si_grana_case_landscape
TRANSCRIPT
EXPERIENCERE-THINK THE CUSTOMER
How E-tailer Grana Developed a Scalable Offline Channel
HONG KONG UPSTARTS
© 2106 Sachs Insights
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Stepping inside Grana’s fitting room
on a trendy street in Sheung Wan, one
is immediately struck by the friendliness
of the customer service. “They’re just
very accessible and laidback. It’s
service with a smile.” says Sean Kesluk,
a 24 year-old customer working in
private equity, as he examines a
cashmere sweater.
Grana, a fast growing e-commerce
retailer and darling of the Hong Kong
start-up scene, has been able to carve a
differentiated niche in a saturated retail
market, one that starts with a focus on
the consumer.
Famous for its sprawling high-end malls
and teeming shopping centers, Hong
Kong has long been an international
locus of consumer frenzy, driven in large
part by throngs of mainland Chinese
tourists seeking reduced import tariffs.
For a mainlander, shopping in Hong
Kong can mean savings of 45% on
imported luxury goods.
This luxury driven dynamic has left
white space between the ultra high-end
and the generic, undifferentiated low-
end. Foreign labels like Uniqlo, Zara,
and H&M have made gains on closing
that space, jostling for position against
Hong Kong natives Esprit and
Giordano.
In this, Grana saw an opportunity to
serve the middle market while
differentiating on quality. As Pieter Paul
Wittgen, Grana’s co-founder and COO
puts it, “We focus on the world’s best
fabrics, travelling the globe to find the
best mills for your clothing, and because
we focus on scaling online, we can
deliver quality at a really good price for
our customers.”
Using this model, Grana has grown to
50 employees in less than 18 months,
and in addition to Hong Kong, maintains
operations in Singapore, Sydney, and
San Francisco with plans to expand
their reach further still.
Figure 1.1: Shoppers in Hong Kong’s Causeway Bay, a popular destination for mainland tourists seeking reduced import tariffs. [Courtesy: Getty Images]
NEW ENTRANT, UNIQUE MARKET:
GRANA MAKES A SPLASH IN HONG KONG
© 2106 Sachs Insights
Figure 1.2: From top to bottom, Grana stores in Sheung Wan, Causeway Bay and Sydney, Australia. [Courtesy: Grana]
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“We knew we had an
offline channel that
could be really
successful, but we
didn’t know how to
scale it.”
While the fitting room concept in
Sheung Wan represented a departure
from the traditional e-commerce model,
Grana had understood that an offline
channel was important to help establish
trust and name recognition in new
markets.
“We noticed that especially with quality
at a good price, people wanted to feel
the clothing, try it on and also to know
who’s behind the brand and what the
philosophy is. We started experimenting
with temporary shops where people
could try on the clothes and then order
online,” Wittgen said.
And although on a single day last year
130 million Chinese visited Taobao.com,
spending a staggering US $14.3 billion,
e-commerce in China and Hong Kong is
still relatively nascent by Western
standards. Many customers were
unfamiliar with how an offline-to-online
fitting room concept worked.
re
Figure 2.2 : Giant platforms like Tmall, TaoBao and JD.com dominate e-tail and help connect merchants with Chinese customers. Fake merchandise proliferates so Chinese consumers rely heavily on peer reviews and established brands to guide online and offline purchases.
re
Figure 2.1 : Grana co-founders Pieter Paul Wittgen (right, COO) and Luke Grana (left, CEO) in the Grana warehouse in Wong Chuk Hang, Hong Kong. [Courtesy: Grana]
“We were having a lot of issues
connecting to potential customers. It felt
like we weren’t addressing our
customers’ needs, and as we continued
to grow, we needed to figure out how to
optimize the fitting room strategy and
experience,” said Emma Sussex,
Grana’s director of strategy.
“We knew we had an offline channel
that could be really successful, but we
didn’t know how to scale it,” Wittgen
said.
THE CHALLENGE:
BUILDING AN OFFLINE EXPERIENCE
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a sample of Hong Kong, mainland
Chinese and Western shoppers, Grana
revealed some unexpected findings.
“The most useful part was to see how
the customers’ emotions went up and
down throughout the shopping
experience,” Ho said.
“We found out something unexpected.”
CEO
BRANDING
VIZ. MERCH.
STORE MGR.
PRODUCT
STRATEGY
COO
MARKETING
WEB
Figure 3.1 : Grana assembled a cross-functional team to study their customers and design a scalable pop-up store template. © Sachs Insights
Figure 3.2 : Sachs outfitted participants with Google Glass and paired with Grana team members to understand the customer journey.
Clockwise from left: Grana’s head of design Anthony Hill with a study participant in Sheung Wan. Smiley Ho receiving feedback from a customer on messaging. Grana and Sachs team up to plot the customer journey in a workshopping session. A study participant reacts to a question after shopping. © Sachs Insights
DESIGN INSPIRATION:
UNDERSTANDING THE CUSTOMER JOURNEY
TO better understand the customer
experience, Grana assembled a cross-
functional team of their branding,
marketing, product, store and
management personnel and partnered
with Sachs to outfit shoppers with
Google Glass, following them as they
interacted with Grana’s fitting room and
competitor store experiences.
“We wanted to answer: who are they
before they shop with us? What is their
experience when they meet us for the
first time? And what do they think about
us afterwards?” said Smiley Ho, who
heads up visual merchandizing for
Grana’s stores.
By tracking the customer journey across
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Grana had anticipated friction in the
checkout experience, and following
customers fulfilled this expectation. But
in addition, customers experienced real
confusion when first entering the store,
and also when browsing the product.
By following customers as they
interacted with the store and studying
the Glass footage, it became clear that
Grana’s value proposition was not
always landing. Additionally, customers
were overwhelmingly product focused,
missing key messaging designed to
help them in their journey.
“It was amazing. We concentrate on
web so much, jumping to a shop was
very different,” said Dave Reid, Grana’s
art director.
“You have a lot to say in a very short
time and space. Originally we were
trying to say too much, and customers
were getting confused about what to
take home.”
“We didn’t know what to focus on and
we didn’t know what was important.
Coming out of research and the
workshop we understood how to say
things more simply.”
Inspired by a shared understanding of
their customer’s journey and a Glass-
driven competitive assessment from
Sachs researchers in New York,
Grana’s team was able to re-imagine
how customer service interfaced with
shoppers across the journey.
A new system created three roles within
customer service, each mapped to the
customer journey and answering the
customer’s need at critical inflection
points.
Service reps went from generalists to
specialists, and a leaner team was able
to handle surges in customer traffic
while still ensuring customer
comprehension, critical to Grana’s need
for scalability.
Figure 4.1 : The aggregated customer journey revealed where Grana could improve the store experience. Customers were confused on entry, struggling to comprehend the O2O model, and visual merchandizing and messaging issues impacted the browsing process. As expected, checkout was problematic. © Sachs Insights
Figure 4.2 : The Re-envisioned customer service. Customer service reps went from generalists to specialists, each addressing a specific need within the customer journey. The new process ensures that regardless of volume, a lean team can deliver the most important elements of Grana’s value proposition, while still ensuring an orderly store. © Sachs Insights
GAINS IN MESSAGING AND SCALABILITY:
A REDESIGNED CUSTOMER SERVICE STRATEGY
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Additionally, Grana designed a new
approach to visual merchandizing,
identifying a template focused on multi-
dimensionality in store and product
layout that leveraged the customer’s
reliable interest in product. With a new
list of best practices in hand, Grana felt
confident that the layout of their stores
would intuitively guide shoppers through
the intended process while successfully
landing the key value proposition.
“Sachs helped us put together a plan
and helped us prioritize that plan so that
we had a roadmap going forward and it
felt attainable and much more grounded
in the needs of our customers,” Sussex
said.
“What’s exciting is bringing people
together to come up with a solution.
People get heard, there’s investment
and that has a positive impact on follow
through. There’s great value in being
aligned and doing something exciting for
the customer.”
Meanwhile, back in the fitting room in
Sheung Wan, the customers keep
coming in, and it’s always service with a
smile.
Figure 5.1 : Above, a prioritized list of design features and improvements serves as input for a phased roadmap to implementation (not shown). Below, David Reid, art director, shares insights from a customer ethnography. © Sachs Insights
Figure 5.2 : (Clockwise) Carolina Arraiza, brand director, with a participant in a pre-interview. Collages from participant homework reveal influences and preferences (Below and left). Says Arraiza, “what’s gold is to interact with your customer. To see them touching your clothes, trying them on. Honest feedback can be harsh, but it is incredibly useful.” © Sachs Insights
LOOKING FORWARD:
A ROADMAP TO EXPANSION
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WHY SACHS:
CLIENT TESTIMONIALS
© 2106 Sachs Insights
“We chose Sachs because of their broad expertise in cracking offline/online UX and their proposal of approaching this project as a 'collaboration' between Sachs & Grana. I worked in top-class advertising agencies for 10 years and knew how these things needed to be done. I saw first-hand the professionalism and methodology used. We move fast and they had the time, involvement and willingness to understand our business and run at our pace.”
“We really trusted Sachs in having not just Hong Kong experience but also a strong international focus. It felt like a natural fit. The people we worked with had a thorough understanding of the brand, very open minds and an idea to work with our whole team of stakeholders. Sachs came in, saw where all the parties were coming from and helped us find a more cohesive way of looking at the problem, not just from an analytical point of view but also practically, how do we map this out to get to a solution.”
“It allowed us to step back. You get so much bias about your company because you only see it through your mindset. Everything makes sense to you because you have the background in the industry and it just is. Rarely do you get to actually meet anyone that’s new to the brand and it really helps in the design process. We were able to make better design decisions as a result.”
Carolina Arraiza-brand director
Pieter PaulWittgen-COO
DaveReid-art director
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