eCommerce Expo: Retail Systems reports
Written by Chris Lemmon
eCommerce Expo returned to London’s Olympia on 27 and 28 September, where more than 100 retailers, payments providers, marketing firms and technology suppliers showcased their latest concepts on the exhibition floor and shared their thoughts on the online retail industry in the UK and worldwide within the conference streams.
The first panel discussion was ‘Cracking China: How to successfully trade in the world’s biggest e-commerce market’, chaired by director of Pivot Commerce, Ben Morgan. China is the biggest e-commerce market in the world and continues to grow at a rapid pace, with an increasing number of British retailers turning their attention to the country.
James Hardy, CEO and co-founder of Avenue51, highlighted the importance of customer interaction in China and the strict rules imposed by Tmall – China’s largest B2C marketplace, run by Alibaba, which enables international or domestic retailers to sell directly to the Chinese market. According to Hardy, the regulations include retailers being required to respond to customer queries within 22 seconds – resulting in a necessity for retailers to partner with a TP (Tmall Partner), companies designed to help and support foreign businesses with the everyday management of running an online store in China.
Commenting on the role of TPs, Hardy said: “Your TP effectively runs your store. They handle payments and marketing within Alibaba, all upstreaming data into the store, the order flows out of the store, store management and all customer service.” There are around 2,000 of these TP operators, with the vast majority based in Shanghai or Huangzhou.
Tim Baker, head of marketplaces for Mountain Warehouse, echoed the importance of customer satisfaction in China, stating that the market “wants to see a much greater level of detail on products than the UK”.
Mountain Warehouse, for example, posts around 20 pictures per product on Tmall, including close-up images of materials and zips, and averages around one customer interaction before each purchase. Baker stressed the importance of quality in China, stating that Tmall is “more luxury” due to the influx of international brands on the marketplace. Customers in China, and around the world, now have an expectation of detailed information when purchasing products online, and retailers must keep up, he added.
The complexities of trade regulations in China were underlined by Steve Hope, Chinese e-commerce specialist at the Department for International Trade. He explained the two operating models of the free trade zone in China, which include an 11.9 per cent duty tax on goods in the free trade zone. Sending goods from the UK, he explained, would be delivered through the system as personal items – with different levels of tax depending on the product. Apparel will generally be around the 30 per cent tax mark, while other products such as cosmetics can rise to a 60 per cent tax rate. In order to negotiate the Chinese trade rules, Hope said, retailers must invest in a logistics partner.
The China-focused conference session was followed by a UK-based presentation – ‘Mobilising the High Street: How mobile can help drive footfall back in-store” by Séverine Philardeau, vice president of retail and brand solutions at VoucherCodes.co.uk, which has facilitated £500 million worth of sales for retailers over the past year.
Philardeau began by speaking about the rapid increase in the average daily time spent on mobiles in the UK, which is set to be almost double the average time spent on desktops by 2018. With 50 per cent of VoucherCodes.co.uk’s traffic now coming through mobile channels, Philardeau stressed the importance of mobile site optimisation.
Research conducted with Forrester found that 99 per cent of large multi-channel retailers have a mobile-optimised site, while one in three retailers are now prioritising their mobile site over apps and desktops. The importance of an optimised mobile site was also highlighted by the August 2016 IMRG Capgemini Sales Index, which found that the growth of online-only retailers is up almost 25 per cent on last year, driven by investment in mobile channels.
Retailers must also target multi-channel shoppers, according to Philardeau. The Forrester research found that 86 per cent of consumers start their shopping journey with one channel and end with a different one. Furthermore, multi-channel shoppers who have completed previous research before coming in-store spend more than regular consumers, spending £41 more on average. With this in mind, three quarters of leading multi-channel retailers are increasing their investment in digital channels to boost in-store sales.
Echoing the importance of a strong online presence in his ‘E-commerce in Europe 2016’ talk, Olof Kallgren, market information manager at Scandinavian postal service PostNord, stated that there are currently more than 253 million online consumers in Europe, spending an estimated €189 billion in the past year. The UK and Germany remain by far the most popular markets to buy from in Europe, eclipsed only by China on a global scale.
He noted that “price is becoming less important for online shoppers”, with variations on payment, delivery and returns options now the most important factors when a consumer is considering a purchase. Kallgren also said that Postnord are testing solutions to deliver products to the boots of cars or directly to fridges and cupboards to people who are not home. Focusing on delivery options, he stated that an increasing number of consumers expect delivery of goods within one or two days of purchase – with the highest demand for speedy delivery in the Netherlands. But Nordic shoppers were the most patient across Europe, he added, with many happy to wait six or more days for their delivery.
Kallgren also acknowledged the rapid increase of international orders in Europe. Poland witnessed the greatest year-on-year increase in the number of cross-border orders, up 12 per cent, while Nordic consumers remained the most prolific international shoppers, with 73 per cent of survey respondents ordering items from abroad. Lower prices were cited as the strongest driver for purchasing abroad, followed by finding products that are unavailable in your specific country.
The potential impact of the EU referendum result on cross-border commerce was discussed in the ‘Coping with Brexit and grow revenues in Western Europe’ panel session, featuring Jon Copestake, chief retail and consumer goods analyst at the Economic Intelligence Unit. He noted how retailers in the UK are benefitting from a short-term increase in cross-border sales due to the significant drop in the value of the pound, but could expect smaller levels of growth in the longer term. However, he believed retailers are struggling to plan for the future as it remains unclear on how Article 50 will actually affect the UK market and its trade agreements.
While some analysts fear the referendum result will hinder the growth of the cross-border sales that UK businesses have seen over the past few years, however panellist Bozena Nawara-Borek, international key account manager for Grupa Allegro Poland, claimed that “nothing has changed when looking to cooperate with UK retailers” in the aftermath of Brexit, with Grupa Allegro ready to help them reach the Polish market.
Lorna Beaument, marketplace manager of The Dune Group, and Mary Gleeson, business development manager at Stylight, agreed that Brexit had not hindered their plans for internationalisation. Gleeson said that there was now a greater focus on expanding abroad and she advised other retailers to “analyse the strengths of the local market before expanding on a global scale”, adding that having the right resources in place was key for international success.