Improving digital customer experience during the cost-of-living crisis

Ecommerce businesses should double down on smart automation solutions to better support consumers, win trust and generate sales

With prices in the UK currently rocketing at their fastest rate for more than 40 years, the cost-of-living crisis will also have an impact on ecommerce. During this uncertain period, companies should focus on their brand, the technology they have integrated into their online journeys and getting the customer experience right.

Andy Mulcahy, strategy and insight director at IMRG, the trade body considered the voice of online retail in the UK, is in no doubt about the state of the market. “Lots of retailers provide us with their sales figures so we can benchmark performance, and right now, it’s in sharp decline,” he says. “It’s been extremely turbulent recently, but the difference in impact between the pandemic and the cost-of-living crisis is stark.”

The coronavirus crisis was, he says, “the most disruptive thing anyone has ever seen.” But from an online retail perspective, it was a huge accelerator. Lockdowns forced many businesses to enter the world of ecommerce for the first time. Those brave enough to embrace it reaped bountiful rewards. Now, however, with all the low-hanging fruit gobbled and consumers’ purse strings pulled tautly, it’s a different story.

“Today, the growth is low,” says Mulcahy. “It’s negative, year-on-year, and the market is shrinking.” Other metrics analysed by IMRG provoke alarm. “People are spending longer making purchasing decisions online, and looking at Q1 2022 – which is February, March and April, so includes the early fallout from the Ukraine invasion – compared to Q1 last year, the checkout completion has dropped by 22%,” he adds.

Paul Hornby, digital customer experience director at the Very Group, remains bullish about his employer and the industry’s longer-term prospects. “Yes, retail has clearly been impacted,” he says. “But we are confident about the outlook for online retail in the UK.”

Supporting customers in straitened times

As a digital retailer with over 2,000 brands that boasts almost five million active customers and a financial services provider offering its unique version of buy now, pay later (BNPL), the Very Group is well positioned to thrive in the ecommerce space. “As a multi-category retailer, our model is naturally resilient,” says Hornby. “Online is the place to be, and our flexible payment options are really popular with our customers.”

Very Pay, which most customers use, according to Hornby, allows buyers to pay for goods in three interest-free instalments over three months. There is also a BNPL option, enabling consumers to spread the cost over a year. In the current climate, the Very Group is adding value by providing visitors to the company website tips and tricks to better cope with the cost-of-living crisis.

“We’re helping customers by introducing content about money management,” Hornby says. “We aim to be customer champions and natural problem solvers, and so we will always think about different ways throughout the journey that we can help our customers.”

Matthew Parker, country manager of the UK and Ireland at Vonage, a company that builds omnichannel conversations and transforms customer experiences, stresses the urgency for ecommerce organisations to invest in technology solutions; and even more so in these straitened times, to stand out in an increasingly packed market. 

“I’m seeing post-pandemic cost-saving initiatives, but in some areas, companies are doubling down,” he says. “For example, there has been an increase in technology around artificial intelligence and other tools that can bring a level of smart automation to the buyer experience, without losing the human involvement.”

Doubling down on smart automation

Hornby reveals that the Very Group was an early adopter of conversational AI. The organisation initially invested in a chatbot in 2016 to ease the workload on employees answering simple queries. “We very quickly partnered with IBM Watson to utilise its AI to help us understand customer sentiment, but also to generate the right answers,” he says.

The chatbot facility proved invaluable for the Very Group’s customers and its contact centre staff last Christmas as it was used almost 140,000 times, reducing telephone calls by 17% compared to the previous peak. Hornby states the maturity of smart automation makes it a compelling business case for those looking to boost digital customer experience.

The market’s only going to become more competitive, so speed to market is critical. That speed comes partly from the process and partly from technology. But, most critically, everything you do must truly serve your customers’ needs

“If a customer comes to the website or our smartphone app and asks a question that is more complex than the chatbot can handle, it will elegantly hand that over to one of our customer care colleagues so there is the appropriate level of human intervention,” he says. “We will definitely continue to invest in this technology.”

Mulcahy argues that ecommerce businesses don’t have to spend big on improving digital customer experience; sometimes, a little goes a long way. “If you took two websites and they both have exactly the same products at the same prices, one can generate more sales just by optimising certain bits,” he says. “You might offer free delivery, for instance, or it’s easier to navigate. There are many things you could do, and now with traffic expensive to pay for and conversion rates down, this stuff is essential to get right.”

Hornby agrees: “Having friction throughout the user journey is a surefire way to send the customer into the arms of a competitor, so we have to obsess about the problems on our site and solve them.”

Top tips to improve digital customer experience

Parker from Vonage believes the way to improve digital customer experience is by ultimately being a trusted retailer. “Trust boils down to four things: integrity, intent, capabilities and track record,” he says. “Brands that best demonstrate those four things, focus on customer needs, and don’t bombard people, will do the best.”

And for ecommerce players unsure about their future, or where to invest, Mulcahy offers soothing words. “Don’t panic. It is a very different time, but it’s rough for most businesses. Those who focus on building their brand and make the online journey simple will do well.”

Hornby stresses the importance of keeping the customer at the heart of any digital design. Forget futuristic and hyped concepts, such as shopping in the metaverse or non-fungible tokens; what consumers want today, especially during this cost-of-living crisis, is a retailer they can rely upon that serves them well.

“You have to embed the customer in all of your thinking, which is easy to say but difficult to do,” he says. “The market’s only going to become more competitive, so speed to market is critical. That speed comes partly from the process and partly from technology. But, most critically, everything you do must truly serve your customers’ needs.”

Retailers have had to face years of disruptive events. But, armed with the technology and the online know-how, they can now ensure they get the digital customer experience right for all their audiences.

This article was first published on in August 2022 – it’s a write-up of a virtual roundtable that I moderated, sponsored by Vonage

‘Cash is no longer king’: the rapid shift to e-commerce

Customer shopping habits have been completely reshaped in recent years, with the boom in global e-commerce market sales predicted to be here to stay. So what can retail businesses do to adapt?

The retail industry has undergone a radical transformation. Even before the Covid pandemic, the shift to e-commerce was completely reshaping how the industry operates and how customers shop.

But lockdowns made these shifts more rapid and seismic, forcing businesses and consumers to shop online at record levels. The pandemic also expedited the adoption of in-store contactless payments. Research from UK Finance, which represents the banking and finance industry, found that 27% of all payments in 2020 were contactless, up from 7% five years ago.

While people have been talking about the shift to e-commerce for decades, we are now getting a much more definitive and enduring sense of what that transformation actually looks like, and what it means for retail businesses.

“Finally, cash is no longer king,” says Jacob Rider, senior programme manager at Projective, a financial business, technology and innovation consulting firm. “Notes and coins went out of widespread use during the pandemic, while payments innovation in the contactless space – and the relaxing of regulations allowing the upping of limits – means digital and contactless payment with card or phone, or wear[able] tech, is now the preferred method of payment for many.”

This means that trust is now of paramount importance – for both retailers and consumers alike. “Businesses are frantically working on recovering from the pandemic disruption, and they need to instil trust,” says Harshna Cayley, managing director, gateway products at Barclaycard Business. “Comfort and security is top of mind for a range of businesses, whether large or small.”

Another effect of these trends is the way physical and online retail shopping have increasingly blended into one experience. However customers choose to shop, they expect the benefits of both approaches. For instance, some might wish to order online and then pick up in store, or they want to try out products in store and then have the purchase fulfilled online.

Alternatively, they might expect their in-person shopping experiences to be more personalised. Retailers have often found themselves having to shapeshift in response to this demand for seamlessness and ease – and key to this are so-called omnichannel payments systems, which allow retailers to offer near-frictionless online payments regardless of whether customers are shopping in person, online or via mobile.

Analysts suggest that the ability to offer frictionless payments is critical in business. “A flawless digital experience is now required to compete,” says Rider. “Brands need to innovate again if they want a customer payments experience advantage.”

For example, regardless of how smoothly a customer progresses on their e-commerce purchasing journey – browsing, comparing and choosing an item – it is likely to come to a shuddering halt if the payment experience is challenging.

According to Barclaycard research, £39bn worth of online shopping baskets have been abandoned since the start of the pandemic. Typical reasons for customers abandoning their cart include delivery fees, concerns about cybersecurity, and the absence of their chosen payment method.

These stats don’t surprise Nick Maynard, head of research at Juniper Research, which specialises in financial and payment technologies. “Generally, friction is the main reason for cart abandonment,” he says. “This can come in many shapes or forms, including the inability to use a preferred payment method, poor design, or onerous security steps.”

Cayley argues that a robust payment gateway is crucial for online retailers. A payment gateway is essentially a communication layer that sends payment information securely from the acquirer to the customer’s issuing bank, and back again. “Barclaycard payment gateway seamlessly connects the customer’s website with our payment system,” she says. “Then it securely captures and encrypts transactions, passing the necessary information between the end customer, the merchant, and the acquiring bank.”

She notes that Barclaycard payment gateway is easy to integrate and scales depending on business needs, adding that it can improve the customer experience while helping companies comply with regulations and meet their legal obligations.

Recent global events have brought into focus other shifts in the e-commerce landscape, such as the entry of more manufacturers into the direct-to-consumer retail space. Likewise, international sales have become an increasingly important way for retailers to plug the gaps left by supply chain problems and the decline of bricks and mortar trading.

In a sense, omnichannel payments are evolving into omnipresent experiences and, as such, we can expect further rapid developments in this space, according to Jeroen Hölscher, head of global payments and cards practice at Capgemini, an IT services and consulting company. “Customers and businesses are undergoing a radical shift to digital wallets, mobile payments, virtual cards and other advanced payment solutions, which offer feature-rich, hyper-personalised digital payments experience,” he says. 

“Already, digital wallets are one of the most preferred payment methods for e-commerce purchases. Global e-commerce market sales are predicted to surpass $7tn (£5tn) by 2024, and digital wallets are expected to account for more than 50% of all the e-commerce payments.”

More recently, e-commerce merchants were once again buoyed up by Black Friday last year, with the number of payments made via Barclaycard up by 23% between midnight and 5pm compared with the same period in 2020, and up 2.4% on 2019.

“The prize for retailers is huge, with the bounce-back of the economy and consumers looking to spend,” says Cayley. “There is a massive opportunity to drive e-commerce.”

This article, sponsored by Barclaycard, was first published by Guardian Labs in January 2022

Reimagining digital customer experience and brand engagement

As companies strive toward a frictionless digital experience, they must find ways to improve customer loyalty and trust. How will digital customer experience evolve in the coming year?

The pandemic-induced explosion of ecommerce and the acceleration of digital transformation means that most companies will re-examine and revamp their customer experience strategies and capabilities in the coming year. With customer loyalty increasingly difficult to gain and sustain, pioneering, data-powered technologies will improve the seamlessness of these digital experiences and deliver better brand engagement.

A dozen leaders in the customer experience (CX) space spanning a range of industries – including healthcare, travel, insurance, and banking – met to discuss challenges and solutions, and debate the direction of travel in the coming year. 

The lively discussion, supported by Vonage, a global business cloud communications leader, examined customer loyalty and trust, delivering CX with less friction, and how digital CX and brand engagement might develop in the coming year.

The conversation took off with Jack Smith, director of digital at British Airways (BA), who stressed the importance of ‘human touch’ with CX, an even more crucial point in the digital age. He said that BA is both “fortunate and unfortunate” because it is a well-recognised UK organisation.

When Smith joined BA, in 2017, there was much work to do on the digital CX front. “The challenge was that the digital channels didn’t represent the same human touch evident on our flights,” he said. “The tone of voice was robotic, like a booking system, and there was no conversation.”

While chatbots and other digital solutions are popular, Smith warned: “These wonderful bits of technology and digital channels miss the point if you are led by tech; you have to remember there’s a person at the other end.”

Lucy Jones, vice president of clinical at Oviva, noted that organisations now have the challenge of meeting ever-rising customer expectations. These have drastically evolved with the shift to digital platforms for ecommerce and thanks to the acceleration of digital transformation in health and communication since the start of the pandemic. As a result, retaining customer loyalty is perilously tricky.

Building trust is a must

“Digital loyalty is not like bricks-and-mortar businesses where the cost and complexity of transitioning [to a rival] is enough to buy a little slack,” Jones said. “In the digital space, it’s simple for that alliance to be lost if we are not meeting customer expectations.” Therefore, she added, it is imperative to build trust through “providing a seamless experience, avoiding wait and holding true to your promises.”

Avoiding friction is essential, agreed James Elliott, head of customer and commercial experience at Bupa Global. “We’re desperately trying not to make the mistake of creating infinite loops for customers to fall into,” he said. “We are attempting to educate customers to make the right choice, but still 40% of them want to contact us via email, which is not an optimal, quick experience. 

Elliott added: “We want to create a digital-first portal to triage and prioritise customer needs, whether it’s an urgent phone call or a scheduled outbound call at their convenience. What you don’t want is to spend 20 minutes searching through the frequently asked questions and then another 20 minutes finding a customer service telephone number.”

Digital loyalty is effectively achieved through more personalised and omnichannel [experiences], but fundamentally it won’t work just with technology; it has to have an emotional connection with the customer

Educating customers was also high up on the list for Dr Alice Pan, global chief medical officer at Bima,a provider of health and insurance solutions for the emerging middle class in Asia and Africa. Digital technologies, she says, can not only support diagnosis and treatment of health conditions but also enable prevention and wellness promotion.

But there has been a learning curve for Bima as well. Lockdowns and the need for treatments led to Bima offering a telemedicine service in the last year, and the uptake has been incredible. “Our internal research shows that after the first use of telemedicine, the percentage of people selecting it as their preferred channel of accessing healthcare went from 5.8% to 58%,” she said. “It shows that trying something for the first time can shatter preconceptions.”

Be true to your purpose

Conny Kalcher, group chief customer officer at Zurich, identified a “major change” in what customers – especially younger generations – expect from organisations. “They want to buy from brands that do good, not just [those] doing well in business,” she said. When Kalcher took up her new role at the global insurance firm in July 2019, she updated the company’s purpose to be more ambitious and less self-interested. 

“It was ‘we are here to protect you,’ but – guess what – all insurance companies are here to protect you,” she said. “It was not a unique message, so we co-created with customers to develop a new, inclusive purpose, which is ‘create a brighter future together.’ The younger parts of our customer base desire not just a brand purpose, but a sense of community. However, if you define your purpose, it’s not just nice words on a piece of paper; you have to live by that purpose.”

However, Dr Anthoula Madden, managing director of customer experience at Accenture, said the supposed digital divide between generations is narrowing. She pointed out that the pandemic triggered a 160% increase in ecommerce from “new or low-frequency users.” She said: “The generational gap around digital seems to be fading away, and more consumers of all ages are very comfortable with shopping online, especially using their smartphones.”

Research from Oviva supported this. Jones said: “I was surprised that 60% of customers across Europe will either mostly or only use a mobile phone for engaging in shopping and interacting with services such as healthcare; and it’s not just those under the age of 25, it’s across the board.”

Additionally, Madden encouraged businesses to invest in technology solutions, but do so in an agile way, testing and learning what might work best. “You need to be prepared to experiment. Fail fast. Just try it out, and if it doesn’t work, try something else.”

Value exchange: more choice and customer empowerment

For Stephen Gilbert, EMEA loyalty solutions director at Collinson, a company that offers loyalty programme solutions and owns airport lounge and experiences programme, Priority Pass, funding tech projects is not enough. He said: “Digital loyalty is effectively achieved through more personalised and omnichannel [experiences], but fundamentally it won’t work just with technology; it has to have an emotional connection with the customer.”

Gilbert added: “That’s the strategy piece you have to determine. There has to be a perceived value exchange between the customer and the brand. That is one of the keys to a loyalty programme.” But, he warned: “If organisations don’t see this as part of their branding and view it as digital marketing alongside a piece of technology, it will fail.”

What you don’t want is to ask people to remember the first, third and seventh digits of a passcode they have not used in years and leave them in a doom loop of password hell.

That insight resonated with Sue Bradley, director of customer experience delivery at Tui, the world’s largest leisure, travel and tourism company. Tui announced it was investing more in advertising to support the launch of the new ‘Live Happy’ campaign and to drive online sales. Bradley revealed the thoughts behind the recent ‘Live happy’ campaign.

“We wanted ‘Live happy’ to be inspirational,” said Bradley. “Tui offers a wide range of products, as well as the beach package holidays which we’re well known for, we also offer cities, tours cruises and ski. Our customers want to know that they are going to have fun when they go on holiday and at Tui, we help create those moments that make life richer. We also recognise the importance of experience. This week we launched the ‘Makers of happy,’ [referring to] our colleagues who make it memorable and personal for our customers.”

Tui has also released a new smartphone application to guide the customer journey. As well as being able to chat to the team 24/7, the app shows flight information, plus details about transfers including coach number and location. “It makes it far simpler,” said Bradley. “But what we found is more than ever, in this time of a global pandemic, people want that human touch.”

Reducing friction: beware the password doom loop 

Integrating people into the digital experience was a key focus for most. Kalcher said: “A younger person might not want to talk to an agent, they prefer to find their own way, while other customers might need that personal assurance. So, it’s all about understanding your different customer segments and letting customers choose how to interact with the company.”

Smith concurred that empowering the customer is vital. But some brands miss the mark in this respect. “People often confuse ‘automation’ and ‘digital,’” he said. “They think that digital is a way to remove and automate processes, and it’s not. It can be hugely enabling, but there has to be that human need and human touch. 

He added: “For example, if you have a healthcare app that provides the patient with all their details and data, they are empowered. But it doesn’t mean they want to be left alone.”

On the topic of friction, Lisa Scott, chief marketing officer of Banked, a global payments network “built on modern bank rails,” said the Strong Customer Authentication rules, introduced by the Financial Conduct Authority, has meant another layer of verification has slowed the online purchase process in the financial services industry – and perhaps that is no bad thing. The frustration, though, is that there are so many methods of secondary authentication across various apps. 

“Do you want that additional verification to be an SMS message notification,” she asked. “Could it be something like your fingerprint or facial recognition? If they can make it simple and quick, and thereby reduce friction, then that’s good. What you don’t want is to ask people to remember the first, third and seventh digits of a passcode they have not used in years and leave them in a doom loop of password hell.”

Direction of travel: be cleverer with data use 

Looking at how CX might develop in the coming years, Ashish Bhardwaj, senior solutions architect at Informa, emphasised the importance of data. Make sure you gather customer data and compliment it with secondary data,” he said. “You can personalise experiences and make relevant, proactive suggestions for the customer. The use of data and the tone in which it is communicated should be a careful choice from the marketing and communications teams.”

Madden confessed to being a “big fan” of the John Lewis app. “It’s amazing,” she said. “It shows your loyalty card, all your receipts, and it’s quite personalised. As long as I can see some value in engaging with that brand, then I will do so, but if you are a brand that keeps bombarding me with meaningless emails, I will block you.”

Looking further ahead, Mohammad Al-Ubaydli, CEO of Patients Know Best, predicted that sustainability could – and should – feature more prominently in CX, for the greater good. He said of COP26 that he sensed a groundswell of public demand for greater environmentally friendly processes.

Al-Ubaydli said: “When I consider the next 10 years in healthcare, the big question is: with an ageing population, how can you continue to deliver universal coverage? Everyone’s talking about not having enough money to help, but even if there was enough money, there are not enough professionals to look after everyone. The only solution is digital. If a person obtains their test results and knows what to do, it avoids clogging up an appointment with the doctor.

With the COP26 refrain of “keep 1.5 alive” possibly still ringing in his ears, Al-Ubaydli suggested that the desire to embrace digital solutions would be much greater in 20 years, as patients strive for more sustainable – and less wasteful – healthcare. “If we want to be able to afford universal coverage structurally, then you must allow people to have the medical data to look after themselves.”

He added: “About 5% of the vehicles on the UK’s roads are related to the National Health Service. Indeed, 5% of carbon emissions in the developing world are healthcare-related. So, if you can prevent the need to travel, stop the need for operations and so on, that is a serious contribution to reducing carbon. By protecting the patient, you protect the healthcare system, and ultimately you protect the planet.” 

Clearly, environmental concerns are one more factor to add to the already complicated world of digital CX, which has undergone incredible evolution in the last couple of years, spurred by the coronavirus fallout. Customers are increasingly demanding, but organisations that fail to keep pace will see brand engagement and loyalty melt away.

This article, sponsored by Vonage, was first published on Raconteur in November 2021

Generation game: how to sell to all ages

While consumers in different demographics have varying priorities when it comes to online shopping, they’re all losing tolerance for substandard etail experiences

Gertrude Stein, the avant-garde novelist and poet, declared that “whoever said money can’t buy happiness simply didn’t know where to go shopping”. The meteoric rise of ecommerce has, 75 years after her death, given this aphorism added meaning.

Thanks to the power of the internet and the ubiquity of smart devices and applications, today’s consumers have never had more places to go shopping and be happy, without even having to leave their homes. With such a wealth of choice at their fingertips, they’re unlikely to be patient when a retailer fails to hit the standard of ecommerce experience to which they’ve become accustomed.

Any brand that fails to engage with its target customers in their preferred place to shop will pay a heavy price. The lack of an effective ecommerce strategy has proved damaging for Topshop, Debenhams and Primark, to name but three laggards.

Research shows that 51% of consumers now want a mix of both bricks and clicks for the best experience

It’s clear that retailers need to keep pace with consumers’ changing requirements to survive. The digitalisation of the shopping experience, accelerated by the Covid-19 lockdowns, has transformed how customer loyalty is gained and lost. New statistics indicate what shoppers want from etailers varies depending on their age. 

A survey published by Sitecore, a company focused on improving consumers’ online experiences, suggests that 61% of 18- to 24-year olds are less loyal to brands than they were before the pandemic, compared with 33% of baby-boomers, while 69% of these post-millennials have become less patient with poorly functioning websites. 

Meanwhile, research from customer-service software firm Zendesk has indicated that 80% of UK consumers will switch retailers after only one bad experience. 

A great opportunity to innovate and expand the customer base

“The pandemic has undoubtedly changed the way we shop,” says Jeni Mundy, Visa’s MD in the UK and Ireland. “Our research shows that 51% of consumers now want a mix of both bricks and clicks for the best experience.”

She continues: “As the lines between offline and online continue to blur, there is great opportunity for businesses to keep innovating to reach new shoppers, expand their customer base and build their brands. But different generations and age groups have varying priorities, so it’s more important than ever for retailers to tailor their websites and social media offerings to meet their target audiences’ needs.”

Visa’s research suggests that 18- to 34-year-olds shop mainly online for a wide variety of goods and services. “Updating your website to showcase the full range of products is a good way to attract this audience,” Mundy recommends. “Many in this age group are also likely to shop on social media, so having a presence here and switching on the ‘swipe up to shop’ functionality is a great way to meet them.”

Social media campaigns and digital events encourage micro-influencers

Studies show that consumers aged between 35 and 54 most want an efficient online shopping experience. A well-signposted website is therefore vital. For people aged 55 and above, simplicity is the key, so maintaining an uncluttered, straightforward page design should help to attract and retain them as customers. 

Francesca Grillini, an ecommerce manager at Reckitt, points out that social media platforms ranging from TikTok and Clubhouse to Instagram and Facebook are especially popular among both millennial and gen-Z audiences. 

“Members of generation Z are digital natives who have attention spans of eight seconds, compared with millennials’ 12 seconds. Yet they are notoriously loyal,” she says. “They can quickly become brand ambassadors, acting as micro-influencers on social channels.”

Ecommerce is “more about necessity” for baby boomers, she says, suggesting that people in this generation have changed their shopping behaviour the most during the pandemic. Ecommerce has “opened previously closed doors” for boomers, many of whom have been forced to shop online more often because of lockdowns and health concerns. 

The Covid crisis obliged most high-street businesses to close their doors at various points over the past 18 months. North London restaurant Top Cuvée was among them, but it took a glass-half-full approach to the problem and has successfully turned to ecommerce, becoming an online wine supplier. It has fostered customer loyalty by adopting a multichannel marketing strategy, including email newsletters, social media campaigns (the firm’s Instagram following has grown tenfold to 35,000 in a year) and interactive online events. 

Brodie Meah, co-founder and chef at Top Cuvée, says: “Our mailing list is a great way of keeping people informed and engaged, but we generate a lot of sales from social media too. We recently held a digital Easter egg hunt, which drove mass engagement online as well as attracting over 1,000 customers to our physical store.”

Tom Pugh is director of client services at Revive Management, a software company specialising in payment systems. He salutes any retail business that’s willing to embrace a multichannel approach. 

“There is a huge demand for them to accelerate, improve and enhance their digital capabilities and to blend these with in-store experiences to add value,” he says. “Omnichannel strategies allow businesses to create breadth and increased accessibility to their customers.”

Connecting with consumers across various channels enables a deeper understanding of their generational habits, which is why investment in ecommerce is worthwhile, Pugh adds. “Providing customers with a variety of channels of engagement is key, as it empowers them to interact via their preferred channel.” 

After all, shopping instils happiness – as Gertrude Stein would concur.

This article originally featured in Raconteur’s Future of Ecommerce report, published in June 2021

Taking a peek at the new retail calendar

What happens to Black Friday when customers can’t jostle in the aisles? Or Christmas shopping season when we can’t hit the high street? Experts think these dates will become part of a whole new online retail calendar

Will it be a happy Christmas for UK retailers? After the coronavirus pandemic squeezing the life out of the high street, they certainly deserve some cheer. Data shows their fortunes could be resurrected by ecommerce. But given the shift to online, and the evolution of shopping habits, what does it mean for the traditional retail calendar?

New data from Adobe indicates activity around key retail dates will begin earlier, and peak retail occasions will be higher and more prolonged. According to the software giant’s international president Paul Robson, online holiday sales will “shatter all previous records”.

This is supported by Adobe’s projections that, in America alone, Black Friday will generate $10 billion (£7.5 billion) in online sales. “That’s a 39 per cent year-on-year increase,” says Robson. “Cyber Monday will remain the biggest online shopping day of the year,” he continues, adding that $12.7 billion (£9.6 billion) is expected to be spent in the United States, up 35 per cent on last year.

Robson says: “Our research into the online shopping habits of UK consumers during lockdown found that while they were up to four times more likely to buy from marketplaces like Amazon, it’s not always at the expense of smaller independent retailers. Where marketplaces may have the edge when it comes to convenience and speed, shoppers have also shown they are keen to support local, independent retailers where they can.

“The extended shopping period, coupled with the ability of independent retailers to deliver great, personalised digital experiences, could see them have a happier Christmas period than many might expect.”

Looking beyond traditional retail peaks

Google data also implies the retail calendar needs updating. “As a direct result of COVID-19, we have witnessed heightened search queries for online retail this year that will lead to a new baseline for Black Friday,” says Becky Power, director of consumer retail and technology at Google UK. “Google searches for ‘early Black Friday deals’ were up by 150 per cent versus November 2019.” Further, Google searches for “Christmas shopping” are up 1,800 per cent compared to the same period last year.

“The message is clear: consumers are looking beyond traditional peaks in the retail calendar as they continue to enjoy the flexibility of browsing online,” says Power, who points out that Enders research estimates there will be an additional £4.5 billion-worth of online sales in 2020.

Retail owners must keep pace with customer expectations and arm themselves with technology that enables multi-channel personalisation and improves data analysis. “Given that a continually growing number of consumers are already shopping online for traditional peaks, retailers will have to adapt to be ready for this rise in demand,” says Power. “Digital tools are imperative for applying product promotions easily and quickly, boosting retailers’ visibility to new customers, and can uncover meaningful insights from their performance.”

Kyle Harbinson, of global technology consultants REPL Group, agrees. “To reduce the impact of the troughs, retailers need to connect with and understand the circumstances of their customers, in a dynamically changing environment,” the consulting partner says. “We are in uncharted territory, so retailers need to pivot from instinct-driven decision-making to a data-driven culture.”

Taking steps to bolster the online offering

Warnings are being heeded. Capgemini’s annual Holiday Shopping Survey reports that while more than a third (36 per cent) of UK retailers expect an increase in holiday sales compared to previous years, 91 per cent have taken deliberate steps to bolster their online offering. Almost half (47 per cent) have improved their ecommerce propositions and 52 per cent will offer more generous discounts both online and in-store.

The benefit ecommerce brings allows you to create and build your own peak retail event

However, Dr Rajesh Bhargave, associate professor of marketing at Imperial College Business School, cautions that one issue retailers will face post-COVID-19 is the dilemma of “sticky prices”. “Consumers tend to remember what they would have paid previously for a product, so would view price increases as unjust in poor economic conditions,” he says. “Similarly, cutting prices would erode pricing power.”

No retailers should be discouraged from embracing ecommerce, however, stresses author and business consultant Erica Wolfe-Murray. “The hype surrounding traditional retail peak days has a halo effect across the board whether you are actively marketing or not,” she says. “But the benefit ecommerce brings allows you to create and build your own peak retail event. Think ‘Founder’s Day’, ‘Dress-Up Day’, or whatever.”

Embracing technology is business-critical

Technology can also help with the morphing of traditional peak retail periods, from dealing with stock management and the supply chain, to predicting when more staff might be required. Or with improving the delivery process, posits Mike Hancox, chief executive of UK couriers Yodel. “The five months stretching from November to the end of March have long been the busiest period for those in logistics as they encompass retail’s traditional peaks of Black Friday, Christmas, Valentine’s Day and Mother’s Day,” he says.

“This year we’re expecting Christmas to be higher in intensity and longer in duration than previous years, but a greater increase in overall volumes means the fluctuations seen in previous years could be less pronounced in the future.”

Yodel has developed a parcel-scanning app to streamline the delivery process. “It gives more flexibility to the growing numbers of self-employed couriers out on the road who can download the app on their own devices rather than having to get up to speed with a handheld terminal.”

Striving to reduce touchpoints and frictions through tech is now business critical, argues Professor Laurent Muzellec, founder and director of Trinity Centre for Digital Business. “Big digital players such as Netflix, Amazon and Apple use artificial intelligence to produce an effortless experience; this should be a source of inspiration for all retailers,” he says.

Retailers that act on this advice and tailor their offerings, both online and offline, look set to have a happy Christmas and beyond.

This article was originally published in Raconteur’s Future of Retail report in November 2020