2016 has already been an eventful year for the digital industry, and we’re only halfway through! As Q2 draws to a close, there’s no better time to take stock and reflect on the year in digital so far. Here we’ll run through some of the digital highs and lows of the year so far, and what they mean for your marketing and customer relationships.
The digital highlights
Ecommerce soars to new heights
We’re probably preaching to the converted, but it’s more important than ever to prioritise your online customer experience, because ecommerce is growing at quite a clip. According to the Office for National statistics, Q1 2016 saw an increased amount of retail sales taking place online than in the same time period last year.
Average weekly spending online across all industries in January 2016 was £863.5 million, which is a whopping 10.4% increase on January 2015. This increase is all the more impressive when considering January is traditionally a softer month for retail spending. February 2016 saw an increase of 12.3%, while March had a slightly lower lift of 8.9%. If this continues throughout the year, it’s estimated that the UK’s ecommerce economy will have expanded by £12 billion by 2017.
Retailers are used to hearing that mobile commerce is the future, and the latest mcommerce growth figures certainly confirm this. In Q1 2016 the number of people in the UK who purchased something using a tablet or smartphone grew by 13% from Q1 2015.
That may not sound like much, but this increase meant that 32.3 million people bought something via mobile device in the past year - that’s half the population of the UK. As this trend only looks set to continue, ensuring commercial sites and marketing communications are mobile optimised with responsive design templates is now a must for retailers.
Social media advertising graduates to the major league
For years treated with scepticism, social media has emerged as a dominant force in digital advertising in 2016. In a March 2016 study by Social Fresh it was found that 61% of marketers plan to use Facebook at least once a month for advertising purposes. While Instagram came third behind Twitter with 29.5%,the photo sharing platform had most reason for optimism. Over a quarter of the marketers polled said they were planning to invest the most in Instagram over the next year.
This is a remarkable achievement for the platform considering it only introduced advertising features less than a year ago. Retailers looking to target potential customers more effectively should pay closer attention to social media platforms to ensure they’re advertising in the right places.
B2B marketers get on board with programmatic
B2B marketers often wait a little longer before jumping on the latest marketing trend, and programmatic advertising proved to be no exception. In 2015 this innovative new way of selling ad inventory made significant inroads with B2C marketers, but B2B marketers were more reticent.
However, this attitude appears to be changing. According to a May 2016 study by Kantar Media and Connectiv, 79% of B2B marketers expect to purchase at least some of their digital display advertising through programmatic exchanges in 2016, with 20% of marketers surveyed planning to spend 60% of their advertising budgets this way.
The digital lowlights
April is the cruellest month
For most industries April is normally a relatively strong month for sales. However, this April ecommerce growth appeared to stall, with sales increased by only 11% compared to the year before - registering the lowest monthly growth rate on the year so far.
Bhavesh Unadkat, a retail analyst at Capgemini, suggested the adverse weather was the main reason behind the sluggish performance, saying: “the heavy rainfall...discouraged shoppers from purchasing the seasonal items that traditionally drive the Index.” Perhaps next year retailers would do well to prepare for the notorious British weather with alternative offers.
Publishers get battered by ad blockers
Ad blockers were high on the agenda in 2015 and this has continued into 2016. Some believe it’s destroying a free and open internet, whereas others believe it will help to enhance it by forcing advertisers and ad publishers to improve their offerings.
More worryingly for retailers, a recent study has suggested that ad blockers do not simply block ads but can actually reduce overall site functionality. In tests carried out on the UK’s 100 most popular websites with the 24 most common ad blockers, it was found that ad blockers disabled retail order tracking pages and airline check-in screens. It might be time for retailers to put up notifications warning users of the adverse effects of ad blockers when trying to purchase goods.
Adobe Flash bows out… finally
This digital low has many people dancing in the streets: in May 2016 Google announced that from June it would begin to phase out ad creatives built using Adobe Flash on its Chrome browser, with the policy being in total effect by January 2017.
Flash has long been criticised for being a proprietary technology, in contrast to the open source HTML5 which can handle much of the same animation functionality. The power-hungry nature of Flash was the final nail in the coffin for the technology, given that more and more ads are loaded on mobile platforms. Marketers should be aware of this change, and update their creative and tech teams accordingly to work with HTML5 if they are not already doing so.
A word on Brexit
It would be remiss of us to ignore the UK’s decision to leave the EU in an article assessing the ups and downs of the year, as it has undoubtedly cast a broad shadow of uncertainty over the digital economy. This uncertainty makes it hard to confidently label it is a high or low.
However, while the public message from industry voices has been almost unanimous in its opposition to Brexit, and the fiscal downturn has already begun, there are still too many unknowns surrounding the final outcome. Time will soon tell of course as the dust settles, but for now there are definitely more questions than answers.