Understanding the Changing Nature of Retail
This blog is based off of Zignal’s Retail Industry Report. Click here to download the report in its entirety.
The retail industry continues its never-ending transformation. In a world dominated by Amazon and e-commerce, brick-and-mortar retailers are re-aligning to meet the needs of the omni-channel consumer that wants to buy “anywhere, at any time and through any channel.” At the same time, these mobile-savvy consumers are empowered with competitive pricing and products – all within the reach of their pocket or purse. Armed with an array of information, today’s omni-channel consumer is also extremely mindful of how their clothes are manufactured and seeks out sustainably sourced garments.
These hyper-informed consumers have shunned traditional retailers who have been slow to align their online and physical businesses. Brands that have failed to leverage a strong online presence face declining sales and the looming threat of bankruptcy. Zignal Labs analyzed social and media intelligence across the retail industry between February 20th and March 5th to understand key trends and market drivers. So, which retailers are well placed to take on e-commerce giants like Amazon? Which brands are struggling? What are the emerging trends in fashion? And where does the conversation take place?
The industry was driven by four main topics: “bankruptcy and crisis”, “e-commerce”, “ethical sourcing” and “mobile commerce”. These four topics produced more than 3,000 mentions a day (on weekdays) and accounted for 86% of the total retail share of voice.
Walmart’s E-Commerce Department Flexes it’s Muscle
Within the retail sector, the largest peak in media mentions came from the “e-commerce” topic. The spike, which generated over 7,500 mentions, was attributed to a positive announcement from Walmart. Specifically, the retail giant announced it had generated 29 percent growth from its e-commerce department, beating a report stating the industry average as an increase of 15.6 percent. The upward trajectory for e-commerce was reflected by a positive net sentiment score of 81 percent.
Traditional retailers aren’t the only ones trying to get involved in e-commerce. Microsoft recently announced a strategic partnership with Indian e-commerce company Flipkart, while Alibaba invested $177 million in Paytm, another indian e-commerce company. Both companies hope to use e-commerce as a strategic play to compete with Amazon’s AWS computing service.
Retrenchment and Bankruptcies for Traditional Retailers
As some of the more tech-savvy retailers have adapted to the omni-channel consumer, many of the large, traditional retailers have struggled under the shadow of e-commerce. Continuing a growing trend, more brands planned to liquidate assets. Both Nasty Gal and hhgregg announced plans to file for bankruptcy, while JCPenney announced the closure of around 140 stores.
Sustainable Fashion Replaces Fast Fashion
The conversation around ethical sourcing was driven by the sustainable fashion trend, as celebrities strutted their responsibly sourced garments on the red carpet during the 2017 Academy Awards. Emma Watson’s sustainably-sensible fashion earned the top spot. A tweet about actress Emma Roberts wearing a sustainably sourced dress was the second most popular tweet. As the celebrities advocated their cause, key influencers such as gossip or fashion magazines also joined the conversation.
Top Media Channels
The topics outlined in this report were syndicated across a range of media channels and varied by topic. For example, most “bankruptcy and crisis” stories originated from news outlets, while “e-commerce” stories came from a combination of LexisNexis, Twitter and blogs. Instagram is also a far more popular channel for posting “e-commerce” content.
The retail industry has been forced by Amazon and other upstart e-commerce companies to cater towards the omni-channel consumer. The way the industry is headed, only the incumbents who can adapt will survive. Retailers also need insights into the direction of consumer tastes as they permeate through the market. The best way to capture these emerging trends is through media intelligence data.
To view the entire Retail Industry Report, click here.