This article was published in the September 2016 issue of STORES Magazine.
Indochino creates winning customer experiences in-store and online
Indochino has built its success on getting the right fit. But while its custom-tailored suits fit like a glove, the pure-play e-commerce site wasn’t quite measuring up. The Vancouver, B.C.-based company followed its customers where they led, learning more about who they were and what they wanted, making alterations to its business plan along the way — all based on data and insight, much coming through a partnership with big data analytics platform Qubit.
The first alteration came when Indochino found that some customers were hesitant about ordering a suit online, unsure of fabric selections or uncomfortable measuring themselves. Thus, “traveling tailor” events were born, where customers could purchase suits online, then make an appointment to visit a tailor to ensure perfect measurements.
The traveling tailor events not only created a fun client atmosphere, they also offered Indochino plenty of lessons about how consumers interacted with the brand, says Pilar Catala, director of omnichannel digital experience at Indochino. “These are profitable events and it made us think, ‘Why don’t we start thinking about bricks-and-mortar retail?’”
Indochino opened its first physical store in Vancouver in 2014, and quickly realized that omnichannel was its future. Its eighth North American showroom opened in June, and in-store retail sales increased 80 percent year over year for the first five months of 2016, accounting for 46 percent of Indochino’s sales.
Growth has happened online as well, with year-over-year e-commerce sales up 58 percent in the first five months of 2016.
Improving insight
As the company grew, it realized that each channel delivered its own benefits. The challenge was to bring the best of bricks-and-mortar to online and vice versa.
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“With all the data that we were collecting in our website and the qualitative data that we were finding face to face with our clients, we realized we needed to have the same singular experience on the web,” Catala says. “At that point, we started looking for ways to use technology for better optimization and segmentation of our customers.”
Indochino began working with Qubit, which helped it identify three core segments: the wedding party, the fresh-out-of-college job seeker and a VIP.
“When we started engaging with [Indochino], they would be the first to admit that they had a static experience,” says Ian McCaig, Qubit’s CMO and co-founder. “Marketers couldn’t do good merchandising or batch those products to incent where they have low stock, creating a sense of urgency.”
Indochino also wanted better segmentation based on its personas. “A lot of what we’ve been doing is putting people at ease over making these big purchases,” McCaig says.
Indochino attributes $1 million in incremental revenue to better personalization of its website, thanks to its work with Qubit. But it hasn’t hurt that the company also has improved the insight offered when a customer walks into a showroom to be measured, leading to a 4 percent increase in revenue per customer.
“You may get measured in the showroom after you have purchased online,” Catala says. “When you make the appointment to come in, we can show you the fabric as well as other things. It presents a great opportunity for upsell. That’s where we got the lift.”
Taking it in
The continued insight has led Indochino to again shift its business plan. Originally its bricks-and-mortar stores were open by appointment only and located in urban areas. Better insight into Toronto customers, though, revealed that many lived in the nearby suburb of Mississauga. When the Square One Shopping Centre revitalization project was underway, Indochino opted to open its first mall store with regular business hours.
But there is one key difference between Indochino and other menswear retailers: There are virtually no products on store shelves.
“By using data to learn more about our clients, we have changed the way we interact and serve our customers.”
“By using data to learn more about our clients, we have changed the way we interact and serve our customers,” Catala says. “We do walk-ins and appointments. We’re already solving how we interact with those different customers. We’ve come up with new training for our staff in Square One to let customers know what Indochino is, why we make suits and the reason it takes four weeks.”
That is vastly different than customers who walk into any other by-appointment store, she says. “The fact that the customer had already made an appointment, you know the probability of conversion is quite high.”
Indochino shoppers outside the Toronto area might never know about the mall store if not for Qubit’s geolocation feature. “A lot of people might want to come to the showroom and get measured first and look at the fabrics,” Catala says. “Or they may want to look online. We are able to collect data that’s marrying the online and the offline. We can then create the right experiences dynamically.”
That’s brought a challenge in trying to “bridge the data together,” she says. “We started using different layers that show different content based on [past performance]. Have you come to the site before and not purchased? Did you purchase? These are all A/B tests.”
Following the customer
Catala says one of the most significant transitions from a pure-play e-commerce site to a full omnichannel experience is who is in charge.
“If you keep the customer journeys all online, you can dictate,” she says. “With the omnichannel experience, it’s up to the customers. They decide how they want to buy from you, rather than the past e-commerce mentality of ‘Sell. Sell. Sell.’ Now we’re focused on engaging with our customers and helping them buy what they want, when they want and how they want.”
“If you keep the customer journeys all online, you can dictate. With the omnichannel experience, it’s up to the customers.”
McCaig says Qubit “wants to help businesses move away from that one-size-fits-all experience. Most e-commerce sites are treating everyone the same. Creating a more relative digital experience is no longer just nice to have, but a strategic imperative for businesses. We’re now in the expectation economy where customers set the standards of how they want to engage with brands.”
For the Indochino customer, it means overcoming the inherent drawbacks of online when it comes to upselling. “I can’t help you feel the fabric. I can’t explain why this fabric is much nicer than the one you picked,” Catala says. “I can tell you that it’s 10 percent cashmere, but I can’t upsell you in that product online. Online, it’s a number. Your entry level for an online purchase is different [from] the entry level for the showroom purchase.”
That’s a far cry from the bricks-and-mortar stores which are “a high touchpoint and so interactive,” Catala says. “How can I grab a little bit more of that and bring it into the website? We still have a way to go. Everybody is looking at omnichannel with a big question mark. At the same time, if you don’t test it, you’ll never know. Qubit has a pretty powerful platform to help us get there.”