'The rise of digital influence ... will rock the world of retail over the next five years' – Paul Manning

  • Opinion
  • September 17, 2015
  • Paul Manning
'The rise of digital influence ... will rock the world of retail over the next five years' – Paul Manning

Even in today's hyper-connected digital world, e-commerce still contributes less than eight percent of retail sales across Australasia. That said, the influence of digital is skyrocketing. As of September, research suggests around half of retail sales were influenced by digital and that trend is expected to continue. No longer simply looking to the web to take away the inconvenience of physical transactions, consumers are discovering new products, researching them, and making purchase decisions before they walk into the store.

Changing attitudes about privacy and loyalty are already impacting retail. It's interesting that close to half of consumers now prefer relevancy of targeted information over preserving their privacy. When it comes to loyalty programmes, a quarter of consumers say they prioritise service and access to exclusive items over discounts.

Shoppable content

Shoppable content (including ads) is the latest manifestation of how the retail experience will be transformed by technology. We know already that mobile devices and big data mean that retail is now everywhere, instant and increasingly personal. 

Omnichannel commerce is the present and the future. People don't care about channels, they just want to be able to move seamlessly between platforms, media, devices and environments to achieve their shopping mission.

This convergence is also happening in advertising. That's meant that in some markets brand owners have stopped budgeting by media and marketing discipline and started allocating their marketing money by business challenges.

It simply isn’t enough for brands to invest in creating content – it must either drive conversion or contribute to brand loyalty as a whole. Much of branded content is misplaced and in silos away from products for sale, therefore not contributing to either. For retailers, content must be integrated with commerce to have a meaningful impact on ROI. One great example is the ASOS As Seen on Me community, which links customer-generated visual content to e-commerce.

Technology is resetting expectations of retail and transforming shopping behaviour. We are getting used to being able to click on a product image and go into the buying process. Soon, we'll expect to be able to buy any image we click on – and be frustrated if we can't.

In turn, retail will need to be a single API that can plug into every ad, image, film, tweet or post, because people will expect everything to be shoppable. The natural consequence is further convergence of retail channels, and advertising too.

Personalisation

33 percent of marketers say personalisation of information and relevance is their primary focus in 2016. Brands face the difficult decision of how much data is too much. But more often than not, brands fail to use the consumer data they already have. Recently, viewed products and other information, such as sizings, can be gathered from browsing history without the need for additional input. Yet, many major retailers fail to display recently viewed products and leverage that information for cross-selling.

Personalisation may include displaying the closest store on the site based on the shopper's profile, customising the homepage based on an individual’s browsing profile, targeting them with items they are most likely to buy, or recommending products based on the results of tests or behaviours.

Real-time customer service

As more retailers around the world are adopting standard live chat, those who can customise and speed up the service experience will differentiate themselves. The best examples of live chat don’t just ask consumers for help, they guide them to a specific topic. For example, the Apple help box asks consumers if they need help with a product they own, an order they placed, or if they need to discover the right product for their needs. Estée Lauder’s pop-up chat box contains a message relevant to what the consumer is browsing.

Loyalty

The top loyalty programmes don’t rely on discounting to build a fan base. Nordstrom and The North Face offer experiences to their VIP members. Neiman Marcus offers wardrobe consultations, and Nike offers run clubs.

The best loyalty programmes also offer convenience to all members. Sephora’s Beauty Insider enables users to save 'loves' and purchases on their phone. Sample, online, and in-store purchase histories are stored in a 'beauty bag', which is retrievable across all channels. 

Starbucks – also a leader in loyalty – customises its programme by country. In the US, members gain convenience as they can pre-pay for their drink and pickup in store. In China, consumers are offered coupons via games.

Commerce without boundaries

Mobile browsing is becoming a preliminary step to visiting the store as over half of consumers who search locally on their smartphone visit a store within 24 hours of their local search. Yet, because of often-cumbersome mobile checkout processes, mobile commerce is yet to take off.

Brands are working to remove the friction of that last step. Apple enables one-touch pay and exhibits live stock status on its mobile page. Nordstrom has built a single-page checkout on mobile, but requires users to enter shipping, payment, and identity information, saving between each step.

New Zealand retailers still have a long way to go. There's no doubt that America is leading the way; retailers like Tag Heuer offer click-to-call for appointment scheduling, while Home Depot provides in-store availability down to the aisle and shelf. Meanwhile in the UK, John Lewis has partnered with Waitrose grocery stores to enable users to pick up their items while grocery shopping.

It's safe to say, the rise of digital influence, and advances in shoppable technologies, will rock the world of retail over the next five years.

  • Paul Manning is the executive director of Ogilvy & Mather NZ. 
  • This post originally appeared on LinkedIn.

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