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Becoming omnichannel

There is no escaping omnichannel. It is at the forefront of retailers’ minds as it continues to drive the majority of sales growth. Retailers are predicting that 42 per cent of sales will be through e-commerce in five to ten years. Critically, however, they expect m-commerce sales to grow substantially to 29 per cent, equalling sales through physical stores. This shows, for the first time, a more balanced omnichannel experience.

Mix

A major reason for an omnichannel future are the digital natives who have grown up buying across channels and will, over the next five to ten years, move into the 18 to 34-year-old grouping when they will develop greater buying power.

This tech-savvy group are also very demanding and they expect an improved customer experience compared to previous generations – with technology underpinning everything. They expect to be at the centre of retailers’ thinking and the relationship to be driven by data.

With mobile technology now augmenting the physical shopping experience, and shopping destinations and stores increasingly offering complimentary wi-fi, it is surprising that only 17 per cent of retailers regard omnichannel as a key driver for customers. Most retailers now believe that this experience has already ceased to be a differentiator, at least as far as product purchasing decisions are concerned, as consumers increasingly expect it as standard.

By contrast, the proliferation of price promotions and claims of “everyday low prices” underlines why 61 per cent of retailers believe that value will remain a key demand from shoppers in the future.

Retail Demand V2Some legal points to consider…

Innovative methods to get products into the hands of customers will enhance the customer experience. The “Store within store” concept linking major brands (even traditional competitors) means that the way brands are marketed will be diverse. Well drafted co- branding agreements and revenue sharing models will need to be devised.

Increased reliance on mobile marketing will mean that logistics agreements need to be carefully drafted. KPIs and service level credits need to be properly drafted, recent case law on penalties will need to be considered carefully.

Luxury goods – traditional forms of selective distribution channels will need to be re-considered in the light of omnichannel marketing. The criteria for maintaining such systems will need to be rethought in light of the reduction of personal interaction in the digital environment.

Check back soon for our next blog post which reveals how retailers believe they have progressed in implementing an omnichannel strategy.

DWF Future of Retail Report

The Future of Retail

We spoke to 150 C-Suite executives at leading retail organisations in the UK to find out about these areas of growth alongside some of the key challenges facing the industry in a period of unprecedented technological change. 

The report combines DWF's legal expertise with insights from some of the UK's top retailers. Essential reading for everyone involved in delivering growth in retail.

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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Dominic Watkins

Partner - Head of Food Group

I am Head of DWF’s internationally renowned food sector group as well as being Head of Regulatory in London.

Hilary Ross

Executive Partner (London) - Head of Retail, Food & Hospitality

Recognised by The Lawyer as one of the UK’s Top 100 lawyers, I advise clients on compliance and challenges across the EU in relation to products, systems and safety.

Ed Meikle

Partner - Head of Retail Group

I advise on all aspects of intellectual property law, especially advising businesses in retail, food, sport and consumer products on the development, commercialisation and protection of their brands and technology.