Fishburn Hedges

18.05.2011

2011: the year when hardly a day goes by without the release of a new set of statistics to illustrate the dire straits in which the retail industry currently finds itself. Following recent BRC data about falling sales (April’s slightly more optimistic results being attributed by many to the bank holiday bonanza halo effect), the E&Y Item Club is the latest organisation to deliver a gloomy forecast for the sector - predicting challenging trading conditions and reduced consumer spending for the next few years.

Can technology save our shops?

This of course isn’t news for many brands. Recent months have seen several high-profile appointments, such as that of Laura Wade-Gery as ecommerce and multi-channel director at M&S, and announcements of big moves into multi-channel (the integration of online and offline shopping), as retailers look to keep up with the pace of change. Without doubt, a willingness and ability to embrace new technology in retail is going to become even more of a differentiator as brands try and prepare for an unpredictable future.

Operationally, many retailers are getting there, with better, ‘socialised’ websites and an increasing number of useful smartphone apps, meaning that sales aren’t quite so dependent on footfall in uninspiring and dilapidated town centres as they once were.

What role for comms?

The question we need to answer as communications professionals is what we can do to help our retail clients ensure that they are well-placed to deal with the changing habits of the modern shopper, as well as the opportunities offered by technology.

For us, the key thing is to ensure that technological developments are not made in silos and that where possible, marketing and PR teams have the opportunity to help shape multi-channel strategies which, in turn, form part of a broader brand narrative. Getting it wrong will not just have a short-term impact on customer service but a bad user experience can affect corporate reputation, sometimes within minutes.

‘Social commerce’ offers lots of opportunities for retailers, for example via Groupon or Wahanda-esque group-based shopping. But these volume deals can put a huge resource-strain on participating retailers and not necessarily result in the expected uplift in longer-term brand awareness or loyalty.

Where multi-channel meets social media

Depending on the brand in question, it might be advisable to start slowly cultivating a loyal community online, for example via Facebook, offering access to special offers and opportunities to win prizes to those who participate, as well as regularly responding to fans’ questions and suggestions. John Lewis’ Facebook page is one good example.

In due course, these fans can be encouraged to shift to multi-channel purchasing, with the whole experience acting as a seamless reflection of the shop in cyberspace or indeed, in the palm of the shopper’s hand. A US study by Syncapse recently found that someone who has ‘liked’ a brand on Facebook will spend an average of $71.84 more each year on that brand’s products or services than will someone who has not so there is certainly a commercial rationale behind investing in your online community.

Retailers certainly have a fight ahead of them for their share of consumers’ dwindling discretionary spend but they’ll do themselves a disservice by thinking it all depends on footfall on the high street. Initiatives like Facebook Places Deals, currently depend on the consumer physically going in to a store to redeem a special offer. However, before long, stores themselves may become little more than a theatrical prop, and it’s this shift that brands need to be ready for.

Posted by Joanna Kwiatkowska (as featured in reputation online)