Digital Goodie, the Finnish creator of an award-winning digital platform for Headless Connected Commerce, announced today it has acquired Maginus.
Retail has evolved exponentially over the last few years. It’s a different landscape to just five years ago – let alone ten, fifteen or twenty. Gone are the days when delivery in 3-5 business days was exceptional or buying before you try was looked upon with suspicion. Now, online is king and physical retail is loitering in its shadow – no longer the haven of teenagers looking to pass time or the hustling high street we used to see.
What’s more, the proliferation of online has opened-up the sector to new entrants. The heritage brands of the UK high street – Marks and Spencer, John Lewis, Debenhams – have seen market share slide and profits eroded. Where once a trip to Woolworths sufficed, Amazon now reigns supreme. Add to this the increasing number of newer generations entering the purchasing fray, and it’s easy to see why customer acquisition and retention is so hard in today’s competitive landscape.
The fact of the matter is that younger shoppers, in particular, are less loyal than their older counterparts. And why should they be faithful? They’ve grown up in an era of unprecedented flexibility and choice – it’s no wonder they will shop around for the best deal or experience. For retailers trying to convert interest into sales, the rules are changing all the time – good end-to-end experiences no longer cut it – the journey has to be frictionless, exceptional and omnichannel. Retailers can ill-afford to let customers come to them – they need to woo the customer on multiple fronts otherwise they put themselves in jeopardy.
A prime example of this is Jack Wills. Once the darling of the British high street and a brand of choice for preppy teenagers ten years ago, its fall from grace has been a stark reminder to some on how keeping up with a target demographic is more important than brand name alone. By failing to change with the times and instead of expecting customers to come to the brand, it faced collapse until a last-minute intervention by Mike Ashley. By failing to recognise its loyal fanbase was growing up and the failure to court a younger audience with very different demands meant the brand once synonymous with university campus life almost met its demise.
So what can other retailers learn from this experience? With a landscape so fiercely competitive, how can they meet and exceed expectations when the bar is increasingly being raised?
Know Your Audience
Perhaps Jack Wills’ biggest failing was its inability to keep pace with what its target demographic wanted. Teenage priorities are very different to what they were a decade ago, with ethical trade and equal social opportunity of far higher importance, for example. Until relatively recently, Jack Wills’ strapline was ‘outfitters to the gentry’, which it quietly dropped a couple of years ago. In an era where aspiring to be part of a secluded social circle is far less of a priority, Jack Wills no doubt turned away many prospects with the elitist attitude which had proved so successful in a different time. Combine this with a high price tag compared with fast-fashion alternatives like ASOS or Boohoo, and it’s not hard to see how heads were turned. The failure to cater to changing delivery preferences (a minimum spend of £50 for slow free delivery or £6.99 price-tag for next-day) may also have been an issue, as consumers are now used to quicker delivery times. Abercrombie and Fitch suffered this same issue a few years back in the States, and lessons must be learned by others that simply changing lines don’t keep the punters coming back.
An example of a retail brand raising the bar in terms of performance has to be Boohoo. With revenue up 48% this year and turnover growing 37% and 64% respectively in the UK and internationally, the brand has clearly tapped into a successful formula.
However, not content with hoovering up sales amongst its target demographic of 16-30-year-olds, the brand’s shrewd acquisition of Karen Millen and Coast could be a masterstroke. Unlike Jack Wills letting its older, loyal demographic go, this portfolio expansion means Boohoo now has the collection to nurture loyalty for years to come. Whilst Generation Z and Millennials are less loyal if you keep giving them what they want there will be less reason to go elsewhere.
For example, the demand for a frictionless experience is widely talked about, with cart abandonment a major issue. Boohoo has tapped into what younger generations want – an easy shopping experience complimented on the whole with fast, free delivery. Granted customers sometimes have to pay small contributions or are incentivised to spend more to unlock the offers, but Boohoo knows what its audience wants and caters to it relentlessly. Jack Wills, on the other hand, did not offer free returns unless it was to store – something time-pressed Millennials were no doubt put off by.
A bad experience will turn customers away, so retailers cannot afford to let them down. Some of ASOS’ recent woes have been down to stock issues, with customers ordering items which turned out to be unavailable. This all plays into the frictionless experience – getting a consumer to press the buy button is a significant part of the challenge but failing them in after-sales care is disastrous. Retailers must have a seamless, multifaceted approach. This means the website linking to OMS software, so stock levels are accurate and true. It shouldn’t just be all about online either. Physical stores don’t just have to be used as showrooms – they can be used as extra delivery touchpoints, for example, which can help accelerate delivery times to keep ‘generation now’ happy but in a profitable manner.
Retail is arguably entering its most volatile period yet, with concerns over an economic downturn fuelling fears that the worst is still yet to come for the sector. With customer expectation at an all-time high, meeting these demands in a timely and profitable manner will be the challenge facing retailers over the coming months. What is for sure, however, is that meeting and beating expectation will require a long and short-term approach, to help nurture loyalty and grow dealings beyond a simple transactional relationship. Expectation goes beyond fast delivery or a discount code – it’s the feeling the brand elicits that matters. So now is the time for retailers to address the issues perturbing target audiences and give them what they want – both now and in the future.
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