Retail e-commerce over the last few has changed dramatically but how has this effected the future of the retail industry?
Amidst rises in digital shopping and other technological advances, the future of the retail industry is beginning to look 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?
Fashion retailers, Trilogy Stores, discuss the future of the retail industry and how companies should take advantage of the digital world. 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.
What does the industry look like now?
The retail industry is becoming more and more digitally orientated. 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.
Retailers have recognised the attraction to online shopping and have attempted to mimic the physical shopping experience on their websites through size guides, free returns and fast delivery. 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.
When comparing the overheads of online and offline retailers, it’s clear to see the attraction to setting up an online store – they aren’t faced with the massive running costs of a brick and mortar store. It’s no wonder that new companies are choosing to start online, and existing fashion giants are starting to make the transition to digital.
A digitalised future
As with many industries the future is looking to be digital. 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 will be no more – the technology revolution is here and it’s time to make the transition.Some big players in the current industry have proven just how successful operating online can be. Many of which have found success solely on online platforms, using e-commerce websites and social media apps to drive business – with high street names following in their footsteps and favouring digital platforms over high street stores.
There is undoubtedly potential through operating online – giant high street stores such as Trilogy Stores, retailers of premium velvet jeans, have created an outstanding online presence and for others to compete in the same way, a digital transition is key. Customers appreciate the convenience of e-commerce and the beauty of being able to shop whilst sat at home, on their sofa – they aren’t limited to certain shopping hours, such as 9-5pm in a store.
What effect does social media have?
The increased use of social media has impacted the way that people shop as well as the way that retailers advertise. 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.
Many companies keep up their own online presence through Instagram on Facebook and often other social media users promote their products 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.
Celebrities also build up their online reputation through social media channels and interact with their fanbase. 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 some fraction of those 81.6 million followers – guaranteeing more exposure than most other forms of marketing. This then encourages users to redirect to the brands profile, or their website – if one picture can reach millions of people, then isn’t that more successful than a shop window display?
Similarly, denim designer, PAIGE jeans have Rosie Huntington-Whiteley as the face of their campaigns. With over 7.6 million followers, the brand is guaranteed exposure to all of those people when Rosie posts a photo wearing a pair of the jeans. 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.
Satisfying customer needs
To satisfy customers and retail loyal buyers, it is suggested that retailers should go online. When it comes to customer service, interactions across social media app, Twitter, has increased by 250% in the last two years. Customers are looking for a service which reduces their effort which is both quick and convenient. But has social media become the answer?
When it comes to satisfaction, over 32% of respondents in a recent survey revealed that phone and voice communication is the most frustrating 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.
With these changes in e-commerce the future is beginning to indicate that if your retail business is not prepared to take the full digital plunge yet, social media can be a good place to start. The retail industry is looking more and more digital and the longer you wait, the less competitive you may find yourself as the market continues to shift in this direction.