Peer Panel

As more and more consumers go online, Marketing Week brought together a panel of five etail experts to give their views about the sector’s burning issues.

The Panel

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Marketing Week (MW): Is retailing the main use for your digital operations?

SL: QVC is a retailer so that is our focus. As well as the website, we have a mobile application and red button interactivity on Sky, Virgin and Freeview. With the exception of Freeview, these are fully transactional with real-time stock updates.

However, our business is all about building customer relationships to stimulate long-term purchasing from our platforms, so we use digital technology to drive interactions with our customer base through blogs, forums, ratings and reviews.

Our differentiator is that we use video clips from our live broadcast online, trying to educate the customer by demonstrating the benefits and uses of a particular product. This aims to enhance the online customer experience.

EJ: Digital is everywhere in our business. The UK leads the world in grocery ecommerce and with key players such as Tesco opening up their application programming interface and continuing to innovate, I have a huge amount of confidence in this sector. Brand building is also incredibly important to P&G. Earlier this year, we used social gaming on Facebook to support a key launch.

MT: Shop.com is a shopping engine. Our function is to help consumers browse, compare and buy products from the UK’s leading online retail stores. We try to achieve brand building through developing our site, which is our product, and delivering a great service to our customers. Big, fancy offline branding activity hasn’t delivered a return on investment for us.

SP: We7 provides an online music jukebox that lets consumers listen to

any song or album in our catalogue (4 million at the moment) for free or buy full songs and full albums. The digital operation also allows us to syndicate music to other publishers such as NME, The Guardian, GQ and many others to build audience reach – again, providing value for potential brands. We combine retailing with a place to get over brand stories and ideas.

DC: Nissan’s online presence aims to build brand opinion before potential customers visit dealerships and physically get in touch with our products. With the established framework of franchise networks and complex distribution agreements, moving to online retailing is not straightforward.

Retailing from our website will come at some point, although the barriers are high. A car is an emotional purchase, a technical product and an investment. Most customers need to test and touch before they make a decision. Nissan had a very successful “toe in the water” with the GT-R supercar, which you could only pre-order online. We learned a lot of lessons from that exercise.

The next test for etailing for Nissan is our electric vehicle range. The cars represent a new way of moving, and we need a new way of selling.

MW: What is the biggest challenge in online retailing at the moment?

SP: We7 lets people listen to all the music they want for free via streaming and buy what they want in MP3 form. Many people ask: “Why buy if it’s free?” By providing a “better than free” model, we aim to turn more people away from piracy into the legal net. The biggest challenge continues to be the fact that consumers’ use of music is changing faster than the industry can understand; there are no single silver bullets in retailing anymore, just an infinite number of preferred ways of consumption depending on access and context.

MT: A big challenge is differentiating our brand and offering a unique selling point in an increasingly commoditised retail market. Low barriers to entry allow multiple versions of any business model to spring up overnight. The difference between a company doing a great job and one doing an average job can appear marginal, especially to a first-time customer.

SL: The heart of our business is live broadcast and the “buy it now before it sells out” impulse shopping format. Online, however, customers have a broader browsing experience and extended range. Our challenge is to continue to develop these two modes of purchasing, both as standalone and integrated offerings.

MW: How should brands be using social media such as Twitter and Facebook to support etailing? Or shouldn’t they?

DC: Not yet. Brands need to build a reason to exist online before they “push”. Social media is like a personal relationship. Your friends would quickly get bored of you if you kept asking them for money or favours without something in return.

Be a good friend online. Give value through content, entertainment and beneficial services. Then give people easy access to your sales platforms (in our case, preferential test drive terms or specific offers) but don’t push it. Those friends will lend you money without you having to ask if you have been a good friend to them.

MT: The necessary level of engagement with social networks varies by brand and vertical. For many organisations, social media is still a potential channel rather than a legitimate current revenue stream. In shopping comparison, there is a big opportunity to marry the inclusive, engaging and fun elements of the online shopping experience with the similar community elements of social networking. We are focused on producing professional and user-generated content alongside our comparison shopping functionality to create a community shopping experience.

SP: The “or shouldn’t they?” part of the question really sums up social media for me. Many brands get seduced by the sheer volume of users – 100 million here, 200 million there and so on. But in social networks the most important thing is context: why is the user there and what are they there for? If you don’t understand that, brands can alienate audiences they are trying to befriend.

Understanding the context and enabling the reasons people are there – or even providing the reason to be there – can make a massive difference. Etailers that use social networks for display advertising will normally find abysmal clickthrough rates and poor branding as quite often it just doesn’t fit. Etailers that try to provide value to the context and become a friend to consumers can see great results.

SL: This is the decade of customer engagement. The days of broadcasting a message or brand positioning at your target audience are over. Social media channels are all about conversation and dialogue – and ultimately influence. They are great engagement tools.

Social media gives us another route for engaging with specific communities of interest, key influencers, our customers and viewers. It’s also a great listening platform. As we build our social media platform, there are three things we will not be doing – faking it, hard selling and butting into community conversations with corporate viewpoints.

EJ: Brands should absolutely use social media – brands should be wherever their consumers are, provided they always add to the experience. A great idea can make the most seemingly unlikely brand welcome in these new environments. Comparethemarket’s meerkat character Aleksandr Orlov is a great example of this with over 30,000 followers on Twitter and 613,000 fans on Facebook.

Social media does not have a single purpose – it can be used for branding as well as more functionally as a customer support channel. Ocado does a great job on Twitter providing support to shoppers in a medium they choose.

This is the decade of customer engagement… Social media channels are all about conversation and dialogue – and ultimately influence. They are great engagement tools. Sue Leeson, QVC

MW: How have you been able to effectively use personalisation in your etail or activities to help drive purchases?

SP: Here you have to be clearly aware of relevance – with personalisation, you are moving closer to the consumer and crossing the intimate zone. If you get the relevance right, you can make it a powerful tool to get a sale. Get it wrong and project a purchase opportunity out of context or that is irrelevant, then you have crossed a line and can quickly alienate yourself – making it harder next time.

DC: We haven’t done this yet but it’s definitely our direction. People need to land on a different page, see different content and be offered different products and services depending on their profile and their previous experience with us. We have already kicked off an integrated eCRM programme which is personalised and will become more and more so over time.

MT: The most obvious but complicated personalisation tool is a search function. If you rely on third-party content, as we do, this becomes even more complex. Algorithmically ensuring relevant search results are displayed for terms that a human can comprehend quite easily is an ongoing task.

SL: We use an array of targeted direct marketing initiatives to drive increased sales volumes based on our knowledge of our customers’ shopping behaviours. The future will bring with it more and more personalisation and we are currently exploring a selection of initiatives that will meet this trend.

EJ: Personalisation is key to simplifying what can be an overwhelming experience online. Internet-based operators who do not have the space constraints of physical stores can offer incredibly large ranges.

Deep shopper understanding that drives the presentation of the online range can help shoppers navigate the online store without issue. Personalisation in the future will provide shoppers with an individual shop that is unique to them – the layout, the range that is presented, and even the services. Consumer want their demands met as quickly as possible, and personalisation is the shortcut to meeting that.

NikeiD is rightly lauded because it is a great example of bringing content and commerce together, which many brands still keep quite separate. Emma Jenkins, Procter & Gamble

MW: Which brands get etailing right and why?

MT: I really like the stuff Nike did with its iD range [where you can design your own shoe]. This taps into the zeitgeist and is fun for people into sneaker culture. It also enables Nike to differentiate buying on its own site from the multitude of resellers.

To compete with the giants, category specialists need to offer more than just good prices. Ebuyer is a site that gives me the sense it lives and breathes technology products. The White Company has turned a simple idea into a powerful [homewares] brand and its uncluttered, stylish site complements its ethos and commitment to quality.

SP: Amazon, iTunes and eBay quite simply do what they say on the tin. There are no distractions; they make the experience simple and recommendable to a friend. One that I would also add is Google – it is not a classic etailer but it uses the internet to deliver search in a way that sells your presence to a third party.

SL: ASOS is the obvious choice, not only because its product catalogue is optimised with great customer-facing features that make the site very easy to use (such as video, filtered navigation and 360-degree photography). It has also successfully integrated the ASOS community into its site and invites them in to help build its future strategy.

Notonthehighstreet.com is another favourite because of its unique concept – unusual home and gift items from small businesses brought together in one website with one shopping basket.

EJ: I agree. ASOS must be admired for bringing an entrenched offline shopping mission to online so successfully. Doubling sales during a period of recession is quite a feat and when you use the website, it is easy to see how.

It is easy to navigate, provides plenty of inspiration for shoppers and brings the product to life in rich, “buy me” ways. NikeiD is rightly lauded because it is a great example of bringing content and commerce together, which many brands still keep quite separate.

But top of my list is Amazon – it continually innovates across platforms, making its store and services available to shoppers whether they are on or offline. Its latest iPhone app is fantastic and has already saved me lots of money.

Argos is also a great site, which has leveraged ratings and reviews to great effect. Taking advantage of its retail estate, the reserve online/collect instore function is very attractive to shoppers who want to avoid a delivery charge or who simply cannot wait to get their goods.

DC: Tesco’s approach is genius as it is a perfect reflection of its offline retailing and there is increasing crossover. The simple act of preloading your “favourites” from your Clubcard to your online account summarises what we should all be doing – providing value to the customer that they don’t even know they need yet. l

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