Is the future of the retail industry digital?
Is the future of the retail industry digital?
For the retail industry, the future looks uncertain. Some of our favourite high street brands are closing their doors to the public, as mobile and e-commerce websites take over sales. It has become apparent that customers would much rather sit in their pyjamas on their sofa to do their shopping — and this applies to all sectors in the industry, from groceries and white goods to fashion. Fashion, in particular, has a significant presence in the digital world, accounting for almost one third of all online purchases in the UK — but what does this mean for our high street stores?
We have teamed up with Trilogy Stores to investigate if retailers should consider making the transition to a digital platform. Whilst some high street stores might fear they are entering unfamiliar territory, if they fail to make a transition, they could face an uncertain future.
How does the industry look today?
Aside from fluctuations in the pound, British retailers are facing new challenges from digital competitors. In the last twelve months, approximately 87% of UK consumers have bought at least one product online — with online sales increasing 21.3% in the year 2016, and forecast to increase by 30% by the end of 2017. Consumer buying patterns have shifted a great deal. Consumers are choosing to shop in their spare time, usually on an evening or during the night, making it difficult for retail high street stores to compete with their limited shopping hours.
Online retailers are attracting traditional physical shoppers through techniques such as size guides, speedy delivery, free returns, and competitive prices. The need to physically try before you buy is fading away. This is influencing the success of high street stores — driving some of them into the ground.
Offline retailers face higher running costs and start-up costs too — it’s no wonder that new companies are choosing to start online and existing fashion giants are starting to make the transition to digital.
Is the future digital?
If the retail industry is to stay successful, it is advised that companies should go digital. That’s right, the future is digital for the retail industry. With many big brands already marking their territory online, smaller brands need to consider digital if they are to stay in the game. High street retail, made with bricks and mortar will be no more — the technology revolution is here and it’s time to make the transition.
Many successful fashion retailers today have no physical shops that they operate from. With giant high street stores such as Trilogy Stores marking their presence online, for others to have a chance in competing, a digital transition could be vital. Customers appreciate the convenience of e-commerce and the beauty of being able to shop whilst sat at home, on their sofa in their pyjamas — they aren’t limited to certain shopping hours, such as 9-5pm in a store.
Social media’s contribution
One large contributor to the success of new fashion brands is social media. Platforms such as Facebook and Instagram have become essential marketing tools for fashion retailers, evolving from catwalk shows and big shop window displays; retailers now capitalise via their social media profiles.
Retailers operate through their own social media pages and ask social media users with high amounts of followers to advertise for them, too. The fashion industry is extremely competitive, and social media apps have provided a platform to help brands stand out from their competitors. Instagram, in particular, has over 700 million active monthly users, with over 40 billion photos shared. With this in mind, the app has become a platform whereby celebrities, public figures and social influencers are used to endorse a brand’s product, guaranteeing a certain level of exposure and success depending on how many followers they have.
Some social media users such as models and celebrities have millions of followers. For example, model Kendall Jenner has a huge 81.6 million followers on Instagram. When she is asked to endorse a product or be the face of a brand campaign, she is securing exposure to all those 81.6 million followers — guaranteeing more exposure than most other forms of marketing. This then encourages users to redirect to the brand’s profile or website — if one picture can reach millions of people, then isn’t that more successful than a shop window display?
Denim designer, PAIGE jeans, has Rosie Huntington-Whiteley as the face of its campaigns. With over 7.6 million followers, the fashion brand is guaranteed exposure to those 7.6 million followers with every picture that Rosie posts on her Instagram account — tagging the brand in each photo. Fashion brands know that the success of a campaign can be influenced by the level of followers the endorser has. Using a celebrity endorsement encourages a certain level of user engagement.
Customer service through social media
When it comes to offering the most likable type of customer service, research suggests that companies should remain online, too. When it comes to customer service, interactions across social media app, Twitter, have increased by 250% in the last two years. Customers are looking for a service which reduces their effort, and is quick and convenient.
Is social media the answer?
32% of people said that they found phone and voice communication the most annoying customer service channel. Customers want a quick-response rate, without the need to wait in line or on hold. Social media provides a platform for customer communication, and with the opportunity to offer quicker responses, this could equal higher willingness for customer spend.
Perhaps you don’t feel that your company is ready to take the full digital plunge — why don’t you start with improving your social media presence first? However, the future looks to be digital for the retail industry. For high street brands to remain, maybe it’s time to make the transition and secure your presence in the digital world.