The rise of tech-savvy value retailing

Value retailers are not particularly renowned for their technological prowess but Studio is on a journey it hopes will successfully marry up its keen pricing with the adoption of clever technologies.

Chris Chalmers, marketing director at Studio, says: “The challenge is that we’re not a digital start-up and no one has made value work online because of the cost base. Although our legacy is paper-based catalogues and credit, we’ve got big digital ambitions.”

Although Studio began trading online 10 years ago it has been a constant challenge for the business. However, over the past year the company has been at the early stages of a transformation journey that involves an overhaul of its digital capabilities. This will address what Chalmers acknowledges are the constraints he faces from operating with mainframe systems and the inability to handle real-time order processing.

The aim of the transformation is to align technology with what Chalmers says are the “sticky elements” of the business: its product selection, keen pricing, and the credit offer. Products remain absolutely crucial to the success of Studio.

“There is dwell time online through customers finding unexpected products. Our buyers source quirky products and customers go deep [in the selection] and explore. We don’t want people to go quickly in and out of the site,” he says.

Where shoppers’ search criteria is open then the objective is to “disrupt with quirk” and furnish them with “the unexpected and elements of surprise” as Chalmers describes it. In contrast, where there is a very clear search criteria used then he is very keen to home in on the required items very quickly. This is one of the areas where Studio is using AI technology.

“We’re leveraging AI capabilities to give us the best search results and return the 100% most relevant product,” says Chalmers, adding that Aptos is one of its technology partners helping it capitalise on the latest technology.

However, there remains some caution: “We get so many approaches of new technology that we’ve got to do some filtering. We’re not there yet with things like AR (augmented reality) and VR (virtual reality) but artificial intelligence (AI) has been very beneficial for us. We’ve also being using it for fraud prevention.”

App launch

Studio is also making an investment in Salesforce through the implementation of its marketing cloud solution and it has plans to further use the technology firm’s capabilities to give it a 360 degree view of its customers. In addition, Studio has also worked with Mulesoft to help it launch an app last year that has been particularly successful as it enables the retailer to seamlessly integrate its credit offer, which is used by a significant proportion of customers.

The app has enabled the company to drive 70% of its online business through mobile devices and this has contributed to the change over the past two years whereby online revenues now account for 85% of total sales compared with 70% previously. The remaining revenue comes from phone and orders through the post.

These figures are reflective of Studio attracting a younger audience. Whereas it has historically over-indexed on 55-plus-year-old shoppers, the new developments online – combined with an earlier rebrand – is helping it attract younger customers and the greatest growth is being seen in the 25-36-year-old age bracket.

Chalmers says the ongoing transformation plan will see further changes coming through that will ultimately prove that technology and value retailing can work in harmony.

Chalmers was due to present at the UK’s leading retail event, RetailEXPO, which was cancelled due to the coronavirus epidemic.