& reasons to expand
COMPETITIVE PRESSURES
GLOBALLY
ONLINE
Presence
I
n todays market it is essential to establish an online presence as current trends indicate that this is the future of business. In previous years, consumers did not trust buying their products or services online due to the risk of viruses or scams. Current technology has allowed consumers trust to grow as the government and businesses have put security measures in place to protect people. Consumers are also using the Internet more as for many it can be faster and more convenient than actually going to the high street and spending the day browsing different stores. A lot of online retailers offer online exclusives or one off discounts that consumers may not be able to buy in store and so this can be a huge factor for choosing online over high street. The positives and negatives of e-‐commerce that I have already spoken about differ between the consumer’s and the businesses perspective. Overall the consumer has more convenient choices and saves money by comparing prices whereas the business has to put more work in and to spend more money to make their e-‐commerce efforts successful. When purchasing products online, the consumer tends to buy 50% more items than they would in a store. This could be linked with delivery charges and the consumer wanting to get the most value for money if they are to pay for delivery. It could also be linked with discount codes, as the majority will all have an expiry date and so the consumer wants to get as much as possible at a discounted price while they can. Businesses should look ahead to plan how to grow their business using e-‐commerce, even if that means starting a new trend. The businesses that are successful in the future are those who will act now and not wait for another brand to lead. E-‐commerce can also affect the economy of a country as more and more consumers start to embrace the Internet and shop online. For example Internet sales in China had grown by 130% according to Internet Retailer in 2012. Marketing online can increase brand awareness so it is a valuable tool for businesses to use.
WWW.COUPONFOLLOW.COM BOOHOO USES INSTAGRAM TO CONNECT WITH CONSUMERS
Multiple platforms are often used in business to gain a wider section of the market and to make it more accessible for people. In a previous task I showed how Burberry and ASOS branding is consistent across all of their platforms and this should be true of any other brand who want to maintain a strong image. Boohoo, Nasty Gal and Missguided are all based online without a bricks and mortar store. They rely on e-‐commerce and interacting with customers via social media. On each of the websites, they offer consumers the chance to share items with their friends using embedded social media buttons such as Instagram and Facebook. This has in some ways replaced the traditional word of mouth communication as now consumers can share with hundreds of people in one click. By using methods like ARTICLE FROM E CONSULTANCY this in e-‐commerce the brand can actually increase their profits, as the cost of ASOS E FIT advertising through social media is considerably less than that of television or magazine advertising. Competition from online retailers has entered a new level due to the advances in technology and so brands need to ensure they stand out from their competitors. A brand must have some sort of unique selling point that defines them and so makes the consumer think of them over others. Technology can make a brand stand out though the use of technology also with virtual changing rooms were you enter your measurements and see how an item would fit on you to online stylists and personal suggestions. As mobile shopping is becoming more popular than ever it is essential for retailers to have a full mobile version of their website to make it more accessible for users. ASOS do very well at connecting with the consumer all the way from browsing to delivery. They offer access to their website on a range of mobile devices with product videos allowing consumers to see how a garment moves and hangs on a model. Their confidence in the product and we the brand is increased through all of these different e-‐commerce methods including delivery as ASOS offer next day delivery where you are also able to track the products progress right to your door with an ETA from 15 minutes away. There are very few retailers that offer such an involved experience for the consumer. ASOS use e-‐commerce for all of their customer service points and they do not use the telephone or any face-‐to-‐face contact. Customers use email and online forms to contact ASOS. They can also contact them through several social media platforms. ASOS even send an email to the customer to confirm their order and when it is also dispatched. A new and upcoming trend in online branding is personal branding. As there is so much information on the Internet, consumers find it easier to link a brand with a person. For example, the owner of the brand Hackett is Jeremy Hackett and he has a separate website to his business one which he dedicates to his personal life and what he does on a daily basis. The brand that he owns is obviously more formal, but for the consumer, being able to relate a face and a real person to a brand will help it stand out over another. Other trends include augmented reality, personalised shopping and body map technology. With augmented reality retailers are likely to start taking advantage of its benefits. It can allow the computer to scan the consumer and then show that object they are considering buying actually on the person. Body mapping is very similar as they can virtually try on clothing, this is hoped to reduce the amount of Internet returns. Personalised shopping is also becoming a major trend as websites gather information about the consumers shopping habits and purchases
for future reference. When the consumer logs back onto the site, it gives the consumer other suggestions such as “Based on your previous purchases you may like” giving the consumer a hint and hopefully making them stay longer on the site. Subsequent marketing in emails or traditional mail can also be personalised using this method and the more information that is collected from the consumer means that the marketing can be more accurate. Data like this is normally collected and stored on an internal database that is only accessible by the brand that has asked for permission from the customer to hold this information. A database could also include order patterns. For example if they know the consumer tends to buy products immediately after payday, they would start sending promotional emails the week before showcasing new items. Consumers are also buying more GOOGLE GLASS products that are classed as wearable technology. With the release of the apple watch this year and Google Glass in 2014; technology is becoming part of consumers every day life. These products are predicted to become more common just like tablets and smartphones have. E-‐commerce can also use these new products to take advantage of future predictions. They could give consumers alerts when they are near one of their favourite stores with a swipe through example of the new products on display judging from previous purchases. A disadvantage for customers is that they need Internet to access online brands. For businesses, this limits their consumer base to those with computers, smart phones and tablets. It can be difficult for a consumer when choosing products online also as they cannot physically touch the product and see its size. This is why brands are increasing their interactive levels on websites to immerse the customer in a product as effectively as possible.
“E-commerce is set to keep a strong pace
through 2017” WWW.EMARKETER.COM
The projected growth for e-‐commerce differs from country to country. With mobile devices contributing to many of the sales in the UK the outlook is improving for the future of the UK economy. More and more consumers are now investing in the smartphone market that is something I have learnt from my own experiences at work. Customers who before were not interested in accessing the Internet are becoming more curious and confident at using tablet devices. The cost of smartphones and tablets has also decreased from when they were first released and so this adds to the accessibility for consumers and will pave the way for an older generation looking to buy online. Sales in the UK and parts of Europe are expected to grow from £132.05 billion to £156.67 billion this year and reaching £185.44 billion in 2016 (www.retailresearch.org). The UK, France and Germany are the biggest player actually accounting for over 60% of Europe’s e-‐commerce. Online sales in the US are much larger though going from £189.26 billion to £215.39 billion this year to £245.96 billion in 2016. Retail Me No Inc. completed this study, which is the same company that runs the online voucher websites such as www.vouchercodes.co.uk.
T
hese graphs above estimate the increase in ecommerce sales in the UK, USA and globally based on previous years. China and the USA are currently leading the e-‐commerce world as combined in 2014 they accounted for over 55% of e-‐ commerce sales. With China overtaking the USA in the top 10 countries ranking it is clear that on average the consumer in China will make more frequent online sales than that of the consumer in the USA. Overall the revenue in e-‐commerce is set to rise dramatically over the next few years which could make retailers worry how to keep their bricks and mortar stores in business. At the International E-‐Commerce Forum in 2013 it was noted that customers still worried about international delivery with small proportions actually buying from other countries as compared to their own. I feel that this is not helped by the fact that only 27% of retailers actually sell across borders. In the future this will likely increase as retailers safeguard their future and expand their target market.
TAKEN FROM E-‐COMMERCE FORUM 2013 – THESE FIGURES COULD BE IMPROVED
N
eal’s Yard concentrates on ethical and organic products. They started to export from early on in the business as British brands are highly respected around the world. People came to Neal’s Yard asking for them to ship them abroad and it made it easier for them to be recognised worldwide. Exporting started to Japan and then USA, Taiwan and Hong Kong. UKTI has helped Neal’s Yard through funding and visiting countries with them. It gave them a lot of insight and helped them out with cultural issues and regulations. Direct contact with the market you want to expand to will also give you a great insight. In 2014 Insider Media stated that Neal’s Yard was reaching a £30 million turnover that was driven by growth not just in the UK but abroad. They have used a multi channel strategy to grow their business both online and in store offering social media button links from their website. If you live in the UK you can order a catalogue for free, otherwise you can browse the website on a laptop, tablet and also on a mobile device whilst still maintaining full navigation without zooming in and out. This ease of use will make it easier for customers to engage with the brand and find the products they need. ASOS is a very different business to Neal’s Yard as it is based solely online but in the same way is expanding globally. ASOS has 15 currency options available to consumers in a range of different languages to allow easy access to a wide consumer base. They offer free worldwide shipping that is a huge incentive for customers who may be put off having to pay excessive international delivery charges. ASOS was founded in June 2000 and was the first UK retailer to launch catwalk videos on the website. ASOS allows consumers to sign up to a monthly magazine online which showcases some new products, interviews with celebrities and beauty tips.
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” JEFF BEZOS, FOUNDER OF AMAZON.COM