Artificial intelligence (AI) enhances an online retailer’s ability to engage with customers, says Peter Thomas. The technology that is now redefining retail enables algorithms to make the same complex decisions a human could, sifting through the data, but much faster and at volume. It means the customer experience (CX) becomes more tailored and personalised; the customer journey more comfortable. When used well, the tech helps both retailer and consumer.
When Welsh entrepreneur Pyrce Pyrce-Jones set up the world’s first mail order company in 1861, he was considered a visionary. He broadened his market and got his wares into the hands of distant punters by capitalising on cutting-edge technology of the era – the locomotive. Doubtless, if he were in business today, he would be enthralled by social media as a sales platform and would be busy posting about his exceptional woollen products. In fact, he might well have been behind Mahabis, the woollen slipper company, that is taking the internet by storm.
The humble slipper has had a make-over. No longer the realm of the ‘Last of the Summer Wine’ cast and viewers, it now wouldn’t be out of place in London’s Design Museum!
Mahabis cannot be bought on the high street and its founder has no plans to sell through third party online retailers. Instead, it sells direct to its consumers via its website. Controlling the supply chain is proving successful. Within two months of launching it had sold 10,000 pairs and first year sales topped £2.5million.
While UK-based, it now has a global clientele, selling to customers in 150 countries. It has built a whole culture and lifestyle around its product. It’s not selling slippers, it’s selling downtime and promotes the idea of investing in things that allow you to relax. You put your slippers on and you feel like you’re at home, wherever you are.
From product development to launch, Mahabis invited its customers behind the scenes for a sneak peek at what it was up to. This transparency allowed potential customers to feel closer to the brand, established trust and helped build anticipation. It followed this up by making its customers feel part of its brand image by encouraging them to share images of themselves and their Mahabis.
It does this very cleverly by branding all the user generated content (UGC) it receives. This means that the brand is always consistent.
Brand building tool for retail start-ups
Another start-up direct-to-customer business that has capitalised on social media as a brand building tool is smartphone maker, OnePlus.
The company sold 1.5 million phones globally in its first year of trading – a result that, while tiny in industry terms, greatly exceeded the expectations of the management team. It began by only selling its phones to customers who received an invite from the company, granting them permission to buy. OnePlus owners could also share invites with their friends which created an invested community of OnePlus supporters which it now engages and mobilises through relevant content.
Both of these businesses have the benefit of being start-ups so have been able to design their company from the ground up. However, established online direct businesses like Amazon (which is 22 years old!) are social as a means of innovation. Just look at Echo. It provides a level of convenience that was previously unimaginable.
Before, people perceived mail order as being about big book catalogues, a 28-day delivery window and cheap clothes. The demographic was always tipped towards the over-55s, but this is clearly no longer the case. But the over-55s must not be dismissed and there is plenty that the more traditional mail order organisations that target this highly profitable group can learn from these online businesses since the so-called ‘Grandroid’ demographic – smart technology-enabled pensioners – is booming.
Eighty per cent of the over-55s in the UK are online, according to Ofcom – accounting for almost 18 million people. Moreover, half have tablets and a third smartphones. They are the fastest growing adopters of smart technology. Furthermore, they have the highest disposable income of any age group, so this begs the question, are direct sellers doing enough online for this age group?
Apparently not, OFCOM reports that a mere 15 per cent are satisfied by the way brands treat them online. Demand by the over-55s for greater online shopping experiences is growing as technology becomes more deeply entrenched in everyday life and the firms that have previously profited from this audience, that fail to get it right, will find diminishing returns from their previously loyal customers.
As the Mahabis and OnePlus examples demonstrate – to succeed, a social strategy must be viewed through a brand lens so that it makes sense to the customer and adds value to their shopping experience.
There is clearly a huge opportunity here for direct brands that are brave enough to alter the status quo and engage with the over-55s across the relevant online platforms.
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