CS: So Pete, what has the impact of that been on the business and the way you structure the business?
PW: Well, I think, in many ways it means that we have to be way more digital and customer experience-centric than we were in the early days. And when you’re delivering your customer experience mainly in-store, you can go to a store and you can see the experience. But in the digital world, you can no longer see it, you have to experience it in different ways because often it’s personalised and it’s done through a channel that is invisible. And as you go in, you experience the same set of clicks and the same stream of activities.
I think there is a massive shift now in terms of how you run a retail business to try and integrate what was a traditional model with that digital model, which is a different set of skills. It’s about how you blend the art of the old retail and the customer service experience and the human interaction with the new retail experience, which is about tech and personalisation and virtual interactions, and put that together in a way that is unique for the customer.
JH: I believe that The Future Laboratory coined the term ‘phygital’, which is exactly what Peter’s referring to…
Martin Raymond: It’s interesting. Think about what’s happened in the UK: that understanding that Covid has just accelerated incoming changes that would have happened over time, but now it’s compressed, we’re seeing changes happen swiftly. People who are less familiar with the internet are using it every day. The bar to usage and familiarity is now gone. We’re now understanding that service, as somebody described to me recently, is about speed of delivery.
So that’s interesting, people are seeing it as being able to get things back and forward at an efficient rate. I asked someone recently: ‘What is it that you miss?’ And they brought up the notion of experience and I said: ‘Okay, so what would you like to see when you get back into the store?’ Now that they accept that the product is a given, and the speed of delivery is a given, they said they wanted to have a chat with people, just a bit of human contact. I thought that was interesting given that for the past 10 years we’ve avoided human contact in stores because it’s inefficient and we just wanted to get in and out, and get the product into a bag or whatever. So, have you had any thoughts about how, potentially, when everything re-opens again – and I know that you are one of the few retailers, I would say globally, that majors on in-store experience – have you now rethought or worked out how that will change after Covid?
JH: I think, first of all, that we’re going to double down on what is our DNA, our raison d’être, what we call the Mecca moat. During Covid, we launched Mecca Versity, which is an online education platform, and all of our team members who are unable to work in-store enrolled in Mecca Versity, did a week, chose their major and chose their minor, and the level of education that our team has undertaken during Covid is unparalleled globally. So, the first thing is, we have a team which is now educated and has majors in skincare, colour, fragrance, but also in things like leadership and many other topics, so that when they get back into the store, they can engage with the customer, bring the customer up the learning curve immediately, personalise the plethora of products to that customer. And that, to me, is what Mecca has always done, but I think we’ve just doubled down in terms of how we ameliorate that experience during the silver lining of Covid.
Another silver lining is that we’ve been able to access experts – brand founders, for
example, globally – and beam them into customers’ homes in Australia. So, for us, if we take the Mecca team member experience and the fact that we’ve been able to get our customers used to this and you’re accessing global talent, how about we then find a way in-store to beam these global experts into the store and then provide the human connection through the Mecca Beauty Lab where eight to 10 people sit in a horseshoe, look at the screen, have a live experience with a global expert and get the human contact from each other around the horseshoe and from Mecca team members?
And we’ve already started doing that. We are going to take the expertise of the in-store team and take the acceptance of globalised content that has come as a result of Covid and bring that to the in-store experience. And the human connection will come from fellow beauty enthusiasts sitting next to you as a Mecca Beauty Lab and it will be facilitated by team members. It’s a new way of consuming beauty. It’s like YouTube, but you have the product in front of you and you have customers around you.
MR: It’s proper phygital!