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Drapers Digital Festival 2020: How Digital Holds the Key to Retail Survival

  • 1st October 2020
Anna Murphy, Communications Lead

Written by Anna Murphy, Communications Lead

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Co-authored by Andrea Williams, Marketing Executive

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The Drapers Digital Festival has been running for almost 10 years, but the importance of this industry event has never been more apt than in 2020.

As this new decade began with even more challenges, unprecedented difficulties, government restrictions and health concerns for customers, head office and store teams alike, there’s never been a better time to celebrate innovation and to share best practice. Yet it’s not all doom and gloom; this festival acts to unpick the secrets behind successful digital strategies and to highlight the many opportunities that lie ahead for retailers and their teams.

Last year, we attended the 2019 Drapers Digital Festival, sharing our thoughts and key takeaways in our blog. Due to Covid-19 restrictions, this year the festival has moved online, and we’ll be live blogging and tweeting with the latest updates from the various speakers across the show. Read our discussion summaries below!

The new frontier for digital marketing

Carly O’Brien, CMO at The Very Group, spoke about the importance of digitally connecting with your customers.

She said: “There’s been a speeding up of digital transformation programmes, with expectations on marketing teams to move quicker than they normally would and an expectation of swift commercial results on tighter marketing budgets.

“Customers are already online; through lockdown, this has sped up with more ‘online everything’ than ever before. We have the opportunity to engage with customers in environments they feel comfortable.

“There’s an opportunity to test lots, fail fast and do it on a small proportion of your spend and then put the bulk of your spend on the successful activities.”

Carly then explained how they adapted their campaigns – usually shot with models and influencers on a shoot location – to include seeing real people in their home environments, as this was the most relevant for the majority of the country during lockdown.

Carly gave the example of launching the new Michelle Keegan collection. She said that it’s crucial for brands to maximise the creative capitol of influencers to engage your audience and gave the example of the video that initially showed Michelle self-shooting the video in her own home, trying on items from the collection, and then “throwing” an item off the screen, which cut to another video with a different influencer “catching” it and trying on more items from the collection. This allowed Very to showcase Michelle’s collection on a range of different body types and demand on the lines shown reached 176% on day 1, with the video receiving 1.2m impressions in 24 hours.

Carly’s other top digital marketing tips included:

  1. Interactive formats are useful and engaging. For example, her team created a Facebook chatbot with a curated range of product options. This gave a seamless experience all the way through to landing on the website, which she felt was key to its success.
  2. Listen to your customer’s actions and follow up on their intent. Browsing behaviour has increased, with consumers browsing things they wouldn’t have normally looked at in the past. Very integrated more browser behaviour into their email campaigns and created the “recommended for you” section which links with the customer’s recent changed behaviour. This has seen a 12% improvement in the click through rate.
  3. Create content once but with a clear proposition for all of your channels. There’s no substitute for traditional detailed planning.

Finally, Carly reminded us that: “Consumer demand will ebb and flow – move seamlessly with it. You have to engage with your customer where they are.”

 

Social Commerce – What’s Next?

With consumers spending more time than ever before on social media apps, this talk looked at what the future holds for social commerce, sharing the views of Emma Watkinson, Founder of SilkFred, Hannah Widdicombe, Head of Brand, The Fold, and Simon Monahan, MD of Sara Da Silva.

What was your social strategy over lockdown?

Hannah: “(At the start of lockdown) we were a brand that went from selling power dresses to Zoom tops overnight!

Simon: “I think the problem for us was that customers were asking for products that we couldn’t give them – we couldn’t meet demand. However, we kept trying to listen to our customers on social media and what they wanted.”

Emma: “We didn’t want to do anything that cost a lot of energy for small amounts of returns. Our social content had to be high impact, high return. We were asking customers what did they want to see: did they want to be shown lots of dresses if they can’t leave their house? We ran polls on social media and took our cues from there. So, our focus was on two things: what maximises revenue and what do our customers want to see?”

What are your key platforms for your brand?

Hannah: “At The Fold, we use Facebook for customer acquisition and conversion and Instagram for inspiration – the posts that do well include seeing other customers in our brand. Facebook has helped us to find audiences in different place, which has been instrumental in targeting our strategy. It’s allowed us to grow an audience in America, especially New York City, and now 50% of our base is in the USA. The new thing for us is LinkedIn where we can operate in a space that our customers are using in their day-to-day jobs. So, for us, our tactics will be different moving forward.”

Simon: “We started the business on Facebook and it’s been consistently strong for us; everybody’s housebound more and are also online, talking, wanting to engage with each other and other brands. We’ve experimented with Pinterest – it drives lots of traffic but lots of bounce, too – and we’ve also migrated to Instagram, where we use stories with swipe ups and direct links to other pages. We haven’t set up checkout on Instagram yet so we still have to drive customers to our website to complete their purchase.”

Looking to the future of social media, what will change?

Emma said: “I have no idea. There are so many different platforms and technologies coming up all the time. For us it’s having an open mind and giving it a go.”

Simon: “I think VR will be a big one, especially as everything’s so visual and phones are getting so sophisticated. Especially given how the world is at the moment – we might not be allowed in shops!”

Hannah: “I think the idea of being able to see things will be huge, for example, you can see a sofa in your living room before you commit to buying it. Anything that makes life more easy and more speedy!”

If you’re an emerging brand, where should you put your money and your effort?

Hannah: “Facebook was a really good place to start; we already had a small pool of customers and helped us grow really fast. It allowed us to see if there was a The Fold customer in the States. It allowed us to be a bit braver and was really informative due to their analytics too.”

Emma: “Just join SilkFred and let us spend the money for you! Joking aside from my shameless plug, joining a platform lets us do all the heavy lifting. In terms of emerging brands in general, one of the best things of selling on social is finding out who your customer is. Who you think your customer is might not be who the customer actually is – you might have to adapt your product offering to where demand is and what your customers want.”

 

Digital Saviours

Amidst the Covid crisis, brands have been forced to find new innovative ways to help them boost business. From increasing product visibility, heightening search navigation and improving checkout, hear from the experts about the technologies that came to the rescue. Drapers spoke to Rob Weston, CMO at Beauty Pie.

Where next for the industry? Here are Rob’s key ideas.

  1. The rise and rise of digital: “I think there’s definitely room for the high street to come back but I also think digital will continue to rise and rise.”
  2. Personalisation will refine luxury: “No other industry feels this more than the beauty industry, tailoring to hair colour, eye colour, skin type… I’m really excited about the potential for personalisation.”
  3. The need for innovation: “We can’t lose sight of this. It’s imperative that companies just continue to adapt what they do and how they do it, including technologies that allow them to meet consumer need.”
  4. Brand will also be critical, amidst the tech: “For digital businesses such as ours, brand is incredibly important to build and maintain. We don’t have the benefit (for our customers) to walk past a shop and keep it top of mind. Getting the brand stuck in people’s mind is critical.”
  5. New models will emerge: “Beauty Pie is essentially sharing the middle of the pie with the consumer, but I don’t believe this is the only piece of innovation we’ll see. Omnichannel will bring so much creativity, such as bricks-and-mortar experiences that complement the digital.”

Summarising, Rob concluded: “Reinvention will be the only constant that we’ll see.”

 

The Current State of Returns

Jonathan Hsieh, Senior Product Marketing Manager from Forter, who offer fraud prevention solutions, talked us through the current value of returns in retail. When looking at the importance of returns to consumers, 72% of consumers report that the ability to initiate returns online is vital to their purchase decision, with 23% of these consumers abandoning carts if a returns policy doesn’t meet their expectations.

The most frequently returned items by shoppers are clothes, shoes and accessories at the top, making up 55% of returns, with 10% of returns being electronics and only 9% being related to health and beauty.

When considering the criteria that is important when selecting an online retailer, 89% look for competitive prices, however more interestingly and not so far behind, 83% of consumers look for free returns and 72% look for the ability to initiate returns online: these came in much higher than expedited shopping options and loyalty programs or rewards. This proves that returns are a major factor in purchase decisions.

Retailers should also consider the importance of a returns timeframe. 68% of consumers prefer a 30-day returns period, which contrasts with 44% who said they would opt for an unlimited returns timeframe. However, this could be because unlimited returns aren’t widely available yet but also because it’s seen as unnecessary for most consumers.

Jonathan then looked into the different methods of returns and the importance of BORIS (buy online, return in store), as 63% of shoppers have taken advantage of store returns and 57% consider it very important.

No retailer can talk about returns without having to consider returns fraud, with 54% of retailers having reported lost revenues of over $5m annually due to returns abuse. Although a major issue, only 17% of merchants say they’ve taken steps to help eradicate returns abuse, with lots of retailers limiting their returns policies and restricting refunds. However, this comes with the potential risk of creating a poorer customer experience, which holds far more value.

 

Preparing for Peak Trading in 2020

In this talk, Carl Scheible, CEO of payment method company, Clearpay, spoke about the rise of online sales and what this might look like for peak trading.

Prior to COVID-19, online retail represented roughly 20% of total retail sales. However, during the pandemic online, sales shot up dramatically to 30% and Carl said that he expects that the bulk of this number will remain permanent. This new statistic represents a number of changes in the market as, at one point in the pandemic, there was little consumer choice, so people had to shift their buying patterns to online retail. Now a lot of people have been forced to use online retail, there’s a good chance that they’ll continue to shop online.

There’s also been considerable changes in financial situations changes resulting in more considered purchases, budgeting and consumers looking for payment choices at the checkout (for example buy now, pay later). On the flip side, you’ve also got consumers who are now left with an increased disposable income as they don’t need to pay for travel or spend less on eating out, so this also reflects on purchasing decisions.

But how will these behaviours reflect on the upcoming peak trading period?

Carl predicted that the growth of online purchases will increase, but that’s not a trend restricted to 2020 –  the last two Black Fridays have seen an increase in online sales too. The last two years also saw the trend of retailers bringing their sales forward by up to two weeks to gain maximum exposure from Black Friday. It’s thought that this year this trend will be accelerated as consumers will start their Christmas shopping earlier due to worries about not receiving orders in time or products going out of stock. This is a trend that has emanated from lockdown where items were running out, people were bulk buying and also consumers were getting FOMO from bargains and deals. There’s also the issue with local and national lockdowns which could intercept once seamless supply chains pushing orders back and resulting in late deliveries.

Carl said that he expects consumers will indulge in products as treats for themselves, items that they believe will make them feel and look good after a tough year, mixed with the increase in disposable income. Consumers are also spending more time at home, increasing home spending, but also a lot of families who tend to go away for Christmas will be spending the season at home, so it’s also expected that seasonal decoration purchases will increase.

There’s an increasing trend of retailers opting out of Black Friday sales, with the idea that some retailers go “too big”, however this is very dependent on customer base and brand participation will likely be a reflection on this year’s performance as well as potential overhanging stock that may need shifting. Consumer participation is expected to be strong as consumer behaviour patterns suggest that people like to hunt for bargains online and, with more time at home, it is expected that some will spend more time making cross comparisons of discounts and pricing prior to purchase.

Carl said that big questions facing the peak trading period this year query how in-store sales can be managed in line with social distancing measures and how this will impact brand reputation, as although there’s a continuing trend of increasing online habits, people still love going into stores to search for a bargain. Another factor that will become more obvious once the peak trading period has begun is the likelihood of Boxing Day sales: will there be anything to discount if sales offers have run from mid-November until the end of December and, even if they do, will people leave the house on one of the busiest days in the retail calendar in search for a bargain?

 

Thank you for reading our round-up of the Drapers Digital Festival. A huge thank you to Drapers and to all the people whose talks we watched. Don’t forget to subscribe to our blogs here so you can get all the latest industry insights delivered straight to your inbox!

  • 1st October 2020
Anna Murphy, Communications Lead

Written by Anna Murphy, Communications Lead

Add me on LinkedIn

Co-authored by Andrea Williams, Marketing Executive

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