Last week at a Tradedoubler event in London I presented key findings from our latest Quarterly Digital Intelligence Briefing, looking specifically at trends in the retail sector for 2015 and beyond.
Before outlining my key themes for the sector, it’s worth giving some context about the growth of the online retail.
According to Justin Opie from IMRG, 2014 finished with online accounting for 24% of retail sales. More than £100bn was spent online. This was up 14% on 2013. Average basket value was up 4% on 2013 to £81.
We also saw the fight back from multichannel against pureplay with year-on-year online retail growth rates up 15% for the multichannel retailers, compared to 13% for the pure plays.
The key message to retailers was the need to plan ahead this year to avoid the impact of Black Friday and Cyber Monday on delivery and site performance that some retailers suffered.
Black Friday will be repeated in 2015 – though the form that the event takes may alter in terms of scale and shape, depending on how retailers adapt their promotions in line with what they learnt from this year’s experiences.
However it evolves, there are some very clear learnings that can be taken from 2014 and we will shortly be publishing industry-wide recommendations for managing the peak to ensure that Black Friday 2015 works effectively in the interests of both business and shoppers alike.
Customer experience is the most exciting opportunity for retailers
Retailers signalled customer experience as the single most exciting opportunity for 2015 and up from 2014.
Interestingly mobile had decreased as a priority from 2014, which is likely to be down to the investment retailers made last year in improving the mobile experience for their customers.
More than half of retailers asked see customer service and experience as the primary way they will seek to differentiate themselves from their competitors over the next five years.
Surprisingly, only 14% said that product quality would be their greatest differentiator, while only 6% would be relying on price.
With the spotlight on customer experience there is a need for retailers to look for ways to inspire greater creativity to deliver undeniably better experiences and to stand out from their competitors.
Cross-channel marketing is a key focus for retailers in 2015
Cross-channel, multichannel and omnichannel are all terms that have been around for several years now, but 61% of retailers agreed that cross-channel marketing will be a key focus for them in 2015.
Omnichannel personalisation will become a reality for retailers
Retailers are now thinking of personalisation across the whole customer journey, rather than in a particular marketing silo and 44% of retailers agreed that omnichannel personalisation will become a reality in 2015.
Those that can get it right can reap the rewards, as highlighted by research by IDC Retail Insights.
While multichannel shoppers spend on average 15% to 30% more with a retailer than consumers who use only one channel, omnichannel shoppers will spend 15% to 30% more than multichannel consumers and exhibit stronger brand loyalty, often swaying others to patronise the brand and more likely to make more purchases.
Driving the sale is top priority for retailers
Driving the conversion is the top digital priority for retailers in 2015 and marketing will become more personal with targeting and personalisation ranked as the second highest digital priority.
Technology shaping the retail experience
The final theme was the role Technology is playing in how it could shape retail in the UK through the use of beacons, ECG authenticated micro-payments, sensors on shop shelves, facial recognition cameras in mannequins and personalising digital price labels.
Steve Butcher from PowaTag described how its technology works showing a video where 10,000 stores were launched using the product in Paris on one day.
PowaTag combines instant mobile ecommerce and Bluetooth geolocation to let shoppers impulse buy when they see a product, billboard, screen advert or retail display.
Once scanned, the app purchases the corresponding item of clothing from the participating retailer.
CEO of Powa Technologies Dan Wagner:
Retailers can no longer afford to think in terms of online verses offline – they must seriously rethink how they connect in-store and online strategies to provide the agility and innovation needed to enable customers to buy whenever and wherever they may be, when they are at that critical buying-decision moment.
With customers’ rising expectations for an excellent customer experience and simplicity new technology is providing exciting opportunities for retailers.