As we enter the 16th month of the pandemic, we also look to entering another phase of the reinvention of retail – a phase characterised by investment in the technologies needed to drive hybridisation.
This week, Secret Sales secured €10m in Series A funding – from among others Belerion Capital, the ecommerce investment specialist and early stage investor in ASOS, The Hut Group and Boohoo – to expand its UK operation alongside launching in new territories in 2021 and bringing hundreds more brands and retailers onboard to drive both domestic and international growth.
It will also invest heavily in the technology that will make this possible: improving data mining capabilities to optimise user experience on the platform, which in turn will increase sales and customer engagement for its brand and retail partners.
Meanwhile, Revolution Beauty Group – a multi-brand, multi-category, multi-channel mass beauty retailer – is set to float on AIM on the London Stock Exchange, generating an injection of cash to help it do much the same.
Both these retailers are focussed on leveraging the new ways in which consumers have begun to shop across the lockdowns and are well aware of the need to invest in the data mining tech needed to create the personalised experience that consumers now demand.
But they are still much in the minority. Research from Wunderkind, formerly BounceX, suggests that there is growing ‘personalisation gap’, with the boom in digital not necessarily translating into enhanced online customer experiences, with personalisation – or lack thereof – a key cause of friction in buying journeys.
According to the study, during the past year, more than half (51%) of consumers said they had experienced more frequent marketing communications that were either impersonal or irrelevant.
Additionally, 70% said the branded communications they receive from retailers felt ‘batch and blast’ or generic, despite almost half (49%) saying impersonal interactions would minimise their likelihood of conversion, potentially costing retailers lost sales opportunities and loyalty.
Meanwhile, further research of 60 senior UK ecommerce and marketing retail professionals – also conducted by Wunderkind – showed that two thirds (66%) of retailers said personalisation was a critical initiative in their current operations, while seven in ten (71%) felt that personalisation would become increasingly important over the next five years.
Over the past year and a half, retailers have undergone a crash course in going digital. So have many consumers. The industry now finds itself with consumers demanding more personalisation and experience than ever, while retailers struggle to implement the solutions they need to meet these demands at the speed that consumers want to see them.
There is also the question of the level of investment needed to deliver these services. For all the Secret Sales and Revolutions that are raising funds, many others are going to struggle – not least off the back of some trying times – to raise those funds.
The imperative it invest and compete in this hybridised world, however, is perhaps too vital to ignore. The proof of the pudding can be seen in the likes of Dixons Carphone. It saw revenues drop 111% initially in lockdown, but has clawed its way back up to a respectable £33m profit. And it has done that by investing in the tech that brings the in-store experience to the online world.
Sure, Dixons Carphone also has the added boost of more people wanting consumer electronics for home working and entertainment during lockdown, but the company is an object lesson in how getting the tech right can deliver the right results.