RetailTechNews’ weekly roundup brings you up-to-date research findings from around the world. In this week’s edition: Direct-to-Consumer on the Rise; Slow Mobile Web Could Cost Business Millions; and 6 Years to Save the British High Street.
Direct-to-Consumer on the Rise
Over two-fifths (40%) of Americans are planning to make at least 40% of their purchases from direct-to-consumer (DTC) companies in the next five years, according to Diffusion.
Key motivating factors to these trends include convenience, with 27% of consumers feeling these brands make the purchasing experience more convenient than going to a traditional store. One in six (18%) would consider buying from a DTC brand because the quality is better than that of traditional brands. Meanwhile, the same amount (18%) would prefer to shop with DTCs because they have fast, free shipping. However, DTCs aren’t outpacing traditional brands in every aspect. Only 11% of respondents believe they offer more personalisation or assistance than their traditional counterparts; while only 9% say customer service from DTCs is superior.
All ages largely share the same opinions around purchasing motivations. In fact, 26% of Americans aged over 55 find it more convenient to buy from a DTC brand than go to a physical store, compared to 17% of millennials. However, one-in-six millennials would rather purchase from a DTC brand because they are more committed to using organic or eco-friendly ingredients, compared to 6% of those aged over 55.
Slow Mobile Web Could Cost Business Millions
Slow digital experiences are affecting the bottom line, finds a study by WP Engine. The vast majority (82%) of respondents say their enterprises have an average website load time on mobile devices of two seconds or more, while 31% admitted it takes an average of five seconds or longer for their website to load on mobile devices. With just two seconds being the acceptable threshold for e-commerce, enterprises are risking millions in lost revenue.
Although almost half (44%) of organisations’ website traffic comes from mobile devices, most enterprises are only committing 40% of their web strategy to mobile and only 38% of their marketing budget on mobile. WP Engine also finds that smartphone users have a clear preference for using company websites over mobile apps when making purchases online.
The research also suggests that respondents think that Progressive Web Apps (PWA), which are installable and live on the user’s home screen, could mean an end to the App Store. With the cost of development and maintenance for iOS and Android apps totalling over USD$1m (£758.9k) over two years, organisations are turning to PWA and Accelerated Mobile Pages (AMP) mobile solutions.
6 Years to Save the British High Street
Retailers failing to engage in digital transformation won’t be operating by 2024, according to 90% of senior retail decision makers in a Hitachi Consulting report. In fact, a quarter believe that retailers steadfastly clinging to more traditional ways of doing business won’t exist three years from now.
The research reveals that despite the importance of retailers modernising and future-proofing their operations, less than half (45%) have passed the midpoint on their digital transformation journey – and only 1% consider themselves to be where they want to be.
A lack of internal strategy (29%), management buy-in (19%), and knowledge (29%) are the biggest barriers to digital transformation, according to three-quarters of respondents asked to consider their own operations. Concerns over these barriers led a quarter of respondents to state they were “scared” to digitally transform, citing a lack of understanding around how best to begin transformational projects, coupled with a heightened fear of risk.
Respondents also highlighted that an omnichannel strategy is critical. Seven in ten (70%) agree that it is critical to the high street surviving; and 82% already closely link their omnichannel strategy to their brand values.