Vegas has extended it’s golden hand out to the ecommerce community this week. To remind us we’re in Vegas, the exhibition hall is filled with jugglers in leotards on watercolor spheres and ribbon-climbing acrobats who dangle above the Blue Acorn booth.
While I would love to recap the hilarious matching outfits of said jugglers and our CEO or the unique setup of the hall, I’ll assume you’d benefit most from a recap of the insights being shared in the chilly, dimly lit session halls, which are in stark contrast to the colorful displays outside their doors.
Shoptalk has four major tracks, and I couldn’t be at them all. However, I was able to make it to enough of them to provide you with some interesting data, insights, and a few actionable items. I’ll run through them chronologically as I experienced them.
Research & Market Insights
I started my day with a healthy dose of data. Kind of like the 8:30 AM statistics class that I took freshman year, although I took much better notes this time around.
Adobe Releases Customer Experience Retail Report Card
In this session, the head of retail strategy at Adobe took us on a magical ride through personalization and mobile. If you’re not in the mood for math (perhaps you’re recovering from too many Mai Tais at the craps table), feel free to scroll right past. I’ll understand.
- Mobile visits outpaced mobile revenue across the globe
- Smartphone conversion is highest on Cyber Monday
- Customers are spending more time but less money on mobile; desktop boasts 65% of revenue; cart conversion rate is 16% for smartphones and 26% for desktop
- Consumers switch to desktop because 30% want ease of navigation, 26% want to see images on bigger screens, and 16% want to enter payment information
- 62% of companies are planning to increase their mobile marketing budget in 2017, but only 8% place the highest emphasis on making their experience as consistent as possible across channels; 79% of companies said understanding how mobile users research/buy products is very important, more than any other option
- 34% of companies said that, over the next five years, customer experience – as in making the process on properties easy, fun and valuable, is how they will seek to differentiate themselves from competitors
- A surprising 28% of respondents said engaging audiences through virtual or augmented reality was the most exciting prospect for 2020
Data is great, but without advice, they’re just numbers. Our presenter from Adobe had these four tips:
- Embrace a digital friendly culture
- Use data compulsively to improve customer experiences through personalization
- Understand the customer journey and identify key moments
- Experiment with more innovative technology
Consumer Research on the Impact of Declining Auto Ownership on Retail Sales
Ken Cassar, principal analyst & vice president of Slice Intelligence took the stage to talk about how ride sharing is affecting ecommerce. Obviously, the popularity of each have risen together, but I never considered what direct links the two had. Funny enough, while this talk focused exclusively on this trend, it’s something I heard about several times in other presentations.
Slice Intelligence noticed that ecommerce growth is picking back up, and while there are a number of reasons for this, the speaker thought ridesharing is playing a part. Their team mined a panel of 4.5 million consumers to uncover the online purchasing habits of heavy ride-sharing users and came up with an interesting case. Their argument is simple:
- Physical shopping is a pain if you don’t have a car
- Trends point towards a decline in auto ownership
- A decline in auto ownership will lead to ecommerce growth
Right now, few people have abandoned their cars so this isn’t a massive revolution. However, it could be. Heavy rideshare users make up only one percent of the population, but the group spends far more online than those outside the group. Their online spending is $4159 compared to a paltry $1778. Plus, a huge chunk of that is in the grocery sector, an industry that isn’t usually on par with the likes of apparel and electronics. The inflection point seems to be around five trips per week. After that, Slice sees a 24% increase in ecommerce spending. When you break it down by industry the numbers are even more dramatic. Health and beauty increased 49%.
Our presenter from Slice suggested a few implications. First, there is a growing demand for “need it now” delivery solutions. Just because someone doesn’t have a car, doesn’t mean that they can wait for important items. Two, there is a potential to shift dollars from car payments, insurance, and gas to consumer goods. Third, ridesharing companies have access to a powerful ad targeting database. Expect that to be an important channel in the near future. Last, there will be many ways to partner with ridesharing companies, including delivery, sampling, and promotions.
Visa Shares Insights for Marketers based on Consumer Spending Habits
Our first speaker in this session gave us data. Our second gave us a theory. Our third speaker, the VP of Visa Commerce, told some interesting stories. Looking at consumer spending, Visa found that consumers spend two times more and transact 4 to 5 times after buying coffee. The data provides us with a chicken-or-the-egg-type question that is, “Are these consumers actually shopping addicts who need to refuel, or does the caffeine fuel a shopping spree.” Perhaps this story is a circular narrative. Either way, it’s a cycle worth instigating; all you have to do is install an espresso machine near your front door. Or, maybe you encourage customers to go make a cup of joe before they start browsing your site. Personally, the whole thing just made me want a Starbucks and a new pair of shoes.
Visa also looked at what happens after consumers buy gas. Interestingly, they tend to do different things depending on what region they live in. New Yorkers head to department and grocery stores. Here in Nevada, they head off to the dry cleaners and home supply stores. I won’t guess why, but clearly there’s an opportunity for ad placement. I’m not really in the petroleum business, but if I was, I would start building my stations in Reno next to a Lowe’s.
Third, frequent flyers, even after adjusting for different customer groups, spend four times more on auto rentals, six times more on hotels, and four times more on restaurants. That’s intuitive enough, but they also spend four times more on jewelry stores. Our speaker theorized that the cliche traveling salesman is using diamonds to make up for lost time with a spouse.
So how did our speaker make all this actionable? Our presenter had us consider ride-sharing users again. Uber riders spend $144 billion a year in physical stores. $2 billion of that is within three hours of getting out of an Uber. Partnering with ridesharing apps allows you to make special offers to customers in your area who are ready to spend. You could consider paying for a free ride to customers who come and spend at your store.
The lesson is, knowing who and where your customers are, and what they tend to do, makes it easy to nudge them in a direction they are already leaning.
Emerging Technologies Transforming Retail and Ecommerce
This one was a twofer and is in the competition as my favorite presentation, thanks to some great subject matter and solid demonstrations.
Lowe’s Innovation Lab
Kyle Nel is the executive director of Lowe’s Innovation Labs. The description said that he would talk about how “next-generation technologies such as augmented and virtual reality, robotics and 3D printing are being tested and deployed in stores.” Yeah, right, I thought. But no, they actually are embedded in those fields and more.
One of the ideas I really appreciated him addressing was the “hype cycle,” or as he called it, a trough of “deceptive disappointment.” Basically, everyone gets hyped about the prospect of a new innovation, then expectations don’t match reality, and everyone stops paying attention. Meanwhile, a few people go to work on making it happen. The changes come about exponentially and the innovation catches us off guard when it resurfaces in a way that matches our original expectation. Gartner would say it reaches a “plateau of productivity,” which is an example of an alliteration scheme that does not work to make something sound better (only sort-of joking).
The stuff that Lowe’s is doing is straight out of science fiction, and they know it. It’s a part of their strategy. Given that people are better at taking in disruptive information when it is part of a story, the innovations lab hires actual science fiction writers to create stories that feature the technologies they want to use, and then they present those stories to their corporate leadership in the form of comic books. Yes, that’s right. The most powerful people at Lowe’s make decisions based on what they read in comic books. And, man, it works really well. They legitimately are innovating at a level that makes no sense for a home improvement store. Did I mention that they currently have a 3D printer in outer space? Or that they have robots in their store that speak 17 languages? C3PO’s galaxy isn’t as far, far away as previously thought.
I have an iPhone, but I have never really used Apple Pay, but I’m now happy to put that part of my life in the past. This presentation demonstrated just how awesome it is, it made me want it on every site I shop. It’s one of those features that I’m going to be pushing with every client I talk to, not just because the data is compelling, but because that is how I want to shop from now on.
According to Baris Cetinok, senior director of product marketing & management for Apple Pay & iCloud, Apple Pay has seen impressive results. During the 2016 Holiday, Apple saw that 60% of visits were from mobile devices, two out of three mobile orders were from an iPhone or iPad, and there was a 30% higher conversion rate on such devices. In two-and-a-half years, Apple Pay accepting locations have grown from 220,000 visits, a number that Tim Cook may have suspected was padded, to over five million.
Baris described their strategy as three-pronged, and offered three examples of clients who were doing it well. Number one, turn browsers into shoppers. Lululemon integrated apple pay with product pages this past year and has seen great results. Second, simplify shopping for everyone. Macy’s was an early adopter of Apple Pay. They offer one-tap checkout, and buy online/pickup in store, plus they’re rolling out product page integrations into Macys.com on both mobile and desktop later this year. Third, increase loyalty across all channels. Gap, Inc., which owns Banana Republic, Athleta, Old Navy, and more, have integrated Apple Pay into stores, an app, the web, and integrated their private-label credit cards.
After the session, I spent some time with one of Apple’s Engineering Program Managers, who was really excited about how the platform is going to work with ecommerce platforms like Magento and Salesforce Commerce Cloud.
Blue Acorn has been fortunate enough to be Rebecca Minkoff’s ecommerce partner for several years, and I can tell you that it is a pleasure being aligned with a group that really gets it. Uri is an excellent speaker, and his passion for the company he co-owns with his sister was apparent within moments of taking the stage. I think his talk captured what makes Shoptalk really different. You get actionable insights from almost every talk, but there is a second part and that’s the motivation you walk away with. Rebecca Minkoff is really walking the walk. They put their customers first and they use data.
Uri’s talk technically revolved around foolproofing your business with the millennial audience, although he took many leaps from there to talk about some cool initiatives the company has been making. Last year, the team started to think about another one of its customer types, the kind that wants the privacy of a digital experience but also wants to experience the product in person before buying. Using Qhop, they created an anonymous and private experience that allows customers to self-checkout. It’s a busy store with high-end products but the technology allows them to provide this experience with full security. RM is a fashion brand, and they launched this product on the same day as Amazon Go. That is the definition of keeping up with Goliath.
Recently, the company opened their own micro-VC fund, so they could support new technologies. The initiative allows them to let people come in and build a proof of concept for a real retailer. One of those companies is 42 Technologies, a data warehouse business intelligence platform that integrates with Alexa. The whole crowd got sweaty palms when he sat down in the middle of his presentation to test the technology live. “Alexa, ask 42 what was our top selling line last year?” And it worked. Woah.
RM is currently going through a two-year process to totally transform their business. They had to build up an audience to have enough scale as a brand, but they are reorganizing the company and supply chain to be nimble. They need to be able to test and react, manufacture more product in the US and Europe, and even change the seating arrangements in their office. The goal is to go from design to the sales floor in twelve weeks. They want to get rid of the excess inventory and solve the problems that plague everybody.
One big question the company looked to answer last year was, “If our customer has fourteen bags in her closet, how do I make sure she uses ours?” In other words, how do you get Rebecca Minkoff bags to find success in the internet of things?
The company placed RFID chips in bags that allows consumers to scan your bag to get exclusive invites. Pretty soon, scanning could be used to give access to unique media, discounts or exclusive access at coffee shops, museums, concerts, you name it. You could scan a bag in the fitting room and get recommendations. You could get a discount if you check in with that a bag a certain amount of times. The product is the key to unlocking experiences.
Lastly, he said something we at Blue Acorn agree with wholeheartedly, “Everything you do has to be an A/B test.”
Interactive Store Technologies
On the heels of Uri’s talk, I attended a panel that featured the builders of Rebecca Minkoff’s interactive fitting room. Topics included interactive displays, virtual dressing rooms, smart shelves, magic mirrors, augmented reality, digital signage and more. A few things stuck out to me as memorable and provided useful frameworks for thinking about these technologies.
Healey Cypher, co-founder and CEO of Oak Labs, divided tech into two categories, implicit and explicit. Explicit technologies, like augmented reality, make your customers say, “Oh man, we’ve got to got there and try that.” Implicit technologies, like customer service apps, make customers say “The lines there are always short and the people are so helpful.” Considering that 47% of people will not ask for help in a store, it’s pretty important to find ways to engage.
Mohan Ramaswamy of Work & Co made one strong recommendation: be the best on mobile everywhere. Two-thirds of people use their phones to shop when they’re in store. And it doesn’t have to cost an arm and a leg. Target spent millions developing product beacons that sent custom messages to shoppers in the store, but a simple map of the store on product pages is easier, cheaper, and provides great results.
Wow, you really read this far. I’m impressed.
Be sure to check out my recap tomorrow. If you’d like to learn more about what we do, please feel free to contact us on this site, or, if you’re at the show, message me on Twitter or Linkedin or just visit us at booth #1413.