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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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IREU Top500

The latest InternetRetailing EU Dimension Report investigates the area of brand engagement. Emma Herrod shares some of the insight.

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Brand Engagement is an aspect of RetailCraft where the idea of what constitutes best practice seems to change by the day thanks to a dynamic combination of the emergence of new channels and technologies, changing customer behaviour, and the influence of new entrants to the market with new ideas, such as pureplays and brands selling direct.


Capturing customers’ attention is difficult so InternetRetailing’s EU Brand Engagement Dimension Report acts as a primer for retail professionals trying to understand what’s happening in this area currently while also examining where the market is heading.


We live in a world that, in terms of the sheer amount of information with which we’re bombarded, is far noisier than even two decades ago. Social media, the smartphone, news feeds, television boxsets of entire seasons suddenly available for binge watching... it’s impossible to keep up, yet we all try and, in so doing, we can all get anxious. This, in turn, means that at some point, any or all of us can become so saturated that we simply decide to cut off, to unsubscribe from all this noise.


For retail businesses reliant on the cycles of seasons and product obsolescence, this poses a problem. When consumers are no longer listening, how can retailers cut through? To take a more specific example, if consumers are culling the number of marketing emails they receive, as many did when GDPR legislation was introduced, how can retailers get these consumers to opt in?
The most recent RetailX research suggests this is a live issue within European retail.

 

To summarise the current state of the market in the broadest strokes, there appears to be a strong recognition among IREU Top500 retailers that beginning and then sustaining conversations with customers is crucial to success, but far less agreement about the best ways to do this.


In part, this can probably be explained by local differences across markets, but that’s by no means the whole story. Rather, when it comes to Brand Engagement, which, for the purposes of RetailX research entailed focusing on how retailers communicate with customers, uncertainty over best practice reflects changes in the way consumers choose to access information – data.


To take the most obvious answer here, how should retailers engage with consumers via social media? You could describe this as the Facebook problem. Facebook, it’s safe to say, is more used than loved, in that it’s a way to manage our circles of friends. Except it’s also a place where urgent conversations between close friends take place. It’s increasingly a marketplace too.


Conversely, there’s evidence Facebook is becoming a kind of latter-day AOL of social media, the place where an older demographic gathers, and the young have a presence just so they can check up on their elders while making sure their elders aren’t checking up on them too closely.

 

Where is the sweet spot for retailers here as they seek to engage with customers via the platform? Should retailers, for example, enable Facebook commerce, or will this take customers away from the retailers’ own online presence?


The answer, of course, will depend on such factors as customer demographics, the sector in which the retailer operates and territory. More than this, it will depend on each retailer’s understanding of itself and how it interacts with its customers.


Here, one retailer that has consistently taken a different tack from its contemporaries is IKEA, which makes a virtue of sometimes introducing ‘friction’ into its processes and its shopping experience. If this seems counterintuitive, it all helps to make the retailer stand out, so that its other Brand Engagement initiatives – showing off a 350sq ft home so that customers can see how to make efficient use of space – cut through the noise, and help it to begin and then sustain those all-important conversations.


Other retailers featuring in the Brand Engagement Dimension Report are John Lewis, Hobbycraft and Pets At Home.


John Lewis’s announcement in September that it was changing its name to John Lewis & Partners was a move that sent a clear message: its biggest asset is its partners, who are central to its brand.


One of the most important factors playing in this area is the rise of direct-selling brands.
In an age of digital technologies, there is no longer any need for these brands to rely upon third-party retailers to present their wares to customers.

 

Brands value this because they can begin to gather data about their customers directly rather than having this information filtered back to them. That doesn’t mean consumer brands don’t recognise retailers’ insights or want to bypass retailers entirely, but it does mean there’s a certain amount of renegotiation going on here.

 


This development has been widely reported upon, but less noticed is the way that customers value the chance to talk directly to brands and are also driving change. After all, why bother to talk with a retailer when you can speak with someone who understands a product because they helped design or make it?

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