At this time last year, online retailers had it easy. Consumer spending was at a high and exciting new e-commerce tools including user-generated content, ‘searchandising’ and advanced profiling had emerged, transforming the online shopping experience.
Consequently, users were turning to the web for their shopping rather than the high street and out of town shopping centres. However, since September’s financial crisis really took hold, the retail industry has been hard hit as consumers took a long hard look at their spending.
While the second half of 2008 saw the retail industry take a dive, there is no doubt that the impact of the economic climate will hit the industry harder in 2009. Yet, despite the doom and gloom of the high street, online sales are still doing well with a rise of 18 per cent on this time last year, according to the IMRG Capgemini e-retail sales index.
Asos.com, the UK’s largest online fashion and beauty store, recently reported that sales over the last two months had more than doubled, having increased by 107% in the six months to October. So what has been the reason behind the success of e-commerce in the face of such adversity?
If we pause and reflect back on 2008, there have been some notable trends that will stay with us in 2009 and beyond. The first is streamlined multi-channel strategies, which continued to gather pace with the increased adoption of tools such as ‘click to call’ and the unveiling of interactive video advertising.
More retailers evolved their business models to engage customers and prospects with the right information at the right time through their preferred channel. Delivering a multi-channel customer experience, whether over the web, chat, phone, or mobile device to help customers to see the store as one continuous, personalised relationship will certainly be an ongoing trend for 2009.
A key part of this multi-channel strategy has been the rise of personalisation. Consumers today are no longer willing to accept the ‘norm’, and in doing so retailers have turned to more sophisticated forms of marketing. This has led to the rise of multi-channel marketing on a more personalised level so that consumers preferring mobile are communicated and incentivised in that format, while web users are reached through this channel.
The scatter gun approach has all but disappeared in favour of the highly skilled sniper strategy that works on a one-to-one basis. Highlighting this shift towards personalisation is the emergence and evolution of automated recommendation engines that have significantly reduced shopping cart abandonment rates and we believe will change the way that customers buy online in the future.
Social networking e-commerce
2008 also saw new technologies such as mobile solutions and social networking enter the e-commerce realm. While the opportunities that social networking and mobile solutions bring to the e-commerce mix are significant, retailers will be continuing to test different methods and techniques to incorporate them into their online marketing initiatives. These tools provide an opportunity to tap into groups of like-minded individuals where advocates can make or break brands.
Economic pressure will mean that customers will be even more selective next year and so retailers that close sales most effectively using all of the tools available are sure to come out on top. If there is hope for 2009, it will come as a result of ‘innovation’ as hard times will certainly drive more remarkable advances and retailers work even harder to differentiate themselves under increasing pressure.
The role of mobile, social networking and multi-channel strategies will have a major impact on retailers and those that are willing to embrace innovative approaches are more likely to retain existing customers, but acquire new ones in the process.
2009 and beyond
There is little doubt that in 2009 more retailers will struggle to remain in business and so the once unusual step of M&A in retail will become more common place as some of the larger retailers look to pick up opportunities to extend their offering and customer base. Indeed, 2008 saw the first signs of this trend and provides a valuable lesson about the future direction of the market.
One thing is certain, those that flourish in 2009 will be retailers and marketers that focus on managing the customer experience from acquisition to conversion, service to repeat purchasing, by embracing innovation and the latest technological advancements.
Retailers that discover how to integrate the latest solutions, such as mobile and online communities, correctly are sure to stand out from the crowd in the year ahead.
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