Bad economy, good technology
This week has been a mixed bag in mobile retailing. While there are some obvious good points – average order value of mobile is up
in July, contactless mobile payments are growing
more rapidly than thought, and social media is driving more UK sales
– the overall picture for UK retail is potentially a turbulent one.
Take the average order value rise: this is very welcome news to anyone investing heavily in mobile retail and plays nicely with the fact that there is a growing cabal of digitally obsessed shoppers that are switching to the digital savvy brands.
However, the figures belie what is really happening in retail. Growth is down and, while traffic may have gone up over July, revenue hasn’t match it.
The reason is simple: Amazon Prime Day. While Amazon saw its own traffic up 60% year on year on Prime Day this July – and most other online retailers saw a spike because of the now well-established shopping jamboree – the net effect is that discounting was so high that revenues never saw the growth that the traffic would suggest.
Now, it would be unfair to blame Amazon entirely: it is more symptomatic of the problem than its cause. Retailers face a tough market right now as consumers tighten their belts ahead of what many know will be the disaster of Brexit. To compensate and to keep things moving, retailers are forced to discount or face lower turnover. Either way the revenue figures on the bottom line go down.
Amazon offering a discount shopping day in the middle of the lull between Christmases is more because it can, rather than to destroy all other retailers. Quite the reverse in fact: it is meant to be boom time for all. Sadly, with the UK economy predicted to tank and confidence already ebbing away, this year’s Prime Day may well have done more harm than good.
Of course, the bleak outlook ahead means that retailers are going to be forced to look again at technology and new business models to remain competitive, which is good news for the tech vendors and the tech loving consumers
Expect to see more efficiency gain through deployments of AI from here on out, and see how some retail brands – especially those with a High Street presence – start to look at how to really shake up how next generation tech such as AI, virtual and augmented reality (VR and AR) are used in stores.Going mobile-first has certainly paid dividends for the likes of ScrewFix
, which has moved to meet the changing needs of its customers and its experience is starting to seep into other parts of parent group Kingfisher.
See too more mobile payments, the move towards combining mobile payments with loyalty schemes and the increasing use of mobile to aid better – and much faster – click and collect services and better delivery.
While the summer slowly burns out and autumn’s melancholy descends, it will be interesting to see who starts to deploy what tech and what interesting new things start to creep into retail. As always, the storm will be weathered, but it will be an interesting ride as it passes through.