The Retailer Summer Edition 2022

THE RE TA I L ER

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UNDER THE INFLUENCE: RETAILERS, ONLINE INFLUENCERS AND LEGAL RISKS

Alex Mizzi Legal Director Howard Kennedy

I nfluencers can help bridge the gap between online and in-store selling – but retailers should consider the potential blowback It's no secret that the last decade has seen a shift from bricks and mortar retail to online shopping. Although this shift was well-underway by the late 2010s, it was accelerated by the COVID-19 pandemic. With widespread hybrid working increasing the convenience factor of online shopping (who needs to miss a deliverywhen your home is your office?), consumer behaviour is unlikely to switch back in the foreseeable future. One study suggested that by 2026 38% of UK retail sales will take place online – the future is online. Online shopping has evolved so as to replicate most elements of bricks and mortar retail – products can be shown frommultiple viewpoints and via video as well as images, prices can be easily compared and retailers have developed highly efficient warehouse and delivery systems to enable a smooth purchasing experience. However, despite the huge attractions of online retail for consumers, there are some aspects of the physical retail experience which translate poorly (or at least imperfectly) to the online space. One is fostering a sense of brand identity and creating the sense of a community of customers. Gap in the 90s and Abercrombie and Fitch in the 2000s are both great examples of how a retail space can create an instantly identifiable brand, whether it's cool minimalism with neatly-folded preppy sweaters, or a pulsating teenage nightclub of-dreams inhabited solely by the rich and gym-honed. Even the best retail websites struggle to create the same impact. Another aspect which is much harder to replicate online is interaction with the product. Even the most carefully chosen online video is a far cry from being able to touch and interact with a product before buying it. And with e-commerce returns a huge drain on profitability (as well as having a significant environmental impact), there's a major incentive for retailers to convey the look and feel of a product accurately in the online sphere. Retail brands are increasingly looking to online influencers to bridge these gaps between the online and physical retail experiences. Well-chosen collaborations with influencers can foster brand identity and create a sense of an authentic online community of customers. Influencers who can be engaged to post videos of the product in use can also give a much fuller and more persuasive picture of the product than would be achievable on a conventional e-commerce site. However, these collaborations can come with risks, both legal and commercial.

The sense of immediacy and identificationwhich online influencers create means that retailers need to be very conscious of who is excluded as well as who is encouraged to identifywith the brand. This isn't just a question of consumer perception; it can have legal ramifications. Discrimination allegations and claims by customers have become increasingly common, often supported by charities and activist groups and amplified by canny use of social media. This is another trend which was exacerbated by the pandemic, mask and vaccine requirements having generated many complaints of discrimination. Businesses are often caught unawares by such allegations because they're less familiar with how equality law applies to service-providers and are anxious about the reputational consequences. If a brand's ambassadors are universally thin, white and non-disabled, this could well be cited in discrimination complaints and legal proceedings as evidence that the brand disdains other groups of customers – and, of course, it could fuel an online backlash. Employees also often cite aspects of brand identity in support of claims for discrimination. There have been several high-profile claims over the last decade or so where the brand's image played a major role in the case, including claims by hijab-wearing employees and employees with visible disabilities. A brand's relationship with online influencers adds an extra (and highly visible) dimension. claims against retailers.” ‘‘ One might think the answer is to ensure that the business engages with a wide range of influencers, to demonstrate a commitment to diversity. This approach has its merits, but retailers also need to tread carefully. Businesses are under increasing scrutiny from investors and consumers in relation to their ethics and business practices. Before making public pronouncements about a commitment to equality, businesses need to consider the skeletons in their cupboards – nothing encourages disgruntled former staff to break cover like a whiff of hypocrisy. A host of collaborations with race equality activists, for example, won't help you (and will probably make things worse) if the business has a history of underpaying or underpromoting staff from certain ethnic groups. Accusations of hypocrisy can be hard to refute – many businesses came unstuck during the BLM protests for this very reason. Employees also often cite aspects of brand identity in support of claims for discrimina tion. There have been several high-profile