Earlier this year, Mastercard Economics Institute released a report that detailed the extent of online retail growth across global economies. Once again, the UK received special mention for being way out in front with almost 27% of retail sales passing through online channels during the third quarter of 2021. That was down from peak level recorded in May 2020, when the lockdown-driven level of UK online sales stood at a record breaking 33%.
Panamoure’s work with retail clients reflects the long term trend of online retail growth. Companies operating in consumer-facing markets are facing stiffer competition, challenges to secure customers that are less brand-loyal than previous generations and are having to seek out greater efficiencies to compensate for tightening profit margins. A digital approach is an attractive prospect for those companies with the foresight and bandwidth to consider that option. It does not not just benefit traditional retailers, of the brick-and-mortar variety either. Across clothing, food and drinks manufacturers and a wide variety of building products suppliers, we are working with growing numbers of formerly B2B “wholesalers” and distributors that have recognised the opportunity to connect and sell directly to end consumers. A recent report published by Neos Networks found that almost half of UK businesses surveyed had brought forward plans for digital transformation by more than a year to either take advantage of the increase in digital shopping, or to simply to survive extended periods of restrictive lockdown. In the UK, that trend to incorporate digital sales ramped up significantly during the peak of COVID responses and lockdowns.
Best practice digital implementation and utilisation will make for a very powerful, and potentially unique, omni channel retail offering in what is an increasingly crowded consumer marketplace. The conversion, or updating, to an online retail or broader E-Commerce business model is not a simple exercise, however. The volume of data already held internally by the client may be rich and valuable and yet, unstructured, inconsistent or incomplete. Research carried out by Modern Retail found that 63% of retailers were unable to identify more than 50% of their web traffic, for example. To get it right needs detailed scoping and considered decisions about the most appropriate digital tools to capture and clean that data. But a word of warning. Essential though data is to a successful digital transformation, it has also been the root cause for many transformation programme failures. So, its critical to build a solid data strategy and structure at the outset as part of any digital transformation plan.
The other advantage of possessing the infrastructure, skills and knowledge to interpret this growing volume of customer and business data is that it will permit ambitious companies to truly disrupt. Once the core data platform is established, being in possession of the KPI measures to monitor, measure and manage (3M) the organisation, means that business leaders will have a data-backed understanding of the dynamics of their business. This allows for real innovation and the opportunity to redirect the business paradigm.
In this report, we first of all highlight the growth in online retail value over the last five years and how it is anticipated to continue to grow. We then provide a brief description of how Panamoure incorporates data and analytics within an E-Commerce framework and other digital transformation programmes. In the second half, we highlight some of the main advantages to various stakeholders of developing a data-led E-Commerce platform. We also look at how this has evolved from modest beginnings to a growing collection of increasingly sophisticated tools and applications designed to facilitate online retail sales and supplier relationships. In order to do that well, E-Retailers must not remain static but, at some point, evolve themselves.
