Has retail marketing accelerated into the future?

Puffer jackets hanging on a rail

Significant changes in consumer behaviour – resulting from the closure of bricks & mortar stores (either permanently in the case of Arcadia Group) or as a result of short term lockdown restrictions on non-essential retail – have accelerated the growth of ecommerce beyond forecasted volumes. Combine this with the inherent risks of visiting a busy shopping centre with crowds of people, not all of whom will adhere to social distancing rules, and it’s no surprise that customers are proactively choosing to physically visit stores less often but to spend their time shopping online.

According to Statista, the UK has the most advanced ecommerce market in Europe and the value of online sales was forecasted to reach just below £100 billion British pounds in the UK1.

Not only is there an increase in online spending being seen in Europe, similarly it can be seen across the world. Since 2014 ecommerce sales worldwide have risen almost three-fold from $1,336 billion to $3,535 billion in 20192.   

The primary benefit is that no longer are businesses limited to local markets, an online presence means the smallest start up business can have a global presence, by interacting with and fulfilling orders to customers worldwide.

Adopting an omnichannel approach to meet customer expectations

Whilst there will always be a need for brick and mortar retail shopping, it seems that many who have swapped to internet shopping have found it easier and more convenient, with a recent survey showing that two in five people will carry on purchasing online rather than return to stores when they re-open3.

No longer are brands reliant on a single, traditional retail channel, with hard-nosed retail buyer negotiations to secure listings, alongside commitments to price promotions. The evolution of retail channels, from Instagram to TikTok, to ecommerce brand website and Facebook eshop, dilutes the power once held solely in the hands of bricks and mortar retail buyers. More importantly it offers an opportunity for a brand to have a direct customer relationship – to gather data, create subscription selling models, trial NPD, cross sell and much more.

The challenge for brands is how to deliver this in a cost effective and measurable way – customers expect and demand sustainability of packaging, for speedy delivery, their queries to be handled promptly and with live order tracking. All of these are the expected standard for ecommerce fulfilment but for the majority of brands, their manufacturing or Head Office operation is not designed for consumer fulfilment, and even less so for the integration required to benefit from discounted despatch, text delivery notifications and the complexities of international shipping.

This is where a great 3PL partner will demonstrate the value of their service, offering brands an complete packaged solution from storage, to order fulfilment with same day despatch and with live customer services support that can be set up and fully operational within a matter of days.

As further evidence that ecommerce is changing consumer behaviour, more than 80% of consumers are expected to make at least one purchase through a D2C brand within the next 5 years4. So, although brick and mortar retail shopping will continue after the pandemic an online e-store has to be worth the low cost of investment.

With these changes in mind, more companies have been focusing on a direct-to-consumer marketing strategy. A few examples are Heinz with their Heinz to Home scheme4 and Dollar Shave Club5.

One of our favourite examples is Function of Beauty7, who provide 100% tailored beauty products based on the customer creating a user profile. They even offer personalisation of a product with your name – no more arguments in the bathroom for mums & daughters!

In our next blog we’ll be looking at where (and how ) to start, what type of brands may be best suited to a D2C proposition and the key considerations when looking for an outsourced fulfilment partner.

In the meantime, if you are thinking about implementing a D2C strategy and would like more advice on where to start and the options available to your business don’t hesitate to call us on 01858 410 510 or email sales@mrm.co.uk. 

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