A new year it may be, but happy it may not. As the debris of New Year’s Eve is dusted away and we get back to work, many smaller businesses and retailers are starting the new year with trepidation.
A quarter of SMEs, for example, fear that they may not be able to pay their bills in January, while 70% of UK businesses of all kinds are not prepared for a recession, should we officially have one.
However, while we are all feeling the pinch and the uncertainty that hangs over the stuttering economy, retailers will survive – footfall figures across the holiday period show that people are still spending, with Boxing Day being a big driver of online bargain hunting – they just have to adapt to the new circumstances.
Downturns always force innovation and for retailers this downturn coincides with some interesting digital trends that had already started to emerge and which, thanks to straightened times, will accelerate.
Black Friday shopping data, for instance, indicates that consumers have wholeheartedly embraced mobile. According to analysts Data.ai, an average of more than 50% of sales over the Black Friday period were made on mobile. For some brands the figure is closer to 80%.
Simultaneously, data from ecommerce finance platform Juni suggests that 65% of ecommerce ad spend online in Q4 was made on Facebook and Instagram – and 4.3% on TikTok. A separate study finds that TikTok advertising yields profits very quickly for many smaller retailers – with 78% of them getting a positive ROI from TikTok in as little as six months.
Together, these two pieces of data suggest that shoppers are increasingly browsing and buying on mobile, but that journey is driven by social media to a large extent, which typically is also mobile-led.
Together, these two pieces of data suggest that shoppers are increasingly browsing and buying on mobile, but that journey is driven by social media to a large extent, which typically is also mobile-led.
This should be a big indication as to how retailers need to move in the coming months. They need to be social and mobile, yes, but more than that what this shift shows is that consumers are wanting more sharable and delighting experiences (that they can share on social and which retailers can then capitalise on to drive sales). This need for enhanced user experience presents retailers with an opportunity, but it is also challenging. The shift to this way of interacting with customers had started to emerge in the past three years, but it now needs a rapid acceleration if it is to succeed. Shoppers have moved on, retailers have yet to catch up with them. And fast: before you know it they will all have migrated to the metaverse.
How the industry – especially in the Growth 2000 – gets there is going to be an interesting journey and one which InternetRetailing and RetailX will be mapping out for you as 2023 progresses. So, Happy New Year to you all and let’s get down to experience-led, Instagram-able, metaverse-ready business.
