Last Tuesday (17 July) the inaugural RTS London event saw retailers, brands, and agencies come together to discuss the biggest topics in the industry. As well as panels and presentations from sponsors Bazaarvoice and Baidu, the attendees also had the opportunity to dive deeper into the issues affecting the retail ecosystem, through a series of roundtable discussions during the lunch break. This piece highlights the key points from these sessions and takes a closer look at: the growth of mobile; APAC’s technological marvels; both Amazon and GDPR’s impact on retailers; and the importance of perfecting both your online and in-store flagship.
The mobile retail expansion
With the perpetually evolving state of modern technology, brands and retailers are sometimes proving hesitant to jump head first into new sectors of online marketing, while the trend is still fresh and untested in terms of ROI. The fear of failure, perhaps due to launching pre-emptively (before customer demand is ready), or due to their house style simply not meshing well online, means that retail businesses can be fearful of over-committing and over-investing on their mobile retail strategy before results can be guaranteed.
However, retailers are not blind to mobile’s growth, and are looking to take advantage of this by leveraging user-generated content on desktop and mobile apps, as they look to influence the increasing number of their customers shopping on mobile. One of the key points explored at RTS was the widely used medium of personal mobile notification systems to notify a customer of a business’ product release, or news concerning it. This personal, parasocial relationship built between the consumer and the business builds brand loyalty by developing the consumer’s reliance on the app to remind them of new products and deals. This is a technique commonly used by larger companies, such as Amazon, though it is also encouraged for smaller enterprises, to challenge this hegemony with their own diverse mobile app.
Europe vs Asia: Retail’s future
It’s no secret that China is paving the way for retail’s future, with the rest of the world aspiring to catch up with their advancements. With their high population, it’s no wonder that Chinese shoppers favour online environments, where they don’t have to worry about overcrowded shops. However, in terms of technology, China has missed the desktop stage of digital commerce, and has gone directly to mobile, while the rest of the world bides their time over these movements.
The Chinese culture has ensured this move has been a success. The digital in-store experience in Asia already implements technology like QR codes and online shopping apps in their daily lives, as opposed to the more traditional European markets.
The question here isn’t really about what will happen to retail in the future, but rather what’s happening now that will affect retailers worldwide, thanks to advanced Asian markets, and their exploration into different online technologies.
Online or in-store flagship?
While attendees of RTS deemed online and in-store flagships equal, this does not mean they are the same, nor that they are not competing with one another. Today, we are seeing e-commerce pureplays trying to eat the lunch of the physical stores, as well as brick-and-mortars looking to expand their online operations. Retail has become a dog-eat-dog world, where those who can monetise the largest audience wins. Due to this ‘Hunger Games’ approach, it has become increasingly easy for established brands, that have money to spare, to develop their online capabilities, and further strengthen their position.
A perfect example of an online retailer looking to build a physical presence, is Amazon’s ‘Amazon Go’, designed to go hand-in-hand with their juggernaut of an online model. The added value of this initiative in bringing new customers through the physical realm and keeping your current customer base loyal with the online realm. How smaller retailers – and, indeed, retailers of a similar size – can match a move like this could prove a pivotal question to retailers over the next couple of years.
Keep your friends close… and Amazon closer
A frequently asked question at this year’s RTS was “can retailers afford not to sell to Amazon?”. Obviously there’s no black and white answer here, as how effective Amazon is as a selling strategy depends on your sector, but for most retailers, the case is that all their competitors have a presence on Amazon.
The double-edged sword of Amazon is that they function as a distribution point for many brands and retailers that struggle to directly interact with their customers. The risk here for businesses is the data they are giving to Amazon, which may lead to the launch of Amazon private-label brands that have been refined based off the data of successful products on their platform. While you may be boosting your sales in the short-term, Amazon still has the power to undercut you in the long-term.
Unfortunately, this is the lesser of two evils. The alternative of not using Amazon to engage an audience is too risky, especially for smaller companies. Using Amazon is more viable for niche businesses with niche products, as there is less risk that their market will be supplanted, but the subversion of secondary enterprises is a very real threat to many that use Amazon.
GDPR + effective data usage = engaged audiences