Retail In 2016: Omni-Channel Restructuring, Content That Converts, And Smart Data

The Director’s Report: eTail West 2016

By Lori Hawthorne, Executive Director, eTail

The retail industry continues to evolve at a break-neck pace. Omni-channel capabilities have become table stakes, forcing many brands to re-evaluate their operations. When it comes to influencing the consumer journey, retail brands now understand how content can engage and convert. Meanwhile, the age of big data is alive and well, but brands are working to maximize the insight they gain from that data.

The retail industry’s top leaders will gather at eTail West 2016 to dive into these issues, explore the most promising technologies, and trade best practices. In this year’s Director’s Report, I analyze the forces driving retail success and innovation and discuss how the retail landscape is facing major change as 2015 comes to a close.

- Lori Hawthorne

1 Omni-channel integration and digitizing the in-store experience

2 Expeditedshippingandfulfillment,includingsamedaydeliveryandbuyonline,pickupinstore

3 Digitalpayments

4 Reachingtoday’sconstantly-connectedconsumers

5 Innovationsinmobilecommerceandmobileengagement

Retail In 2016: Omni-Channel Restructuring, Content That Converts, And Smart Data

The Director’s Report: eTail West 2016

Top Disruptors of Online and Multi-Channel Retail

1 Mobile Bridges the Omni-Channel Gap

Multi-channel used to be defined by creating a seamless experience online and in-store. That led to the creation of tools such as Live Chat, which can enable similar experiences online that consumers would have in-store. Retailers are focused on integrating digital content into the store. Mobile has become the bridge for the integration gap, as this channel can bring digitally enabled experiences into the store environment.

Executing on this goal has been a challenge, giving rise to new technologies aimed at helping engage customers while they are in the store. Beacons, for instance, are gaining popularity. Brick and mortar retailers are starting to use these technologies to help them personalize the in-store shopping experience and compete with online-only retailers. Brands are also focusing on multi-platform shopping to help meet customers wherever they are and keep them engaged. In short, retailers must now leverage every channel, especially stores, to engage with the always-connected consumer. Omni-channel is a major differentiator, and retailers are discovering how mobile devices can help bridge the omni-channel gap.

2 Restructuring Internal Operations Around Omni-Channel

Now the question becomes: how do you enable great omni-channel experiences and compete with online-only retailers like Amazon, who are rapidly shrinking delivery times? So far, the answer has been to offer as many omni-channel programs as possible, including ship to store, reserve in store, buy online, and curbside pick-up. Over 70% customers expect these capabilities, but less than 30% of retailers have them.

One of the biggest omni-channel challenges retailers have encountered is working through inventory accuracy issues to enable customers to see what inventory is available in-store, and what is only available on the website. This is the first step to help enable these programs to be successful. They also have to align themselves internally around these initiatives, and organize themselves to be more nimble, flexible, and work in real-time. In some cases, this may mean a leaner staff, or a complete revamping of their structure (like Macy’s approach). Stores also have to learn how to enable these initiatives: for example, 20% of a store employee’s day could now be spent on ship to store customers, whereas these employees have never had to handle those duties before. There will have to be a restructure of the store operations to handle omni-channel.

The Forces Driving eCommerce & Omni-Channel Retail

Retail In 2016: Omni-Channel Restructuring, Content That Converts, And Smart Data

3 Using Data And

Measurement To Drive Your Business

Retailers are hyper-focused on making data actionable, and they are discussing how to analyze and measure that data effectively. They use data for testing, to help with usability testing and to optimize different portions of the site experience, as well as to help drive customer experience changes. Advanced analytics will also be key in the design and development of new products, dynamic pricing strategies, and even inventory forecasting.

Similarly, retailers are working to understand cross-device measurements and the value of every data point.

4 Devices don’t matter. Only

consumer intent does Today, consumers see smartphones as a way

to service an immediate need. In response, retailers must adjust the way they view mobile devices, instead of creating device specific strategies. They have to think about mobile in terms of consumer intent, taking the device out of the equation. In other words, mobile strategies should not be focused on the device itself (and its capabilities), but rather should be about the intent of the consumer. Once retailers figure that out, they can craft strategies that will move consumers beyond just traffic acquisition, to conversion and loyalty on mobile devices.

5 Content is Being

Reimagined To Drive Engagement

Content has become a huge priority for retail companies; it is now a key differentiator for both acquisition and retention strategies. Personalization is a huge part of effective content, but unfortunately it is not something retailers have traditionally excelled at. In reality, over the past decade, retailers have written very little content outside of product descriptions. Now they need to create more engaging, personalized communications, or they will lose customers who have come to expect more than just product descriptions. Whether curated content or user-generated content, the way that consumers view content is changing.

Newer boutique websites that started out online-only have developed a new language of engagement that is purely digital. Their businesses target highly specific customer segments and their value proposition is built around personalization. They are the masters of engagement through content and are leaving other eCommerce sites in the dust. All retailers now need to adopt this engagement language and build it into their DNA, or they will lose market share.

Retail In 2016: Omni-Channel Restructuring, Content That Converts, And Smart Data

MultichannelRetailBytheNumbers32% of retailers expect sales from smartphones andtabletstoincreasemore than 20% over the nextyear.

Emailmarketingandorganicsearch are the top drivers of customer acquisition for 74% of retailers

Source: 2015 eTail Holiday Retail Trends Report

Search 40% of product searches begin on Amazon,

rather than Google. Meanwhile, Google is forcing retailers to go responsive, requiring retailers to have a mobile-friendly website in order to continue to appear in mobile search. The end of Yahoo’s partnership with Bing will have major repercussions for desktop traffic, much of which will shift back to Yahoo’s platform. This could make Yahoo a much bigger search contender. PLAs are also significant due to of the percentage of the search budget they now claim; some estimates say that PLAs command up 40% of search budgets. Finally, retailers are now hiring for marketers, not just SEO experts, because they have realized that SEO needs to be a part of the entire marketing conversation.

Branded Manufacturers Google is looking to bring disruption to retail

by adding a Buy button to some searches. This presents a new challenge to manufacturers, who will be watching closely to see how successful Google’s buy button is. If it is successful, it may spur on general innovation in the retail space, as other manufacturers scramble to differentiate themselves and create a more seamless buying experience.

Globalization and Growth These days, consumers can buy virtually

anything from anywhere and at any time. This has global repercussions and creates new levels of complexity for marketing and logistics on a global scale. The tremendous growth of eCommerce in countries like Australia, Brazil, China, and Russia adds to those challenges. Globalization is also driving other logistical innovations, as companies like Alibaba are stocking their warehouses with product obtained direct from manufacturers at huge discounts. These companies can then offer steep discounts.

Content and Commerce Merging

Houzz’s IPO earlier this year was an indicator of where the industry is headed in terms of content: Houzz was valued at $2 billion – and they are only four years old! Content now streams seamlessly into commerce, allowing consumers to scan new styles on Pinterest, then in one click land on the retailers site to purchase those items. Pinterest even has a new Buy (button separate from a pin), as does Instagram.

Omni-Channel Changing Interactions and Operations

In the 90s, consumers asked retailers what to buy; they were much more receptive to “push messaging” from retailers. In contrast, consumers now have more of a self-help mentality when it comes to shopping, which dramatically changes the brand-to-consumer interaction. Consumers no longer want associates to help them – they would rather to do it themselves. Omni-commerce, when done successfully, can help them do that. Mobile is a huge part of the omni-channel opportunity, but there is also potentially a $25B mobile sales opportunity in the US.

From an operations standpoint, Amazon has moved well beyond same day shipping, now offering one hour delivery in some areas. So what does that mean if the biggest advantage a store has is access to inventory immediately? It changes the playing field as much as Amazon’s low cost structure disrupted the industry 10 years ago. Retailers are now focused on getting products to customers as fast as possible. Home Depot for instance, has said that they are investing heavily in supply chain to stay ahead of the curve.

Evolving Trends & Technologies

Retail In 2016: Omni-Channel Restructuring, Content That Converts, And Smart Data

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Featured speakers to date include:

Targetedretailer-to-retailernetworkingeveryday eTail is the only conference providing retailer-only networking

sessions throughout the course of the event, including fun and informal sessions. Experience concurrent networking during the main conference days, which run throughout the day, plus networking sessions differentiated by company size. The Women In Retail Roundtable brings together female executives to discuss their unique experiences and accomplishments.

Alternative Session Formats • Case study Revolutions – These sessions get you involved in solving

a specific challenge area using small, interactive roundtables. Work together with your peers to learn how they work through the challenge.

• Interactive Working Groups – These groups are a mix of short, high impact presentation and audience-run working groups where you’ll be a main part of the discussion. Break into small working groups, collaborate to hash out answers, and voice your opinion throughout the session.

RevampedExhibitHallincludingSocialLounges,WorkStationsandNewInteractiveGames

The Exhibit Hall is completely revamped, with dedicated lounges for informal networking, a complete work and charging station, and an interactive game lounge complete with cash prizes. The exhibit Hall is not only focused on providing cutting edge solutions, but also a fun environment with refreshments, great food, and an opportunity for networking.

eTail’sBest-In-ClassAwards Every year, eTail presents the Best-In-Class Awards to the industry’s

most innovative executives. This year, a panel of peer judges will decide which retailers have the best in class programs in categories like mobile, social, search, email, and the Retail Innovator of the Year. Be present for the awards presentation and make sure to nominate the organizations that you think are redefining retail!

DynamicGuestSpeakers Retail leaders are not the only speakers you’ll learn from at eTail.

You’ll also hear from special guest speakers who dive into big picture thinking and professional development best practices.

Eoin Comerford, CEO, Moosejaw

Rob McClellan, SVP Omnichannel IT & Innovation, Coach

Jon Kubo, Chief Digital Officer, Boot Barn

Mike Ritter, VP Petco.com, Petco

Joan King, VP eCommerce, Crate and Barrel

Angela Caltagirone, VP eMarketing and Email Marketing, Williams Sonoma

Kevin Moffitt, VP eCommerce, OfficeDepot

Jennifer DiMotta, VP eCommerce, Sports Authority

Eric Bibelnieks, VP Enterprise Analytics, Insights, CRM, Maurices

Judy Hsieh, Head of Product and Digital Marketing, Nastygal

John Kim, VP Pricing and Profitability, Wayfair

Nizzi Renaud, VP Marketing, Zazzle

Igor Krakovsky, VP Online Acquisition, Beachbody

Ryan Linders, VP CRM and Loyalty, SallyBeautySupply

Bob Sherwin, Sr. Director Customer Acquisition, Wayfair

Eric Nash, Sr. Director Online Marketing, Stamps.com

Kim Lewis, Sr Director CRM, Golfsmith

Eric Wu, Sr. Director SEO, Edmunds.com

Kedar Deshpande, Head of Mobile Marketing, Zappos

Kristen Taganashi, Director Online Strategy and Product Management, SearsHoldingCompany

Mike Pitone, Director Product Management and UX, UrbanOutfitters

Jeff Lerner, Director Customer Acquisition, Provide Commerce (FTD)

Tari Huddleston, Director eCommerce VP Jeanswear, VF Corporation

Ashish Braganza, Director Global Business Intelligence, Lenovo

Retail In 2016: Omni-Channel Restructuring, Content That Converts, And Smart Data