Making a success of diversifying through technology

By Nicola Broadhurst, Partner, and Angelica Lovell, Associate at Stevens & Bolton LLP 

Diversification takes many forms including enhancing customer experience through perks like free coffees to the use of a sophisticated technology to provide a customised product. Ultimately it is a way to differentiate from competitors, increase sales and engage with the customer.

For many retailers, a more drastic diversification to their offering is necessary to meet changing consumer preferences. With online sales rising at a meteoric pace, an attractive, profitable and on brand way to sell goods online is imperative for most retailers, whether done directly or via a third party platform.

Physical stores still play a vital role in shaping customers’ connection to brands. Technology can be helpful to joint up the dots between online and in-store purchases by obtaining customers’ email in-store so customers’ transactions across in-store and online purchases can be mapped for profiling purposes. Attention must be paid to data protection law implications before introducing new technology.

There is little point in setting up a website if it performs poorly or the aesthetic jars with that of your stores. Doing your due diligence on the web developer is important as is the contract with them. Retailers should pay special attention to intellectual property rights to ensure that they own key rights and that liability to third parties for website content or intellectual property infringement is minimised.

The fulfilment of orders is critical; failure to supply on time is one of the quickest ways to annoy a customer. To ensure fulfilment during peak periods there is an increasing reliance by retailers who wish to offer a home delivery option on third party suppliers and in particular digital platforms. Robust contracts with suppliers and continuity plans are important to tackle potential failure of logistics suppliers to perform.

Retailers wishing to expand globally may look to technology to facilitate the expansion. Payment solution providers offer the ability for retailers to reach customers internationally enabling them to pay on the retailer’s website in their local currency with the payment solution provider fulfilling the order. Beware providers using non-branded site pages to take payment and contracts with unfavourable liability provisions.

Whatever the form of diversification employed, brand alignment across channels and careful regard to the risks will help savvy businesses get ahead.

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