This content is produced by The Australian Financial Review in commercial partnership with Salesforce.
A recent study released by US-based analysts Fung Global Retail and Technology suggested the retail sector is around four to five years behind the finance sector on its disruption journey. According to the study, true disruption in the sector is still to come and retailers will need to develop “multi-sided ecosystems if they want to survive”.
The study suggests many current players will drop out of the sector as “basic psychology leads many companies to remain in a state of denial about what is happening around them”. Unfortunately, it’s a state of denial a number of older Australian retailers seem to have embraced.
Conversely, one of the more forward-thinking retail segments is the fashion industry and while there have been casualties, the Australian launch of international category-killing retail names such as Zara, H&M and Uniqlo has stirred up the sector as has the birth of online players like The Iconic. Yet what the whole local retail sector is holding its breath for is Jeff Bezos’ behemoth, Amazon.
Yet while Amazon’s imminent arrival is making some of the nation’s brick-and-mortar retailers uneasy, nimbler online players have been busily honing their own wares.
Speaking at the recent The Trailblazers roundtable co-hosted by The Australian Financial Review and Salesforce, chief operating officer of leading online retailer The Iconic, Anna Lee, spoke at length about the online fashion retailer’s culture and focus on continuous improvement.
According to Lee, the company’s whole philosophy revolves around improving the customer experience and while it can be a technology improvement, it can also just involve tinkering with the human process.
Lee says the company “rips apart all their customer feedback and really drills down on every facet”.
“We then identify the particular owners and allocate functions to those people in the company. While we try to improve on the things our customers already love, we obviously identify the pain points and work on those. We then compare how these are tracking month to month so we can work out our priorities,” Lee says.
For The Iconic, drilling down on issues and allocating functions means different teams then have to work on a solution. The key is the specific team owns the problem and is empowered to make the changes.
A major part of the company’s focus on continuous improvement is the technology team which is the hub of experimentation, according to Lee.
“We have created a sandbox for them to play in and conduct hackathons and so on. A lot of our customer initiatives have actually come from these. For example, we recently launched a sizing tool online because one of the biggest objections to shopping online for clothing concerns getting consumer sizes right.
“What we’ve done is enhanced the customer experience by allowing them to use their measurements, their details, as well as the details from past purchases as well as measurements from other customers to essentially crowdsource the right size.
“Things like the sizing tool have been really phenomenal, and have only really come through because we encouraged that kind of sandbox thinking.”
Beyond technological innovation, the company work hard on ensuring every employee understands the whole business process and the importance of every role.
For example, the company’s fulfilment centre is located in Sydney’s west at Yennora, while the head office is in the city. Lee says the two sites are very different with different workforces. On one side, there is the office-bound team in the city while out at Yennora it is the pickers and packers in the warehouse.
What the company has done is build a rapport between the two workforces on social media and via email and has encouraged cross-functional collaborations.
“Ever since we moved to Yennora back in February, droves of people from the head office go out and work from there every week. At the end of the day it creates empathy for each department and people understand what they do has a direct impact on another department,” Lee says.
“It has broken down a lot of hurdles so people can actually work together and make things more efficient, easier and better.
“Just that in itself is a very simple way of innovating.”