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The Changing Digital Landscape

The Changing Digital Landscape

Andrew Atkins, Managing Director of Resonant, a specialist strategy, digital and ecommerce consultancy, discusses how the digital landscape has changed in recent years and how independent retailers can compete

Whether you’ve been a winner or a loser from ecommerce, one thing’s for sure when it comes to its impact – it’s made the lives of independent outdoors retailers considerably more complex and considerably more uncertain.

Many of you will also understand, from first-hand experience, my view that brands and distributors (often with their own well-developed online presence) have struggled to adopt trading strategies that recognise the independent retail channel as being more than a collection of physical stores.

Whether that’s because so many field sales people don’t ‘get’ digital (something not unique to this sector), or senior management within brands simply don’t consider independents within their ecommerce planning, it leaves many of those retailers either refusing to risk going big on ecommerce or doing their own thing and keeping quiet about it. Neither of these approaches is ideal, given that it’s now hard to exist on physical store sales alone, but any long-term online plan will work better if the retailer is able to work proactively with their suppliers.

To put it in practical terms, how many suppliers offer you marketing and promotional programmes that explicitly include ecommerce as well as physical channels?

Note that I keep talking about ecommerce, rather than website sales – that’s simply because the emergence of marketplaces (Amazon and eBay especially) has provided additional channel opportunities, regardless of whether a retailer has their own trading website. Many of the most progressive outdoor sector independents have strong presences in these channels and have invested in the systems and skills that generate profits from these price-sensitive channels.

I’m not recommending that everyone should rush to trade on these platforms. Far from it, as they’re complex and require commitment to make them effective. However, I will illustrate the selling power of these new opportunities, using some Amazon UK trend data that caused a stir during my talk at the OIA Conference in March:

Brand Product Sales per Month
TNF Drew Hoodie (Black Medium) £22,000
Black Diamond Trail Walking Poles £15,000
Bridgedale Men’s Hike Socks (Indigo x-large) £1,550
Berghaus Hillwalker 2 GTX Boot (Brown size 8) £11,000

Probably the most important point is that all these sales, on only one platform, would potentially have taken place through physical stores only 15 years ago. Seeing the numbers in this way tends to make it very clear why physical stores are under such pressure – and these figures obviously don’t include sales through retailer websites or brand websites.

So how do indies compete in a disruptive age where ecommerce will continue to grow (exceeding 30 percent of outdoor category sales within three years), where information and validation is no longer the preserve of brands and retail staff and where it’s becoming ever-easier for brands and non-traditional players to sell directly to consumers?

Well, there’s an important role for accelerating things you’ll already know about, such as:

  • Differentiating your product ranges from the big chains;
  • Being clear experts (not just enthusiasts);
  • Working more closely with supportive brands;
  • Creating a great instore environment (continental retailers have an edge here);
  • using social media to build an engaged audience (see Keswick Boot Co. for a good example).

But it’s also important to recognise that the difference between store and online sales will become evermore blurred for consumers – they have multiple ways of accessing product and apply different priorities of delivery/collection, price, expertise, choice, etc. at different times. The trick is to cater for these needs without significantly increasing your overhead percentage or complexity – easier said than done.

But it is possible. Ecommerce used to be a sector where independents could do very well, as the major retailers and brands were slow to adapt, and Google traffic was free or low-cost (and social media wasn’t even ‘a thing’). That changed five to seven years ago and many smaller players from store-led backgrounds went into decline or were forced out.

Happily, that’s changing again, as many of the technologies that drove the recent dominance of the big players are now available in bite-sized packages, with many being suited to integrated instore/online management of things like stock control, pricing, product images, multi-channel selling and payments. Even social media can now be managed in a planned fashion.

So, for most of us (yes, I’ve also retailed successfully in a specialist category with similar dynamics), the future involves us seeing retailing as a multi-channel effort and, as the balance between online and instore sales moves towards 50/50, accepting that customers increasingly expect this.