Paul Skeldon, mobile editor, InternetRetailing, investigates peak from a mobile perspective.
Just when you think you have it nailed, everything changes. With another Prime Day under the belt, most retailers are now gearing up to keep that peak momentum going between now and the all-important Christmas bonanza. However, many of the ways they are used to selling things could all be set to change – if not this Christmas, then certainly by Christmas 2020.
Peak 2019 for UK retailers is set to be a tough one. The economic climate is already making it look tricky and, should Brexit occur on 31 October, that could be made worse by throwing imports and exports to and from the continent into chaos depending on whether there is a deal or not.
Against this backdrop, there is also a shift in how shopping is likely to work – on mobile at least.
For starters, retail app use is now de rigueur. Depending on whose numbers you look at, mobile traffic to retail sites already outweighs that of desktop. Increasingly, we are seeing more sales on mobile than on desktop (in certain circumstances). Now retail apps are starting to come into their own, driving more sales for more retailers than ever before.
According to research in the US by US app marketing company Liftoff and fraud preventer Adjust, which analysed more than 90.9 billion ad impressions across 13.6 million installs and 3.9 million registration and purchase events between April 2018 and April 2019, the traditional ‘make-or-break holiday shopping season’ is dead as mobile users shop all year long.
Historically, retail app marketers are laser-focused on the holiday shopping season – from Black Friday through the New Year – to target consumers ready to spend. This year’s trends, however, beg the question: is holiday shopping still a make-or-break period for ecommerce?
“Winter holiday shopping is still alive and well, from mobile to brick-and-mortar,” explains Liftoff co-founder and CEO Mark Ellis. “But our data shows consumers now spend steadily all year long, suggesting the traditional holiday shopping season won’t make or break a brand as it might have in the past.”
In short, the data suggests that linking mobile advertising campaigns to traditional holidays is somewhat passé. For mobile marketers looking to get the best return on their marketing dollar this year, throw away preconceived notions and target users year-round.
Amazon, as Prime Day has shown, is still a dominant force in mobile retail at peak, but this too is changing. A new study by Wunderman Thompson Commerce in June found that younger consumers report less satisfaction with the retail giant than older generations – and are stopping using it.
The Future Shopper report, which takes an in-depth look at the current commerce landscape through the lens of the modern shopping journey, found that, while Amazon attracts more than a third of all online retail spend internationally (36%), 16 to 24-year olds are less likely than older shoppers to believe the marketplace provides the best experience when it comes to access to brands, easy returns and customer service.
Almost one in five (18%) Gen Z consumers also said they were swayed by brand ethics when making a purchase decision, a factor which would see them choose another retailer over Amazon. Only 36% of Gen Z shoppers turn to search engines for inspiration.
For brands and retailers, the study reveals a key challenge in the online shopping journey. While consumers are relatively platform-agnostic when it comes to finding inspiration for purchases, this behaviour changes when they search for products. More than half (51%) of consumers said they turn to Google and other search engines for inspiration or ideas for products to buy, while 33% said the same for brand websites and 32% for social media. However, when it comes to actively searching for individual products to buy online, 56% of consumers go directly to Amazon to start their search.
Although the statistics reflect Amazon’s increasing dominance, there were certain factors that shoppers said would influence their decision to shop elsewhere. For consumers to choose other retailers and brands over Amazon, they look for cheaper pricing (61%), more attractive loyalty programmes (26%), more convenient delivery options (23%) and a better, more specialised product range (18%).
“Brands and retailers continue to grapple with the challenge of how to exist alongside Amazon. While the retail giant may be a competitor, it is also a platform that can give brands and retailers enormous scope to reach millions of consumers globally. The most important thing is that they find a way to partner with Amazon but still own the relationship with the customer; now and into the future,” says Neil Stewart, global CEO, Wunderman Thompson Commerce.
One of the reason given for Amazon’s slight fall in favour lies in the growing desire – especially among younger shoppers – is that they don’t dig Amazon’s somewhat utilitarian approach. Once the gold standard in making mobile retail work, the Amazon app is now considered effective, but pedestrian.
Instead, shoppers in the Gen Z cohort want personalised experiences. Michael Schirrmacher, managing director UK at Bloomreach believes that young shoppers want to feel valued, shop with ease and get access to the right products quickly and simply.
“Growing up with the online world at their fingertips, this generation expect instant access to what they want and the information they need as standard,” he says. “Amazon’s almost infinite product range is a huge competitive advantage, but the actual experience of using [Amazon] simply doesn’t cut it. Fewer and fewer people have the patience for the sluggish and outdated experience Amazon offers. What people actually want are contextual and highly relevant shopping experiences.”
He continues: “Going big on personalisation and tailored experiences that encourage customer loyalty and spend is where competing retailers and brands can play an advantage. People chose where to shop based on the experience they receive. Whether on web or mobile, only by using digital experience platforms that combine AI search and merchandising with a connected CMS is it possible to build more effective, differentiated customer experiences. That might mean delivering search results that truly fit the query, or it might mean ensuring the homepage highlights products that fit the user’s interests.”
There is also a shift, believe it or not, towards stores, which is also going to shape who the winners and losers are over peak 2019 and beyond. According to the Wunderman study, consumers are also still craving an in-store experience, with almost half (46%) saying that they want to shop with a brand that has a physical store, which rises to 49% among Gen Z shoppers.
This is backed up by research in the US by Kelton Global on behalf of RetailMeNot, which found earlier this year that consumers today do almost nothing without a mobile device in hand and the study data shows this is especially true when shopping in stores.
Gen Z-ers shop with their phone and use their phone while they shop to help them, but overall they want to visit real stores. In fact, most in-store shoppers (69%) would rather consult a product review on their phone than ask a store associate, while more than half (53%) would rather use a mobile device to find deals and offers on products they are considering purchasing than discuss promotions with an in-store associate.
This is driving Gen Z engagement with brands in a new way and retailers need to tap into that. A key part of this lies in increasing interaction between consumers and brands, as well as letting consumers feel that they are influencing brands, believes Philippe Loeb, consumer goods, CPG & retail industry vp, Dassault Systèmes.
According to Loeb: “Businesses today must look beyond the aesthetics of a product or the practicalities of a service. Consumer engagement and loyalty count far more than features and benefits alone – so much so, consumers expect to interact with or even influence suppliers. As a result, products are no longer enough for today’s consumers who value being a customer as much as a creator. Nothing embodies this shift as much as the rise of co-creation with brands asking their customers to design new products, or even select the ones that would make it to the market.”
He adds: “The retail sector is now also heavily influenced by social networks, playing a vital role in consumers’ online buying behaviour through advertising and the rise of voice activated and algorithmic commerce. It is no longer a simple task to attract the consumer and business models need to be more agile and flexible to adapt continually to the whims of buyers.”
The logical extrapolation of Loeb’s theory, that consumers are more likely to become collaborators and influencers of brands, may not be as far-fetched as some may think. Last month Instagram CEO Adam Mosseri told the Financial Times that the social site is set to become fully-shoppable, with native checkouts, shopping baskets and more – making it a place to discover, influence and shop.
“Our research suggests that 85% of millennials reach for their smartphones first when making purchases via the internet and, with 1 billion people using Instagram every month, the market potential for retailers to capitalise on this move is huge,” says Andy Burton, CEO of Tryzens. “By working with Instagram, retailers will be able to reach the largest possible audience, who can purchase an item in a matter of seconds due to advancements in simplified payments on websites from the likes of Apple Pay, Android Pay, and PayPal.”
Kees Jacobs, Vice President, Global Consumer Products and Retail Sector at Capgemini agrees: “Instagram’s plans to integrate online shopping into its app is another sign of the changing nature of the shopping experience,” he says.
“Everything – from video content to social media – will become directly shoppable everywhere – from mirrors to VR, multiplying frictionless opportunities for purchase and embedding shopping into day-to-day activities and routines. If the customer is willing to allow access to the relevant data, this offers brands the opportunity to interact with customers in new and innovative ways.”
And this could be the most fundamental shift in mobile commerce – in commerce in general – in the coming 24 months. Suddenly, everything is shoppable: VR, AR, voice assistants, video, TV, advertising and more.
This shifts what it means to be a retailer away from online sites to, in theory, stores as showrooms and a place to take the snap, while Instagram becomes the shop front. It is an interesting change – and one that could severely dent Amazon – that shifts how retailers operate, but which could boost their sales. It is certainly going to be an interesting Christmas – both this year and next.