Boohoo’s deal to acquire Debenhams' brand and website for £55m, while leaving behind its physical stores, is another significant milestone in the shift towards digital’s complete dominance.
The move makes sense for the online fashion brand. Debenhams' website received 300 million visits a year, putting it in the top 10 retail sites in the UK by traffic. In comparison, despite performing well commercially, when you look at the search data, Boohoo has suffered a decline in the past three years, while other digital search businesses have flourished.
Advertising is responding to this digital avalanche. In 2019 digital’s share of adspend tipped over the 50% mark for the first time, and IPG is forecasting that digital ad sales accounted for 77.6% of the UK ad economy in 2020. My money is on this being echoed globally, because where the UK leads digitally, the world often follows.
So I’d suggest we’ll see that there was a global jump from 50% to at least 60% in 2020.
This prediction is founded in my own experience. When it was becoming clearer that many channels were going to be unable to deliver the reach they once could, Croud responded by significantly reinvesting budgets in digital. The result was a bumper Q4 2020 that was way ahead of expectations. From my conversations with friends and peers in the digital space, I know we were not alone in our thinking, and it felt like the digital addressable market increased by 20% overnight.
Boohoo’s decision, with Asos hot on its heels in talks with Topshop, is evidence that the shift in life is seismic. And while the pandemic has undoubtedly changed everything, it has catapulted digital media forward to such an extent that 2021 looks more like the 2024 we predicted. And with change comes opportunity, but it requires a shift in thinking.
Although the move to ecommerce was already quickening, the pandemic accelerated the trend by three to five years. Twenty eight per cent of retail sales in the UK in 2020 happened online, up 10% from 2019, so it’s not surprising Boohoo is looking for a bigger share of the pie.
This fundamental shift in behaviour washes through to how advertisers think about digital as a channel – it’s no longer performance, it’s everything. It’ll be how we engage customers right through the funnel. Also, given how much we are thinking of the "funnel", there is a real blurring of the lines between what was once brand versus performance. Is an Instagram story ad without a call to action brand or performance, is it both, or is it just a touchpoint along the customer journey?
Similarly, the boundaries of what is analogue versus digital media are becoming less defined. Most traditional channels – TV, radio, outdoor, print – are increasingly being delivered, engaged with and (importantly for us) advertised on through digital channels. For traditional media channels, it’ll be those that evolve and embrace the digital world that will succeed.
Creative will also be different. Your 30-second TV slot still has a place, but it’s a place amongst myriad other digital-first and innovative formats. This demands creative thinking and speed of delivery. Ultimately, quality content, the work that creates the type of desire that pulls audiences to engage, will win through.
I’m sure we’ll see more moves similar to Boohoo’s decision as businesses continue to see the value in digital real estate and the increasing influence of digital in all areas of our lives. Fortune will favour those who embrace it and seek to maximise the opportunities the new world brings.
Luke Smith is founder and chief executive of Croud
(Picture by Paul Ellis/AFP/Getty)