Retail and Digital Convergence: an Open Discussion

Updated: Dec 21, 2018

It’s hard to believe, but some people still shop in physical stores. In fact, brick-and-mortar retailers make a significant contribution to the global economy. However, well aware that online sales have doubled in the last five years, retailers (rather unsurprisingly) are paying attention to how they market their products online, to knowledgeable, fickle and often distracted retail-gone-digital customers.


So how do the two worlds co-exist? And what can they learn from the one another?

In order to learn from the experts, HVO Search gathered 10 senior executives (from co-founders of start-ups to CEOs) for breakfast on the top floor of Google Campus to discuss the biggest challenges to retail and digital businesses. Attendees and biographies are listed at the end of the article.   


With social and mobile shopping becoming the biggest trade drivers to physical stores, the discussion about omnichannel approaches is omnipresent.


Maria Hvorostovsky, Director of HVO Search, posed some questions around the issue.


HOW DO YOU CREATE A SEAMLESS USER EXPERIENCE ONLINE?


Nuno Miller, CIO at Farfetch.com, describes his business as a digital world with physical touch points – over 300 boutiques in over 24 countries. The way Farfetch attempts to juggle these two elements is, according to Miller, to ensure that the products (more than 2,000 brands) are presented in as uniform a way as possible. For instance, models are always photographed in the same pose – standing, with their faces out of the shot. This is a challenge, as brands can be particularly sensitive about the presentation of their products. For Miller, this means that, “we really need to work quite closely with the boutiques and let them get to know us”; the integration between the brands, boutiques and the platform is paramount.


At Farfetch, there is also a lot of A to B testing, with different versions of the site running simultaneously to see how users respond to various layouts, colours, etc. A lot can be learnt from this raw data about customer behaviour online, meaning that Farfetch are “always try[ing] to experiment with different things.”


What is key, says Miller, is the fact that the home page doesn’t sell the product, but tells stories and shows you what’s happening in the world. As he puts it:


“If you get to our homepage, we don’t really sell product […]; we just show you stories.”

It’s content that’s given centre stage, allowing the community to search for, and discover, products. For example, fashion bloggers are used in this space in order to create buzz: the most prominent ones are invited to design new products – a shoe, for instance – and the customer is invited to choose which one gets to be produced and sold on the site. In this way, the process becomes much more interactive.



BUT HOW DO YOU GET CUSTOMERS TO SAY, “I WANT THIS”? HOW DO YOU CONVERT A “LIKE” INTO A “BUY”?


Nish Kukadia, co-founder and CEO at SecretSales.com, advises retailers seeking to gain new customers to develop interaction, to “invest in channels where your target audiences are likely to be”.


For his organisation, Kukadia claims that better engagement is found through another channel – TV, or, more precisely, through the integration of TV advertising and mobile. Due to an increasing amount of their customers using mobile devices whilst watching TV, Kukadia states that, “we advertise on daytime TV and get tons of people coming in from that.” In fact, 60 percent of SecretSales revenue is through mobile and tablet devices.


This being the case, Kukadia says that: “We haven’t used social media as a core acquisition channel. It’s a great ‘touch point’, but rather than a strong sales channel, it is more of a brand building environment”. For Kukadia, social media is not the best place to engage his target market. As he says, “I don’t think, from a personal point of view, that [users] are in a ‘purchasing’ frame of mind [when using social media]; If someone follows a brand on social media, the brand doesn't follow them back. It's a personal space and most people prefer to watch videos of cats than talk to brands.


WHAT MISTAKES DO RETAILERS WITH AN ONLINE PRESENCE MAKE IN THEIR BRAND’S DIGITAL CAMPAIGNS?


Elena Koudreiko, International Business Director at Be On, a division of AOL, and an expert in online video content distribution, argues that, when it comes to creating branded content, companies fail to make the distinction between driving sales and driving acquisition: “Videos of cats are obviously well received by audiences online, so if brands out there are looking at using that to their advantage, they need to make the distinction between driving sales and driving acquisition. I think video is still very much a branding tool, which is about investing, in making sure that the audience already has a relationship with your brand, they know who you are, they know what you stand for, why they like you and they know why they want to come to you. And if you’re looking purely to drive sales, then there are, of course, other channels, affiliates or others that might be more relevant.”


The focus of marketing campaigns should be to create user engagement by creating enjoyable user experiences. It’s more important to build a relationship with your audience which then, in an informal manner, leads to sales and recurring sales. Essentially, user experience governs whet