The digitalisation of retail is creating new opportunities for engagement, whether that’s building a presence in the metaverse, launching non-fungible tokens (NFTs) or using personal data to customise services. Our latest research among the UK’s top 100 retailers looks at the importance of technology to retailers’ growth strategies and reveals the latest trends including in relation to the metaverse, NFTs, data and payments (including the growth of ‘buy now, pay later’ services). While the metaverse was largely considered irrelevant to most retailers when it was first conceived, millions of consumers now use it to engage with brands. Everyone from luxury fashion retailers to high street brands and restaurants are experimenting with virtual worlds, trying to decide what the opportunities are and how to incorporate them into their future plans.
META MISMATCH
According to the research, 12 per cent of retailers are already using the metaverse and two fifths (39 per cent) plan to in the future. This is despite lingering questions over what it is and how it can be used, as well as the risks – given it isn’t clear how existing legal frameworks would apply in this context. However, there is a mismatch between how retailers and consumers plan to use the metaverse. The top use cases for retailers include marketing (35 per cent), engagement (31 per cent) and clubs and communities (29 per cent), while only 27 per cent see themselves creating experiences such as games and virtual classes. In comparison, an overwhelming majority (72 per cent) of consumers see themselves using it for experiences, followed by engagement (70 per cent), marketing (67 per cent) and clubs and communities (39 per cent). Getting this wrong could damage a retailer’s brand and its reputation in the metaverse, which can ultimately reflect across their other channels too.
NEW WAYS TO PAY
Digitalisation has led to an increase in novel payment methods, with ‘buy now, pay later’ (BNPL) becoming considerably more prolific. While buying goods on credit isn’t new, BNPL is a very quick and easy way of delaying payment, which creates risks for retailers. As the cost of living crisis bites, the majority (64 per cent) of retailers say they are worried about consumers getting into too much debt. Nevertheless, more retailers plan to offer BNPL in the future (58 per cent) compared to today (42 per cent). With the right protections in place, BNPL can be an effective way of attracting customers looking for this option to sensibly manage their cashflow and ensure brands appear on what have quickly developed into marketplaces in and of themselves. Everyone from luxury fashion retailers to high street brands and restaurants are experimenting with virtual worlds. PopTika / Shutterstock
PROTECTING DATA
Retailers have faced a wave of issues since the start of the pandemic, from successive lockdowns to Brexit, a global supply chain crisis and now the cost of living and energy crises. As a result, data privacy and protection has fallen down retailers’ list of organisational priorities. Only a fifth (21 per cent) say GDPR compliance is a top organisational priority with exec-level sponsorship. The research identifies a number of barriers to this, including a lack of time (44 per cent), GDPR fatigue (37 per cent), a lack of budget (26 per cent) and a lack of expertise (26 per cent). Despite a growing volume of data and acknowledging that there is room for improvement, the majority (60 per cent) say their investment in data protection is staying the same. Retailers need to review their risk exposure – including in line with recent changes to international data transfer law – and ensure their policies and processes are effective. Retailers can rarely afford to ignore new trends; success will lie in finding ways to minimise the uncertainty that comes with new technologies and pinpointing future opportunities.
Download a free copy of the report at tlt.com
