As the last episode in our current Change is Now series, we close out what has been one of the most challenging years for the retail sector in recent history.
National lockdowns, a shift in consumer behaviour and general economic turmoil have already claimed a number of casualties. And the high street as we know it might never be the same again.
That’s why in this last episode of the Change is Now series, we turn our attention to the technology and innovation that is driving big changes across the retail sector right now, as well as trends to look out for next year.
Martin began the session with an introduction to Summit’s own proprietary technology, Forecaster, developed to help retail partners identify when and where to spend money to generate the greatest return. Forecaster is a marketing intelligence platform that optimises your paid search budget to effectively meet your budget and efficiency targets and it competes with the likes of Google Search Ads 360, Keshoo and Marin (take a look at how Forecaster triumphed in a recent head-to-head trial).
Summit and their proprietary technology
Martin explained that innovation and technology are driven entirely by the needs of the customer and that is at the centre of Forecaster too. It uses consumer behaviour data to identify when retailers should spend more and over the last 10 years Summit have pioneered the principle of buying triggers, which means understanding what motivates customers, what are the moments that matter, and what influences their buying behaviours. This could be seasonality, weather, promotions etc. and Forecaster is able to observe, measure and forecast against these buying triggers to make sure Forecaster delivers the greatest return and enables retailers to hit their objectives.
The importance of seasonal curves
Seasonality is the core buying trigger that underpins the whole principal of Forecaster and every product, category, audience and customer has a seasonal curve. Basically, there are always points in time where products are less or more likely to be sold. Forecaster takes historical data from the last few years, along with recent data from the last few days/weeks and use both data sets to create a seasonal curve. The other buying triggers that influence consumer buying behaviour such as weather, location, competitor promotions etc. are layered on top of the curve, and Forecaster can then recommend that retailers spend or pull back budget to ensure they hit their targets and deliver the most value for our retail partners.
Ultimately it is important to understand that your customer remains at the heart of any technology or innovation play. You need to know how you can better serve their needs, respond to their requirements, build the capabilities and experience to make sure they turn to you over other brands.
Joining the discussion next was Kate Ancketil, CEO and founder of GDR, who started by discussing cultural megatrends influencing consumer trends at the minute. There were:
- Cloud technology and 5G allowing real time connectivity and allowing brands to develop their virtual eco-system
- Localism, driven by Covid-19, which has driven a desire for collective experiences with virtual reality no longer being a frontier
- BLM movements and social fairness with brands embracing social activism, showing they understand the issue and making moves in the right direction
Kate went on to introduce the 3 topics she wants to discuss: virtual brand placements, peer to peer sales and virtually anywhere.
Virtual brand placements have been huge
She explained that the expansion of brands into gaming has been huge in the last few months, noting a couple of placements that have been really successful. Gillette’s female razor brand Venus brought inclusivity and body positivity to Animal Crossing by allowing users to choose realistic skins, such as hairy arms, acne, and scars. Another to watch is CGI influencer Lil Miquela who is a computer-generated character and is being used as a model by the likes of Prada and Gucci- but she is also spotted out and about in real life too! Burger King was seen in Call of Duty: Modern Warfare,with a slight name change. But Burger Town has also now been built in the real LA, with menus oriented around the game for players to win special prizes and access special levels within the game. A great online to offline experience.
A look at peer to peer sales
Kate then discussed peer to peer sales and affiliate marketing which has exploded during lockdown. Look Cook were a brand that did it well. They are an affiliate marketing site, but they are entirely content/image lead, and they sell kitchenware and recipes by styling them in images of food. You click on the image thinking you’ll see the recipe, but actually it will then take you through to a partner site where you can buy the cookware and ingredients. Affiliate marketing has become more sophisticated.
Google’s Shoploop is a new video shopping platform that allows users to discover and buy beauty products through a 90 second product video from influencers. You can then buy directly through a link to the brand. These videos are pre-recorded but will probably become live in the future. This type of live streaming, conversational commerce, the performative web is likely to become bigger in the west (to follow the likes of China where it accounted for 9% of all e-commerce sales in 2019).
There has been an acceleration real life going virtual because of Covid-19, but it is likely to continue in the future. Amazon have created Amazon explore where they are making normally physical experiences virtual- shopping virtually, cooking virtually, visit historical landmarks virtually, all guided by hosts to help you still create memories.
- Nintendo’s video game Animal Crossing has become a digital icon of the coronavirus era
- Affiliate marketing has grown into a content-first media, with performative e-commerce set to grow massively
- All swathes of “real” life are going virtual: working, traveling, clubbing, shopping, cooking… the trend has been accelerated by lockdown, but it is here to stay
Next, we welcome Victor Bayata, Global Vice President of Clarks who chats with Martin about transformation at Clarks. He joined Clarks to help accelerate transformation and to help enable and trigger cultural changes in the way the company works and innovates- whilst remembering that Clarks is a heritage brand that holds memories for many families when they go to get measured for their first pair of shoes.
How have they managed to pivot?
This year they have introduced a process for people to book appointments and have a virtual assistant to ensure they’re still getting the support they previously did in the physical store. This activity was a pilot, but now is now being rolled out as part of enhancing the experience for customers.
How long did this innovation take?
Concept to rollout was a matter of weeks. People think the process takes time, but it’s actually all about solving the pain points for customers. Victor explained that they looked at the customer journey, how customers shop and visit us in store, then they thought about how they could enhance that experience and reimagine that moment for the customer. They needed to be there at a certain moment in time with a specific solution, otherwise they’d have missed an opportunity.
So, has it been successful? And how can we learn to do this the right whilst still interacting with customers?
You need to try in order to learn and in order to grow. For me it is about leadership and helping people get out of their ways of thinking. You have to nurture people and the culture through the process. And remember- it is ok to fail, because when you fail you learn. It is also ok get there and have the right solution.
Last but not least, Martin chats with Samantha McCarthy, B2B Marketing Lead at Klarna who started by introducing the brand to us. Founded in Sweden in 2005, Klarna then grew across Europe and is the preferred payment method in Germany. It is a payment service and in the UK it is mainly known for 2 products; pay in 30 days (try before you buy) and pay in 3 instalments. Their goal is to become a famous shopping brand!
Introducing technology to a new market
Samantha went on to discuss the importance of knowing when and how to introduce new technology to a market. When they wanted to move into the UK, they had to create the category of invoice payment, because it didn’t exist here and just because it worked in Germany, doesn’t mean it will work in the UK. You need to find the right product and need to localise products to that market. They had a product that customers wanted and enjoyed using, so needed to focus on how to speak to those customers and listen to them to create the categories- they always have a customer first attitude. This activity resulted in 10 million UK customers now who use Klarna versus none 4-5 years ago.
A good year for e-commerce
Klarna was growing before pandemic, but the pandemic has sped up e-commerce. They have seen strong figures within home and garden as people want to make home a nice place to be. Garden sector saw sales heavily increased. Health and beauty saw an increase in sales with salons closed, people were thinking about self-care. Anything that brought joy into a person’s life did well during lockdown. Sports and outdoors similarly performed well. Gym Shark always get the tone right, changing logo to Home Shark. In April Halford had more bike sales than they ever had in a Christmas peak period and couldn’t get more stock.
Black Friday saw incredible results. In Samantha’s first year, there is a 7-day period and they had a set number of purchases. They saw that number in one single day on Black Friday this year!
Klarna isn’t just payment methods
Klarna doesn’t just support at conversion. Everything they do has customers in mind to see what they’re looking for from a shopping experience. There is the upsell at basket element, which sees typical uplifts of 40%, but from a consumer perspective, it is way to help them manage their money. There is also an app with shoppable wish lists, price drops and deals too!
Klarna dares to be different
The future is very customer focused. Klarna expect to see an evolution around the future of shopping. There will be more campaigns based on communities, seeing what products resonate with different audiences. Finally, we can expect to see an acceleration of Klarna in store to improve the omni channel experience!
And that brings us to the end of our Change is Now series, but as we look ahead to 2021 and a mix of challenges and exciting opportunities ahead, we will be back with a brand-new webinar series aiming to help you make the most of your opportunities and make more sales online.
If you missed any of the other Change is Now webinars, you can view all the of the highlights and videos here.
Make sure you get in early and register for The Retail Reset series, kicking off in February 2021 – sign up for it now.
Summit would like to give one final big thank you to all those who attended our events this year, and of course to all our fabulous guest speakers who have been so generous in sharing their invaluable insights.