Retail Reduced – August 2024

At some point in all of our lives, we’ve probably flipped through TV channels, hoping to catch some Come Dine with Me, only to land on a teleshopping channel and get hooked by an overly enthusiastic host selling us a wonder mop.

But now, for many, the idea of TV channels seems medieval with more than 18.8 million UK households (65.4%) now having access to a streaming subscription.

Teleshopping channels may feel old school now, but they paved the way for e-commerce. Fast forward to today, and online video streaming has created ‘social commerce’ – a fusion of content and commerce – a new powerful force in the retail landscape allowing consumers to shop as they scroll.

With over 5 billion global social media users, it is no shock that social commerce is projected to hit a $1.2 trillion market value by 2025. TikTok, once just a short video app, now boasts shoppable posts, livestreams, and influencer marketing. Users spent $3.8 billion on the app in 2023 alone (up 15% year-over-year). Until this year, spending was largely concentrated in Asia but TikTok’s is now winning more Western consumers. Earlier this month, beauty brand P.Louise broke the UK record for the most revenue generated on TikTok Shop by a brand, as it made £1.5m in just 12 hours.

However, there are challenges to harnessing the vast potential of social commerce:

• Consumer protection – consumers must be provided with information on pricing, delivery times, and rights to refunds and returns. This can be difficult to enforce and monitor when businesses are selling through a third-party platform so careful consideration should be made to ensure compliance with consumer and privacy law.

• Data sharing – social media platforms thrive on data sharing so companies and influencers need to ensure they abide to the General Data Protection Regulation and obtain any necessary consumer consents required for data processing.

• Trust – gaining the trust of the consumer remains the biggest hurdle to social commerce because when it comes to making a purchase, customers are quick to be deterred and abandon their carts in favour of more traditional selling platforms. However, the tide is changing as PayPal found almost 50% of all UK consumers made a purchase through social media in the first half of 2024.

• Terms and conditions – consider whether there are any restrictions on the content you are able to promote in the Terms and Conditions of the social media platform you are seeking to use.

• User-generated content (UGC) – trust of social commerce can grow if brands can encourage customers to share their shopping testimonials in social media content as this fosters engagement and bolsters authenticity.

• Influencer marketing – collaborating with the right influencer allows businesses to tap into their audience and gain credibility through their endorsement.  However, influencer advertising must be legally compliant and clearly labelled as such by, for example, prefixing hashtags such as #advertising or #advertisement. Companies should also carry out thorough checks before partnering with influencers to ensure their public values align with its business values and do not cause any reputational damage.

• Retailer partnerships – partnering with streaming or social media platforms can unlock new audiences for your products. However, copyrights must be observed when using music, images, or videos in the shoppable content.

Social commerce can provide a seamless shopping experiencing, allowing consumers to discover and purchase products without switching platforms. Retailers that can overcome the legal challenges in connection with social commerce and deliver this kind of slick and secure shopping experience are likely to stand out from the crowd, provided they observe with.

After a six-year legal battle, several thousand current and former Next employees have won a landmark equal pay claim. The employment tribunal, involving 3,540 claimants, ruled that the retailer failed to show that paying their sales consultants, who are overwhelmingly women, lower hourly pay rates than their warehouse operators, the majority of which are male, was not sex discrimination.

The case, which examined the period from 2012 and 2023, found that 77.5% of retail consultants at Next were female, whilst men made up 52.75% of warehouse operators. During this time, warehouse workers were able to earn between 40p and £3 more an hour than retail sales workers. Meaning the claimants’ average salary loss was potentially more than £6,000 each.

At the hearing in May, the high street retailer argued that the difference in pay for the two roles was based on the “market rate” for each position and was to ensure the “viability” of the business. Under the Equality Act 2010, work that is of equal value, at the same company, must be paid equally unless an employer can show that the reason for the inequality is genuinely due to a “material factor” that is not the difference in gender.

Whilst the tribunal accepted that the discrepancy was not due to “direct discrimination”, saying there “there was no conscious or sub-conscious gender influence in the way Next set pay rates”, it ruled that the “business need was not sufficiently great as to overcome the discriminatory effect of lower basic pay” and that “there must usually be a more compelling business reason for such arrangements to be justifiable”.

Elizabeth George, Leigh Day partner and barrister representing the claimants, said that the ruling was “hugely significant” and noted that “this is exactly the type of pay discrimination that the equal pay legislation was intended to address”. George goes on to say, “the Employment Tribunal has confirmed employers must go further to justify paying the different rates “.

The tribunal is yet to decide on compensation and back pay, but Leigh Day said it could force Next to pay out more than £30m in total.

According to Leigh Day, this successful equal pay claim is the first of its kind against a national UK retailer and will likely set a precedent in similar cases its lawyers are organising against the large supermarkets. More than 112,000 store staff across supermarket chains Sainsbury’s, Tesco, Asda, Morrisons and Co-op are being represented by the firm bringing “similar equal pay claims”.

Next has confirmed that it intends to appeal the decision, we will keep you posted…

Its officially a brat summer! Charli XCX’s album, ‘brat’, has captured the zeitgeist this summer and taken over marketing: from fashion to food to political campaigns. Much like ‘Barbiecore’ last summer, plenty of brands have hopped on the ‘brat’ trend including Kate Spade which posted a Brat green starter pack on TikTok meanwhile Skims have launched a ‘brat summer’ campaign with Charli.

Considering the volatility and fast-paced nature of social media trends, brands must weigh up the risk of jumping on online culture and viral aesthetics. Recent years have seen a proliferation of micro-trends on TikTok, such as girl dinner, Roman Empire, and “very demure, very mindful”, which must be harnessed quickly by retailers looking to get more mileage out of a viral moment. Although ‘brat summer’ can claim to be a lower risk investment for brands because of its enduring presence since the album’s release in June.

Embedding social media culture into mainstream marketing isn’t new, but the memeification of marketing is an effective approach particularly because it presents a cost-effective means to target specific demographics. For example, ‘brat’ themed marketing simply references the album’s stretched Arial font and lime green background.

Talking about the impact of TikTok, Social media expert Josie Pattle, senior editor at creative agency We Are Social explained that “Trending sounds, formats, and filters play a massive role on the platform, and help to drive discoverability.” Therefore, retailers across the spectrum can benefit from staying alert to national and global trends, monitoring what their audience is responding well to, and following a diverse collective of influencers relevant to their brand.

This approach will not necessarily always translate to a broader, passerby audience, but for Gen Z and Gen Alpha consumers operating within the realm of digital media, brands may be wise to prioritise their social media output.