The retail behemoths of the future will be the ones crafting a seamless online platform
A casual observer of the much publicised takeovers of high street behemoths like Debenhams by online retailers such as Boohoo would be tempted to conclude that having an online presence is the swiftest hack for a brand to succeed in the current retail climate. But that is not the case.
The UK may have leapfrogged five to six years in terms of ecommerce as a share of addressable retail during the pandemic, but it is not a case of smooth sailing for any brand, as long as it has a fully stocked website that can deliver products in record time.
Consumers are demanding a faster pace of change from brands and their customer services. Even after a year of enormous shift to online, brands across the spectrum are falling behind in meeting consumers’ expectations of a good digital experience. Younger consumers between the ages of 18 and 24-years-old are more than twice as likely as older shoppers to be put off purchasing if they have a clunky digital experience, according to research by MullenLowe Profero. Platforms like Depop, with their slick user experience, are putting the screws to the likes of Debenhams who have failed to keep up.
The current state of the retail sector, where online leaders are actively buying up brands who have failed to keep up, has been on the cards for years.The ASOS acquisitions show that digital experts are hungry to make more out of legacy brands online, believing in the potential to turn brands like Topshop around and driving more sales from a better experience.
Nike is another great example of a digital leader. It has spent years innovating in both product and linked digital service offerings and building a compelling retail offering. Apps such as the Nike Running Club and Nike Training Club put people through their paces and integrate the online shop into the platform. It’s a masterclass in well-rounded online offerings.
While there are a few dazzling gems of online retail, there is an overwhelming lack of originality across the board in nearly every business sector. Around 2 in 3 consumers felt frands in the finance & banking, automotive, telecoms and food & beverage are likely to display copycat digital experiences. Those who can create seamless platforms will be able to push their way to the front of the pack.
The lack of innovation in the automotive industry is particularly striking. Over lockdown there was a spike in car ownership, but brands were some of the worst performing across the board. It now faces the herculean task of trying to fill the humanity gap in a world where they are forced to operate without the physical presence of human dealers.
This is primarily because the path to purchase is more difficult within this sector – few automotive brands have managed to get the ‘buy button’ experience to work for them on their websites and with their dealerships. The process from finding a car to purchasing is too onerous. Credit is due to challenger brands like Cazoo who are rethinking the car buying journey with a digital first approach and a razor sharp focus on humanising the digital experience. Their recent stock market valuation of £5bn, just 16 months after their launch, is testament to that.
The consumer has decided that the brands who are brave enough to think differently in order to get their digital experiences right, will end up owning this new brand experience world. The hierarchy for retail has changed.
A huge high street presence is not a guarantee of success. The tectonic plates for online retail are still shifting. Those who fall behind will be those who apply old rules to a new world. We will see acquisitions continuing as the likes of ASOS continues its charge to become the new Arcadia.