While on a recent business trip to Ireland I heard an interesting comment from the leader of a major retailer who was seriously questioning the value of investing heavily in an online platform and instead just keeping the key focus on the stores portfolio and utilising Google.
The theory being that shoppers will increasingly go to Google and search for goods so the most sensible strategy is to continue to invest in the store estate while running a basic website alongside it and committing resources to Google Ads that ensure a high placing for the relevant search terms.
This view comes at a time when there is plenty of evidence to suggest that in the run up to Christmas when promotions like Black Friday were taking place the real winners in the retail sector were those companies that had invested in digital to create a true multi-channel proposition.
What these contrasting situations attest is that there remains lots of question about the strategies retailers should follow. It is certainly not all black and white and there must be some sympathy for retailers who have so many options available to them at a time of great change in the industry.
Consumers are increasingly setting the agenda and their adoption of new technologies at an increasingly rapid pace is leading to some interesting times for retail leaders and the people responsible for selecting the technologies.
One thing they have fully embraced is mobile. But even here things are not clear cut. Yes, it is sensible to take a mobile-first strategy, judging by the most recent statistics of growing traffic coming from smart devices, but should retailers commit most of their resources to a responsive mobile site or to developing a rich experience for their customers via an app?
With today’s improved smart-phones and widespread Wi-Fi and 4G (going on 5G) ensuring decent connectivity it could be argued that a good mobile site is better than an app. This is supported by the fact that Amazon is the only retail app in the top 20 (in 20th place) among the most popular applications sold for Apple devices. It is followed by eBay (22nd), and Wish (43rd).
But this would miss the fact that apps enable retailers to link shoppers’ online engagements to their activities in the physical store thereby giving retailers the much-vaunted single view of their customers. Expect to see a lot more of this linking of digital and physical in the future.
We’ve seen some early examples of this – most notably from Starbucks, which has just rolled out its Mobile Order & Pay pre-ordering service to 300 UK stores. Starbucks’ loyalty scheme, payments, and in-store visits are blended together via the app in a seamless way that ensures the company knows all the interactions it has with its customers.
The reality is that retailers probably need to commit resources to both mobile sites and apps if they are to future-proof their businesses. Or so you would think. So how come the likes of Primark still does not even have a basic transactional website?
They argue it is all about margins and that they are only willing to operate online when there is a clearly profitable way for them to do so. This is why Poundland has only tentatively stuck its toe into the online waters by launching its website with only a select range of products available to purchase.
While the Irish retailer’s view might seem rather outdated to some of the more progressive operators out there, it should not be criticised too heavily as it is clear that retailers have lots of decisions to make around their digital strategies and one thing is obvious – it is not a one-size-fits-all scenario.
Guy Chiswick, Managing Director, Webloyalty Northern Europe (@Webloyalty_Guy)