When 3 major UK retailers went bust right after Christmas last year in early January 2013, we should have all known that something fundamental was changing in people’s buying behaviour.
When 3 major UK retailers went bust right after Christmas last year in early January 2013, we should have all known that something fundamental was changing in people’s buying behaviour. Retailers spend their entire year working up to Christmas, and then either win big, or poof!, disappear. But retail wasn’t once a ‘hits based industry’ like movies and gaming.
Technology such as iPads, Kindles and smartphones has enabled us to browse wherever and whenever we are. The retailer with a physical presence must offer something different, therefore, as they can’t compete with ubiquitous browsing capability.
The UK has always been a nation of shopkeepers. So not surprisingly, our entrepreneurs are innovating in this space. Start-ups have a choice: disrupt or engage. They face a critical problem when building their firm – that of how to engage customers. If the Goliath enterprises underestimate, avoid or ignore them, they are faced with doing distribution deals with the likes of Facebook, Apple and Google. But there are great retailers in their backyards – N Brown, Sainsbury’s, John Lewis, TopShop and Juicy Couture. These retailers can be an important ‘highway’ for the ‘digital cars’ that need distribution, scale, audience and reach.
The web enables local activity as never before. People who like certain things can find them, and retailers who want to provide what was ‘niche’ before can find their customers through the web. This is what ‘long-tail’ means: You don’t have to be in the majority to be served.
Net-a-Porter led the way with the merging of content & commerce. As a route to market, more entrepreneurs are helping retailers become publishers than the other way around.
Noteworthy ‘digital enablers’ to watch include Taggstar and Atosho. Fraser Robinson, the former senior exec at lastminute.com, turned entrepreneur at Taggstar is befriending retailers and enabling them to improve the core metric of their business, namely shopping conversion. Any online retailer in any sector faces a low single digit conversion rate, and they are all trying to influence that figure. Taggstar is a shopping conversion optimisation technology which is easy to use for retailers as it doesn’t require any major IT involvement.
Atosho turns any premium editorial content into a new ecommerce channel for retailers, with retailers paying a commission on anything sold.
The retail landscape will be shaped this decade as much by the Goliaths as well as the David’s. Investors in retail won’t be able to secure impressive returns except by analysing how the retailers embrace technology and digital capabilities.
Julie Meyer is the founder of EntrepreneurCountry Global, and managing partner at Ariadne Capital Entrepreneurs Fund