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3rd Row

ICO issued fines of £42million last year

The Information Commissioner’s Office (ICO) has issued a number of final civil monetary penalties in 2020, totalling £42,416,000 – The reasons for the fines included breaches of Privacy and Electronic Communications Regulations (PECR) and the Data Protection Act (DPA). 

The data, contained in the ICO’s ‘work to recover fines’ report and analysed by the Parliament Street Think Tank, reveals a catalogue of fines issued across a variety of sectors.

The analysis shows the scale of the fines highlights the severity of the problem. A total of 17 penalties were issued last year according to official figures. The largest fine was given to British Airways in the transport and leisure sector on 16th October 2020 at a total of £20,000,000 for a breach of the Data Protection Act (DPA). This is followed by a fine of £18,400,000, issued to Marriott International Inc on 30th October 2020, also for a breach of the DPA. 

The next largest was to Ticketmaster LTD, with a fine totalling £1,250,000 for data breaches on 13th November 2020. Then, DSG Retail Ltd, CRDNN Limited and Cathay Pacific all received fines totalling £500,000. 

Additionally, CRDNN was with a £500,000 fine on 2nd March 2021 for breaches of Privacy and Electronic Communications Regulations (PECR).

The industry hit with the biggest fines was marketing with nine fines in total issued, followed by three fines issued to firms in the transport and leisure sector.

Additionally, the ICO issued three court orders for winding-up upon petitions in 2020. Trusted Futures Ltd received a penalty amount of £70,000, Superior Style Home Improvements received a penalty fee of £150,000 and Alistar Green Legal Services Ltd received a penalty fee of £90,000. All three organisations were given court orders in 2020.

Additionally, there were eight directors disqualified following ICO enforcement action in 2020. These directors have been disqualified for a number of years for conduct while acting for various companies.

Charlie Smith, Consultant Solutions Engineer, Barracuda Networks, said: “In today’s digital working environment, data security, recovery and protection is of vital importance. Unfortunately, it has become apparent that many business owners, workers and consumers are not aware of the need for backup and recovery services for their email service providers. Our own research even revealed that 40% of Office 365 users believe that Microsoft provides everything they need to protect their data and software.

“Whilst Office 365 does offer some level of security, even Microsoft suggests using a third party backup to ensure that data is fully protected and retrievable. Without it, organisations can be left prone to accidental data loss and even ransomware attacks. 

“Thus moving forward, organisations should invest in a third-party data backup solution that runs in the cloud, to enable seamless, efficient and comprehensive backup of data on a granular level – allowing lost, stolen or misplaced data to be restored without delay.”

Ecommerce revenues remain buoyed as bricks-and-mortar reopens

As the UK High Street experienced a boost in the first week of non-essential retail re-opening, the digital High Street also remained buoyed, with revenues up +2.5% week-on-week.

That’s according to data from Wunderkind‘s Marketing Pulse report, which says as consumers hit the shops after months of closure, traffic on the High Street increased +178%, and an estimated £1.6billion was spent in-store on the first weekend of trading.

Web traffic also saw a rise, increasing by +2.4% over the same period (w/c 12.04 vs w/c 5.04) – which the behavioural marketing specialist says illustrates sustained digital demand.

This, Wunderkind suggests, is not only indicative of the seismic – and permanent – shift to digital, but of the importance in understanding and connecting more closely with shoppers to drive long-term brand advocacy and increased customer lifetime value. 

Wulfric Light-Wilkinson, GM EMEA at Wunderkind, said: “There’s been much debate as to whether the boom in online could successfully be sustained once retail reopened.  And, from what we’ve seen so far, even pent-up demand for real-life shopping experiences in the first week of opening hasn’t deterred consumers from the ease and convenience of shopping online, suggesting the shift to digital is here to stay.  But the real test now comes in how brands and retailers connect and engage with their customers moving forwards, to turn the new cohorts who have come online into repeat shoppers and those existing shoppers into long-term brand advocates.” 

While web revenues and traffic increased on the week before, email performance dipped slightly with revenue down a marginal -1.6% week-on-week. 

“This slight drop in UK email revenue retail could be down to a number of factors;” Light-Wilkinson suggested.  “Non-essential retail opened on the same day as outside hospitality, which also coincided with the last week of the Easter holidays – this may have prompted many to step away from their desks and take time off to enjoy new freedoms, perhaps explaining the slight dip in email performance during the week.”

Social mentions for the words ‘hairdresser’, ‘shops’ and ‘pub’ all saw significant spikes on the first day of restrictions easing, according to social agency, the tree, up 277%, 276% and 272% respectively on the day prior.

Understanding D2C: What’s fuelling the move?

By Elliott Jacobs, EMEA Commerce Consulting Director at LiveArea

The direct-to-consumer (D2C) market has skyrocketed, experiencing double-digit growth to the point where it is projected to grow 19.2% this year. While D2C will have been on brands’ radars for some time, the majority have lacked the systems and processes needed to support such a move. The closure of physical retail, however, has proved a catalyst for many to make the move as they aim to reinvent themselves for the new landscape.

While the April 12th roadmap puts a return to the high street back on the horizon, we’re unlikely to ever return to pre-pandemic footfall. Together, shrinking margins, the emergence of digital disruptors and the unstoppable rise of eCommerce mean D2C is no longer a nice-to-have for many brands, but a means of competitive differentiation in the age of at-home retail.

Changing behaviours under Covid

When we think of ‘D2C,’ it’s usually the likes of Dollar Shave Club, Brewdog and Bloom & Wild that come to mind, and two key similarities run through them all. Firstly, they tend to be niche and offer a fine-tuned proposition concentrating on one category – think subscription razors, craft beers or letterbox flowers. Secondly, they are obsessively focussed on digital, whether it’s through social media engagement and user-generated content or innovative eCommerce experiences, these brands lead the way in data-driven business decisions.

The most agile, efficient and resilient businesses over the past year have been the ones which place digital commerce, data and analytics at the heart of their operations. Businesses can no longer rely solely on bricks-and-mortar, with many household stalwarts reliant on physical real estate having shut their doors for good. Spurred on by lockdown restrictions and panic-buying, many consumers are now sold on the convenience of buying directly from brands – a trend which is unlikely to change even with the reopening of physical stores. 

These behavioural changes have sprung larger brands into action, who are now launching their own D2C operations to improve profitability and take over the relationship with customers. Here, Nike has reaped the rewards of an earlier decisionto pull back from Amazon and use its website and shopping apps to build close connections with customers no longer shopping in-store. Elsewhere, PepsiCo and Heinz launched D2C offerings catering to common lockdown purchases to address supermarket shortages as a result of the panic-buying seen in the early days of the pandemic.

Acting on data intelligence 

The reason behind many of these brands adopting D2C lies in the data. Typically, CPG brands reliant on supermarkets, marketplaces and retailers to sell their products are at the mercy of these partners in feeding back the data. Retailers who take a D2C approach, however, own the entire customer journey and are well-placed to develop a 360 understanding of their customers.

The wealth of data available is substantial, providing brands with valuable insights and one singular source of truth which cannot be underestimated. Brands can then go on to optimise products, processes and communications and increase relevance to consumers in a way that isn’t possible when selling via third parties. Not only this, but control of the data also facilitates new ways of exploiting it – whether it’s running more targeted marketing campaigns or identifying shifting consumer behaviour patterns. The lesson here is that data is the future, and retailers will want to own as much of it as they can.

The switch won’t happen overnight 

A D2C sales channel should factor in every stage of the customer journey and there are myriad factors to take into account. For a start, they should consider the most effective means of competing with marketplaces, retailers and other brands for web traffic, whether it’s through social, search or PPC. From there, engaging content, immersive experiences and a seamless user experience will help brands build genuine connections with consumers and retain their custom.

Beyond this, a well-oiled D2C operation requires significant upfront investments in real estate, technology and staff. For example, any business aiming to achieve scalable online sales needs a platform that provides all the modern tooling needed to run an online business. It’s through these tools that brands gain the information required to treat customers as individuals. From a fulfilment perspective, D2C brands are in the business of sending regular packages to consumers rather than shipping bulk containers, meaning considerable changes to operating models will be necessary.

PepsiCo, Heinz and Nike have all proven the value of D2C in times of hardship. If other brands are to embark on similarly successful projects, they will need to ensure data, technology and processes can integrate and inform one-another across the entire customer journey. Those which do it right will set themselves up with a new source of income on top of the traditional wholesale channels when they return. But a cookie-cutter approach is no longer enough, and CPG brands considering the leap will have to decide whether such a commitment is right for them.

IPA Bellwether reports UK digital ad budgets rise

The Institute of Practitioners in Advertising’s (IPA) Bellwether reports marketeers have revised their budgets upwards in the first quarter of 2017, the highest level recorded in almost a decade.

Some 26.1 per cent of those companies polled remain positive about 2017/18 budgets, signalling growth for the coming year,  while 11.8 per cent of companies said that marketing budgets would increase during the first quarter of 2017.

32 per cent of those companies polled also reported improvement in the financial pipeline, compared to 19 per cent that predicted things would be worse during the quarter.

The IPA reported marketers on tighter budgets are seeing greater value from digital and positioning ad spend accordingly, mostly as a direct result of the unknown effects of Brexit negotiations and wider economic uncertainty.

However, despite a positive outlook for digital ad spends in 2017, the IPA predicts stagnation materialising in 2018, with marketers being advised by experts to proceed with caution.

Speaking about the report, the IPA’s director general Paul Bainsfair said: “The election result has thrown further uncertainty into an already volatile environment.

“It is inevitable that this has had a knock-on effect on UK. Specifically, for marketers this has meant a desire, where possible, to seek out more activation driven advertising. As evidenced strongly in this latest Bellwether Report, this has resulted in a further move towards advertising in the digital space.”