Online will remain the fastest-growing channel even when stores reopen, but are retailers really prepared?
Hidden deep within Amazon’s results a fortnight ago was a staggering figure: UK revenue grew by 51% last year.
It was already clear Amazon was outperforming the rest of the retail market during lockdown. However, what may not have been realised is that this jump in revenue shows Amazon’s growth was also higher than its other major markets – the US, Germany and Japan, which grew by 38%, 33% and 28% respectively.
“UK consumers have been uniquely willing to switch to shopping online and other retailers are not doing enough to maximise the opportunity”
This reveals that UK consumers have been uniquely willing to switch to shopping online and that other retailers are not doing enough to maximise the opportunity.
Amazon is synonymous with online shopping. I have been a customer for 21 years, appreciating its ability to stock every product under the sun, and making transactions and delivery both reliable and frictionless.
It is difficult to fault Amazon’s performance throughout the pandemic, when it adapted its range and strategy, and played its part to support independent sellers, help the NHS with test kits and keep people entertained with Prime video content.
“With stores closed and customers craving inspiration, there is a gap that functional Amazon cannot fill”
Yet, with stores closed and customers craving inspiration, there is a gap that functional Amazon cannot fill.
It feels as though there is much opportunity to engage with customers that is beyond Amazon’s reach as lockdown drags on. However, my own recent experiences shopping on other sites have shown performances that are horribly mixed.
Retailers struggling with the basics
As the grey lockdown days merge into one another, I’ve been trying to cheer myself up by ordering a few small things, including beauty products, clothing and items to refresh my home.
But during this prolonged period retailers seem to have struggled with some of the absolute online basics – having the right items in stock and the capacity to deliver them within a reasonable timeframe.
Even retailers with whom I had previously had great experiences online have struggled. It took me two months to use one gift card received at Christmas, because the retailer had failed to anticipate demand and the products I wanted to buy were persistently out of stock.
“It’s frustrating and potentially damaging to brands when they cannot fulfil customer expectations”
Another fashion and lifestyle retailer confidently sent me online marketing to promote its new spring clothing range. I ordered three items, only to receive an email one week later to say that two were out of stock – and I’m still waiting to see what happens with the third.
Friends have told me of similar experiences. It’s frustrating and potentially damaging to brands when they cannot fulfil customer expectations.
Curation, personalisation and emotional connection
One of Amazon’s weaknesses is that, because it is a very functional site, it does not lend itself well to product discovery. This is where other sites can offer much better curation, personalisation and build relationships.
A couple of highlights for me during lockdown have been seeing brands lift people’s spirits with humorous social media posts (Weetabix being the latest), and creative storytelling and engagement from various fashion brands, even when people may not have been in the right mindset to buy.
Seasalt is a good example, reminding me of the gorgeous coastline in Cornwall that I hope to visit again as soon as I am allowed, and engaging customers with craft activities, books and recipes. It’s a strategy that is paying off – its online sales are likely to grow by around 70% this year.
A recent dull weekend was brightened by attending a couple of free, sponsored online events as a John Lewis loyalty scheme member. And other brands that I might not have expected to be strong online have surprised me with some excellent service and delivery.
Planning for the longer term
It’s still early days, but Marks & Spencer seems to have found the right strategy for reinvention and brand relevance. Its latest tie-ups with retailers such as Joules, Hobbs and Phase Eight will be welcomed by shoppers online and in store, as will the trial of video technology similar to Dixons Carphone’s ShopLive.
Even as we all pin our hopes on physical retail reopening in the coming weeks, online will remain a much more significant growth channel, because many people will continue to work from home and seek the convenience of shopping online.
“The more retailers can do now to fix supply and delivery issues and to invest in multichannel strategies that inspire and engage shoppers, the better positioned they will be for the second half of this year”
The more retailers can do now to fix supply and delivery issues and to invest in multichannel strategies that inspire and engage shoppers, the better positioned they will be for the second half of this year, when people dream of holidays, travel, and getting out and about with friends.
There still remain many multichannel opportunities for retailers – right now – that are being wasted by failing to evolve and invest for the long term.
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