Ben Potter

How the big retailers conquered the recession (and the lessons you can learn from them)

I'd like to start by wishing everyone a very Happy New Year! And what a start to the year it has been. Wherever I turn recently I am being bombarded with news that many of the UK's largest retailers enjoyed a roaring, and in some cases, record Christmas trade. The likes of Next, John Lewis, Marks and Spencer, Gap and House of Fraser are just some of those reporting some mind boggling trading figures. Whoop whoop and high fives all round because after a year of doom and gloom it is both a joy and relief to hear such marvellous success stories. And the even better news, especially if you work in digital, is that the Internet played a defining role for most of these businesses.

Online retailAlthough the recession suffocated the high street in 2009, it appears online retail, or e-tail if you like, may have saved many of our favourite high street names from suffering the same fate as big names such as Woolworths. For many of our largest retailers Internet sales have seemingly countered the losses of a quieter high street. And it’s not just big brands that have experienced this. We work with a small retailer based in Brighton. They invested in their digital marketing strategy at just the right time and it paid dividends in 2009. The client set growth targets of 22% for 2009. They hit 27% and although sales via the physical store were down the web more than made up for it.

But how have retailers achieved this and what can you learn from them? Well first and foremost, and perhaps most importantly, was the ‘fortune favours the brave’ approach taken by major brands and many smaller players alike. The wisest of retailers looked at the situation at the beginning of 2009 and realised to survive they needed to continue investing in marketing, particularly online, by ramping up their efforts in order to match the expectations and demand of their customers. Three key areas have been integral to success:

Improvements to website

Retailers worked hard to improve their websites, with a particular focus on design and user-experience. If there is one analogy that I cannot stop saying to people right now it is this…’you can lead a horse to water but you cannot make it drink’. No words could better describe the workings of a website because in many ways it is relatively easy to drive traffic to your website. However, actually turning visitors into customers is a whole different ball game. Research from Amaze and the University of Glasgow discovered a staggering 87% of customer abandon their baskets before completing their purchase. This should highlight just how hard you have to work to turn an interested window shopper into a purchasing customer.

This challenge is only met with a well designed, intuitive, content-rich website that instils trust in the visitor. Retailers are realising you need to offer a lot more than a list of products. Useful and engaging content, such as ‘how to’ guides, articles, blogs and especially video have become vital to retail websites over the last year or so. Marks and Spencer and ASOS are just a couple of the retailers who have invested heavily in cat walk style video to show their products off in a more engaging way. I don’t have the data available but I bet it’s had a profound impact on conversion rates.

Social media

Many retailers have also embraced social media as a means of creating open dialogue with their prospects and customers. Facebook and Twitter have proven to be particularly powerful tools with retailers looking to connect with their audiences with product updates, sales, promotions and so on. The recent figures released by Dell show that with the right strategy in place Twitter is a viable marketing channel that can be linked directly back to sales and ROI.

The rise of social media has also contributed to retailers upping their game when it comes to service. In an age where blogs, forums and review sites offer an open invitation for customers to say both good and bad things about a brand, companies have realised that they need to wow their customers with great service and communication. The use of social media tools are therefore perfect for creating open dialogue with customers both as a promotional tool and for customer service.

Measurement

Retailers are implementing systems that allow multiple channels to be measured with a high degree of accuracy. In turn, the marketers on the front line can demonstrate to the big cheeses that Internet marketing is not a passing fad but the most targeted, cost effective and measurable means of reaching their target audience available.

It is worth noting that retailers have also benefited from changes in consumer behaviour. The average consumer has become more astute and explorative when buying online meaning they’re investing more time in hunting down a bargain or discount. According to a recent Paypal report, 62% of shoppers believe the best bargains are to be had online. The advent of voucher codes along with the discount boom helps provide a constant incentive for people to browse and spend more time on the Internet than they would normally spend visiting the high street on a Saturday afternoon. (And with that men up and down the country are rejoicing as their better halves turn to the Internet instead of dragging them around the local shopping centre!!).

In a follow up post to this one I’ll be going into more detail on what needs to be included in your digital strategy for 2010 if you are to repeat some of the success stories highlighted above. In the meantime, bear this in mind; Retail Decisions (ReD) has calculated that internet retail sales in the UK hit £49.8 billion in 2009, up 21% from 2008. Overall, up to 33 million consumers made an online purchase last year. And according to research carried out by eDigitalResearch, four in ten consumers plan to spend more online next Christmas due to a positive online experience this year. It might be said therefore that online retail has defied the recession and in my view will continue to do so.

So as we say goodbye to a pretty rotten 2009, it’s time to start afresh and review your plans for 2010 to ensure you are positioning yourself to take full advantage.


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Ben Potter Leapfrogg Digital Marketing Ben Potter
Company: Leapfrogg Digital Marketing
Position: Commercial Director
Commercial Director at Leapfrogg Digital Marketing based in Brighton. Leapfrogg is a specialist digital marketing agency helping premium brands and retailers increase customer acquisition, revenue and market share Read Ben's full bio

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