Big shift in retail and customer experience
It takes 30 days to build a new habit. But when new habits are forced, which ones will stick?
We saw ecommerce contribute to highs of 15 per cent of retail turnover in April 2020. Photograph: Getty Images
There is no doubt that ecommerce has made our country resilient throughout the pandemic. Technology has been a linchpin for connection but also a direct source to goods and services, allowing us to live our lives with some semblance of normality.
Data from the Central Bank of Ireland shows ecommerce through card purchases increased 25 per cent year on year, the result of colossal digital transformation across all sectors of retail.
Retailers have all had to pivot their sales funnel and infrastructures to become truly digital-first. The entrepreneurship and innovation has been truly inspiring, technology has enabled the recreation of physical experiences in a virtual environment. Today we can do everything from buy a house to our weekly groceries with a few clicks.
On this week's Inside Marketing podcast we're joined by Pauline Browne, marketing and ecommerce director at Carphone Warehouse, and Meabh Connellan, head of strategy at Dentsu, to discuss the recent explosion in the ecommerce sector, whether it's going to continue post Covid-19 and what the future of retail looks like. Listen now:
We saw ecommerce contribute to highs of 15 per cent of retail turnover in April 2020, compared with just 3 per cent the previous year, and 65,000 new registered .ie domains in 2020 – a record high.
Interestingly, in months where lockdown eased, that increase reduces dramatically. The summer months of 2020 saw ecommerce contribution reduce back down to about 4.5-4.6 per cent again, highlighting the direct correlation between ecommerce and high-level restrictions.
The pandemic acted as that unwanted catalyst that did the job of democratising technology and pushing the digital transformation agenda. So now we must uncover what behaviour is caused as a result of resilience during a pandemic and what new behaviours are truly transformational and here to stay.
The retail ecosystem has changed, with brands now having to navigate more combinations of virtual and physical touchpoints than ever before
Looking at the bricks-and-mortar retail model, pandemic or not, cracks were beginning to appear. Numerous store closures and empty retail space had earned the title of “retail apocalypse” within the press. Reasons for this “retail apocalypse” came from deurbanisation and rapid expansion to expensive legacy overheads, but the common thread throughout was retailers not embracing technology in their infrastructure.
The shift in customer experience has been brought along by a new economy, made up of multiple combinations of digital and virtual touchpoints. This new economy has brought discovery, first interaction and transaction closer than ever before, but along a much messier journey; and it’s the brands that deliver the right experience at the right touchpoint that will win out.
Jack Ma, former chairman of Alibaba, famously came out with his vision for “new retail” back in 2015, where Alibaba focused on using technology as a disrupter in the retail model. The “new retail” initiative connects online and offline retail and digitises shops in order to provide a better customer experience.
Using this framework, Alibaba enhanced the grocery category through its Hema stores. Hema stores have three functionalities: in-person shopping, a distribution centre for online orders and a robot restaurant. All experiences are anchored through the Hema app, from discovery (recommendation engine), point of purchase (buy, deliver and experience through app), even to social sharing and reviewing. The success of Hema stores is a brilliant case of how technology can transform a category and create personalised experiences.
Success within an omni-channel model results from building experience-led transactions across all sales channels from retail to commerce. Looking closer to home, Musgraves has a real focus on how technology can enable better customer experiences. By 2025 it sees technology as fundamentally changing the relationship it has with consumers, which is already evident with its tech-enabled online grocery shopping, the beat-the-queue functionality on its Centra app to the in-store Superscan wand in SuperValu, all linking to real rewards.
Currys PC World is also showcasing tech-centric solutions when it comes to its infrastructure. Throughout the pandemic it introduced the ShopLive functionality, which allows a video chat with its tech experts as you are shopping online. Director of retail and ecommerce Pauline Browne describes how the company views this as “blended customer service”; no matter how a customer chooses to interact they still get everything they want and need.
When designing your omni-channel marketing strategy around customer experience, there are some key trends of note.
Never waste a touchpoint
Every single interaction that someone has with your brand should be an opportunity to transact. As our shoppable universe continues to grow both digitally (social, audio, video) but also in real life (smart cars, shoppable TV, intermediaries), there should be no excuse for a customer dead-end. This highlights the absolute importance of CX and UX as key components of your marketing strategy.
Eight per cent of people abandon a cart if a page takes more than three seconds to load, and 80 per cent of these never return, so a bad experience can be detrimental to your brand.
Purpose and experience
There is a large trend towards active consumerism, and understanding the impact your purchase has on an economy. It’s that battle of being sustainable, supporting local and making ethical decisions versus the experience of fast delivery, free returns and greater choice.
Fifty-three per cent of Irish people said they had done most of their online shopping with Irish SMEs since the start of the pandemic. That number has already reduced to 49 per cent this year. To compete, brands should push their local, trust and community credentials. A great example is Irish athleisure wear brand Gym+Coffee, which seems to have built a company from a strong social community upwards.
Social media has become the mirror to how we live our lives. What we do in real life, we can now do through our social platforms, and shopping is no different. Thirty per cent of Irish people use social platforms to be inspired and discover new brands, and 32 per cent conduct their buying research through their social platforms. Social media is a space where advertising content isn’t just expected but sought out and appreciated. The creation of shoppable shopfronts, matched with power of community and the immersive nature of live, delivers social as not only a platform for transaction, but also a key discovery platform.
Be more than lower funnel
Although we say that every interaction should be shoppable, that does not mean that transaction should be the key focus to all our communications. We need to move out of lower funnel thinking, and use our media to aid in discovery and inspiration with our customers.
When it comes to digital discovery the act of pretailtainment or pre-purchase entertainment is the enjoyment of pinning, previewing, streaming and sharing. Brands can earn a place early in the customer journey and push closer to transaction by providing content that enables this behaviour.
Equally, a physical environment should take advantage of showrooming behaviour, where the retail space can be used in a way a website can’t. Retail start-up Showfields is an amazing example of how brands can create personalised in-store experiences that will positively affect the bottom line, and they are not alone: Nike, Adidas and Sephora are all brilliant examples of brands using technology to enable showrooming.
The retail ecosystem has changed, with brands now having to navigate more combinations of virtual and physical touchpoints than ever before. Embracing technology is fundamental to allowing brands leverage that interplay across these messier and more fragmented customer journeys, and win those experience battles across discovery, engagement and transaction.
Meabh Connellan is Dentsu group strategy director
Inside Marketing is a series brought to you by Dentsu and Irish Times Media Solutions, exploring the issues and opportunities facing the world of media and marketing.
For more information, visit irishtimes.com/insidemarketing.