With shopping peaks continuing to drive major sales for brands, it’s more important than ever for retailers to be prepared for moments in the year like Black Friday, Singles’ Day and Cyber Monday. Whilst you might expect the opposite would be true, the Ready or Not? The Digital Commerce Leader report by Wunderman Thompson Commerce found that commerce leaders are actually enthused by the success of these ‘event’ shopping holidays.
Indeed, amidst an uncertain and challenging landscape, the study of 503 senior decision-makers in digital commerce highlighted that chiefs across the board are presenting a positive front: Nearly four-fifths (79%) of digital commerce leaders feel ready to take advantage of the opportunities digital commerce has to offer going forward.
To gain some deeper insight into the findings, we spoke with Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce. Hugh speaks of the challenges faced by leaders in the UK and the US, how they envisage the future of commerce and the way they view Amazon.
How important do you feel ‘event’ shopping (Black Friday, etc) has become in the grand scheme of things?
Retail peaks have grown in importance every year and Black Friday is now the pinnacle of the retail calendar. In 2015 we predicted that Black Friday would be the UK’s first £1bn online shopping day. If you fast-forward four years, we are now seeing week-long sales periods and potentially four times that amount (£4 billion) spent over the Black Friday and Cyber Monday weekend. The figures alone show how important these calendar moments are for retailers.
Possibly the biggest measure of Black Friday’s success is that other days such as Amazon Prime Day and Singles’ Day have made their stamp on retail peaks. And if a retailer cannot be part of the conversation you can almost guarantee they’ll be part of the losers – reputationally and financially.
Do we place too much emphasis on these stunts?
It’s not about retailers putting too much emphasis on ‘stunts’, but these peaks are now ingrained into the retail calendar and expected. And it’s not only retailers that are expected to offer sales but consumers will actively hunt for the best possible deals. Take Amazon as an example. The eCommerce giant offered specific Black Friday deals through voice, not only to increase people’s use of Alexa but to get them to invest in Amazon-own products.
Doing this locks-in the customer to their brand and ultimately drives a higher sales margin over the entire year; once Black Friday finishes customers will continue to use Amazon Alexa, continue to buy products through voice and continue to invest in the brand.
Is Amazon an enemy or a friend?
The reality is that it can be viewed as both – but the best way is to view it as a partner within a balanced commerce strategy. Of course, this partnership needs to be approached with caution. Equally, if you don’t work with them it would be a missed opportunity. Our figures back this up as 57% say the retail giant is holding back their organisation’s growth, however, over three quarters (77%) still look to Amazon for inspiration.
Amazon is commonly seen as a threat because it continues to innovate and disrupt the retail market. However, commerce leaders need to find a way to work with Amazon to benefit the consumer. While the retail giant is a competitor, it is also a platform to give brands and retailers enormous scope to reach millions globally; this reach will expand further once Amazon enters the high-street.
If brands and retailers consider what Amazon can’t do (WACD), it will become evident that there are ways to differentiate in the market and invest in successful digital projects and retain customers. Ultimately, the only way for both Amazon and other commerce leaders to thrive is to share elements of the customer relationship.
What do you think the future of commerce looks like - 2 years from now and 10 years from now?
When it comes to the future of commerce, many organisations are not thinking far enough ahead – they are too concerned about this week’s, this month’s or even this year’s figures. But while they have been focused on 2019, some major players in the market are very much planning for 2029 and beyond – and are defining customer experiences and expectations.
With voice and social commerce becoming more sought after, it should come as no surprise to expect the future of commerce to be online. But the recipe for all great retail experiences remains the same off and online – convenience, reliability, and genuine innovation. The majority of commerce leaders have recognised this with organisations already having a social (70%) and voice (68%) commerce strategy in place, and a further 70% say conversational commerce (instant messaging) will be important to their organisation in the future.
Through social media platforms such as Instagram or Twitter, brands can reach shoppers directly and build a relationship like never before.
Is it start-ups or legacy brands that are the greatest innovators?
In general, we tend to think that start-ups have a better licence to be creative as they are free of legacy issues, or restrictive cultures. However, in the world of commerce, we have found that infrastructure plays such a crucial role that often the big companies have the resources to be innovative at scale.
The best example of this is, of course, Amazon, but even organisations like Walmart are showing that they can be innovative. These investments mean that many of the biggest commerce companies can focus their efforts on data, delivery, and services, and innovate where smaller companies simply do not have the resource or the scale to do so.
How important is creativity in digital commerce?
Very! However, the challenge is that when the word ‘creativity’ is used, we tend to think about visual or audio-visual creativity – adverts, images, etc. When it comes to commerce, creativity takes more forms; whether it is new interfaces through which customers can order, new hardware, faster checkout, or the effective utilisation of data across channels.
A few years ago, retail involved going to physical shops. However, the lines of commerce have been re-drawn with a large dose of creativity. Who would have thought you could access the services of the internet using your voice? Who would have predicted that native AR can ensure that you don’t buy a sofa that can’t fit in your living room?
Without creativity in commerce, we would not have one-click ordering or one-day delivery.
With £255k on average per company per year being wasted, what do you think is the answer to optimising effective digital commerce projects?
The biggest cause of disappointment with projects is a lack of alignment. Over two thirds (34%) blame a lack of alignment with customer needs, followed by logistical issues and the skills to make projects succeed (both at 29%). And the issue stems from the beginning of the journey, where there is often a lack of what customers want from retailers, lack of infrastructure and lack of clarity on what success looks like. Too often, retailers are thinking about the short-term gain, but not considering the biggest picture and that is leading to failed projects.
Should we all be planning further ahead?
The short answer is yes. It’s important to have confidence in business, but one of the reasons why so many brands and retailers find it challenging to move forward is because they lack long-term vision. Amazon and Alibaba succeed because they can see what is coming around the corner, not just what is currently relevant. Commerce leaders plan just 15.5 months into the future on average. UK commerce leaders are taking even less time, planning projects just over a year in advance (13.5 months). Combine this with a lack of alignment that addresses consumers’ desires and wants and it’s easy to see why digital commerce projects are failing.
Hugh Fletcher, Global Head of Consultancy and Innovation, Wunderman Thompson Commerce - With close to 12 years of client-side experience, Hugh’s job is to help clients plan strategically, to prepare and implement digital change, and to ensure their business is ready for the future. Hugh is inspired by learning about new businesses, new sectors and new industries, and working out how his strategic expertise can help clients improve their businesses digitally.