May 13, 2021 | By Jay Johnston

Why are the retailers winning with digital losing their heads?

Galahad Clark, a seventh-generation cobbler of the Clarks shoe dynasty, pointed out that COVID-19 was not to be blamed for his family footwear retailer’s struggles. He argued the most decisive factor was its failure to keep up with the times and build an effective online presence. “They just hadn’t moved forward fast enough,” he said.

Galahad is right. While no one saw COVID-19 coming, the direction of travel for retail has been clear for some time. The importance of digital has been steadily growing since the dawn of the millennium, and has snowballed significantly following the advent of the smartphone era, which has empowered consumers to be constantly connected. 

Then the global pandemic propelled worldwide retail ecommerce sales growth to 28% in 2020, while total retail sales declined by 3%. So, while it has been clear for some time that having a sophisticated digital presence with strong ecommerce capabilities will define the success of a brand, what has held retailers like Clarks back? 

Making technology ends meet

The main reasons retailers have resisted the inexorable march towards the digitization of commerce are simple: cost and complexity. 

In the early days of ecommerce, hardware and software were inextricably linked. Updates to the backend system would necessitate updates to the front-end, meaning small projects could transform into big headaches for retailers. 

The inseparable connection between the front and backend systems delayed retailers in getting to market. Even more dangerously, it discouraged innovation as retailers couldn’t afford any downtime and subsequent loss of potential sales in order to make improvements at the back end that could facilitate an enhanced online experience and services for customers.

The immense time and financial cost of managing and updating legacy backend systems meant that for many retailers, ecommerce capabilities were out of reach. But this is no longer the case – and retailers need to be wary of repeating the mistakes of the past. 

The 21st century headless solution

The growth of ecommerce today and the sheer scale of the digital opportunity in 2021 should be cause for retailers to step back and review their digital strategies – particularly when it comes to mobile appcommerce. 

In the past, retailers have failed to capitalize on the exponential growth in popularity of mobile apps – either ignoring the channel altogether or choosing to build another inflexible digital silo, where the constraints of backend legacy systems limit their speed to market and ability to differentiate and innovate.

Instead, retailers need to take a mobile-first approach to digital and explore ways in which mobile, particularly appcommerce, can free them from these constraints and act as the glue between best-in-class digital and physical customer experiences. 

Harnessing the mobile-first opportunity

The opportunity to reach consumers through appcommerce is clear. Across the recent Black Friday sales period, data from poq’s 2020 Peak report found shoppers spent 126,940 hours browsing in apps alone. 

Time spent in-app increased by 90% across the whole of Cyber Weekend and shopping app downloads increasing by 20% in the UK and 10% in the US (which, combined, accounted for 22% of total global retail sales in 2020). This surge towards appcommerce means this type of shopping is here to stay, and it will increasingly be driven by innovation in the backend through headless commerce. 

Simply put, headless commerce allows for the decoupling of the front-end customer facing channels, such as web and mobile, from the backend applications for centralized sales, order, marketing and inventory management. This not only saves time in front-end development and speed to market – but offers retailers and brands the freedom to support whatever services and build the features and functionality they wish, and so create truly differentiated and compelling customer experiences. 

Capturing digital customer appeal 

A headless approach also enables retailers to truly maximize the value of their digital engagement, by offering immersive multimedia capabilities and a highly curated, feature-rich digital shopping experience with the latest content and personalized offers. This means retailers can make sure their digital presence stays ahead of the curve by capitalizing on the engagement advantages available with native mobile and maximise the higher frequency and conversion potential of appcommerce.

Clarks is proof that it is easy for brands to be overwhelmed by big IT projects, with the result being inaction. But its example should serve as a clear warning to retailers that the acceleration of digital cannot be ignored. With open tech commerce ecosystems that are microservices based, API-first, cloud-native and headless, retailers have direct access to capabilities that can empower them to create a cutting-edge digital experience across web, mobile and beyond without the need for complex legacy systems slowing them down.

Retail Peak report 2020
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