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The reinvention of online retail and how to act

Stephen Murphy
Stephen Murphy
Client Services Director
7 min read
10 February 2022

The online retail industry is booming. In July 2021, UK online retail sales reached a record £10bn, a 56% increase on the same period in 2019. Reuters also found that 70% of Britons now prefer shopping online or mobile, up from less than half pre-pandemic. But as the world begins to open up again, consumers are returning to the high street. In the third week of January 2022, UK high street footfall rose 7.2% compared to the previous week, and it’s only expected to accelerate. The demand for brick and mortar stores is far from dead and with restrictions easing around the globe, the competition between e-commerce and high street retailers will only get fiercer.

To entice customers in, physical stores are raising their game to become ‘destinations’. And online retailers need to ideate and implement even faster in order to compete. Online shopping will no longer be relied upon, so it needs to become less about convenience and focus on becoming a digital ‘destination’ in itself – a place where customers go to do much more than mindlessly browse and buy products. Brands like Patagonia and de Bijenkorf are leading the pack, with creativity, technology and data underpinning their approach. Striking the right balance of these three pillars, brands can recreate a shopping destination in the digital world, resulting in a website that customers keep coming back to, and in turn reinventing the online retail space. It’s already happening, but here are some of the ways we see e-commerce being reshaped in 2022.

Social storefronts

Social media is quickly becoming a platform to transact as well as gain inspiration. Any brand with a social audience has the potential to make money through shoppable content, which is a popular concept amongst younger generations. In 2021, half of consumers aged 18-34 made at least one purchase on social media. Although a third of brands already tapped into the trend in 2021, there’s still ample opportunity for others to get involved before the space is crowded. 

The sociable aspect of social commerce is one of the reasons it’s increasing in popularity. For many, in-person shopping is a social experience. 81% of consumers’ purchasing choices are swayed by their friends’ social posts and recommendations, and 78% are influenced by brands’ posts. While traditional online shopping is distinctly unsocial, social e-commerce is the perfect solution to fill the void. Social commerce provides brands with an opportunity to sell at a point in the journey where customers are most active and inspired; turning social media engagement into sales. With minimal investment, companies can quickly and directly reach desired demographics and generate revenue while maintaining brand equity.

Phygital experiences

For retailers that have both a physical and digital presence, opportunity lies in shedding the siloed model of online vs offline to develop a hybrid approach that facilitates seamless, integrated experiences as customers move from the digital world to the physical. Almost two thirds of shopping journeys start online, but they don’t have to finish there. Just some of the ways a blended, ‘phygital’ strategy can be implemented could include providing customers with real-time stock levels at their local store, so that they can reserve and collect in a matter of hours; or book in-store shopping appointments where the sales rep has access to the customer’s purchase and browsing history and can make personalised recommendations.

AR-powered shopping

At least 30% of all products ordered online are returned, compared to only 9% in brick and mortar stores. One of the most common reasons is that the product received looked different to what it did online. Enter augmented reality (AR) e-commerce, which gives people the opportunity to virtually touch, move, and see a product from every angle before they make a purchase online. 

AR is hardly a new innovation, but it’s a trend that’s becoming an essential part of what customers expect from online shopping. Last year, Snapchat and Deloitte Digital found that over 100 million customers shop with AR and that, by 2025, 75% of the global population will become frequent users. Creating amazing AR applications will not only create competitive advantage; it provides the opportunity to increase customer engagement, help attract new customers and boost conversion rates.

Metaverse mania

The metaverse is for the pioneers of ‘phygital’, where the two previously separate worlds of shopping converge to completely redefine e-commerce. In the metaverse, a combination of tech innovations operate seamlessly to bring technologies like NFTs, social commerce, AR and VR into the physical world. Gaining a name for itself as the new iteration of the internet, brands like Gucci, Balenciaga, Disney, BMW and Snap are using first-mover momentum to step into the metaverse, maximising its potential by creating virtual fashion, assets, content, communities and experiences.

Data-fuelled personalisation

Access to first-party data is essential to fuel next-level innovation, and will become even more apparent as we move into a cookie-less world. To access this data, businesses must create a strong value exchange, where customers are willing to hand over their personal details for a heightened brand experience. Digital-first businesses like Spotify are raising the bar in this realm and, in turn, customer expectations. The brand’s annual ‘Spotify Wrapped’ campaign delivers a true one-to-one, personalised experience for users. The campaign is built on data, which is applied in a way that creates an engaging experience for users and is delivered without any immediate conversion, strengthening the value exchange as users don’t feel like they’re being sold to. 

The e-commerce industry is still some way behind the likes of Spotify, with personalisation efforts being largely focused on short term conversion through email marketing and retargeting methods, rather than how it can benefit brand-consumer relationships in the long term. But in order to catch up, focus needs to be switched to creating a strong value exchange through experience which, in turn, will have a positive impact on sales and loyalty.

Brand storytelling

In such a crowded market, a strong brand identity is imperative. Google reports that 80% of customers carry out research online before making a purchase. And without making an impression, your brand will be overlooked. This amplifies the importance of a strong brand identity and story that is told across all digital touchpoints, helping you build deeper connections with customers at every stage in their journey. DEPT® delivered this ‘branded commerce’ approach for Patagonia, crafting a design solution that brought its massive product and content library to life with UX that echoes its values and tells the brand’s story at every touchpoint – resulting in a 25% increase in mobile revenue.

The e-commerce landscape looks very different to how it did a few years ago, and it’s set to evolve again through the wide-scale implementation and acceleration of these digital technologies. Although each of them has a different weighting of creativity and data, they are all underpinned by technology, making it the cornerstone of online retail reinvention. 

To find out how DEPT® can ensure your commerce strategy is future-ready to meet consumers’ ever changing demands, get in touch with our team today.

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Client Services Director

Stephen Murphy