With a worldwide economic downturn affecting the spending ability of everyone except the super-rich for the past 5 years, any growth in a market except perhaps debt recovery is remarkable. Ecommerce retailers have been a part of a UK growth in the sector of 93% over the past 5 years which is an indication of where the future lies.
So what has made this happen and in what ways are consumers choosing with their mouse clicks?
A number of elements have gone towards the growth in ecommerce including services outside of the digital spectrum. These factors are almost unlimited so I’m going to focus on four which I think are the major influencers.
Not a new phenomenon but one that has seen quite a large growth in the last year. Retailers such as Argos have lead the way as their infrastructure was pre-existing and the move to online was relatively simple. Other major chains such as Marks and Spencer, B&Q etc. have all joined in. Figures from Argos show that 29% of sales were attributed to this service in Q1 of 2012 with up to 80% of consumers having used click-to-collect services at some point this year. This seems to have hit the spot with consumers who still want to visit the high street but who don't want to browse or deal with customer service assistants. Although this drives customers to the high street it is a problem for retailers who are selling either technical items or luxury goods which require the experience to help with the sale.
Omni must be the most overused word in 2012 and retail has followed suit. By understanding that customers don't respond to one or other marketing channel but instead respond in part to everything they see, it is critical that the retail environment reaches every opportunity to project a sales and marketing message. The rise of new platforms has made this even more difficult for retailers who now need to concern themselves with Facebook, Twitter, Pinterestetc. A clear message, that is easily communicated across all channels helps generate the right sort of noise that will slowly help convince shoppers to visit your ecommerce environment. Burberry are seen as the leaders in Omni-channel retailing have the enviable position of managing a multitude of channels and offering the digital experience in store as much as possible. To understand what is at the heart of their activity the telegraph interview with Christopher Bailey gives a great insight into the motivation and ideas behind their development.
The older marketers will remember this theory well from the time that digital forgot and mass marketing dominated. Consumers are digesting content and communications in a very personal way as devices and platforms allow us to pick and choose what we view rather than just sticking the TV on and watching whatever is broadcast to all of us. To increase conversion rates and drive ROI on marketing it is now evident that one message does not fit all and marketers are finding ways of breaking down their key messages so that they fit targeted sectors. Even spammers realise that the amount of responses to Viagra for all emails has dwindled and so data is becoming the new commodity for marketers who are determined to fit us all into categories in order to reach us with a message we might actually respond to.
Ecommerce sites are also getting in on the act with functions that can track users as they re-visit a site and learn consumer patterns. Try leaving an item in a basket and then going away, did you receive an email offering you a benefit for coming back and finishing the purchase? More and more personalisation will be implemented as developers offer clients the opportunity to generate a variety of versions for each site to match male/female/young/old customers.
The rise of mobile and tablet devices
Even if you have been in Outer Mongolia for the past year you can’t have missed the year of mobile. Following predictionsfrom the past 5 years, mobile has reached mass market penetration with the help of tablets. Users are globally using their devices for everything from shopping, booking holidays and of course communicating via social media; the market is still the green field worth ploughing. This growth has meant that every e-retailer now needs to focus their attention on users interacting on these devices and consider the experience they present. Media is leading the way with digital versions of every publication now being made available to consumers and providing media owners some revenue from a dwindling publishing market. Retailers are following close behind as they understand that users believe that providing an optimised experience should be standard and leave site in droves that are not suited to the environment of their choosing. Retailers ignore this growing sector at their peril as it is the early adopters who spend the most and are keeping the market bubbling up. A variety of solutions are available with apps and responsive web design starting to make the most sense with better coding and reduced download times.
Christmas is always the litmus paper test for the retail market with the largest volumes of shopping done at this time. Once again online has out done the high street with growth of 30.9% online in comparison with 1.9%. Boxing Day was the largest shopping day in the year with £3billion spent nationally with online sales contributing a 20% growth.
Digital trends also indicate the way forward. 24% consumers admitted to showrooming during Christmas, which heightens the need for the provision of free wireless in major town centres. Smart retailers will allow consumers to compare prices and then offer to match them. John Lewis have been exponents of this and believe that it helps consumers visit their mobile optimised store online, while in store, therefore connecting with the consumer on two levels.
What does 2013 have in store?
What is hot on the, to develop list in 2013? I believe the further growth in personalisation will lead the way with developers and marketers taking more data from all of us and using it to make every platform, environment and experience about individual customers. When you login to a site you will have an experience tailored to your likes and wants, whether you know it or not with personal greetings and products pushed to the user based on previous activity. Thankfully devices will start to become more standard as the war between manufactures subsides and consumers make clear choices about what they really want. HTML5 will continue to grow as a programming medium replacing flash completely and responsive design will also continue to improve and provide an environment that everyone can access. The integration between the online environment and the real world will continue with users actively being pushed to use their devices in-store to access a world of content. This will dramatically change the way we shop, particularly for luxury goods and will bring the service element into the online experience.
My out on a limb prediction will be that TV will gain ground again as the rise of interactive TV continues to mature and starts to penetrate households. Brands will really push this as results will be easy to identify, show an advert which your mobile responds to and gets you to hit a website for more information, offers, competitions etc.