For many, the return of in-store retailing symbolizes the UK’s continued recovery. Signs for the industry are good, with early data from UK retail intelligence firm Springboard revealing that in the first week of UK retail reopening, footfall was only 25% lower than for the same week in 2019.
Springboard also found that the first week of physical trading after the lockdown this year had the same level of sales volume it reached two months after the UK’s initial lockdown in 2020.
But what does this mean for online retailers who have seen such a dramatic change in growth over the past year due to the lockdowns? What can they do to compete with a reinvigorated shopping street and ensure that online retailing is firmly entrenched in the buying habits of consumers?
Oracle NetSuite software company, Retail Industry Manager Zak Rafiq, explains to Retail Insight Network what retailers can expect in the face of growing footfall and why a Direct-to-Consumer (D2C) strategy may be imperative in today’s retail landscape.
The online sales landscape remains solid
Out of nearly 500,000 companies registered in the UK in 2020, [UK printing retailer] Instaprint’s research found that most were retail – especially online and D2C. Those same D2C retailers need to invest in positive online experiences and digital marketing, cultivate a loyal following, and go the extra mile to compete with reopening physical stores.
A successful D2C strategy can put online retailers in control and provide a tremendous opportunity to generate income without the expensive overhead costs associated with physical retail.
An example of this is Petshop.co.uk, which reacted very quickly to changing consumer buying habits during the first lockdown. After seeing a 300% increase in orders during the first lockdown, they had to quickly pivot to offer a “ Bottomless Bowl ” automatic delivery service to meet demand.
This unique service allowed pet parents to choose the food they liked, as well as the frequency of delivery, so they no longer had to carry heavy pet food. Real-time analytics also allowed the team to stay on top of preferences and demand spikes as they occurred.
This is just one example of a brand that makes life as easy as possible for customers and meets their preferences. Why go back to pre-lockdown buying habits when a faster, simpler and more transparent service has been created for you?
Online retailers can leverage their strengths to stay ahead
The fact that e-commerce and social media are intrinsically linked has allowed brands to interact directly with customers through virtual means.
Online retailers tend to have a good understanding of their customer profile and how to communicate effectively with them. This allows retailers to leverage economic efforts like social media marketing to speak directly with existing customers, while reaching new audiences.
Home decor site Cox and Cox has realized the importance of engaging with consumers on social media via foreclosure and now reaping the rewards.
During the lockdown, he achieved 100% year-over-year growth and increased his Instagram following by 70,000 users by quickly tapping into the home decor demand. He recognized a clear opportunity and quickly jumped on it.
Habits and preferences have also changed, and digital natives now expect a smooth customer experience, which online retailers can deliver. Additionally, many online D2C retailers offer free shipping and returns, which increases repeat purchases.
Brands that typically sell to customers in a physical store will need to connect the online and offline experiences as customer expectations change.
It is imperative that brands learn from every transaction to have a truly successful D2C strategy. It is no longer the sole purpose of having an online presence to reach new customers and accessibility, but also to stay up to date with the preferences of current customers.
Are we on the cusp of permanent change?
The simple answer is yes. The shift to online shopping has been a growing trend for years, but the past year has cemented this shift in consumer behavior. IMRG Capgemini Online Retail results for January show UK online sales grew 74% year-over-year in January 2021, the highest growth rate since the start of the first lockdown in UK in March 2020.
A recent report by [independent economics research agency] Retail economics and [UK bank] NatWest found that since the start of the pandemic, almost half (46%) of UK consumers have purchased a product online that they had previously only purchased in stores. The trend has intensified and is likely to continue.
It also means that the opportunity is there for online retailers if they can harness the speed and convenience that has made this channel so successful.
It’s a well-known adage in the retail industry that customers remember service much longer than they remember the price. The past year has seen retailers adapt their customer experience strategies with the goal of generating new revenue and maintaining a loyal and rapidly growing new customer base.
It will be interesting to see what happens in the months to come, as consumers return to Main Street, but what is certain is that while online retailers have taken the time to learn from their customers. and polish their D2C strategies, they’ll enjoy the rest. Success.