Designing the Store of the Future
DUBAI — When Level Shoes opened its doors eight years ago at The Dubai Mall, the groundbreaking retailer set records of epic proportions: a 97,000-square-foot department store, the largest in the world dedicated solely to the universe of footwear.
The homegrown concept from the Chalhoub Group, the Middle East’s preeminent luxury retailer, has firmly staked its place as one of the world’s leading destinations for footwear. Last year alone, the store sold 250,000 pairs of shoes.
Rania Masri launched and managed Level Shoes for five years before moving into the role of chief transformation officer for the parent company. Her mission: to futureproof and transform Chalhoub Group from a traditional distributor and retailer to a hybrid model. For a group that operates 600-plus retail stores with more than 12,000 employees across 14 countries, this is no small task.
Masri came back to Level Shoes as a testing ground for new technologies that will showcase how a store of the future should function. “Level 2.0,” as it’s been coined, “puts the customer back at the heart of everything, growing and deepening the relationships.”
The role of the physical store has evolved completely, Masri explained. “The idea of a ‘store of the future’ is not something that has to be just tech-led in obvious ways. It’s human-led. A store where you have fun, feel at home, hang out with your friends. Technology enables us to do that better,” Masri said.
“In the eight years since we launched Level, customer behavior has changed dramatically,” she said. “Now the customer does their research online before ever stepping foot into a store. Then they come in, try on sizes, browse, go home and finalize the purchase online. And it could be from another retailer, not us.”
The key to the future is linking the online and off-line worlds seamlessly and using technology to actually create value. “It is not only about growing e-commerce or creating a futuristic setting. We are using technology to help us do our jobs better and strengthen human interactions.”
Although technically complex to roll out, the mission is simple: connect with your customers in as many ways as you can. “There was a time when I used to think we have to replicate the store experience online, but that is impossible. They are two different platforms. Two different worlds. We just need them to work together seamlessly.”
To improve interaction, Masri turned to The Greenhouse, Chalhoub Group’s accelerator program for retail start-ups, to source innovative solutions. “Partnering with start-ups gives us a chance to think about our business totally differently and address specific friction points in our process. They can innovate in ways we would not have imagined,” she said.
Last April, Level integrated a Greenhouse accelerator company called Hero, a conversational clienteling software company that gives frontline salespeople on the store floor the ability to speak directly to online customers in real time. Through the Hero plugin on the web site, a customer can chat with a salesperson actually on the sales floor immediately via messaging from their devices. The salesperson can send pictures and videos, answer questions on sizing, styling and product availability. The customer sees a photo of who they are chatting with. Since its launch in April, 15,000 conversations have been initiated. Conversion rate with the app is 8.3 percent, representing 2.5 percent of all of Level’s online sales.
The planned timing of the integration coincided with the government-enforced lockdowns and closures of malls, driving more people online. “The pandemic this year forced us to adjust to the new reality faster,” reflected Masri. “What seemed to be a disaster turned out to be a blessing in disguise for our online ecosystem. We had to offer them the high standards and quality of service that they have become accustomed to.”
Level 2.0 is using technology to create better in-store experiences for both customers and staff. On the back end, the buying team began utilizing the online wholesale platform Joor, which allowed them to conduct business virtually, another boon as COVID-19 crippled travel. The newly launched Level Shoes app also gives customers more functionality at their finger tips with options like booking customization appointments, getting a spot at virtual events and viewing the unveiling of exclusive and limited editions.
Since December, Level Shoes has seen 600 percent growth in active online customers. Fifteen percent of its total revenue comes from e-commerce and the retailer expects online growth in 2020 to be four times that of last year.
Saul Phillips, the head of clienteling at Level, said this is just the beginning of the new approach. Staying connected with customers is the top priority on and offline. Level’s top 240 clients generate 10 percent of its turnover. “Personal relationships are vital, but in order for us to really be able to personalize to our best ability we have to leverage data. I want to know not just where you live and your phone number, but your favorite hobbies and interests so that I can send you a yoga mat instead of flowers on your birthday,” Phillips said.
Personal shopping averages around 15 percent of Level’s total sales. There is a dedicated area in the store for personal style appointments, as well as private fitting rooms where clients can try on styles more discreetly. Level has launched a new personalization hub that allows customers to create a completely bespoke product by changing everything from the laces to the color and get initials engraved on the shoe by in-house artists. In November, the sneaker reseller Presented By will be opening a concession inside Level. “We want our customers to get whatever they desire and if we don’t carry it, we will help them find it,” Phillips said.
Level has also launched a home shopping concierge service where top tier clients can be sent shoes at home on consignment. “Everyone’s shopping habits are different and to be omnichannel simply means we cater to all of them,” Masri said.
One key new benchmark to ensure the Level team stays focused on a service over a sales-oriented approach is to change the KPI’s for salespeople from traditional transaction-oriented measurements to an NPS (net promotor score) based system, which creates more customer lifetime value for Level. “Acquiring new customers is extremely expensive as we compete in the digital world,” Masri said. “We need to ensure every interaction we have with the customer is adding value for them, are we helping to solve their problems.”
Phillips said he isn’t just competing with his region alone. “Our location here in
Dubai Mall means we see a lot of tourists. But that tourist may visit me once in person, then I can maintain a relationship with her wherever she is in the world. Just this week I shipped an exclusive shoe to a customer in Singapore. This is our reality in the global marketplace. Any customer can be a customer for life.”
Customer lifetime value, said Masri, will remain at the heart of the business model going forward. “It is not about increasing revenue. That is a consequence of doing this all right.
“Level is brand that was born in 2012 right when social media was taking hold of the fashion industry,” she added. “We opened with a generation of consumers that was used to a different style of retail and our ambition is to continue to transform whether it is the in-store experiences to how we buy, we can always be at the forefront of what is to come.”
Rania Masri, chief transformation officer at Chalhoub Group, is rethinking how stores interact with customers.