The rise of new channels and cross-border ecommerce are significant new opportunities to retailers looking for growth; but they will need the right tools to effectively manage their product record in order to scale at pace and capitalise on cross-border growth, says James Barlow, VP UK& I at Akeneo
Almost all retailers’ margins have been impacted in the current cost-of-living crisis, due to both higher costs as a result of inflation and a fall in demand from cash-strapped consumers. Even as first quarter sales held up better than expected and some green shoots of recovery are emerging, the consensus is that the next few months will continue to be tough, particularly once the energy price cap is finally removed.
However, it is not all bad news because there are significant opportunities for growth that most retailers have yet to fully exploit. The first is social media commerce which is still in its relative infancy but already huge. According to Accenture, social commerce will be worth nearly $1.2 trillion by 2025, three times its current level.
Accenture contrasts this figure with $7 trillion total ecommerce spend and points out that while China will remain the most advanced market both in size and maturity, the highest growth will be seen in developing markets, such as India and Brazil. One classic case study involves luxury brand Balenciaga which launched a shoppable campaign on TikTok and had more than 25 million video views and 4.5 m clicks through to its landing pages.
The second is cross-border commerce, something most retailers have embarked on to a greater or lesser extent, but the growth opportunities are enormous. The global cross-border B2C ecommerce market is worth $793.7 million according to Vantage Market Research and is expected to grow at a Compound Annual Growth Rate (CAGR) of 25.1%. Statista estimates it is already 22% of the total ecommerce market.
A further important growth area is retail media, defined as the additional sales potential of the retailer’s existing store and digital assets to promote brands through TV walls, front-of store kiosks, between-aisle signage, digital shelving, checkout aisles, self-checkout terminals, smart carts, end caps, and cooler doors. And that’s just in the store; online, it is about the retailer using its huge web traffic to sell consumer eyeballs to third party brands that they do not stock through their normal channels, monetising their first party data.
Advertising group, WPP, recently estimated that retail media already represents 10.7% of global ad spend, and forecasts this will grow 60% by 2027. And BCG suggests the market will grow by 25% per year to $100billion over the next five years and will account for over 25% of total digital media spending by 2026.
Common to all these opportunities in ensuring that retailers get their share is the need to get the Ps right: product, place, price and promotion of course, but now, presence and presentation. These last two are designed to guarantee that retailers are as professional in their presentation to consumers in all these channels professionally and consistently as they are through their mainstream, owned channels.
This should perhaps be obvious, but it is very common for some companies to treat marketplaces, social media and new country ecommerce sites as almost second-class citizens, presumably because they want to hedge their bets by limiting investment until they see how each channel performs – a cautious move understandable in economic headwinds, but one that never really gives each new channel the chance to showcase its true full potential. A bad start generally has a bad finish and stops the retailers getting the growth they are seeking.
Secondly – and happily – there is actually no need to take this two-tier approach. Using a single platform to centralise all product records, it becomes much easier to build digital image and information assets for products without having to start from scratch. The system should be able to easily access the right product data inherited from a trusted foundation rather than having to re-create it. And that trusted foundation must be cloud-based, which provides certainty that files are always up to date, easily accessible, and can be deployed quickly. A central solution that controls all products and descriptors also ensures that the old product catalogue information or outdated brand messages are stripped out.
Merchandisers and marketers are thus able to work independently, emphasising their unique skills, but without clashing because they are working from a common data set. In this way, they have the freedom to be creative in their ranging, product descriptors, promotions and communications, to build exceptional customer experiences, and are freed from the burden of checking content for consistency and accuracy.
Components to create product data studios can now be composed rather than imposed by the limitations of legacy data. And because everything is in the cloud, access to specialist apps such as onboarding information from suppliers, user reviews, search and product merchandising, is immediate.
This centralisation of both data and deployment will be invaluable as retailers move into new channels and territories, as well as make it easy to see how all actions are performing, essential as new opportunities emerge, particularly in the world of cross-border commerce.
