As the industry moves into peak season, it feels rather like the calm before the storm. In an attempt to smooth out the extreme peaks which characterise UK Christmas season, many retailers are starting sales earlier than ever. Whilst there’s a lot of controversy about opting in or out of Black Friday, it has undoubtedly come to represent the catalyst for peak.
With news that Argos have announced a two week bonanza with discounts across 60,000 products, the pressure mounts on retailers to offer more products and even more discounts. As we wait with baited breath to see if Peak 2017 surpasses all previous records, it seems an apt time to reflect on what 2018 has in store for the UK retail industry. We will be covering this and much more, in our upcoming webinar with Forrester’s Michelle Beeson on 30th November at 2pm GMT.
After years of bleak headlines about impending store closures, Drapers reported today that the number of store closures in the UK has fallen to its lowest level since 2010. Despite 2017 getting off to a rocky start with retailers reporting challenges in trading conditions, it seems that for many, thankfully sales are on the rise. Over the past few years we’ve seen the role of the store transformed as traditional Bricks and Mortar retailers close their full format stores in favour of experience-led store space and disruptive pureplays invest in prime real estate in city centres. We’ve also witnessed the birth of collaborative partnerships, ensuring stores serve as collection points for the ever-popular click and collect deliveries.
All evidence suggests that the store now functions to serve the online channel. So the question becomes how do you support that experience in store whilst enabling product selection online? It’s no longer about “stack ‘em high” - retailers need to ensure they offer a wide and varied product catalogue online, whilst utilising key pieces to illustrate the experience in store.
In your online catalogue, product availability has a significant impact on website conversion, the Baymard Institute analysed consumer shopping behaviour across retail sites and discovered that when faced with an out of stock product almost a third abandoned the site to shop with a competitor. It’s clear that a greater product catalogue has a direct impact on number of sales.
So what does this mean for product expansion? The key for retailers in 2018 is to focus on delivering an exceptional customer experience and empower sellers to extend product lines combining rich information and detail on the site.
Personalisation is big business. Now firmly established as the “term du jour,” and a universal benchmark for delivering on customer expectation, many retailers are still struggling to put personalisation into practice.
In my mind there are two ways of looking at personalisation: You can concentrate on offering the right product at the right time, it doesn’t take a genius to figure out I shop with Wiggle once a year to buy my Dad some bike accessories for Christmas. Or two, do you already know someone wants to buy something from you? By analysing their browsing or shopping intention behaviour it’s now about, how do you create that compelling event and offer complementary products? The second point is invariably the most challenging as you are constantly limited by the number of products you offer. The cost of switching for a consumer is very low but let’s face it, people are inherently lazy. If they can purchase everything they need, why bother going elsewhere? I was discussing this very thing with a colleague the other day, and it reminded me of the research conducted into how many mobile apps we use on a regular basis, the answer was less than half of those we have downloaded. In light of this hypothesis, we decided to undertake some highly scientific research by polling the office: when asked, how many online stores do you regularly shop with every month, the average figure was 5.5 (out of 60 respondents).
If a retailer is able to complete the purchase, offering everything the customer needs at the same time, this is a stronger proposition than them having to shop around and key to ensuring repeat purchase. It can be extremely hard for merchandising teams to predict links between products, do they know that alongside the bike pump I buy for my Dad, I also get him Algerian coffee and a new mug? French retail giant Darty were able to add 60,000 products and enter four new product categories in less than 6 months by adopting a marketplace model. Thus ensuring with every purchase, they were able to build a fuller picture of the customer and strengthen their personalised product recommendations.
If any of these topics have piqued your interest, the good news is, we recorded a webinar with leading Forrester Analyst Michelle Beeson. Watch the highlights on demand now.