- New research from Spring Fair reveals online retail landscape key trends
- E-tailers shun augmented reality in favour of more cost effective tactics
Online retail is the growth area to watch at the moment. In the past decade, online’s share of total retail sales has been on a near-constant upward trajectory. At the turn of the 2010s online represented just 6.9% of total retail sales. In December 2019 that figure was 21.3%. With growth looking unlikely to slow down, we’re rapidly approaching a future where retailers selling online have cornered a quarter of all market sales.
This growth, driven by consumers seeking better deals and more convenience, is great for competition and innovation in the sector. But, as impressive as online retailers’ growth has been, how are they looking to continue to drive the market forward?
Breaking down the numbers
Our latest research launched this week ahead of Spring Fair – the UK’s number one sourcing marketplace for home and gift retail – aimed to gather insight from key retailers with an online presence, revealing the focus areas that they believe will enable them to continue driving growth in the years ahead.
According to the results, social selling will be chief amongst retailers’ strategies to drive online sales in the coming years. The trend is starting to take hold with 57% of UK e-tailers asked believing social selling is already having a significant impact on their business, and almost half believing social selling will increase their revenue by more than 50%.
Differing from social media marketing, social selling is the practice of using social media to identify, engage and nurture sales prospects. It offers unique opportunities for businesses looking to build relationships with their networks and establish credibility. The impact that these benefits can have is clearly already readily understood by many retailers with an overwhelming majority (96% of respondents) seeing social selling as having an impact on their business in the next three years.
As most retailers are clearly already standing up and taking notice of the benefits of social selling, attention is now turning to discussion around the best platforms on which to utilise practice. In this area, Spring Fair research was able to reveal that Facebook’s platforms are by far the favoured avenue for social sellers to reach their audiences. Just over half expected Facebook itself to generate the majority of their sales in the coming three years, whilst 89% expected a combination of Facebook and Facebook-owned Instagram to generate the majority of sales over the same period.
Augmented reality: no clear path to ROI?
2019 was the year that augmented reality (AR) hit the mainstream. It became a key growth area, demonstrating its utility in services such as virtual products try-outs and its ability to help reduce online returns, for example. Investment however tended to come from the top of the industry with big names like Topshop, Ikea and Tesco all developing AR-enabled promotions and apps.
Many more online retailers remain trepidatious. Indeed, more than half of retailers selling online believe that augmented reality will never have an impact on their business and therefore aren’t investing in it. In fact, only 4% of those asked believed that AR was actually impacting their business.
There are a few possible reasons for this. Compared to social selling, which relies on already well-established platforms which are commonly understood and are relatively inexpensive to train sales reps on, augmented reality is costly. It can involve paying designers and developers to build an app or online platform from scratch. The results and impact are often hard to measure, whereas social selling’s success is far clearer with data on the conversion rates it can achieve being easier to obtain.
Product sourcing remains key
There are no sure-fire ways of knowing what’s around the corner for online retail, or what the next big sales driver will be, however what will always remain consistent is the importance of choosing the right products to deliver sales. Product sourcing can be the difference between a bumper sales period and a sales downturn – getting it right therefore is a necessity.
For home and gift sourcing, there is no more important marketplace than Spring Fair 2020. The show gives e-tailers a unique opportunity to get up close and hands on with the on-trend and sales driving products for the year ahead. The antithesis of faceless online sourcing, Spring Fair can help visitors to build essential positive and long-lasting relationships.
As buyers’ one-stop shop for everything fresh and new for 2020, the show will help visitors navigate the products destined make a retailer’s year. Having undergone a transformational reshuffle of its show floor, there will be an array of new and exciting additions for the 2020 event. Attendees will be able to find the latest gifts and giftable fashion, toys, beauty products, housewares, furnishings and more across two dedicated sourcing destinations and 16 carefully curated show areas.
Expert advice will also be high on the agenda, with a seminar line-up spanning three unique insight stages and four days of the show. Trends and insights will dominate, with speakers including broadcasting legends Mary Berry and Mary Portas, as well as speakers from the likes of Google, The London School of Digital Marketing and The Giftware Association. They’ll be covering off topics such as monetising social media engagement, online content strategy, search engine optimisation and how to utilise Google Analytics.
Spring Fair runs from the 2 to 6 February 2020 at Birmingham’s National Exhibition Centre. Register to attend for free here: https://www.springfair.com/spring-fair-registration
Visit the Spring Fair website for more information: www.springfair.com
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