Digital and the consumer: where to next for innovation?

Some of the most influential figures at the intersection of retail and tech gathered at the UK headquarters of Google last week for an MBS breakfast event hosted by chairman and ex-Mothercare CEO Simon Calver. A fascinating discussion concentrated on issues such as the pace of change within the online retailing sector, the use of big data and the challenges of improving systems across increasingly multichannel businesses. Simon is the perfect person to take the lead on an event like this, having enjoyed extensive experiences with retailers and pure play organisations alike. All in all, a wonderful morning’s learning!

Simon outlined his experience at the helm of companies from both sectors, explaining the different points of focus when moving between Mothercare and LoveFilm. In particular, the importance of mobile in capturing new consumers was emphasised. At LoveFilm, for example, the mobile team reported directly to Simon himself, an illustration of the function’s importance to overall business performance. Mobile performed strongly at Mothercare after Simon’s arrival, too, but LoveFilm was more successful when it came to capitalising on analytics. French Connection CEO Stephen Marks still asserts that the product is everything in retail businesses, which is a credible argument. As we’ll see below, though, the use of data is invariably of primary importance to these pureplay businesses.

While the retail sector is clearly undergoing massive change, what was surprising was the emphasis put on the usefulness of data throughout. More than ever, we are seeing new and innovative companies build themselves around data right from the start – look at ecommerce ventures like Yoox, which blend a ‘luxury’ feel with a hard focus on back-office activities. At the same time, though, the customer will respond best to what is on show. This provides an explanation as to how businesses set themselves apart when every company is now doubling down on their online offer. In order to bring the customer on side, data will become more and more important. As David Benigson, CEO of information platform Signal, said to MBS, “the increased ability for retailers to capture data, and then to analyse and act on it in a meaningful way, will be the key.”

In companies that bridge the gap between ‘conventional’ retail and ecommerce, marketing plays a crucial role. In particular, it was interesting to see how traditional media, such as print magazines and billboards, are still seen as important in the overall mix. There is still room for innovation, though; Net-a-Porter, for instance, has used billboard ads that are twinned with location tracking technology to display live online purchases. Retailers can take advantage of techniques commonly used by digitally native companies, too. Last year, Tesco set up a start-up incubator designed to associate the business with hot new properties in the ecommerce space. All this shows that it is possible to thrive when blending the best parts of bricks-and-mortar retail with cutting-edge technology, even if there are still lessons to be learned from both sides!

MBS has assessed how retail businesses can take advantage of the digital revolution in a new white paper, which will be published in the near future. How do you think digital and retail companies will continue to make the most out of their customer bases? Let me know at, and have a lovely weekend.