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The Cure For The Common Retail Fail: Community-Based Brand Commerce

By Tomer Tagrin, Yotpo

The past several months have seen a continuing trend across
the retail old guard — closures. As heritage names like Barney’s and
JCPenney take the brunt and shutter more physical stores, it appears the pace
is picking up rather than slowing down. A reported 7,000 store closures in 2017
— an average of 583 per month — is already being dwarfed by the almost 2,000
this year. It would be easy to look at these numbers and conclude that shopping
has become passé, that retail is at a point of no return, or that
it’s impossible to compete with Amazon. But it’s not that simple.

Against a landscape of shuttered doors and startling headlines,
there is something else going on. The Amazon-paralysis — a retail industry
caught in the headlights of the oncoming freight train — is starting to wear
off for some. And as it does, an evolved class of companies is rising from the
ashes of Main Street. Direct-to-consumer sales will reach $16 billion by 2020
and these digital-first, vertically-integrated and customer-centric businesses
have worked out that there is room and value in being in second, and even third
place to a behemoth. And they’ve also learned how to take that spot. Enter the
vCommerce challenger brands. 

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Companies such as Brooklinen, UNTUCKit, Leesa, and Away Travel
are just some of this new wave. Having learned from Amazon’s obsessive focus on
customer experience, these brands have taken the lesson and evolved it further
yet. Rather than try to do everything pretty well, many staked their claim in
one individual market — combining experiential service, affordability, and
product excellence to foster an almost cult-like community. It’s a stake that
is paying dividends, from day-to-day operations to billion dollar exits (Dollar
Shave Club, anyone?!).

A recent report analyzing 75 digitally native, vertically
integrated brands concluded that they are growing online sales nearly three
times faster than the broader U.S. e-Commerce market. Retail’s death has
been wildly exaggerated. But to survive in an increasingly promiscuous and
fickle world, it is going to have to look and act very differently.

It’s not unheard of for a major athletic apparel company to
spend millions on R&D for a pair of new sneakers, but go to market with
minimum input from that market. Meanwhile, customers are central to how
challenger brands operate. Leaving the transactional behind, they see consumer
engagement as a two-way conversation. Whether founders are hosting monthly
customer calls, showcasing customers (or their pets) in their marketing, or
even being simply so kind as to leave a response to a review: every meaningful
connection continues the conversation.

As part of the brand’s community, customers have a voice in what
they create, how they serve, how they market and, most important, how they
change to heed the voice of the customer. And where challenger brands can’t
gather feedback directly, they use technology: to read all the reviews, listen
to the social chatter, and send AI assistants to be everywhere, at all times.
Building cult-like loyalty is not a result of million dollar marketing budgets,
nor does it result from the high-profile, celebrity-filled ad campaigns of the
past. Instead, challengers are relying on real-world interactions and authentic
testimonials. The ability to harness feedback, along with fast iteration, is
fueling the amazing growth of these brands. 

A fundamental cornerstone of product development, sales and the
marketing stack, the ability to see all of the conversations surrounding a
brand and iterate or respond accordingly is powering these challengers to
methodically planned, data-informed but seemingly ‘overnight’ success. Size and
reach is no longer the strength it once was as technology democratizes the
playing field. The wealth of data, business intelligence and insights to which vCommerce
players have access allow them to combine the optimum product offering with
unparalleled levels of service that draw a loyal fanbase. Retail can
right their ship in much the same way. It all begins with creating that closed
feedback loop with customers that would allow them to iterate more quickly and
finally give them a competitive edge against Amazon. 


Tomer Tagrin is the co-founder and CEO of Yotpo, the leading customer content marketing platform for
commerce brands. Thousands of businesses — from established companies like
Staples and TYR to fast-growing, digitally native brands like UNTUCKit, MVMT
Watches and Esurance — use Yotpo to collect and leverage every type of
user-generated content to increase trust, social proof and sales. Tagrin was a
chip designer for Intel before co-founding Yotpo, and a software engineering
major at Tel Aviv University before that. An e-Commerce junkie, he passionately
believes that great brands are built on happy customers.

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