O2O Marketing Strategy of Timberland in Asia
The challenge of O2O transformation by the General Manager of Timberland who used technologies to make a big difference.
Monday afternoon, the summer in Taipei is hot and humid. While there are not many people shopping in the downtown area, Yuki Huang, the General Manager of the international brand Timberland, shows her concerns to the sky with dark clouds gathering. “If it rains, there will be even less traffic to the store,” Yuki said.
With the impact of the growing e-commerce, one of the biggest challenges to Timberland in recent years is how to continuously bring customers back shopping and strengthen the sales power offline while maintaining the sales channels online.
The truth is, a brand like Timberland which owns over 100 brick-and-mortar stores in Taiwan and more than 500 stores in China, any sales decrease from the offline retail channel would not be made up by the sales growth of the online stores as compensation.
It is time for Timberland to consider the O2O transformation as a new marketing strategy in order to break through the limitation in a fast-growing market full of sales opportunities.
Yuki believes in two key factors that keep her offline business going and growing: First of all, Timberland is a well-known brand in which sales are driven by the loyalty program remarkably. The revenue generated by the members who signed up for the loyalty program has reached 90%, so it makes perfect sense that any O2O models will first have to be acceptable to their loyal customers.
In addition, when retailers work on their O2O transformation, most of the staff who serve in the stores tend to lack motivation since it’s very likely to lead to less revenue for themselves if they push the customers away from online shopping. Therefore, a rewarding system should thus be provided for the onsite staff. “In short, the key is to make the O2O transformation without jeopardizing the existing brick-and-mortar business,” Yuki said.
The ideal procedure will be the retailer knows some VIP customers tried on certain merchandise in the store without a purchase. When his/her preferred merchandises are on sale, the brand should be able to text the VIP promotion messages. Or, the brand knows some VIP has browsed certain items online, then the brand sends him/her wearing advice or styling tips to trigger people to buy in the offline store. In a word, it is crucial to collect and analyze both data online and from offline stores.
Last Autumn, Yuki reached out to experienced companies 91APP and SkyREC for brand optimization. 91APP is a data-driven e-commerce service platform, and SkyREC provides AiMS, an autonomous intelligent management system driven by AI (Artificial Intelligence) video analytics for both public and private spaces like brick-and-mortar stores.
Collecting data in the physical stores isn’t easy and takes special skills, especially when the data is related to the behaviors of moving humans or living creatures. Video analytics software trained by massive sources with deep learning technology can precisely detect and analyze a person with clothing and accessories, moving path, and behaviors including dwell, squat down, or potential shoplifting.
When a shopper walks into the Timberland store, the panoramic camera installed on the ceiling and connected to SkyREC AiMS will be triggered to analyze the shopper’s behaviors, like what the shopper has touched, the display areas the shopper dwells and for how long, then transforms them into data in real-time.
With its object-focused video analytics, AiMS also enables store managers to do rapid remote store visit focusing on the objects they target to. A store visit that used to spend a whole day to be there in the store now can be easily done within few minutes through the internet.
Video analytics and data generated by SkyREC AiMS help Timberland find out the potential problems in their daily selling process. There was one store that initially set the counter in the middle area, and it accidentally caused the shoppers to ignore the display areas in the back of the store while not a single employee has ever noticed it.
“I ended up putting a huge poster at the back with a “Big Sales x% off” sign on it, then the shoppers stepped further to the back!” Yuki said the message that the shopper didn’t want to move toward the back store could have been ignored without the analyzed data.
Data based on video analytics is definitely one of the most obvious and conspicuous benefits of using technology as a tool. “Sometimes, data can even be used to challenge and optimize the conventional knowledge of a certain industry,” said Cate Xie, the Co-founder of SkyREC.
For instance, retailers believe that in terms of shopper traffic, the more the better. However, one of Cate’s brand clients found through the video analytics that the revenue of a flagship store started to decline as soon as the in-store shopper traffic exceeds a certain number. Such data empowers the corporation to act accordingly and make the right move.
The more integration made between online and offline retail, the bigger the sales grow. “Some even grew their revenue by 30%.” Yuki’s ultimate target is to achieve full O2O integration, bring shoppers back to the brick-and-mortar stores, increase the purchase from VIP. Her true ambition is achieving great sales growth in a diminishing and lackluster retail market.
