1,000+ marketing and technology professionals from leading retail and e-commerce companies came together recently for 4 days at the eTail East conference in Boston, MA to share best practices. What’s most interesting is that there was much more focus on strategy, process and organizational design in this year’s eTail event versus a lot of focus on flashy, in-store technologies in 2017. This is a definite sign that retail and e-commerce companies’ digital strategies are maturing. Retail companies in particular are beginning to think more like digital natives, and even leverage the power of a physical presence as a differentiator against their digital native competitors.
The overarching messaging from industry leaders and up and comers is that EXPERIENCE, on-line and in-store, is key for success. Included below are the five key takeaways from the event, plus many quotes and examples from these industry movers and shakers. (Check here for a list of other upcoming e-commerce conferences in the US and Europe)
- Build an emotional connection to your customers
- Use digital content to create an experience that will differentiate your brand
- Expand to a direct-to-consumer approach without disenfranchising your channel partners
- Maintain a laser focus on customer experience
- Evolve to the next level of retail with technology and experimentation
1. Build an Emotional Connection to Your Customers
A focus on product and price is no longer enough for hyper growth in retail and e-commerce. It is much more complicated than that. Today’s consumers want to buy products that represent their own personal viewpoints – what they buy and wear needs to be an expression of their own personalities and passions.
According to Richard Kesternbaum (@rkestenaum), a contributor of Forbes, today’s consumers want to understand more about their products, such as:
- “Were fair wages paid for product manufacturing?”
- “What do makers (and sellers) of the product believe about their mission?”
- “What does this product say about who I associate with?”
One example that demonstrates this shift in consumer preference as an expression of their own personalities and passions is the the fashion trend towards more personalized t-shirts. The global custom t-shirt printing industry will experience a 6.3% CAGR from 2017 to 2025, crossing $10B by 2025. [Credence Research]
Richard Kestenbaum gave a perfect example of how Dunkin Donuts used a promotion to build an emotional connection with their customers while simultaneously propagating authentic, user generated content on Instagram: The Promposal Box. Five fans got the chance to win “a limited edition, tricked out Dunkin’ promposal box, complete with lights, sparkles, donut puns, and of course, donuts! To enter, fans commented on Dunkin’s Instagram post telling why they want to give an epic Dunkin’ promposal using the hashtag #DDPromContest.”
Another example of creating an emotional connection to your customers was presented by Rosie O'Neill, Co-founder and co-CEO Sugarfina. Rosie and her team have created a retail store brand that represents "a candy boutique for grown-ups". In Rosie’s words, “as soon as you walk thru their door, you feel like you’ve entered a friend's cocktail party.” For example, store guests get samples of candy and are treated to a plethora of grown-up candies such as champagne infused bears, tequila grapefruit sours and more. As a result of the emotional connection that Sugarfina has built with their customers, there have been 8 wedding proposals in their stores, along with one wedding.
2. Use Digital Content to Create an Experience That Will Differentiate Your Brand
Content marketing has been a mainstay of B2B marketers’ success for the past 5+ years as they strive to capture buyers’ contact information for their prospect databases, and then nurture them as they progress thru the marketing and sales pipeline. As defined by the Content Marketing Institute, content marketing is defined as:
“A strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience — and, ultimately, to drive profitable customer action.”
B2C marketing and e-commerce professionals have also put much focus on adding content to their online, owned media properties. Newer forms of content include more visual and interactive images and videos, promotions, shoppable images and videos, and user-generated content. For example, a quick look at Amazon’s website in 1999 versus 2018 represents the increased use of content and imagery to build brand equity and deepen the connection between buyers and a company’s products:
Examples of content in action to drive an online experience include:
- User-generated content (UGC): The example from Dunkin Donuts with UGC from their Promposal campaign was already mentioned. Rosie at Sugarfina also referred to the power of online content to create an experience and differentiate their brand. “We're always thinking about Instagram, and how to motivate customers to take a picture within our stores.“ “Make it Shareable” is one of Rosie’s top 10 key success factors.
- Shoppable videos: Shoppable videos help e-commerce companies capitalize on the increased demand for video content by making videos more interactive and engaging with clickable links that allow customers to view product information and make a purchase. Think about it as adding Commerce to Content.
- Digital content campaign management: Add promotions directly within your e-commerce platform. Campaign management helps e-commerce marketers manage promotional content on specific pages for any date or dates in the future.
- Personalizing the digital experience: Personalization and segmentation helps e-commerce companies deliver individualized content for each unique persona, creating digital experiences that compel them to action and turn shoppers into loyal customers.
- A blog to educate and engage your audience: "We are expanding editorial and blog content to help folks transition on-line, and get education about our products. We are evaluating blog performance to determine the importance of this channel as a first touch opportunity to amplify the entire buying experience." [Sam Norpel, GM, Digital Commerce, Vitamin Shoppe]
- Virtual and Augmented Reality: Similar to last year’s insights about innovation in e-commerce and retail experiences, the best companies are striving to take experience to the next level. “Amazon is pushing all of us. We need to get more experiential with our customers, pursuing augmented and virtual reality and other new technologies and strategies.” [Bogdan Constatin, CMO, Menguin]
3. Expand to a Direct-to-Consumer Approach Without Disenfranchising Your Channel Partners
Consumer brands are facing many opportunities and challenges as they shift to a direct-to-consumer approach. It allows them to establish a more direct connection with their customers and reduce the middleman, however, in doing so, they risk alienating their traditional selling partners. In addition, these traditionally wholesale consumer brands rapidly find themselves in head-to-head competition with digitally native brands. Digital transformation initiatives must address these challenges in addition to taking advantage of opportunities.
Executives from Asics Digital, Gamestop, Citizens Watch Company and more shared their insights about key successes bridging the gap between on-line and off-line commerce, including insights about digital transformation initiatives:
- Digital transformation: Don’t go with an all-in-one vendor for your digital experience technology ecosystem: “Critical to our success is that we connect all vendors and don't go with an all-in-one vendor approach.” [Dan Smith (@dcs), President, Asics Digital] Additional insight from a study of 200+ companies supports this success factor, indicating that 60% of companies take a hybrid approach, using Digital Experience Platforms that play well with others and integrate with other best-in-class solutions; and only 17% of companies take an all-in-one approach.
- Create value for your retail partners: “At Asics Digital we look for opportunities to add value to our retail partners. For example, providing early access to programs for our partners in our mobile application. Our retail partners engage with Runkeeper to help drive business to them instead of to our own e-commerce site. We don’t care if sales happens thru us or partners.” [Dan Smith]
- Leverage the power of an in-store presence as a differentiator versus digital native companies.
- Connect silos: Jim Edgett, Head of Integrated Marketing, Gamestop, is very focused on getting the silos across their organization to work together, both online and in their stores. “We run small pilots to not just test the technology, but see how our (in-store) teams react and to help teach them and get educated on what's possible.
- Reorganize company structure:
- “We got past one of the roadblocks of unified commerce by moving our Keurig.com website and e-commerce site to sales from marketing.” [Ryan Scott, VP Digital Operations & Innovation, Keurig Dr. Pepper]
- “We created a new role in the organization that is responsible for bringing digital into physical locations.” [Kim Czopek, VP Digital Marketing, Lily Pulitzer]
- Create a better experience both in-store and on-line: “This is how we compete against digital native brands.” [Jim Edgett, Gamestop]
- Modify compensation and other incentives to better align the organization:
- “We changed compensation and incentives of in-store and digital personnel for better alignment.” [Kim Czopek, Pulitzer]
- “We are figuring out a compensation model so that if a customer buys their first product in-store and then a second product on-line, the original employee that helped them with their first purchase would be part of the success of that buyers’ later purchases.” [Sam Norpel, GM, Digital Commerce, Vitamin Shoppe]
4. Maintain a Laser Focus on Customer experience
The digital transformation and omnichannel movements have been ongoing for many years, but what’s especially interesting this year is companies’ focus on their customers’ combined on-line and off-line journey to buying their products. This is another indicator that retail organization are maturing in their understanding of e-commerce and in-store transactions. Advice from industry leaders included:
- “Don’t make infrastructure and working beneath the water surface your top focus.” [Dan Smith (@dcs), President, Asics Digital] Digital transformation can quickly occupy an extensive amount of staff and other resources.
- Tap into the power of voice of the customer: “Sharing data is key for driving success across our large organization. For example, snippets of what end consumers are telling us and the results of voice of the customer studies help drive innovation.” [Barbara Garces, CDO, Citizen Watch Co.]
- Determine how customers interact with your brand across touchpoints:
- Analyze first, last and multi-touch attribution. This is standard practice for B2B marketers and digitally native organizations, however, retail companies are advancing their digital experience strategies to understand the full customer journey. “We are working on creation of a multi-touch attribution dashboard to get beyond only looking at first touch.” [Kim Czopek, VP Digital Marketing, Lily Pulitzer]
- Take a customer journey map perspective. We analyze our customers’ happy path." [Anshuman Taneja, VP, Product & UX, American Eagle]
- Do not overlook the customer journey as part of an omnichannel transition. “We need to move from being channel-driven to consumer-driven.” [John Woodman, Director eCommerce, Reebok]
- Give high value customers special attention: It is a widely held belief that you cannot compete against Amazon - Wayfair has been doing just that. Therefore, it’s no surprise that they had great advice to share at the eTail East event: “Track ‘high value customers’, and if something goes wrong with one of their deliveries, call them!” [John Mulliken, CTO Wayfair]
- Customers want an experience, both on-line and in-person:
- As Gwen Bennett, SVP of eCommerce & Marketing for Destination Maternity describes, “We’ve created ‘Experience Associates’ in our stores to help customers with their choices. We need to help folks more with the whys, whats and whens questions, and ensure they have an associate that knows their name.”
- “Experience is more than just the website experience: it’s the entire customer journey. For example, paying attention to supply chain management to ensure you have a good product assortment in stock, you offer exclusives for customers, and the timing of launches are well-coordinated with company and customer needs.” [Mary Halladay, Director of Global eCommerce & Omni-Channel of New Balance]
5. Evolve to the Next Level of Retail with Technology and Experimentation
Amazon and other digitally native e-commerce companies were predicted to bring the downfall of the retail store. Now we see these same companies opening up physical stores; but they are not your father’s old-school retail stores. New levels of retail are evolving that combine the advantages of in-store and on-line commerce experiences, and continue to morph as technology and customer trends evolve. Amazon has been experimenting with physical stores and bringing new technology into these stores since 2015.
The most important advice to evolve to the next level of retail? . . .
Examples of experimentation in action provided during the eTail East event include:
- Apply learnings from on-line stores into physical stores: Tara Foley, CEO of Follain, a rapidly expanding health and beauty store brand, is taking her in-store learnings into their e-commerce store, and visa-versa. For example, they often hear from their in-store customers, “just tell me what to buy (versus educating me)". They are considering modifying their e-commerce site to help customers on-board in a similar manner. Follain has also redesigned their stores by category versus brand, taking cues from online shopping and how customers want to shop.
- Varying store concepts, complemented by an online presence: Eleanor Morgan, SVP Customer Experience of Casper, provided several examples of experimentation in action: “We thought hard about how our stores could complement a digital experience.” For example:
- “We let customers book a trial appointment on-line to try products in stores.
- Test out beds in miniature houses built within our stores to test products in a more private environment.
- We’re challenging different store concepts such as The Dreamery in New York City where you can book a nap and try out our mattresses.”
Applying new technology (and experimenting with old technology) is also a significant factor enabling brands to evolve to the next level of retail. Just a few examples of some of the most impactful technology changes enabling innovation in today’s retail stores include:
- Automation: Stores can automatically detect when shoppers pick up items, and deduct payment from their account accordingly. This strategy will free up retail space (e.g., no more need for registers and check-out lanes) and reduce staffing levels. Amazon’s Just Walk Out Technology includes “computer vision, deep-learning algorithms, and sensor fusion just like in self-driving cars.”
- AI-driven personalization as an extension of what brands are already using in their e-commerce stores.
- Virtual and Augmented reality (VR/AR): There were some good examples of this technology in-place presented at last year’s eTail East conference.
- Ben Tilton, Dir of Product & Project Mgmt. for Williams-Sonoma, described their recent acquisition of augmented reality start-up Outward in a $112 M all-cash deal. AR offers the opportunity to enhance shopping experiences both on-line and in-store. Ben’s motto is to “optimize the present, forget the past, and innovate for the future”.
- Payment processing technologies such as mobile applications, e-wallets and gift cards.
- Mobile devices: Mobile devices are not new technology, however, their use is still in a nascent phase within retail stores. Eric Allen, Sir. Dir. Brand Activation of Lovesac shared that they’re using iPads to extend the experience in the store (virtually) beyond their typical 1,000ft2 store.
A final word: We’re only just getting started!
Scott Savitz of Datapoint Capital worded it perfectly, "we're still only in the first two minutes of the e-Commerce movement. There are lots of opportunities for disruption and growth!”
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