by Mark Travers, Ph.D.
If you need any more indication that we’re living in an omnichannel retail environment, look no further than this year’s Shopper Insights and Retail Activation conference.
Neil Blumenthal, co-founder and co-CEO of glasses maker Warby Parker, delivered the first keynote address. He spoke about Warby Parker’s beginnings as an online-only retailer and their subsequent “reverse-pivot” into brick and mortar. Blumenthal noted that, at present, only about 4% of glasses purchases are made online. Physical stores, therefore, remain a critical part of their business model. He also pointed out that consumers cycle between online and offline touchpoints more than you may think during their paths-to-purchase. However, once a customer makes a purchase in a certain channel, they tend to stay in that channel. In other words, getting people to change their behavior from buying offline to online, or vice versa, is more difficult than you might imagine.
Later, Jennifer Fleiss, co-founder of fashion disrupter Rent the Runway, gave an excellent talk in which she echoed many of the themes Blumenthal discussed earlier. Similar to Warby Parker, Rent the Runway began as an online fashion rental retailer. Their breakthrough insight came from observing how women commonly purchased, then returned, high-end clothing. Traditional clothing retailers knew this behavior was happening, but they weren’t actively servicing this segment of the market. By identifying this underserved consumer need, Rent the Runway was able to disrupt the entire fashion industry in only a few years. Similar to Warby Parker, Rent the Runway is now opening physical stores to better serve their customers. Fleiss sees the future of retail as moving toward fully integrated “ecosystems”—a seamless integration of online and offline purchase channels. Retailers and manufacturers that understand this trend will be best positioned for growth going forward as channels continue to integrate.
While young disrupters such as Warby Parker and Rent the Runway are finding value in bricks and mortar, there are another class of “e-tailers” pushing the boundaries of mobile retail. Jackson Jeyanayagam, CMO of Boxed, discussed how his organization applied a Costco-like “bulk” shopping strategy to online ordering. Jeyanayagam spoke in depth about the analytics his organization is using to drive sales, sharing some interesting, if not controversial, opinions. He believes that the race to create “smart sensor” retail technology—that is, developing sensors that inform customers and retailers when your fridge is low on milk, for example—is misguided. Instead, at Boxed, they predict when a customer will run out of a given product by the purchase date, and send email alerts accordingly. He did admit that this type of analysis works better in some categories than others.
Online marketplace, Tophatter, is taking an entirely different approach to mobile selling. Unlike competitors such as Ebay and Amazon that are, in Tophatter COO Andrew Blachman’s words, “racing to the bottom,” Tophatter is offering a fun and exciting mobile retail environment. Tophatter runs 90-second auctions, connecting buyers and sellers of all kinds of goods and merchandise in a “gameified” shopping experience. The company’s incredible growth is a testament to the idea that customer “experiences” matter as much in an online environment as they do in-store. Watch out for more “experience-driven” mobile retail start-ups emerging in the future.
Walmart, The Coca-Cola Company, Kellogg’s, Twitter, and others weighed-in on what they believed to be emerging trends, insights, and best practices in the shopper and retail research space. Julia Kreintz, of Walmart, spoke about the ins and outs of managing a team of data scientists. She mentioned that the company listens better when findings are reported in dollars and cents (e.g., late deliveries cost the company X dollars as opposed to “late deliveries have a negative impact on customer lifetime value”). Craig Geiger, from Kellogg’s, talked about the pivot to online grocery shopping, or what he calls “grocer-e shopping.” He cited a statistic showing that 60% of shoppers expect to spend over 25% of their food dollars online in the coming years. He also talked about structural differences between online and in-store shopping. For instance, there is less room on the digital shelf and price is more prominent online.
Clear throughout the entire conference was this idea that “data is paramount.” Companies who have the data, and who know how to leverage it, are best poised to adapt and grow in this fast-changing world of retail. Is your organization prepared?
For more information on the 2018 Shopper Insights & Retail Activation conference, please contact Thania Farrar.