London Tech Week: 3 spaces retailers should keep an eye on

Charged attended London Tech Week to find out what some of the country’s brightest minds were saying about the retail space and its future.

During the event, three areas were identified as key to the future of the sector, the inevitability of offering ‘buy now, pay later’ (BNPL) options for customers, the emerging esports space and the curious world of NFTs.

BNPL schemes have risen to massive popularity over the last 18 months as a result of the pandemic driving more and more people to shop online.

The use of BNPL schemes boomed last year, reaching £2.7 billion in transactions in the UK and analysts believe that anywhere between five million and in excess of 10 million UK consumers used one in 2020.

The space did exist before the pandemic and wasn’t borne out of the pandemic’s need for extra convenience, with seven million people using BNPL schemes pre-pandemic.

This figure has skyrocketed to over 20 million over the course of the last 18 months.

By 2026, BNPL will be a $26 billion industry and retailers are wasting no time in making their own BNPL products. Furniture manufacturer Ikea’s owner Ingka Group has recently invested in white label buy now, pay later player Jifiti.

The only potential sticking point for BNPL schemes is the impending regulation that is about to hit the sector. This is coming as a result of investigations into the Financial Conduct Authority (FCA) which has highlighted concerns which have prompted the government to intervene.

Currently, regulators view BNPL products in their own right, as opposed to viewing it under the same blanket that it does for normal credit schemes.

 

Esports and retail’s “marriage” is still in its infancy, however experts are estimating this is set to grow exponentially in the coming years, with over 2.7 billion gamers worldwide.

Companies including GameSquare are bridging the gap between retailers and gamers by offering a range of services to help brands get involved with teams and sponsorship opportunities.

Over 200 million people play esports worldwide with the figure expected to rise to almost 286 million by 2024, a vast increase from the 197 million in 2019.

According to esports data company Newzoo, the global esports audience was estimated to be 495 million in 2020.

What retailers will need to consider when entering into the market will be its audience’s age demographic and the data potential.

Nearly half of US consumers have participated in some kind of video gaming activity since the start of the pandemic, with that figure as high as 75 per cent for Gen Z.

Shopify predicted that in 2020, the industry would bring in $1.1 billion including sponsorships, tickets and media rights.

“The marriage between esports and retail and consumer brands isn’t new, with lots of successful stories involving a range of brands including Gucci, BMW, Adidas and Budweiser,” RPC sports lawyer Joshua Charalambous told Charged.

“However, interest from retailers is continuing to rise significantly, and the opportunity to partner with esports organisations is an exciting one, it enables brands to engage with a very substantial audience which has a typically younger demographic, and which is extremely engaged through platforms like Twitch, Discord, Facebook Gaming and YouTube.

“It is this engagement, and the increased power of social, which is seeing retailers like Asos partner with Fnatic (announced last week).

“The esports industry creates an opportunity for fans to feedback and engage with teams and players in real-time in a much more direct and meaningful way.

“It does require more thought and flexibility when it comes to partnership arrangements, because that direct feedback can lead to a need to change certain activations at short notice, but the upsides in terms of brand awareness and value are there for all to see.”

The curious space of Non-fungible Tokens is slowly but surely catching the eyes of retailers, with big names including Louis Vuitton and Karl Largerfield venturing into the scene.

Karl Largerfield launched new digital figurines earlier this month to mark what would have been the late designer’s birthday.

The release included two limited-edition 3D avatars in his image on digital fashion platform The Dematerialised.

Brands are taking interest in how NFTs can help increase revenues indirectly. For example, there is the possibility to purchase an NFT from a retailer which comes with a “bolt-on”, this could be a 10 per cent lifetime discount.

“We are seeing retail and consumer brands increasingly taking advantage of the versatility of NFTs, which can be used for a myriad of different purposes,” RPC IP and technology litigation specialist Ciara Cullen said.

“AB InBev for example, who have a history of sponsoring the Ascot races through the Stella Artois brand, found a natural collaborator in ZedRun, thereby tapping into their established following in the digital horse-race arena.

“Other brands, particularly in the fashion industry (such as, most recently, Dolce & Gabbana) have used NFTs as a way of enhancing the consumer experience and providing purchasers with greater “buy-in” to the brand, with experiential add-ons such as tickets to couture shows, meetings with designers or private tours of ateliers.”

“It also presents retailers with the opportunity to open up additional revenue streams by selling digital replicas of physical goods, or (as in the case of NBA Top Shots) creating an entirely new digital market for archive or library footage. What is certain is that this is just the tip of the iceberg, and that the opportunities for brands will only increase as they continue to explore the burgeoning metaverse.”

Click here to sign up to Charged’s free daily email newsletter

FeaturesLooking ahead

RELATED POSTS

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

Menu