The Retailer Winter edition_2020

retail disruption and innovation

Advertising is evolving, and it’s raising new challenges for retailers

EDWINA BONES ASSOCIATE SOLICITOR Womble Bond Dickinson (UK) LLP

EDWINA BONES, WOMBLE BOND DICKINSON, EXPLAINS WHY IT’S MORE IMPORTANT THAN EVER TO UNDERSTAND YOUR LEGAL OBLIGATIONS WHEN ADVERTISING As Heraclitus wisely said “the only constant in life is change”, and the retail sector is no exception, as our recent report, The Digital Tipping Point shows. Businesses are finding ingenious ways to make shopping faster, easier and more intuitive as consumers expect (and demand) more. However, these changes create new challenges when it comes to complying with advertising law. What are these hurdles and what steps can be taken to help address them? The power of social media It is not surprising that the volume of advertising carried out through social media continues to rise, but the informality of these platforms can make it easy to forget about advertising regulations. An increasing number of ads fail to clearly identify themselves as advertisements or are deemed to be misleading. The Competition and Markets Authority (the CMA ) is taking particular steps to clamp down on celebrities and influencers, who are consistently forgetting, ignoring or are unaware of their obligations even if they are not themselves a business (Rita Ora and Ellie Goulding for example have both been investigated by the CMA and have made formal pledges to be more transparent on their social media posts). Getting smarter with Smart devices The more consumers integrate Smart devices into their lives, the more opportunities retailers have to sell to them and learn about their habits, but there is a growing concern over exactly what information is being collected and why. When are retailers listening to individuals? How are retailers tracking people’s online (and physical) movements? People value their privacy and are becoming increasingly aware of the methods used to collect their data. Nearly one third of 16-24 year olds have limited the amount of data they share with companies in the last year according to The Digital Tipping Point report. The new era of shopping Consumers are becoming increasingly impatient (and dare we say it, lazy) when shopping. The tech-savvy and time-poor customers of today want to be able to buy what they need at the click of a button (in March 2019, 55% of visits to retailer websites were on smartphones). This places retailers under increasing pressure to simplify their marketing or risk losing out on a sale, yet it does not absolve them of their legal duties. Retailers are also finding new ways to engage with their customers, evidenced by the increasing use of online marketing and services in physical stores. This may help to combat the ongoing decrease in footfall in stores given that the majority of spending is predicted to be online within 10 years , but switching between selling platforms can make it difficult to monitor whether retailers are complying with advertising law.

So what can be done? The good news is there are steps that can be taken to help combat these challenges. Here are a few recommendations: • Make sure you subject any social media advertising campaign to the same level of scrutiny as any other type of marketing. Can you back up the claims you make? Is your advert an accurate representation of your product? Are you clearly identifying your advertisements where necessary? • If you are paying others or providing them with free goods in order that they will sing your praises, make sure they are doing so correctly. Both the CMA and the ASA have published useful guides for influencers dealing with advertising on social media. Even if you are not held responsible for their actions, it will not look good if your products are not being advertised correctly. • Be wary of drowning your customers (and potential customers) in personalised advertising content. Whilst there are benefits to this, going too far can put your audience off or feel like they are being cyber-stalked. • Make sure that you (and any supplier you are relying on to distribute your marketing) are permitted under data protection law to use the personal data being collected in order to personalise your advertising. • Make sure your privacy policies are up to date, reflect the personal data you collect as part of your marketing and are communicated to those to whom the data relates (your data subjects). • Put yourself in the shoes of your audience. What do they need, or are likely to want, to know? How will they interpret the wording in your ad? Could the ad be seen as offensive? Adapt your marketing accordingly. • Read the CAP Code and related guidance to understand what information you need to share with your customers and map the journey they take from seeing an advert to making a purchase. Are you supplying the right information, and at the right time? • Remember that additional obligations apply to running promotions, ads aimed at children and certain products such as financial products. Seek legal advice if you do not understand your obligations. • The same overriding advertising principles continue to apply to marketing but they need to be addressed in new ways if retailers want to make sure that they continue to stay compliant. • By devoting a little time to thinking about your compliance you can embrace the future of retail without the hassle of a complaint, fine or bad publicity, leaving you free to focus on new ways to develop your marketing strategy (and even order the celebrity-endorsed office furniture that you spotted on Instagram, courtesy of Alexa).

68 | winter 2020 | the retailer