Influencer marketing is big business: here are five mistakes the stars (and the brands who sponsor them) should avoid
Using social media celebrities to advertise products – influencer marketing – is a lucrative and rapidly growing industry, projected to be worth up to US$15 billion (£10.7 billion) by 2022.
Influencers profit from their online fame by collaborating with brands, endorsing products to their followers in return for a payment (or free goods and experiences).
Some influencers are established stars seeking an additional income stream (the footballer Cristiano Ronaldo, for example, charges up to US$1.6 million (£1.2 million) for an endorsement on Instagram). Others may have recently found fame on reality TV shows like Love Island, an experience which can spark a barrage of endorsement deals.
But among the most successful influencers are ordinary consumers who have risen to fame on social media, often within a specific community. For instance, Zoella’s make-up hauls gained traction within the YouTube beauty community, earning her 11 million channel subscribers. “Cleanfluencer” Mrs Hinch, meanwhile, boasts 4.1 million Instagram followers eager for cleaning tips.
These community-based influencers develop high levels of audience trust, making them attractive as brand endorsers. Yet their particular origins have important implications for influencer marketing.
We studied consumer responses to brand endorsements by leading UK-based beauty vloggers on YouTube, including Zoella, Lily Pebbles, and FleurDeForce. Our research revealed that because fellow members of a wider online community played a key role in their rise to fame, these influencers were seen to have distinct responsibilities to their viewers.
We found that brand endorsements that failed to take these responsibilities into account could backfire, causing reputational damage to both the influencers themselves and the companies they represent.
Here are the five most common influencer marketing mistakes we identified:
1. Inadequate disclosure
Influencers are expected to clearly disclose endorsement activities to their viewers, enabling them to distinguish them from organic content. Viewers expressed frustration when they felt the difference was not made clear.
Endorsement disclosure by influencers is a concern for regulators, and a key focus of an ongoing enquiry into influencer culture by the UK government. Followers were quick to identify instances when influencers didn’t follow the current UK guidance for endorsement disclosure.
They also had additional expectations. For instance, many followers expected influencers to verbally disclose endorsements, noting that they often multitask whilst watching YouTube videos and could easily miss written disclosures.
While influencers bore the brunt of the blame for insufficient disclosure, any resulting negativity could also be passed on to the brand.
Some followers felt influencers had a responsibility to ensure the majority of their videos were “organic” and unbiased by endorsements. They were sensitive to the ratio of organic to endorsed content on the influencer’s YouTube channel, and responded negatively when product promotion began to dominate.
One commented: “All other YouTubers I watch put ads in their videos too which is totally fine, but every video seems a bit excessive. It also makes us question which products you genuinely like.”
This illustrates the doubts over influencer authenticity. While this mistake did not cause reputational damage to the endorsed brand, it led consumers to perceive these influencers sceptically, likely reducing their effectiveness as endorsers.
Influencers are seen as having a responsibility to provide valuable content. We found that followers are critical of brands they believe have taken a high level of control over the influencer’s content, particularly where this detracts from viewer enjoyment. For instance, they responded negatively when they sensed the influencer had been given a script or asked for a high frequency of product mentions.
One response read: “Loved the vlog. Hated the OTT mentions of the product. At first I was interested in it but after the third mention I was thinking, ‘How bad can this product be to need to pay for X number of mentions?’. Once or twice would be enough. But I assume the company asked to be named more than necessary.”
Influencers should be granted a high level of creative freedom over how a product is featured, enabling them to produce endorsements their viewers will enjoy.
4. Brand fatigue
Influencers’ responsibility to provide valuable content was also jeopardised when brands commissioned many influencers within the community to post similar endorsements in quick succession. Saturating the target audience in this way was seen as repetitive and boring, likely reducing endorsement effectiveness.
Indeed, many claimed that they would avoid purchasing from brands guilty of this mistake. Companies should avoid selecting a large number of influencers within the same online community for a campaign, and pay attention to scheduling. Again, allowing the influencer creative control is likely to produce more varied endorsements, reducing brand fatigue.
Fans felt that influencers receiving excessive amounts of freebies (such as luxury holidays and large quantities of free merchandise) made any resulting endorsements less trustworthy. Consumers even complained that the cost of these expensive influencer incentives would increase the retail price of the brand’s products.
Many followers expressed negative sentiment towards these brands and planned to avoid them. Businesses should either scale back influencer incentives or ensure such endorsement activities benefit other members of the community through competitions or giveaways.
Overall, careful attention to influencer selection, as well as campaign timing and execution, will enable brands to avoid the risk of backlash from their target audience and increase the impact of their campaigns.
How to grow sales with better product experiences
Justin Hartanov, Chief Commercial Officer and Mark Detelich, Chief Product Officer, Syndigo
In today’s ever-changing product landscape, it is important to understand the nuances of a quality product content programme. The rise in online shopping has been significant – there has been a decade worth of growth in less than a year – and shoppers aren’t going back to their old behaviours.
Consumers today have evolved their activity from show-rooming, or needing to see and interact with an item before purchasing online, to web-rooming, being online-first – either to evaluate their options or to buy outright. Consumers want to research, buy and enjoy products, wherever they are.
During the past year, both brands and retailers had to make decisive changes in order to adjust to the need for a greater online presence. As consumers were self-isolating or travelling to stores in limited numbers, brands needed to shift to sell more through ecommerce channels. In addition to reconfiguring their supply chains to meet different demand, they also needed to deliver more content for shoppers online to gain the best sales.
Retailers, too, were impacted, shifting their supply chains, distribution and displays to accommodate the online shopper – as well as compete with experienced ecommerce-only players. Since retailers operate on slim margins, it was a challenge to ramp up to be successful… and having complete and accurate content on their websites was a priority.
In Syndigo’s global survey of digital leaders, we found that 66 per cent of companies struggle to integrate data sources, and 94 per cent believe that having an ‘end-to-end solution’ would help them overcome their data integration obstacles. Clearly, the challenges of the past year have brought these issues into even starker focus.
Syndigo was able to help our brand and retailer clients by providing the platform to ingest, manage, syndicate, enhance and optimise product information globally. With a solution that is SaaS-native, our clients can begin distributing product information accurately in a very short timeframe. And with a system that is both flexible and scalable, we are able to accommodate clients of any size. For 12,000 manufacturers and more than 1,750 retailers worldwide, Syndigo is their preferred choice.
As the changes from the pandemic will likely remain for some time, it is important to note that the companies that acted decisively are the ones that are likely thriving in the new world of content today.
Deliver the right data, in the right context, right now – with Syndigo.
Balancing digital promises and physical realities in retail
Guy Courtin, Vice President and Industry Principal, Retail, Tecsys
“We no longer go online, we live online,” says Steve Dennis in his latest book, Remarkable Retail. This reality has been amplified by the day-to-day impact Covid-19 has had on our society: our children moved to virtual classrooms, we turned to more telemedicine, first dates at local coffee shops became Zoom dates, and road warriors had to trade in their frequent flyer miles for non-stop video meetings. Meanwhile, we experienced empty shelves at the grocery store and some shopping channels with limited bandwidth were restricted to “essential goods”. Even now we are feeling the repercussions in the automotive industry – and others – struggling from the physical lack of components.
With recent strides in digital adoption and sustained bottlenecks in physical fulfilment, we can glean important lessons for the future-minded retailer. The digital and physical realms of retail will continue to intersect, and it will become increasingly essential to pursue a balanced strategy that embraces a digital mindset grounded in physical realities.
Yet the digital aspects of retail have commanded a lot more attention over the past decade or so. The surge in e-commerce, and more recently, social commerce, have placed a new breed of digital consumer in the driver’s seat, and those consumers have driven both interest and investment in the digital interface. As that side of the equation has grown, the physical side has been desperate to keep pace.
It is long overdue for retailers and brands to consider how their physical assets and efforts can keep up with their digital promises. The foremost strategies in this effort include:
Rethink how the store fits into the broader ecosystem
Stores are not dead, but their roles are adapting. Many successful use cases of this evolution involve providing more experience-based shopping: demos at Bass Pro Shops, for example, or the PGA Super Stores. Others involve culture-building efforts, such as Apple stores offering a host of classes. Stores are also becoming waypoints for flexible fulfilment options such as kerbside pickup or pickup in store – some are even taking returns from other vendors – Kohl’s, for example, is accepting Amazon returns. The common thread is that retailers are pushing the traditional limits of brick-and-mortar to create added-value experiences within their retail ecosystems, leveraging these key physical assets to address the ever-growing needs of the end customer.
The warehouse is no longer just for storage
The store is not the only physical location that is finding a new role in the ecosystem – the role of the warehouse is undergoing change as well. Jeremy Bodenhamer’s excellent book, Adapt or Die: Your Survival Guide to Modern Warehouse Automation, outlines the new responsibilities placed on the warehouse. The thesis is that if you sell a physical product, fulfilment will make or break you. This begs the question for retailers: how does your warehouse strategy support your physical fulfilment promises? Answering that question may lead to fine-tuning internal resources to improve the customer experience, leveraging third-party logistics partners to provide greater flexibility, or some combination thereof. This physical warehousing and management of goods can play a significant role when it comes to delighting the end customer, and how retailers and brands maximise this asset within the context of digital commerce is often used as a strategic advantage rather than simply a back-office operation.
Last-mile fulfilment is an important customer touchpoint
With close to 20 per cent of our retail happening online, it is possible that the only time a retailer may physically interact with the consumer is at the point of fulfilment. While it is unlikely that most retailers and brands would add their own dedicated fleets for last-mile delivery, there are numerous service providers that help manage this process in a manner tailored to the desired customer experience. Retailers and brands need to have a keen eye on the relationships and services they leverage to architect this vital stage of fulfilment.
Consumers live in a digital world of endless possibilities. But behind each of those possibilities is a digital promise that must be fulfiled in the real world, with real physical constraints. To manoeuvre these dynamics with dexterity, retailers and brands need to have a balanced strategy that not only accepts the two driving forces, but steers them to a competitive advantage.
INDUSTRY VIEW FROM TECSYS
Real-time data: the missing piece in retailer success
Data is one of the main drivers of commercial efficiency for retailers and the consumer packaged goods (CPG) manufacturers that supply them. Used well, data can provide a detailed 360-degree view of customers, as well as enabling retailers to streamline internal processes and optimise pricing. Data helps retailers and their suppliers reduce costs, boost turnover and maximise profits.
The importance of quality data is increasing as the world gets more complex. Competitive pressures on retailers are increasing as barriers to entry are lowered by technology. Following the pandemic, inflationary pressures are rising, caused by disruption to supply chains and staff shortages. All the while, more and more digital devices are being used, creating ever-increasing quantities of data to be monetised.
The problem for retailers, struggling to make sense of this complexity, is that much of the data they depend on looks back to what happened last quarter or last year. It is often out of date by the time it is available, and it is of little use in providing insight into what is happening right now. Most retailers lack the data to make real-time decisions.
A complex marketplace
Covid-19 caused the shift to e-commerce to accelerate by five years. Isolated at home, many consumers shopped online during the pandemic. And, having discovered the convenience that online shopping brings, they are sticking with it. For example, the US Census Bureau reported that food and beverage e-commerce sales in the fourth quarter of 2020 were $7.3 billion, up 125 per cent from Q4 2019. As a result, many retailers have had to shift their focus to e-commerce to accommodate shoppers’ preferences.
The move to internet shopping isn’t simple, especially in an environment where there is a choice between online and offline shopping. Consumers expect a seamless experience when moving across channels. They demand a wide range of opportunities, including traditional shopping, e-commerce (using web, mobile or social media), click and collect, and even visiting a store to choose an item before buying it online – sometimes while still in the store. Retailers need to manage all these different journeys and ensure that each one fully satisfies customer demands.
In addition, third parties such as Uber Direct, Instacart and Shipt provide even more convenience by allowing customers to purchase items and have them delivered, often in minutes. This adds an additional dimension. Retail is now a very complex environment, requiring far more data to manage it than has been available from traditional sources.
The problem with data
High-quality data allows retailers to build insights into their customer and their business. This in turn allows them to make better decisions about what to stock, how to price it and who to target. However, most retailers only use historic data records to inform their current decisions.
Unfortunately, this data is frequently quite thin. The syndicated data sources used in the industry lack granularity; often they are aggregated at regional or market level. This data also lacks recency, coming with a delay of up to eight weeks. In any fast-moving area influenced by the season, the weather or fast-changing promotions, such as fashion or groceries, it is of limited use.
Retailers that do not have access to real-time data also face another problem: emerging inflation. Staff shortages have been caused by the pandemic and made worse by difficulties with continued training of workers. This in turn has caused disruption to supply chains, with fewer workers available to manufacture packaged goods and fewer drivers available to deliver them. All this drives up costs. This is especially true in the grocery industry. One example is seen in the Consumer Price Index (CPI), which shows the price of meat, poultry, fish and eggs in the US rising by almost 6 per cent between July 2020 and July 2021.
Inflation is a major problem for the retail industry. Consumers, naturally enough, push back against price rises. However, manufacturers want to ensure that cost increases get pushed through to the shopper so they can maintain profitability. Retailers are caught in the middle.
Real-time data for real-time pricing
It’s hard for retailers to respond to changing commercial pressures without adequate data. But many are realising that better data is available online. This includes complex data such as feedback on review sites, articles in the online press and informal chatter on social media – unstructured data that can be analysed through powerful Big Data analytics.
Most importantly, though, it includes the detailed local pricing and availability data that can be found on the websites of competing retailers. This is a source of very real competitive advantage. For instance, in the grocery industry, it can be used with surgical precision for promotions such as two-for-one offers, competitor price matching and loyalty card user discounts. In addition, pricing decisions can be made at a hyperlocal level. It can also be used to manage the new levels of price volatility seen in the retail industry with frequent changes being made on an item-by-item basis.
Shoppers expect pricing consistency, irrespective of the channel they buy through or the location of the shop they visit. Their perception of whether a price is “fair” will help them to a final purchase decision. Having the data necessary to make flexible decisions in real-time will allow retail brands to be far more competitive by pricing products according to what is currently happening in the wider market.
Better data is needed to help retail organisations make business decisions more quickly, smartly and efficiently. In a fast-paced and competitive market, granular, hyper-local and real-time data enables retailers and their suppliers to remain competitive, operate more efficiently and drive up profits.
Datasembly provides access to billions of grocery and retail pricing records from every store at hundreds of retailers, allowing organisations to make business decisions quicker, smarter and more efficiently. Find out more at datasembly.com.
Curating the soundtrack to your business
Ola Sars, Founder, CEO & Chairman, Soundtrack Your Brand
Worldwide, more than 100 million venues regularly play music. They do it for one reason: to make the people that use that venue – whether it be a shop, a pub, a tube station or a sports stadium – have a richer, more enjoyable experience. The underlying principle is simple: music both calms and energises a space. It acts as stress relief and a way of breathing life into a venue that otherwise lacks in atmosphere or that pulsates with the wrong kind of vibe.
Billions of individuals around the globe listen to music daily, and so it follows that the venues playing tracks are serving the needs of a pre-existing audience. Businesses require the ability to play music just as much as people do, for many of them play music for people – and in this day and age, that means the ability to stream songs and albums.
Yet as things stand, the streaming market doesn’t quite recognise that – or at least it has struggled to keep pace with changes to the way we play and listen. The major music streaming giants have developed their services on a B2C basis. They may well have had incredible success, but it leaves a huge market opportunity untapped.
Enter Soundtrack Your Brand. It recognised some years back that businesses would benefit just as much as individuals from the ability to enjoy the new functions that streaming services have provided: curated playlists, songs to suit the mood and pointers to new artists and albums. It also knew that, despite all the excitement surrounding the streaming revolution, artists were not being fairly remunerated for their work. Through its research, it found that 90 per cent of these 100 million-plus venues play music from a source that does not fairly reward creators. The music industry has always been tough on creatives, but streaming has generated an even more unequal playing field.
The platform created by Soundtrack Your Brand allows businesses to curate bespoke playlists for venues. The needs of customers for music, information or otherwise are met, while artists finally get the rewards they deserve. At $35 to $50 for a monthly subscription, the budgets of most businesses won’t be dented in the slightest, while artists will take a larger cut than any streaming service currently grants them.
Not only does the Soundtrack platform enable sustainable sourcing of music, but it also allows businesses to use music streaming to grow their business. Recent Nielsen research concluded that 79 per cent of consumers notice the music when visiting a business, 41 per cent will stay longer, 39 per cent are more likely to come back more often, 36 per cent will choose a business with good music and 21 per cent claim they will buy more if the music is right.
Music streaming looks to be here to stay. At the same time, customers will continue to expect that when they go to a venue, something will be coming through speakers to soundtrack their experience. Adapting music streaming to the needs of businesses is the logical evolution of the B2C market. With the market opportunity estimated at $35 to $50 billion, it makes sense to pay close attention to that evolution.
Visit soundtrackyourbrand.com to learn more about the leading B2B music streaming service
INDUSTRY VIEW FROM SOUNDTRACK YOUR BRAND
Providing the infrastructure for personalised communication
Philip Raby, General Manager UK, mediarithmics
For retailers, the past decade has been a huge shift towards digitisation. The pandemic has furthered this trend, with four years of growth in e-commerce sales seen over the past 12 months. This acceleration has presented a new challenge for retailers: being able to truly understand a customer’s needs based on the proliferation of consumer touchpoints and the associated data that underpins these.
The internal challenge for many retailers is that this customer data (including behavioural, transactional and campaign data) is stored in many different tools, such as data lakes, data warehouses, CRMs and many more. This has created silos where customer data is not linked, in turn making it difficult to build a true 360-degree customer view of their users. The knock-on effect of this challenge is the inability to deliver personalised communications to their customer base – thus negatively impacting revenue growth and brand equity.
mediarithmics, a data-first marketing cloud that provides a fully integrated, open and scalable infrastructure (CDP/DMP) to mature advertisers, retailers and publishers, is helping enterprise retailers overcome these issues.
The mediarithmics platform helps advertisers to easily collect customer data and orchestrate high performing, personalised, multi-channel campaigns. Publishers and data-owners can also boost their advertising revenue by leveraging the value of their data thanks to the mediarithmics infrastructure.
mediarithmics began its journey in France, working with some of the local leading retail players, and has become a market leader in the space. In 2019, mediarithmics launched internationally and began working with local leaders in new geographies including the UK and Canada.
mediarithmics is considered a leader among the CDP/DMP ecosystem, where it was recently listed in a round-up of tech companies to watch in 2021.
Discover our Data-first Marketing Cloud and potential and relevant use cases on mediarithmics.com
Instagram Kids: tech development must move from usability to safety
Facebook has announced that it is halting development on its Instagram Kids project. This follows reports that the social media giant had commissioned – and kept secret – internal research that found Instagram was detrimental to young people’s mental health.
The study’s findings, not to mention the fact that they were withheld, have only bolstered the heavy criticism the project initially came in for. “Instagram for kids,” ran one headline early on, “the social media site no one asked for”.
Quite who has asked for what, in information technology development, is an interesting question. In the late 1980s, research had already highlighted that the history of computers was arguably one of creating demand more than responding to need. And social media is no different: it has gone from being the thing we didn’t know we wanted to being embedded in all that we do. Research increasingly confirms it can be a source of harm too.
Children are at the heart of this battle between usefulness and safety. They’re the future designers of our tech – they will inherit our messes – but they’re also using it right now. And they’re tech companies’ future customers. Head of Instagram Adam Mosseri has been quick to defend the value and importance of a kids’ version of the app. But can we trust big tech to give us what we actually need as opposed to manipulating us into consuming what they need to sell?
The advent of usability
The concept of user experience now dominates information technology thinking. But the earliest home computers were anything but useful, or usable, for the average person. That is primarily because they were still being designed for trained specialists: they assumed competence in whomever switched them on.
From the early 1980s, parents were encouraged to embrace the educational potential of home computing. They saw the devices as a boost to their children’s learning and future employability. But this uptake in early devices was still more conceptual than practical.
By the end of the 1980s, however, the idea of usability started to gain traction. IT design started focusing more on how average people might effectively and efficiently use their products, with computer scientists homing in on human-computer interaction and user-centered design.
From user experience to user safety
Technology, of course, now enables how we live, how we communicate, how we interact, how we work. Households are filled with devices and applications which are usable, useful and being used. Indeed, keeping devices and all they contain in use is central to IT design: the user is a customer and the tech is designed to nurture – sollicit, even – that custom.
Figuring out how to provide a meaningful and relevant experience for someone using a digital product or service, from devices to social media platforms, is what is known as user experience design. Tech giants talk about meeting our expectations even before we know them ourselves. And the way designers know what we want before we want it comes down to the data they collect on us – and our children.
A flurry of recent lawsuits, however, highlight the line, in terms of harm to the user, that such digital innovation driven by profit and shaped by our personal data has crossed. These include the case launched by the former children’s commissioner for England, Anne Longfield, against TikTok.
Longfield’s case alleges that the video-sharing platform harvests the personal information of its under-age users for targeted advertising purposes: from date of birth, email and phone number to location data, religious or political beliefs and browsing history.
The concern these days is that privacy is under threat because profits take precedence over safety.
The usability movement which started in the late 1980s therefore now needs to make way for what computer scientists term usable security: human-centric design, where safety takes precedence. Our research shows that many online applications are not fit for use. They fail to find the balance between usability and security (and privacy).
We need to further explore the potential of open-source designs – those not driven by profit – as alternatives. And we need to foster ethical awareness around technology in young minds: they are tomorrow’s programmers. As important as learning to code is understanding the ethical implications of what is being coded.
How do sustainable initiatives for returns impact on consumer experience?
Jelle Schoenmaker, Managing Director and Joseph Valentine, Senior Sales Executive, Cycleon
Sustainability and convenience are not typically paired together when it comes to ecommerce operations and activities. With the modern consumer now regarding convenient features such as free and fast delivery and returns as the norm, brands who do not offer this may lose out to competitors in the race to secure customer loyalty and return spending.
Such features, as well as others such as ‘pay later’ options, do not encourage a greener approach to commerce as they spur on higher order volumes, which result in increased returns volumes, too. If a brand’s returns flow is not sustainably optimised, processing these returns will require more packaging, produce and transport – all of which take up more resources, whether this be materials or energy, that could otherwise be avoided.
Luckily for both brands and their consumers, convenience does not always have to be compromised within a sustainable reverse logistics model. Not only can these desired features be maintained through localised operations and data-driven decision making, but our studies have also shown that customers worldwide are willing to compromise on these features if their returns can be processed in a more environmentally conscious way. This highlights that sustainable initiatives actually benefit the consumer experience.
In Cycleon’s global market study on consumer returns behaviour, we gathered more than 3,800 responses from online shoppers located in 12 countries. We uncovered that in most territories, around three in four respondents indicated that they would be prepared to wait longer for a refund if their return was handled sustainably. Additionally, one in two of those surveyed also indicated that although free returns are valuable, they would be willing to pay for their return to be handled responsibly. In Europe, this value was 73 per cent of those questioned, and in North America, the total was 75 per cent. This is an interesting insight because it shows that, although convenient features are highly sought after by consumers, sustainability is fast becoming a major demand. It is an expectation and responsibility that will only grow over the coming years as all areas of society become more aware of the need for greener practices in everyday life. If concessions to convenience are needed to secure a greener returns flow, it seems that the majority of customers would accept them. Given that concessions are not always needed, offering more sustainable returns will only enhance the customer experience in the long run.
INDUSTRY VIEW FROM CYCLEON
Commerce anarchy has descended on the retail world – but it needn’t be here to stay
Marcel Hollerbach, Chief Innovation Officer, Productsup
In a changing retail landscape, mistakes can be costly
A sportswear giant uses Greek-style lettering to spell out the name of its brand, only to be widely ridiculed for using the wrong letters. A major sports and outdoors shop is fined for using incorrect warning labels on its products. An online fashion retailer mails out clothing many sizes too big, enraging shoppers and receiving mockery on social media.
Occasionally, mistakes such as these are to be expected. Consumers know that not every purchasing journey will be a smooth one. But these days, the mistakes are increasing, and shoppers are losing their cool.
It’s hardly surprising. Consumers in the UK, for instance, spent an average of £3,250 each on online shopping last year. Yet failure to manage the complexities of such an economy – and, particularly, the product information value chains that link suppliers with customers - has resulted in chaos and growing frustration for brands and disappointment in shoppers. The situation is now so bad that some have labelled it commerce anarchy.
What is commerce anarchy?
When products were sold in brick-and-mortar stores, life was comparatively easy. Items would be sent from the manufacturers to the shops, buyers would browse the displays and purchases would be made. This process was mimicked when online shopping took off: a brand would have its own online platform, and within that space, visitors would go through a straightforward digital buying journey, purchasing products from digital shelves.
But the advent of multiple channels - Amazon, Instagram Shops and other aggregators and websites - with products from hundreds of different brands has changed all this. Customer experience programmes now have multiple channels. The creation of new paths between different elements of the browsing and buying process, as well as the various parties involved – not only brands and consumers but also service providers – has greatly complicated the online journey.
For instance, an item you sell might feature on your own website, as well as on Pinterest Shopping and any number of retail aggregator websites. In this fractured retail landscape, it becomes much harder to check the accuracy of the product information attached to each item, track how well it’s selling and measure other key data that brands need to configure their processes and deliver good customer journeys. In short, brands are losing insight into their metrics – control of their own products and, ultimately, the customer experience.
The knock-on effects of this are multiple. You waste time and money fixing myriad individual issues, and you start to become inefficient as product data is dispersed across different systems. Your margins drop, your reputation takes a hit and a once-loyal customer base fractures and starts to shift to brands who are equipped to deal with commerce anarchy and who can deliver better customer journeys.
What can be done?
The first thing to understand is that working to solve problems at a hyper-individual level – for instance, correcting wrong product information on a particular aggregator site – is inefficient and costly.
Technology such as Productsup that centralises this work – ensuring product information is consistent across multiple channels and geographies – is essential. So too is listening to customer feedback to better understand the points of friction and what is prompting them to leave your brand for others.
Unless you work on the fractured relationship between yourself and your customers by managing the various paths between product and buyer, this anarchic landscape will continue to reign. Fix it, however, and you can start to reclaim the space.
Visit productsup.com to learn more about commerce anarchy
To survive or not to survive – that is the retail question
Marco de Vries, CEO, Openbravo
Retail has traditionally been one of the fastest-changing industries. However, the pandemic has accelerated this change at an unprecedented rate, driven among other aspects by an exponential growth in online sales.
In 2020, according to Statista and based on data from the US Census Bureau, online sales in the US reached 14 per cent of total retail sales, or $792 billion in value. In 2015, that figure was just 7.3 per cent, showing how rapidly online has accelerated in recent years and in 2020 in particular.
This rapid shift towards online shopping, with the emergence of new consumer habits and preferences, and the need for new services heavily influenced by social distancing, have forced retailers to review and adapt their operations in a very short time. The traditional resistance of many retailers to change and innovate has been put in second place, as they realise they face an entirely new situation that has put the survival of their businesses at risk.
Among these changes is omnichannel, which has become an absolute priority, confirming a need that already existed before the pandemic, but is now much more urgent. In this new omnichannel reality, physical stores face new scenarios that force them to acquire new capabilities. Perhaps the most important challenge is the obligation to develop a totally new role as logistics centres for order preparation.
Businesses also need to offer new shopping experiences, at a time when both the number of store visits and the time buyers spend in stores has fallen. All of this is also influenced by the impact of social distancing caused by the pandemic, which has given rise to new practices that will likely remain for some time. This has pushed many retailers to evaluate options such as self-checkout terminals, curbside pickup and other options that enable low-touch in-store scenarios.
In dealing with their customers, retailers are also facing radical changes in their values and priorities. New generations of buyers expect greater environmental responsibility from brands. They expect value sharing and collaboration, and want to be more involved in the creation of new products. Sustainability, customisation, co-design and co-creation are now prominent terms in the retailer lexicon, and have a big impact on retail operations.
All these changes are taking place in an increasingly complex technological environment, with the emergence and incorporation of a greater number of innovations. While offering additional benefits and options for retailers, new technologies increase the complexity of their systems map daily.
Faced with this situation, retailers are forced to replace legacy systems and adopt new technological solutions, which must not only offer broad support for a variety of omnichannel scenarios already proven by other retailers in the market, but also – and critically – offer a level of flexibility not seen to date. This flexibility is needed to ensure faster implementation and introduction of changes in weeks instead of months, and to simplify critical tasks such as integration with other systems.
This will allow rapid evolution and adaptation in the future, with new processes, payment methods and channels, thus supporting the concept of business resilience, which has been widely used in recent months. Your existing legacy systems won’t respond well to these needs. In this situation, there is only one real choice. To paraphrase William Shakespeare, to survive or not to survive, that is the question.
It is no accident that those retailers that recognised early on the need to embrace omnichannel retail have shown the best results during the pandemic, and many retailers whose results have disappointed are in the process of transformation. But those that have done neither face a real risk of disappearing.
Personalisation in ecommerce: expectations vs reality
When talking to retailers, the inspiration for personalisation is to be using technology that is so advanced that entire websites are tailored to the customer, not just content and product recommendations. Some companies are known to achieve such advanced 1:1 personalisation because its departments share information while also utilising captured data to better understand its customers. It may seem unrealistic that smaller retailers could ever accomplish the same, but any company can achieve personalisation on that level by understanding the current obstacles and the technology that exists to fix them.
Current obstacles with personalisation
When it comes to personalisation, 57 per cent are willing to share their data with a company if they get something in return, like personalised offers. In addition, 80 per cent of consumers are more inclined to purchase from a shop when they feel like they are being treated as an individual, and if that message is not felt, 52 per cent are likely to shop somewhere else.
From basic to more advanced options, 89 per cent of digital retailers are investing in personalisation, including AI and machine learning to predict user behaviour. But for many companies, personalisation is a very tedious process, with no better example than product recommendations – the most common area to be personalised on a webshop.
However, these boxes are typically filled manually based on their purpose (‘Complete the purchase’ or ‘Similar items’), placed very low on the page creating minimal impact and not updated as frequently as they should be. Worst of all, some solutions market themselves as using AI but in reality are only using popularity to choose recommendations. Overall, the intent to deliver is there, but the execution of personalisation usually still leaves something to be desired for the consumer and lacklustre results for the retailer.
Personalisation of the future
Clearly, there is a reason for the personalisation hype, but not every company has the resources of the major players in ecommerce to build their own in-house solution. Luckily, many platforms use AI and machine learning to help automate and optimise personalisation.
When choosing a provider, ecommerce companies often face the issue of tech stacks that do not integrate nicely with each other or budget constraints that limit where they can implement personalisation. Either they will choose to personalise just one position on one of their channels, creating minimal impact, or choose different providers to personalise different positions across channels, which end up being siloed when it comes to data sharing. There is nothing wrong with choosing multiple providers, as the data sets all eventually feed into the same company-wide data lake. With AI, this is incredibly important, because the more data the algorithms can use to learn, the more accurate the personalisation will be.
As the personalisation industry grows, constant improvements are being made to make these solutions smarter. However, if your provider is not putting in the right amount of effort to improve the underlying techniques, your personalisation will not stand up to your competitors. Don’t be afraid to challenge your provider to share or explain what goes into its solution.
Ensuring your platforms have appropriate dashboarding and reporting capabilities will be crucial in actually understanding how personalisation is impacting your business. Having all your data and knowledge in one place will allow for a comprehensive overview of the company to allow for the smartest decision-making. On top of this, deep machine learning techniques can offer additional insights and emerging patterns that are unnoticeable to the human eye but can have a huge impact.
Personalisation is an integral part of the customer journey, with consumers expecting it and retailers wanting to exploit it. When evaluating personalisation solutions, it is important to ask these questions:
Once your company has gone through these questions and defined the current status quo, you can begin your own journey: implementing personalisation in the most relevant and effective way for your consumers, using a partner that also meets your needs.
Learn more about how Froomle’s modular personalisation can create quick wins for your business.
Looking for inspiration? Take a look at our most recent case study with Colruyt Group.
A digital platform to manage retail business
Edward M Durbin, Director Global Retail Industry Group, VMware
It doesn’t matter whether retailers are big or small, with physical stores or online-only, that source direct or have complex supply chains and logistics to manage; they are all in the same fight when it comes to digital experiences. To win the hearts and minds of consumers, retailers can’t just talk digital; they need to think digital-first.
As Matthew O’Neill, Industry Managing Director at VMware points out, “There is a ready-made digital audience hungry to experience new online services, but they’re not yet excited or compelled by what they’re being offered over the last year. Retailers have a real opportunity to differentiate themselves by taking a digital-first posture, creating apps that attract, engage and retain consumers either online or in their stores. Retailers with digital in their DNA have everything to play for.”
The role of apps is critical. Retailers appear to realise this – a Forrester study noted that 86 per cent of retail CIOs said promoting better customer experience through improved apps is “very” or “extremely” important. Or, as Jarek Matschey, Retail Industry Director EMEA at VMware, puts it “applications are the new storefront for customers, and they are the most important tools for the employees.”
Jarek Matschey, Retail Industry Director EMEA, VMware
The point about employees is an important one, and often overlooked. Giving employees the right tools and access to relevant and timely information not only makes them more productive and allows them to deliver a higher level of service to customers, but also keeps them safer and shows employers care for their well-being. All enabled through apps.
Of course, wanting to deliver better experiences through apps is one thing; being able to actually deliver it is another. Eighty five percent of respondents to the Forrester study said that choosing the right platform for each application (whether on-premises, or private, public or hybrid cloud) was either “very” or “extremely” challenging.
Those CIOs struggling with choosing the right platform need to reset, think about what they actually need their apps to do, and then find the environment that best supports those requirements. It might be they need to capture customer data with an engaging, agile and flexible app that can work across multiple devices and operating systems, so public cloud could be the answer. Yet they then need to keep that data secure and stored in compliance with privacy regulations, so the back end of that app might reside in an on-premises data center. So, rather than being all-in on one type of cloud, they actually need a multi-cloud model which allows them to move apps, workloads and data around as they require it.
What it all comes back to is building a platform. Consumers and employees expect new experiences that make their lives easier – apps are the platform from which to do that. The apps themselves need to be supported by infrastructure that enables them to operate at an optimum level – here, cloud (in all its forms), is the supporting layer. Underpinning all of that is a digital foundation which makes life easier for the retailer – allowing them to
develop and deploy apps, manage multiple clouds, and secure it all, in a consistent manner.
In doing so, retailers can create a platform on which to thrive. Or, as Matschey puts it, “retailers who are able to adapt, who are able to use customer data, create the right applications for their employees to be efficient, create the right apps to interact with their customers, will be the winners.”
Watch the full videos here.
To read more on key trends from NRF 2021, click HERE to get the e-book.
What makes an app engaging?
As mobile apps continue to become critical for businesses in today’s digital landscape, high-touch service providers must manage their organisation’s digital strategy to provide their clients with an engaging app experience to maximise value.
Mobile apps are transforming businesses to be digitally resilient and provide their clients with convenient accessibility. However, without an engaging app, organisations can fail to provide users with a seamless digital business continuation and hold empty real estate space that lacks necessary functionality.
An engaging app brings value to the user. If a client determines that a service provider is offering the most convenient and high-touch experience possible through an app, they will remain loyal and continue business transactions. While mobile apps are imperative for the future of business, their true value lies in retaining users by delivering an engaging and streamlined client experience.
Here are the factors that are crucial in a successful business app strategy:
Intuitive user interface
The hallmark of any poor mobile or web app is a confusing user experience characterised by unintuitive controls, unnecessary features and a lack of streamlined workflows. When it comes to interacting with customer service and online commerce, end-users will have specific workflows in mind that they expect to be free of unnecessary or confusing steps. To that point, an engaging app facilitates streamlined workflows by employing well-researched intuitive practices that lend to end-users being familiar with functionality in as little time as possible.
Consolidating all-in-one workflows
When deploying a business app, it is important that the app serves as a one-stop portal for completing business without ever needing to leave the app. Each app should be equipped with full business capabilities, including voice, video and text messaging, calendaring, digital signature, annotated notes and document sharing and collaboration, to ensure all service needs can be met in one designated space. This all-in-one workspace provides clients with the convenience of accessibility and the transparency of an auditable transcript of all interactions for a thorough overview of service history.
Additionally, organisations can better serve clients with persistent relationships that continue through transition. By maintaining client profiles in one consolidated hub, businesses can be sure that client transaction details are retained and recorded for a more personalised high-touch experience.
Technology built to scale
The possibilities of digital are constantly expanding and reaching new highs. The newest technology today could be irrelevant in less than five years, so it is extremely important when businesses invest in an app that it is built to evolve and scale with technological advances. Choosing app developer platforms with an intricate back-end and consistent updates allows businesses to deploy their own branded apps while ensuring they are future-proofed.
Ensuring reliability and security
Giving clients access to a one-stop mobile app right from their pocket is undoubtedly convenient, but it also involves handling sensitive information.
As customers become aware of the inherent security risks of digital interactions they demand peace of mind, while brands depend on security to uphold their reputations.
App development must factor in security from the outset, with bank-level back-end encryption, multi-factor authentication and multiple layers of security to protect sensitive data.
A controlled and managed environment
Clients’ relationship to a brand is largely based on how the brand is managed because efficiently managed organisations ensure consistent quality. An engaging app is one that can streamline processes from the top down with transparent insight so that clients receive the just-in-time service they expect as a result of administration directing internal teams. A mobile app digital strategy should not only consolidate all client interactions but organisation-wide communications in order to better address and improve the client experience with all efforts in one easily managed space.
A branded interface
Last, but not least, is brand control. Businesses should deploy apps with their own branding, including logos, colour palettes and fonts, so that their app aligns with the brand clients are familiar with. This allows clients to associate the brand with digital resiliency and, ultimately, convenient high-touch interactions.
Moxtra powers OneStop Apps for organisations to manage their teams to deliver a convenient and engaging client experience. Visit moxtra.com to get started with deploying your own branded app today
Retailers need to respect consumer privacy or pay the price
Richard Jones, Chief Marketing Officer at Cheetah Digital
As consumer attitudes towards data privacy shift and regulations rise to protect them, it’s up to brands, including retailers, to shift with them. Here’s how.
We’re coming to the end of an era – the data free-for-all era, where marketers could use any means possible to track and target consumers with zero regard for how it made them feel. Right now, as we watch monolithic tech companies shift their entire models to fall in line with privacy regulations and consumer privacy desires, it’s time for retail marketers to shift with them, to a better way of connecting with consumers.
You can’t fake knowing who your consumers are
It used to be that Facebook, Google or third-party integrations would let you personalise campaigns at scale. Marketers could splash their ads and campaigns in front of their intended audience, but they would never have to really know that audience because these platforms did it for them. Now, with the depreciation of the third-party cookie, the blocking of tracking on iOS 14, and other privacy-related actions, it’s time for retail marketers to take charge of their futures by owning their own data.
How the value exchange plays into this strategy
Here’s what Google is advising – know your consumer. In fact, it has recommended that all marketers start building out their own first-party databases and will support those that do. The International Advertising Bureau (IAB) is telling marketers to build these relationships using a value exchange.
What’s a value exchange? Simply put, it’s offering consumers something in exchange for their data – data that you can then use to build out campaigns that appeal to that individual alone. This includes sharing special offers, personalised discounts, exclusive access and more. It goes beyond simply gathering every data point – it’s intentional and done with respect and openness to the consumer about how and when their data will be used (this collected data is known as zero-party data).
The technology to do this is readily available, either through “experience” platforms that make it easy to collect, parse and integrate data into campaigns, or through a loyalty programme that wraps up the data-gathering and rewarding engagement into one platform.
Cheetah Digital’s Customer Engagement Suite (CES) is a tool that puts the value exchange at the heart of its customer engagement strategy. It helps marketers to manage every stage of the customer lifecycle, while sitting atop, and being fed by, a Customer Data Platform (CDP). It offers an Experiences platform, a Messaging platform, a Loyalty platform, and a Personalisation platform all seamlessly integrated to help you understand who your customers are, and gives marketers the tools to connect with consumers at the moment it matters most. It’s the tool that puts data ownership in the hands of the brand marketer instead of third parties.
What if retail marketers don’t change their strategies?
Retail marketers have an abundance of data and they’re some of the best candidates to start collecting the zero-party data that can come from offering a value exchange. They’ve got one of the most engaged audiences – it’s simply a matter of marketers tapping into their existing connections.
Or, they can continue to try and passively work with the walled gardens of third-party platforms. They can sit back as consumers grow tired and fed up with being tracked and snooped on across the internet. They can watch as tech companies and privacy regulations make their current third-party databases obsolete and irrelevant. They can fade into the obscurity of the likes of Sears and RadioShack.
The savviest retail marketers, however, will see this as an opportunity ripe for change. They will digitally transform their data strategies, refocusing their efforts into gathering data and building campaigns that grow their relationships with consumers, because those relationships are what matter. They’re also what will carry brands through the next wild and unpredictable shift in marketing practices.
Set your brand up for success with a future-proofed data strategy, learn more about the Cheetah Customer Engagement Suite by visiting www.cheetahdigital.com.
Cheetah Digital is a cross-channel customer engagement solution provider for the modern marketer. The Cheetah Digital Customer Engagement Suite enables marketers to create personalized experiences, cross-channel messaging, and loyalty strategies, underpinned by an engagement data platform that can scale to meet the changing demands of today's consumer. Many of the world’s best brands, including Neiman Marcus, Hilton, Walgreens, and Williams-Sonoma trust Cheetah Digital to help them drive revenue, build lasting customer relationships, and deliver a unique value exchange throughout the entire customer lifecycle.
Do you really need more petrol, or toilet paper? There are better ways to take control in a crisis
The beginning of the Covid-19 pandemic saw consumers flocking to the shops to urgently stock up on items such as toilet paper and pasta.
This phenomenon, termed “panic buying”, is now happening again in Britain – but this time it’s fuel that people are after. Continued panic buying is only going to perpetuate any fuel shortages. So what can be done to stop it?
Panic buying is a natural reaction to a stressful experience. In particular, it’s a response to uncertainty. When people feel things are uncertain, they tend to focus on something that gives them a sense of certainty and makes them feel in control.
Of course, most people can’t recruit new lorry drivers or mobilise the army to help with the delivery – but they can stock up on fuel. In taking this action, they feel as if they are doing something proactive, and taking charge of the situation.
Covid-19 has exacerbated uncertainty around what the future may hold and increased anxiety for many people, which is notable given we know existing anxiety is a precursor for panic buying. So when people heard there were concerns about petrol supply, it’s not altogether surprising they began queuing up with extra Jerry cans. People may be more susceptible to this behaviour than usual given the pandemic.
Interestingly, the act of buying can cause the brain to release small amounts of dopamine, sometimes referred to as “the reward chemical”. This too, at least partially, helps to explain the relief people might feel when they finally find a petrol station that still has fuel.
Herd mentality and the media
Humans are social creatures, and as such, we are often influenced by what other people are doing. We observe the choices others make and infer why they act the way they do. We tend to assume that the majority have a better assessment of what’s going on and that panic buying is the correct behavioural choice.
The media can play a pivotal role in preventing panic buying as they tend to guide the public perception of what people in general are doing. Continuous exposure to images of and reports about the long queues at the petrol pumps will see people perceive that “everybody else is doing it”, potentially encouraging them to copy this behaviour. Where possible, this kind of coverage is better off avoided.
Authorities needs to be clear
Precise and thoughtful communication is key to alleviating concerns, and therefore deterring people from panic buying. In this case, the public needs reassurance that there is not going to be a petrol shortage, as well as information about solutions – but it needs to be convincing. For example, announcing that 5,000 HGV drivers will be able to get temporary work visas without stating how they will be recruited may not be seen as entirely credible.
The way language is used can also affect people’s perception of a situation. It’s encouraging to see reports indicating the government has advised councils not to use the terms “panic” or “panic buying” in this discussion. Indeed, widespread use of the word “panic” means we perceive others as panicking. And thinking back to the principles of herd behaviour, we tend to assume others know what they’re doing – and we become more likely to follow suit.
So it’s important that the government, local authorities and the media be careful with the language they use during this time.
Things you can do
If you are in the UK and currently affected by the crisis, ask yourself whether you really need to buy petrol. If you decide you don’t really need to — perhaps you can leave your car at home and take public transport — even this basic thought process is a way of taking charge and reducing anxiety levels.
If you’re concerned about the possibility of not being able to drive your car, it’s a good idea to come up with a plan B. What specifically would you do if you found yourself with an empty tank? Could you perhaps travel to work with a neighbour who still has petrol in their car? Check bus and train routes and travel times to see whether that may be a solution.
By having a specific plan, you will feel as if you are in charge – albeit in a different way – and this might make you feel less inclined to urgently seek petrol.
How brands are primed to thrive in a post-Covid world
Recent headlines do not paint the full picture – retail’s future is looking brighter than many may suggest. Brands and retailers alike have emerged from a highly challenging period carrying valuable lessons, having repeatedly adapted digital and selling strategies over the past 18 months to keep pace with a rapidly changing market. Those companies that have survived have been transformed into more robust, forward-looking, digitally savvy businesses that are primed to thrive in a post-pandemic world.
Brick-and-mortar shops may have faced harsh conditions thanks to repeated lockdowns, but brands that sell online have flourished thanks to a surge in e-commerce. Consumers initially forced to shop online out of necessity have embraced e-commerce’s convenience and many are likely to stick with online shopping under some guise well into the future.
As restrictions in the UK have lifted, there has been a significant return to in-store shopping. While many are now flocking back to the high street to make up for a lost time, it does appear that the future of retail is looking like a more hybrid affair, which should inspire a healthy degree of optimism across the sector. Innovative brands and retailers will use their stores to provide complementary experiences to their digital shopfronts.
Recent research from ChannelAdvisor contrasting current consumer behaviour with pre-Covid habits found that 56 per cent of UK shoppers are undertaking more research online before shopping in-store. This rises to 72 per cent for those aged 18-25. Retailers can learn from this and enhance their websites as research resources, providing shoppers with information on product pricing, availability near their location and the option to click and collect or reserve for fitting in-store.
This period of upheaval has also highlighted the significant impact that a data-driven strategy can have. By understanding consumer habits and applying gained insights across product lines, brands and retailers can make informed inventory decisions, re-allocate marketing budgets and offer personalised promotions to their customers, reacting in real time to meet new demands and provide the best service.
Deploying these smarter, data-driven strategies over the course of the pandemic has proven to be a winning methodology. ChannelAdvisor recently surveyed 304 Chief Marketing Officers working at UK brands that sell items online – 92 per cent said their brand has attracted a significant number of new customers since the start of the Covid-19 crisis, while 82 per cent said their brand is seeing higher sales than pre-Covid and 27 per cent said their sales are significantly higher.
Brands may have vastly enhanced their own D2C offer over the past 18 months, but their relationships with retailers will remain a crucial element of their day-to-day business for some time to come. The new power wielded by brands means that this relationship will be altered – but both sides should see the opportunity here.
Developing a D2C infrastructure has provided brands with an array of fresh experiences, from improving logistics capabilities to how best to market their products online, and this will help discussions with retailer partners to become far more informed. Rather than acting as a straightforward supplier, brands can behave more as business partners, led by mutually beneficial conversations. Retailers can offer brands more valuable, useful data around which products are selling, how quickly and to who. At the same time, brands can discuss strategy with retailers and may even be able to utilise their newly significant channels to benefit retail partners. By working together to reduce negative e-commerce experiences for their customers, such as poor reviews or out of stock items, brands and retailers can boost product performance and improve together.
No matter how strategies develop in response to the changing retail landscape, brands will remain confident and bullish. In the ChannelAdvisor survey, 92 per cent of the CMOs said they expected it to become even easier for their brand to attract and retain online shoppers across the next 12 months, while 91 per cent said they feel confident their brand’s revenue would grow over the same period.
It is impossible to predict what the next 12 months may hold for the retail industry, especially after such a disruptive period. The past year has been truly transformative for consumers and businesses alike. As the world returns to a new normal, innovative brands and retailers will continue to adapt their hybrid-business model in line with feedback to optimise how they meet their customers’ needs.
To find out more about ChannelAdvisor, visit www.channeladvisor.com/uk
by Vladi Shlesman, Managing Director, EMEA at ChannelAdvisor.