As the nation slowly but surely becomes more accustomed to staying in, the retail industry has little choice but to embrace being in “online-only mode” for a while longer. The once-bustling UK high streets paint an eerily tranquil picture at present, with lockdown accelerating the rise and adoption of e-commerce as more and more shoppers turn to online channels for their stay-at-home fashion fix.
While this switch to online-only has caused challenges for many omnichannel and traditional bricks-and-mortar retailers, the tech-first e-commerce stalwarts were already in a position to reap the rewards. Industries such as online fast fashion, for example, are booming at the moment. As we all know, staying in is the new going out, and millennials and Gen Z still have that desire to look their finest for those Friday night Zoom calls with friends and family.
Just last week, leading fast fashion business boohoo announced some welcome good news amongst the ongoing doom and gloom of the coronavirus pandemic. The boohoo Group, which includes leading online brands boohoo, boohooMAN, PrettyLittleThing and Nasty Gal, reported a huge 54% jump in pre-tax profits to £92.2 million for the year, as sales raced 44% higher.
Interestingly, the Manchester-headquartered company did confirm that they’d suffered a “marked decrease” in year-on-year (YoY) growth in March. However, a strong bounce back over the last month as we entered lockdown has seen sales rise, with April figures now up YoY.
“Whilst recent events have understandably overshadowed what has been a great year for boohoo, they have also highlighted its key strengths. Our business is founded on our ability to be agile and flexible and it is at times like this when these abilities are tested, and I am proud of how our colleagues and business partners from around the world have responded to the challenges posed by this pandemic.”
— John Lyttle, CEO, boohoo Group PLC
The agility and flexibility referred to by Lyttle is the key to success in this rapidly changing, unprecedented situation. boohoo doesn’t shy away from its desire to be known as a disruptor amongst the fashion retail sector, and is a long-term adapter of innovative new technologies such as artificial intelligence (AI) and machine learning (ML) to drive maximum value from its vast amounts of data.
It’s this commitment to looking ahead and pushing new boundaries that will define which businesses will come out of the current pandemic well-positioned for the future. Global issues, like the one we’re seeing with coronavirus, act as accelerators of change. There’s now a real need for businesses to look towards taking a data-driven approach, and to utilize technology like AI, to ensure their long-term futures – especially as the retail industry becomes more e-commerce-focused and data proliferation continues.
It isn’t just the likes of boohoo who have been enjoying success in recent weeks, either. Global e-commerce firm The Hut Group recently announced the creation of 500 new jobs across its manufacturing, logistics and fulfillment operations in response to a rapid rise in demand for the brand’s vast range of health, beauty and nutritional products. Meanwhile, digital challenger bank, Starling, recently revealed some notable increases in online customer spending at retailers such as Argos (+49%), ASOS (+12%), John Lewis (+13%) and the Apple Store (+36%)
AI-powered ad optimization
As more businesses push the majority of marketing spend towards digital channels – particularly paid advertising – standing out from the crowd on both Google and social media has become increasingly difficult for retailers.
By introducing our AI-powered Ad Optimization solution into the marketing mix of one of our retail customers, we’ve achieved some great results over a very short period of time. Some stand-out stats include a significant increase in website sessions and higher transactions. Across social media channels (Facebook and Instagram), our solution also helped to drive a huge rise in new customer acquisition.
For businesses like our customer, they know that demand is still there and that their customers still want to shop – it’s just a case of being able to use data to your business’ advantage to help find the most high value customers in the most cost-effective way.
AI is ideally placed to help retail businesses overcome their current marketing challenges, at a time when maximizing every penny spent on acquisition has never been so important. By leveraging your customer and advertising data, AI and its predictive insights allow you to drive customer acquisition and intelligently optimize your campaigns for lifetime value, not just one-off purchases.
Once we emerge from the current pandemic, the differences in fortune between those businesses who took an AI-driven approach and those who were too slow to react will be clear for all to see.