Pureplay retailers have largely outshone their multichannel competitors as the digital evolution of the customer journey has advanced.

Online-only retailers are generally more agile businesses, enabling faster reactions to changing customers’ expectations. Without the burden of store overheads, pureplays are freer to invest in a tech-driven, scalable proposition that supports growth.

When it comes to the digital customer journey – across logistics, ecommerce, marketing and cross-channel – it is Asos and Amazon that have toppled the competition and best illustrate how to thrive online.

Logistics and customer service

A strong customer service offer is a key differentiator in an environment characterised by broad consumer choice and intense competition. With faster response times on average via email and social media compared to multichannel businesses, pureplays have more than made up for the lack of a physical communication channel with customers.

social media smartphone

Asos and Zalando have some of the fastest social media response times

This is clear from the success of Indicator’s pureplay leader Asos and fourth-placed Zalando. Both fashion etailers offer some of the fastest email and social media response times, building trust with shoppers, with Asos aiming to answer all social media communications within 15 minutes. They have reinforced loyalty with customer service features like Zalando’s Google Assistant-enabled gift-finding chatbot and Asos’ live Facebook Messenger chat, both of which cater to their digitally-savvy customer base and offer a connected customer experience.

When bridging the divide between online and offline channels, a retailer’s fulfilment offer is paramount for growth. Convenience and speed are key, and online only retailers shine when it comes to this with a fifth offering either same-day or time slot delivery options.

A reliable delivery offer is pivotal for customer retention, which indicates why 16% of pureplays offer delivery subscription services, such as Amazon Prime.

However, pureplays do have room to improve. Only 56% offer a free returns option, a surprisingly low proportion given their lack of physical presence. Without the option of free returns, some consumers may be discouraged from purchasing from a pureplay. Offering free returns has become almost a necessity among fashion competitors, as consumers expect to be able to purchase, try on and return clothes at ease. The rise in adoption of ‘buy now, pay later’ services, such as those provided by payments firm Klarna, where customers have a 30-day window to make decisions on whether to keep goods, has only upped customers’ expectations of free returns.

While many smaller businesses may find the cost of free returns unsustainable, digital innovations to limit returns and inspire customers with experiential technology is an alternative option. For instance, Feelunique’s Makeup Live app allows customers to virtually try on over 600 products and has elevated its proposition to the point where customers feel more comfortable buying beauty products online.

This highlights how pureplays can truly influence customer behaviour and help shape the future of the online market.

delivery-capabilities-at

Ecommerce

Increasingly, retail spending has shifted away from physical stores and multichannel retailers have been generally less effective in using online customer data to remove barriers to purchase and drive sales.

Six out of 10 pureplays have bolstered average order values and increased dwell time by investing in personalisation capabilities that offer more relevant product recommendations, using data based on a customer’s personal browsing history or a similar customer’s browsing and purchase behaviour.

This is compared to 53% of multichannel retailers, reflecting the divide in the application of customer data. Product recommendations are particularly useful for retailers with a broad product range to ensure customers can see the wider product offer, but more niche retailers would also benefit from online personalisation.

Website speed is another area where etailers reign supreme over multichannel retailers, and one that increasingly drives conversation. On average, a pureplay’s page speed on mobile is 0.7 seconds faster than a multichannel retailer’s, while desktop speed is 1.3 seconds faster. More responsive sites keep shoppers engaged and limit the likelihood of them going elsewhere. Download speed is therefore fundamental for retailers looking to decrease bounce rates and basket abandonment.

Marketing

It is not just convenience but inspirational content that sways consumers towards shopping online. Pureplays have continued to strengthen their position in this remit.

The likes of Boohoo, Childrensalon and Birchbox all use digital content and social media to support targeted interactions that boost customer acquisition and retention.

Birchbox boxes

Birchbox focuses on customers who are open to new brands and products

Birchbox’s subscription-based beauty products model is aimed at consumers who may be indifferent to beauty products – with its concept focused on customers who are open to trying new brands and products. As such, tailoring its lifestyle blog, product articles and video tutorials to appeal to a wider demographic is central to its appeal. It cleverly uses social media to this end. As well as driving traffic through Facebook, Birchbox uses Facebook Live to engage with customers through ‘how to’ tutorials in a visual, interactive format.

Eve Sleep is another pureplay that has disrupted a market traditionally dependent on physical stores for sales. Its use of engaging editorial content, like its dedicated blog aimed at promoting healthy sleep and wellness, has drawn shoppers in, strengthening their relationship with the brand. Add to this its robust fulfilment offer, including online returns via pickup from location, and it has developed a proposition where customers feel comfortable buying mattresses and bedroom furniture online rather than in-store.

Cross-channel

A seamless merger of the online and offline channels is seen by many as the holy grail of modern retail. To this end, pureplays are increasingly developing partnerships with third-party fulfilment suppliers, fellow retailers and small physical networks to offer customers more flexibility.

For example, many of Indicator’s leading pureplay retailers have partnered with CollectPlus to enable customers to collect and return orders from over 7,000 local locations, enhancing convenience and broadening their appeal as first-choice destinations.

Online-only retailers are also taking advantage of multichannel retailers’ physical presence when it comes to order collection. This has seen the likes of Asos partner with Asda through Asda toyou, Amazon partner with Morrisons and The Co-op for its lockers, and eBay collaborate with Argos.

Amazon lockers

Amazon has placed lockers at bricks-and-mortar retailers

While these examples highlight how, in many instances, pureplays see the power of having a multichannel proposition, only 50% offer returns via third parties, meaning there is huge potential for more collaboration. Although, it should be noted, this rate is still higher than multichannel retailers (36%).

Online sales are increasingly shifting from desktop to mobile as consumers increasingly want to shop quickly on the go. It is therefore crucial for retailers of all types to enable cross-device shopping, making sure customers do not lose their baskets as they switch between devices. However, it is surprising that only 81% of pureplays enable this compared to 91% of multichannel competitors.

This not only interrupts the customer’s digital shopping journey, it limits the volume of consumer data attainable when a customer’s full browsing and purchasing journey cannot be observed by the retailer.

On the whole, it seems the strength of a pureplay business lies in its delivery and returns capabilities, and – without the overheads that come from having stores – they have the resources to invest. Pureplays are largely better, and normally faster, at meeting customers’ digital needs and as such they are growing rapidly. But they must work hard at staying relevant and cannot be complacent. There is always another Asos around the corner.

Listen to Retail Week head of data and research Rebecca Marks and content director Jennifer Creevy discuss the Indicator ranking.

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 See the pureplay ranking here

Retail Week Indicator 2018 rankings