“The digital age is providing new, exciting opportunities for brands, consumers and society, by giving us the means to open up access for business, large and small,” said Simon Johnson, Director of Media at Amazon UK at the Brand Evening hosted by the British Brands Group in June.
Johnson explained how, like the industrial revolution in Victorian times, the internet and digital revolution are transforming business for branded companies, but in ways that have the potential to address some of the imbalances left by the earlier revolution.
“The pace of change is something we should not underestimate, but instead prepare for, adapt to and provide the support needed as early as possible to ensure it doesn’t leave anyone behind,” said Johnson. The internet and technology now help customers find and discover new products, whilst entrepreneurs and businesses of all sizes can build an affinity for their brands not only locally but with global audiences in much more cost-effective ways, armed with just a laptop, an internet connection and a great product or idea.
Johnson identified five trends that branded companies are experiencing in the digital age:
Democratisation of commerce
Digital transformation has provided hundreds of thousands of businesses, small and large, with access to a global digital infrastructure and global logistics operations that have democratised the ability to staff and run a business, allowing even start-ups and small brands to reach out far beyond their shop window and access customers globally in a targetted way without heavy capital investment.
Not just online businesses but bricks-and-mortar businesses are benefitting. “By embracing the digital era, even small high-street brands are exporting more, boosting their productivity and growing their revenues to the point where it enables them in some cases to expand their physical presence,” explained Johnson. “They have grown locally and globally.”
Whereas the industrial revolution led to mass urbanisation of business at the expense of the rural economy, Johnson explained that with good communications connections, “digital transformation provides the opportunity to revive the rural economy” through more cost-effective and pleasant working options.
He gave the examples of Second Nature in Dumfries, Scotland, Lente Designs in rural Buckinghamshire and HighBorn, run from Swanage on the Dorset coast, as successful companies that their founders were able to start up with less capital and lower operating costs, whilst enjoying a better quality of life, by running their companies in a rural area and selling to customers world-wide online.
Brands are powered more and more by a mixture of online and offline commerce. “Bricks and mortar are here to stay, but it’s changing and evolving,” said Johnson. “The vast majority of retail spend in the UK is still off-line, but digital technology is playing a role in ensuring that brands are attractive, sustainable and meet changing consumer demands” even in the off-line environment.
Johnson pointed to the example of the iconic Next high street fashion and homewares brand, which now reportedly derives 46% of its sales revenues online. He also explained how Shearer Candles, a 120-year-old family business in Glasgow, and Assai Records, which sells vinyl records in Edinburgh and Broughty Ferry, have been able to expand their high street shops and attract more customers overall through revenues from their online sales.
“The digital era has eroded the historical barriers that hindered exporting, enabling access for all brands, large and small, urban and rural, to customers around the world,” said Johnson. Tens of thousands of small businesses are now taking advantage of digital tools and services daily to make their products more discoverable, to build a global following and affinity for their brands, and ultimately to realise billions of pounds in exports.
Johnson cited statistics that over 60% of UK-based Amazon sellers export their goods to other countries, amounting to £2.3 billion worth of exports last year. The start-up Kano Computers, launched in east London in 2013 and working with Amazon Launchpad, sells DIY computer and coding kits for children. They have been able to sell more than 150,000 kits in 86 countries across the globe to date.
The next phase of automation
Cloud computing, machine learning and similar digital tools are helping companies deliver greater selection, value and convenience to customers and ‘raise the bar’ on customer experience. Machine learning tools are helping companies predict sales and deal with foreign-language issues in export marketing and sales. Vision-assisted technology is helping quality control in the examination of batches of fruit and vegetables before shipment.
Voice-based, machine learning tools like Amazon’s Alexa are helping companies build their own apps to reach customers in new and unique ways. The Laundrapp company, which specialises in collection and delivery of laundry and dry cleaning, developed an Alexa ‘skill’ which allows customers to book the company’s services simply by saying “Alexa, ask Laundrapp to pick up my laundry tomorrow” into their phone.
It’s still Day One
Predicting the future of where the digital revolution will take brands is really hard, says Johnson. A lot of new digital skills are required and there are a number of UK initiatives to support this, such as the Productivity Leadership Group’s Be the Business and new T Levels and apprenticeship programmes. Amazon’s own initiatives include Career Choice, AWS Restart, Women in Innovation bursaries and Amazon Academy.
Johnson does believe that the future for British brands is bright. “This is the first industrial revolution where – if we get it right – we have the chance to share the benefits more quickly and avoid leaving a generation behind. But to fully grasp these opportunities, whilst fully learning from the mistakes of the past, we must all work together to ensure everyone benefits, both now and in the future.”
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