all their consumers believed about products. And so, when a shopper would come to the store, we could preload with, you know, just easy visuals. Like visuals of previous products and maybe a word cloud to say, to remind the sales rep that this person cares about these things, at a glance. 

And it wasn't something studying spreadsheets or looking at graphs or bar charts. It was a very intuitive, easy way to remind a sales rep that this is the type of person that's standing in front of you. Here's what they've done in the past. Maybe you know, in that cloud it might have said, here are the occasions they often come to the store to visit for. 

And so, it was really a tool that was founded in data but being presented in an intuitive way to a sales rep to sort of, you know, one, make that shopper feel important and remembered and two, you know, make the job of a sales rep on the floor a little easier. 

Borsay

And Nicole, you know, consumers are aware of the power that their personal data has. How do they expect the data then to be used to enhance their relationship with a brand?

Srock Stanley

What we find is that a lot of people, they're lacking a bit in inspiration. When they come to a store, they like to be inspired. For example, for fashion, they like to buy a whole outfit. They like to see what matches what. Especially in the department store, there's a huge problem that you have shoes on floor seven and the handbag on floor two and everything is spread all over the place. 

So, it is a lot about guidance. How do I navigate through a building? How do I navigate to my shopper experience? And if there is something like a predictive algorithm and that can predict all my patterns, what I like and just navigate me through shopping mall, department store or even a shop, that is something that will be highly desirable. That's why we're so used going to a website and then all of a sudden, you're in your filter bubble and for consumers, hard to understand why this filter bubble is not working in real life. 

Harms

Maybe to add on this, the Future Consumer Index that's the research we are kind of regularly doing and confirms that the consumers expect a kind of return on investment for investing their data. 

So, trust is a given. If they don't get the trust, they will not give it, but they will also not give it just to make the brand happy and make them capitalize on their data. They want a return for them. 

Johnston

When the journey is digital or physical or personalized and relevant to people, they take less offense. Oh, that's the way it should be. I don't feel like someone is stalking me. It just feels like it's actually the way it's intended to be. How personalized is an experience, right? That's one factor that we should start measuring and asking people, how customized, how personalized was it?

Did the sales representative know your name when you walked in? The other end of it is how we visualize it. How we show the data tells a different story, right? And we need to be constantly looking at the data in different ways and different subsets and different matrixes, right, so we start to see different patterns in different ways. 

Srock Stanley

I think the most important thing is asking the right questions and then figuring out, how can we measure it, and how can people who have to work with this data actually utilize the data, in order to design their services, their products, their experience and so on and so forth. 

We really need to know what we want to use the data for and especially if we want to create something completely new. I think also we need maybe a data free rule. 

Johnston

You know, a lot of data takes a long time to collect, even longer to analyse. We use techniques which are very, very quick hands on. Go and do questionnaires, put something in store. Find out how people react to it. Change it up, right. Use live retail locations as experiments. Test, try, collect data, iterate again because that's how you can incrementally improve, you know, as you go. 

Borsay

Okay, alright. Well let's move into the consumer insights and look at how customer insight and opinion that is shared online can be used to anticipate consumer trends. So, this is from the consumer really, I suppose. It could be product reviews or comment on social channels, for example. John before the others chip in with their opinions on this, set this up for us. Just explain what the opportunity is here. 

Dubois

Absolutely. Yeah. So, every, I think it's 18 months now the volume of data that's being generated by the world is doubling. And you think about that for a minute, it's an insane number, right? But I've read between 80% and 90% of that is being created by consumers, by people. And they're using it to share their perspective. To reach out to brands proactively, or retailers proactively to say, hey, I have a problem, or this was delightful, or maybe they're sharing with their friends, you know, the latest thing that they've done. 

And so, when you think about the opportunity there, think of this almost like a mega panel of observation, where people are not being directed around what to say. They're telling you what it was that evoked an emotion, invoked a passion point, and evoked a reaction, enough so that they're taking the time to share that. 

We can understand emotion. We can understand sensory reactions. If someone is telling us about an aesthetic, we could start to build from an AI standpoint an aesthetic representation of soft goods or fashion. And we can start to build collections of shoes and handbags that fit an aesthetic to a given person. 

There's also research all the way back from the 70s that now we have the ability, the data, the processing power and the science to actually predict psychographics. We can apply things like Oceans Model of Personality to understand is this type of person going to generally be more loyal to a brand? Are they going to be more reactive if a problem happens.

In my world, and I come out of ecommerce and personalization all the way back in the early 2000s, we used to call it, brute force. If you don't have a perspective that's based on something, then you're just trying things and eventually you'll land in a good spot because you're learning. But what if you could just inspire that creative team with a little bit of nuggets so that they could get on a path and then start experimenting? Could you get to value faster? 

Harms

Well, I think here it's all the curiosity that John is referring to. I think that is key. That's also a culture thing, that you really forget about your product and puts a shopper and the customer in the middle of your thinking and are curious about them. Try to find out things. Not try to find out how to sell them more, but try to find out what they actually need, who they actually are. And use this data to get this insight and then I think if we get that change happening then we are getting there.  

Dubois

At EY we do have some critical thinking, in fact we've built the entire shopper journey from the perspective of a consumer. So, we talk about awareness, and we talk about how they consider things and how they experience the ownership or consumption of something. And we build models around that. 

Srock Stanley

But data is always the past, what we've experienced, what we've seen and even if you put predictive analytics on it, they see what they have seen and then try to extrapolate that into the future. But how do we get really high-end new innovations? And that's why I just threw in a bit of a random white noise room where we are data free, where we just like social dreaming, of how should a better society, look like.  

And what would be an ideal way of living together or just selling products or not even selling products, maybe in the future we don't sell products and you know we kind of give them away for other things. So, but to really shake up our system. And I think we're all really aware that we need to do that. 

Johnston

If you work through innovation, people don't know what they don't know, right? And we have to push the bar out and build on our own expertise and our own intuition. And I think that this data world we live in today has actually restricted our own ability to take risks, to be brave.  

You know, no one does anything without a stack of data behind it. All collection has bias, right? Whether we're doing it as a person or as an algorithm. The problem I have with coders in a room writing algorithms that are probably smarter than you know 99% of the people in the world, they aren't out there, right. And being in the field you get a different feeling of what's going on and what people like. 

And so, we just need to combine them both. That you know, it's not just one or the other it's both together. But I don't think we want to build a world where we believe all these AI algorithms is the solution. They have their own bias and they're going to lead us down a certain path. 

Borsay

In a moment then we're going to continue with another big question. Why do people buy what they do? That's coming up next? 

Jingle

Transforming Retail.

Borsay

Well, most data will tell us what somebody has bought, where they bought it and when. But the missing part of this picture is the why. How can retailers go about finding out why a person has bought a product and use this data to their advantage? John. 

Dubois

I think there's a couple of techniques. One that we see often is the retailer may send out a follow up say, getting some more information about the experience. But I think a more organic means would be to study what are the, what are the product reviews and the social signals that are coming from that type of consumer or that individual even in some cases. 

And then how can I extract what I like to call, the why behind the buy? What was the anticipated reason that you selected me and then how has ownership or consumption, how has that all played out? Did I meet your expectations? Because ultimately that's the contract. They make an expectation and then they figure out, was it met.

And so, I think using again social data in some of the ways we talked about earlier make a lot of sense in terms of understanding that en-masse and then applying that to individuals can be done in various different ways.

Borsay

Nicole, for you, and John summed it up nicely there, the why behind the buy. How can data help us with this? Are there previous examples that you've used that have been really useful in understanding why a consumer’s bought something? 

Srock Stanley

I think coming back to the importance of the right questions, I think, why did they buy, is already a wrong question. Because most of the purchases are serendipity. The more interesting question is, why did they end up in my store and what was the competition? Why? Why maybe the question is, they were sitting at the breakfast table and then they were discussing where to go to. 

Like go to the forest, go shopping, go playing with other kids and so on and so forth. Why did they choose the option to come and spend 2 hours in the city and come to my store? So, the question is why did they pick my destination and why were they thinking that as a valuable or a place to spend their own time?

Johnston

The issue that we see at the moment is here is everywhere now, right? And so, as brand engagement expands out beyond the physical world itself, I interact with the brand in different moments, in different times. And so that whole customer journey and that pathway to get me into the store, they all do different things at different times. And I really love charting out those things. Like, how did I get here? 

Well, I interacted with the brand on the tube through Instagram and then someone sent a tweet as I was sitting in the loo, and you know. And those things, and so it's quite complex now and it's so layered that here of course we want to drive and the best place to actually collect data is in the physical store, and that's my belief because it's real. It's not an assumption. I don't know if you've clicked or stayed on the site and so data collected in the store is so much richer than anywhere else. And retailers should start to think about that as their store as a data collection point. 

Borsay

Thomas, for you, I just wonder whether asking these sort of questions is problematic, because you're asking someone, why did they come to this destination? You're asking them what's influenced them when they may not realize what's influenced them. Is this achievable? Is this realistic asking for this type of data? 

Harms

Coming back to my [unclear] years, that I say, okay if you ask what they need, I don't think it's a problem. If you ask why they are here and what do I need to change to sell something to you? Then it's an issue. So, if you want to understand the motivation and the need of the consumer then I think they will welcome it. And I make a distinction between shopping and buying. Buying is when you need something, you actually don't care so much about, and I would provide data and everything that is necessary to get that as convenient, as frictionless to my home as possible.

Other occasions where I want to spend some time, then it comes to shopping experience in it, but then it's an experience over all that I'm looking for that gives me the opportunity to shop for something.

Johnston

Products get manufactured and if we don't know what need state a product fills, then we're going to have a harder time as we move toward a sustainable world. We need to understand why people are using what they're using so we can make it better and make it more appropriate and make it something that they want or not, or need even, want and need being the goal.

Borsay

Okay, well, it's been a really interesting discussion, but I'm going to ask you all to sum up now. If you can give me the key elements that are going to help retail leaders decide how to best use all of the data to make consumer lives better. The first summing up, let's go to you, please, Thomas.

Harms

Well, I think be curious about what the consumer really needs. Be respectful that they may have different needs at different times. So, I would call this, sometimes the retailer needs to be invisible, just save some time. In other occasions the same consumer may want intimacy and in other areas they want them to become indispensable for a certain area. Understand this, respect that, earn the trust. Stay curious, forget about your product.

Borsay

Ian?

Johnston

For me it's the importance of how you collect data, the methodologies you use and how you visualize that data and share it with your colleagues that can open up different viewpoints that perhaps you never saw before.

And so, for me that whole process is really, really important. You can open up a whole bunch of innovation for people.

Borsay

Nicole?

Srock Stanley

The thing is still ask the right questions about what you want to achieve with this data. How do you want to drive your customer experience? Because there's this fundamental shift of buying this online and shopping is a major activity. And that's why we need different KPIs away from revenue per square meters, more to experience per square meter. But that I hope, John in the future, he will have the perfect measurement tools. How do we measure the experience, the joy, the serendipity, the quirkiness? At one time you said we need friction in the system. How do we measure friction as a good part of the customer experience? 

Borsay

And John? 

Dubois

There's a reason we don't call it big data anymore, because data is not the solution. Data is a tool to get to something. And so, the two points, the point Nicole made around KPIs, what are the right things we should be measuring? How can we measure experience and not just a transaction? How could we get to attitudes and other parts of the experience and not just the behaviors? And then what Ian was saying around it's not the data, it’s the insights. We need to get to a point where we're not thinking of data for data’s sake. We're thinking of what is the thing that I need to measure? What kind of insights can that drive? And then what are the data that could underpin those insights and ultimately those measurements? So, this was a fantastic discussion. 

Borsay

There's so much to think about, isn't there? Thank you so much for joining us. That's it for this podcast. Thank you all for such an enlightening conversation, great to have you join us. Thank you first of all to John Dubois. Thank you, John. 

Dubois

Absolutely, my pleasure.

Borsay

And Nicole, thank you to you.

Srock Stanley

It was wonderful. Thank you.

Borsay

And to Ian. Thank you to you. 

Johnston

Pleasure. 

Borsay

And finally, Thomas, big thanks to you. 

Harms

Yeah, loved it. 

Borsay

Well join us again soon when we'll continue to look at how retailers can transform to stay relevant. Also, do subscribe to this series so you won't miss an episode. From me Kait Borsay, thanks for listening and goodbye.