Agencies’ Role in Navigating Commerce Growth

Commerce growth

This past year has marked an accelerated shift to e-commerce, forcing brands to respond tactically to rapidly changing consumer behaviour. Ecommerce Expo recently invited me to explore how agencies, retailers and brands, all in close collaboration, are driving growth in this space.  Here are a few of my thoughts…

The role for agencies always has been and always will be the same: helping our clients to accelerate profitable growth. Last year we saw many brands change direction and move into ‘shorter term’ actions to navigate the different unfolding circumstances during the pandemic.

Companies like Diageo accelerated into shoppable content, really focusing on the digital journey understanding people’s behaviours and to how to connect search to conversion.

Thanks to Covid, Tata Beverages’ new brand Good Earth, a herbal tea and kombucha brand, ripped up and reimagined UK launch plans. Global Head of Innovation, Liliana Caimacan, saw an opportunity to lean into the brand’s positioning around exploration and experimentation. Striking an innovative partnership with Sainsbury’s, the brand pivoted to social commerce and digital experiences. Tata’s hand may have been forced; but by reinventing the rules of a very mainstream category, the brand has had great success in engaging consumers. 

Retail milestone: majority of UK sales to transact online

The growth in ecommerce is staggering. Even across mainstream grocery shopping where 30 percent more people shopped online last year. And that’s set to soar.  Econsultancy is forecasting that 52.1 percent of total UK retail sales will come from ecommerce in 2021, up from 44.8 percent a year prior. 

That means for the very first time, that the majority of retail sales for an entire country will transact online.  And that’s significant for all of us. Retail has exploded and the moments of transaction online are genuinely everywhere. Every media channel is now a moment of purchase.

Mark Read, CEO WPP, has commented, “At the height of the pandemic we saw five years’ worth of innovation in five weeks, with a dramatic shift to digital media and ecommerce as people’s lives went online…” And we see this – ecommerce innovation is rife.

Take our client Evergreen (with a well-known brand portfolio including Miracle Grow, Round Up and Rose Clear).  The gardening category, perhaps unsurprisingly, grew significantly last year as many more of us started to pay more attention to our lawns and flower beds. Yet, Evergreen’s goal was to attract a younger generation of gardener without alienating the existing Monty Don’s.

A traditional category, gardening is highly seasonal and lives mainly in DIY retail.  Traditional sales channels B&Q, garden centres and supermarkets rose to the Evergreen challenge but the nub of the matter is that this is not how young people shop … they shop Instagram.

Consequently, we shifted focus and spend into seven Amazon brand stores to meet the needs of current and, importantly, new gardeners who craved help, advice and education. With a rise in winter gardening – we broke new ground with out of season campaigns. The payback was big – with a massive online growth of 125 percent. We’re now in the process of innovating for the future with a series of new service offerings.

Two speed journeys: one size does not fit all

Many brands are at the very start of their ecommerce journeys – learning how to navigate the retailer.coms, launching on Amazon, and discovering how to use the platform; all while realising the commercial challenge of managing profitable growth across retail channels.

And then there are brands that have accelerated into selling direct to consumer, leveraging the growth of mobile shopping, and the popularity of social commerce to connect people to their ecommerce offer. 

Tech savvy consumers are drawn to DTC and the door is open for brands and retailers to expand into new categories and services. One example is Coco de Mer- the luxury lingerie retailer. A brand that has lived in London’s Covent Garden since inception, it has worked hard over the past twelve months to becoming the luxury experience online. 

The fountain of future growth

Take a moment to consider this: three trillion dollars of global retail economy is online today. With 27 trillion dollars’ worth of retail activity to come.  I see growth coming from major disruption of new categories. We’re predicting that banking, insurance, education and healthcare will be all be disrupted though ecommerce.

We also forecast that Amazon will become King, at least in Europe. Imagine a time when Amazon will not simply deliver your shopping and provide your entertainment, but will have evolved into a healthcare service, potentially become our children’s teachers, hold our insurance policies, savings account and more. Powering every aspect of our lives. 

It’s actually not that far away…

Credit: Michelle Whelan, UK CEO VMLY&R COMMERCE