As online sales continue to rise, retailers are looking to new technologies to not just promote their brand and products but also improve the online shopping experience. Scott Lester, CEO of online content provider Flixmedia argues that as a result, the online retail industry will drive new marketing techniques for years to come.
Online retail sales figures are continuing to grow, to flourish even. The current economic conditions hardly warrant such a bloom but in August a CBI survey diluted the British Retail Consortium’s earlier claim that the retail industry was in trouble by recording a surprise three-year high for online sales. The CBI was supported in the summer by the IMRG which claimed online spending reached £5 billion in July alone, the biggest rise since 2007.
The picture is one of optimism, despite the fears of public spending cuts knocking consumer confidence and retailers are now recognising two things – the need to differentiate and the need to use new technologies and mediums to drive sales.
It’s no coincidence that retailers are heavily pursuing technologies such as augmented reality (AR). Much of this is being co-opted with suppliers, as in the case of Dabs.com and Acer’s recent AR laptop campaign with Flixmedia. The aim is to extend AR into the online user experience, enabling a try-before you-buy application but for now AR is being used primarily for marketing, initially by large brands such as Coca Cola and McDonald’s. However co-op deals are increasing and the advantage is obvious. The online store is the direct call to action for any technology-driven marketing campaign.
With new technologies such as AR, social media and mobile applications, advertising and marketing is no longer static. The ability to link, to integrate, to share and to target campaigns is leading to greater opportunities for online retailers to get involved with vendors keen to explore new promotional activity.
Of course advertising does provoke a degree of scepticism, particularly advertising on social media sites and there are new rules to consider following the Advertising Standards Association’s drive for self-regulation. However using cool technologies and tactics to attract users to unusual experiences is the way to get around this.
No one likes being the subject of a hard sell but most people are curious about creative ideas, stories and images. When Dabs.com ran its AR campaign, 70 per cent of those who went to the site chose to live the experience which is a great conversion rate and of that group 13% then purchased the project – compared to an industry standard website conversion of around 0.5%.
For retailers conversion is the bottom line and new technologies will only really become useful if they can help facilitate this. AR is still in its infancy but the explosion in mobile apps, particularly for the iPhone is another example of where retailers are reaching out, using the latest interfaces to grab new opportunities. A few retailers such as Next Retail, Barratts and Warehouse have launched mobile apps already and more are sure to follow. Tesco, a keen innovator is also using an app with a barcode for Clubcard users.
The retail industry has been toying with mobile commerce in its various guises for a few years now – everything from barcodes to contactless payment technologies. Despite early promise, adoption has been much slower than expected yet it is a clear indication of how retailers think. Making the buying process more seamless, more convenient, more interesting is at the root of retailers’ forays into new tech territory. With mobile apps, retailers may have finally found a home and the number of iPhones in the UK will rise 195% this year to 6.4m, according to research firm MobileSquared.
As online retail grows – and it will continue to grow rapidly – the sector will have even greater clout. This of course will be reflected in increased marketing spend but retailers are helping to make their own beds. They have been quick to exploit new mediums and invest in new technologies. According to recent Experian Hitwise statistics, online retailers are using social networks to drive traffic to their sites with both music and video and games etailers receiving 8.9 per cent, and apparel and accessories etailers receiving 8 per cent of their traffic from social networks. Add to this the growing use of AR in retailer advertising plus the impending boom in mobile commerce through apps and you have a market in the ascendency that will help drive marketing budgets for years to come.