GUEST BLOG: Data-driven insights, DNVBs and the death of the agency model – what does 2019 have in store for retailers and their digital partners?
Jonathan McNamara, co-founder and CEO of digital consultancy RetroFuzz discusses the trends most likely to impact the industry in 2019…
2018 was an exciting, and challenging, year for digital marketing. Conversations around Artificial Intelligence (AI) and influencer marketing became fused, as the rise of virtual influencers like Lil Miquela and Sophia the Robot marked new opportunities for engagement.
Concerns over security and data privacy, heightened by GDPR compliance, remained at the top of everyone’s Twitter feeds. Chatbots, conversational UX and video marketing are all trends from this year that will spill, and expand, into the next. As the year comes to an end, we spent some time thinking about what the digital sector can expect from the next one.
Here are our predictions for what the retail sector should expect and see being implemented by the digital industry in 2019.
The agency model is dead
Or at least, it’s evolving. The gig economy, the 24-hour work day, and new perspectives on work-life balance means that more people than ever are working remotely – either as part of a flexi-time scheme or as freelancers. There has become less demand for a generalist mindset; many retail brands now employ in-house creative team members, making the full-service style of agency feel not only outdated, but redundant.
In 2019, we predict that the most progressive agencies will begin to reinvent themselves as a flexible, agile team of specialists that are built around their client’s exact needs. The agency model will give way to the rise of digital consultancies, who tailor their skillset to fit around a particular project or client – not the other way around.
As an embedded extension of their in-house team, this new form of agency – the digital consultancy – is more than just a workforce. They are advocates for their clients, as well as their creative partners. This model will value transparency and collaboration; empowering clients with expertise and working closely with them through every stage of the process: from strategy, to delivery and finally, implementation.
How DNVBs are doing it better
Digitally Native Vertical Brands (DNVBs) are created on the internet, for the internet. Beauty brand Glossier built it’s cult-like following almost entirely through Instagram (it now has 1.6m followers). Historically, there have been two channels: wholesalers and direct to consumer. DNVBs don’t engage in wholesale; everything they produce is from a direct-to-consumer perspective. They’re changing customer service as much as they’re transforming User Experience (UX) – and that’s important.
In 2019, established retail brands will make a point of learning from the DNVB model. According to We Are Social, more than 3 billion people are on social media worldwide. DNVBs like Glossier have capitalised on social media platforms to tell their brand story; and have built their audiences through customer engagement. Listening to the customer, and learning from them, are not just built into the design process; for DNVBs they’re a point of origin. Structuring a business around the consumer experience, and prioritising their perspective, is the future of accelerated growth in the digital sector.
This will be the year that DNVBs make their biggest challenge to the high street yet: by expanding into physical retail. Following the likes of established DNVBs like Warby Parker, Casper and Bonobos who have already reimagined their customer centric, digital concept as bricks-and-mortar shops. As the customer becomes more discerning, UX and brand narrative becomes all the more important. We believe big retail brands can benefit from focusing on their direct-to-consumer channels and creating engaging, purpose-driven content that tells a story worth sharing.
Data driven insights
According to an article in Forbes, 2.5 quintillion bytes of data were created every day; 90% of data in the world was generated in the last two years – a trend that shows no signs of slowing down. The same research has shown that Google now processes more than 40,000 searches every day, while smart device ownership is predicted to grow to a projected fifty billion by 2020*.
Investigation of data is not just integral to the UX design process, it’s the start of it all. In 2019, retail brands will use data insight to listen more closely to their customers, and apply their findings to inform design decisions. Through software like Google Analytics and Hotjar, screen recordings, scroll maps, polls on websites and face-to-face conversations with consumers, digital experts can gain a 360 degree understanding of a user’s experience. It’s all about getting a clear feedback loop on what the customer wants; telling a story by following the funnel of data, from where it begins through to conversion. We predict that data and insight will become a pivotal element in conversations with clients around UX, and empower their decisions to take onboard new directions of design.
Marketing automation, AI and personalisation
During 2019, marketing automation tools powered by AI will continue to increase, and hone, personalisation. Mapping the customer’s experience – from the messages they receive, to their eCommerce journey – will fuel the UX design process in new ways. According to research by Forrester, global spending on marketing automation tools will grow from $11.4 billion U.S. dollars in 2017 to $25.1 billion in 2023.
The use of marketing automation will only increase as digital marketers discover new, smarter ways to learn about their customers. New trends, like Machine Learning-as-a-Service (MLaaS) products, Machine Learning Data Catalogs (MLDCs), semantic SEO and advancements in chatbots will have a bigger part to play during 2019.
Ultimately, marketing automation and AI will feed into the new model of consultancy that we’ll see more of next year by empowering agencies and their retail clients with rich data and a customer-centric approach to the design process.
But don’t forget the basics
The next big thing in the digital marketing space is all well and good but at the heart of everyone’s strategy for 2019 should be a clear focus on getting the greatest commercial return for their investments in eCommerce. Sometimes, that means accepting the latest tech innovation or update is not in a brand’s best interest; forgoing a few quick wins, challenging all that is trendy, and achieving, together, long-term, lasting results that add real value to their business. Going back to basics is top of our wish list for clients for 2019 – putting digital marketing spend where it is needed and gaining the greatest ROI possible.