The virtues of composable commerce and the emerging possibilities of generative AI were key themes of this year’s Connected Consumer Series, Resilient Retail: How Efficient, Effective and Engaging CX is Fueling Growth. The webinar series, now available on demand, included case studies from retailers Sweaty Betty and SiteOne that highlighted composable commerce’s flexibility and positive impact on site performance, as well as information on how ChatGPT offers personalization capabilities at scale that had previously not been possible.
Discover more of the insights revealed during #CCS23:
How Composable Commerce Gave Sweaty Betty a 41% Online Conversion Boost
In an A/B test comparing a website powered by composable commerce to a traditional template-based site, UK-based women’s activewear brand Sweaty Betty achieved an impressive 41%+ bump in conversions, aided by page load times that were more than 40% faster.
Sweaty Betty’s use of performance and personalization APIs from Salesforce allowed the retailer to “customize pricing and promotions to different shopper groups” depending on the actions they took, said Igor Faletski, VP of Product Management at Salesforce. He and Lars Peterson, CEO of Uniform.dev, discussed the benefits of composable commerce and offered advice on incorporating it into retailers’ IT development during From Preaching to Practice: How to Harness the Power of Composable Commerce.
Composable architectures — meaning components of a retailer’s digital experience stack are modular and replaceable, with all systems decoupled as in headless architectures — offers “speed, agility and value, including higher conversions and more customer engagement driving revenue for the business,” said Peterson. “We also talk about ownership, because creating something composable also means creating something unique for your business. You own it and are in charge of the stack [rather than being] locked into a vendor’s roadmap.”
“Composable is not just about the architecture; it’s also about business wins, experience and agility, which are fundamental to growing in the ecommerce market today,” said Faletski. Peterson agreed about the importance of moving on from monolithic tech stacks to composable ones, noting: “What got you here won’t get you there.”
ChatGPT Unlocks Real-Time, Conversational Personalization on a Previously Impossible Scale
The role AI plays in retail is growing, and it’s quickly reaching a tipping point — 80% of industry executives expect their companies to adopt AI-powered intelligent automation by 2027, according to Juniper Research. One of the key technologies powering this rapid adoption is ChatGPT, which can enable personalization, at scale, above and beyond what was previously possible, including unlocking real-time recommendations using chatbots. No retailer has the necessary manpower to provide every customer with a one-on-one conversation with a live agent during their digital shopping journey, but AI makes this a real — and potentially lucrative — possibility.
“When you’re in the process of purchasing something, it’s too late to engage tomorrow,” said Colin Crowley, CX Advisor at Freshworks. “It’s all about helping the customer then and there, when they’re in the mindset of purchasing something and they’ve already continued a certain way down that process. If you’re not able to engage in real time and provide that real-time support, your ability to engage after the fact can be very limiting.”
The same technology also can prompt customers with proactive messages after they leave the checkout page, but before they leave the site entirely, to capture them in the moment. This gives retailers an opportunity to immediately find out why the customer abandoned their cart and potentially rescue the purchase before they go elsewhere, rather than hope that an abandoned cart email can make the difference hours or even days later.
Retailers’ Reluctance to Put POS in the Cloud Stymies Unified Commerce Progress
Many things can hamper retailers’ efforts to pursue a unified commerce strategy, from internal organizational silos to outmoded managerial incentive structures. But it’s retailers’ reluctance to move their point of sale (POS) systems from a traditional client/server setup to a cloud-based architecture that really slows down progress.
“The resistance is real — people are not comfortable yet with putting their POS in the cloud,” said Dave Bruno, Director of Retail Market Insights at Aptos. “But it’s very difficult to get to any of the other items in the store if the POS is still in a client/server-based silo. [Retailers] have to get their transaction engines to the cloud to achieve those visions.”
Bruno and Brendan Witcher, VP, Principal Analyst at Forrester, spoke during the Preparing for the Evolution of Omnichannel: How to Build a Unified Commerce Culture webinar. Witcher noted that many retailers miss critical pre-initiative work in their efforts to move toward unified commerce.
“Most companies don’t understand where customer pain points are, and they’re not always that obvious,” said Witcher. “If I’m standing at the register and the cashier asks ‘Did you find everything you’re looking for?’ — what if I say no? Can you do anything to help me, or would you need to get a manager and make everyone else in line behind me angry?”
This misunderstanding of pain points (and how to relieve them) applies at multiple points in the shopper journey. “Say your strategy is to have POS devices at dedicated locations as well as self-checkout, mobile POS and automated checkout,” said Witcher. “So where’s the right place to do a product recommendation? Or ask a customer for their email address, or deliver a promotion? Those answers need to be tied into the strategy; for example, don’t make a product recommendation at the POS, because that customer is already mentally out of the store. Do it in the [BOPIS] pickup message or when an associate is with them in the aisle.”
Creating and implementing these types of unified commerce strategies requires close monitoring of data points, the more granular the better. “Identifying the metrics within each experience is a great building block,” said Bruno. “For example, what happens with a BOPIS order? Were there add-on sales? How much time did the shopper spend in line? What’s happening in the parking lot [for curbside pickup]? This accumulation of a lot of little numbers is as important as the topline numbers we focus on.”
Take all Valid Data Points into Consideration to Drive a Truly Frictionless Experience
It’s common sense these days that demographic data, such as a shopper’s age, occupation, gender and geography should be considered when personalizing their experience. These concrete factors can be associated with well-documented habits and demands. However, retailers also need to take more abstract and personal psychographic data, such as personal values, pets, music preferences and hobbies, into account if they truly want to eliminate friction from their marketing approach.
“I own a dog, and I also have tropical fish,” said Thomas Kaczmarek, Director of Customer Engagement at RedPoint Global. “I can imagine that it would be full of friction if I kept getting emails about cat food. I think that might bug me, and I might have a problem with the brand that keeps doing that. If you have information available, and it’s tested and it’s trusted and it’s source is confirmed and you’ve gone through all the compliance related to it — this information can be very valuable to help that relationship and reduce friction.”
Maintaining this deep level of knowledge is particularly important in the uncertain year ahead. Retailers will need to be able to pivot quickly to keep up with changing regulations and evolving customer expectations, which means they must develop a 360-degree view of shoppers while understanding sources, expectations and regulations around privacy as they develop a “golden record” that can automate an improved customer experience.
Unlocking 5 Winning Strategies for Retail Growth
Retail organizations are navigating economic pressures, rapid consumer changes and greater demand for profitability in all investment areas. Executives from Salesforce used data to help retailers better balance these factors and identify their winning strategies for 2023 — and beyond.
In the session Finding Retail Success in 2023: Five Winning Strategies to Balance Brand Loyalty and Operational Efficiency, Salesforce’s Caila Schwartz, Director of Consumer Insights and Strategy, Retail and Consumer Goods, and Michelle Grant, Director of Industry Insights, shared some of the latest Salesforce data, which includes feedback from 4,000+ commerce leaders and the shopping behaviors of more than 1 million online consumers.
The winning strategies reaffirm the importance of a sound first-party data strategy that provides all functions — from marketing to service and operations — with the insights they need to adapt their investments and tactics to customer needs. When retailers “unlock” that data to drive growth, they can establish a solid foundation to tackle the other strategies, which include customer service extending beyond the call center and those responsible for the supply chain joining the front office. Jenna Flateman Posner, CDO of SNIPES, a growing sneakers and apparel DTC retailer, provided her thoughts on the data and how these trends reflect the go-forward priorities of her business.
“As digital executives, we get very focused on the front-end. It’s always so front-end, customer-facing,” said Flateman Posner. “But there are the nuts and bolts of how we take care of our customers, from the cart to the doorstep, that often go under-supported. There’s a huge opportunity at the intersection of inventory position, customer expectations, SLAs and transparency into where products are in their lifecycle that we need to really lean into.”
How SiteOne’s Digital Transformation Supports its Rapid Acquisition Growth Model
Landscape supply retailer SiteOne operates in a lucrative ($25 billion annually) industry that’s also highly fragmented: SiteOne has 16% market share, and that’s 4X greater than its next competitor. The prevalence of so many small operators has led SiteOne to an acquisition-based growth strategy: “Throughout the last several years, we’ve been averaging at least one acquisition a month, and in 2022, more than one per month,” said Scott Canney, Senior Director of Product Management at SiteOne during the webinar How Composable Commerce is Playing a Key Role in SiteOne’s Digital Transformation.
Absorbing companies at that pace would have put a major strain on the retailer’s IT and operations capabilities had SiteOne not moved to a MACH [Microservices, API-first, Cloud-native and Headless]-based composable commerce architecture. Canney cited not just security concerns around incorporating multiple ecommerce sites running on a range of platforms but also the additional resources needed to manage multiple websites: “Needing different skill sets to manage them can be very costly, so we wanted to consolidate down to a single architecture while still having the flexibility to manage multiple sites,” he said.
SiteOne’s opportunity arose with its acquisition several years ago of the Canadian company Burnco, which “had a very big web presence, but it was on a monolithic, heavy, on-premises system that we desperately needed to get off of,” said Canney. “But after we do Canada, we won’t stop there; our future vision is to ‘chop off the head’ and have commercetools, Algolia and other backend platforms supporting multiple front-ends. Whether it will be SiteOne.com, SiteOne.ca or a co-branded ecommerce site, they will all be on a common back end that connects to our ERP and other backend systems.”
Going this route offers multiple benefits, including better allocation of developers’ time, according to Kelly Goetsch, Chief Strategy Officer at commercetools. “Commerce [functionalities] used to be expensive to deploy and hard to maintain, but now you have multi-tenant SaaS MACH-based commerce vendors, so it makes much more sense to pay a nominal fee to use, for example, our shopping cart versus building something and maintaining that. Developers are expensive, and no developer wants to get out of bed and fix a big queue of tickets around pricing errors in the shopping cart.”
“It all comes back to speed; MACH is named for it,” noted Thomas Mulreid, Head of Sales at Orium. “Moving as quickly as possible helps with both hard times, like COVID when you need to pivot quickly, but also the day-to-day. Your team wants to do things quickly, test things quickly, and having an experiment-driven approach is really important to success in B2B, B2C or any digital experience.”
River Island Drives Customer Retention with Personalized Promotions
With customer acquisition costs rising and consumers cutting back on spending, the name of the game this year is retention. UK fashion retailer River Island found that convenience, value and customer service were its customers’ top priorities. To deliver on those expectations the retailer knew that an omnichannel approach was essential.
“Customers don’t see different channels,” said Cecilia Corapi, Product Manager at River Island in the session, River Island’s Approach to CX: Leveraging Omnichannel Agility to Build Customer Engagement. “They see their interaction with the brand regardless of the touch point used, so consistency and connection through touch points are essential.”
Corapi detailed the ways River Island is doing this, including migrating to a headless commerce architecture, personalizing promotions at the customer level and launching a “take back scheme” in partnership with Reskinned.
Loyalty programs also can be a powerful omnichannel differentiator in times like these, according to Talon.One’s Enterprise Customer Success Manager Alexa Pak: “As shoppers are now thinking more critically about the brands they buy from, it’s also worth focusing on the non-financial benefits of your loyalty program to boost engagement — whether that’s introducing a community aspect, early access to sales or offering exclusive products,” she said.
How CTV is Helping Brands Maintain Marketing ROI Despite Ongoing Uncertainty
Uncertainty seems to be a constant in today’s world. Even as previous challenges resolve, new ones continue to crop up in the form of creeping inflation, fickle consumer sentiment, geopolitical conflicts and now bank failures. Riding it out is clearly no longer an alternative; instead, brands need to infuse their strategies with agility so they can adapt to whatever comes next.
In the session Resiliency Through CTV: Why the Retail Revolution will be Televised, MNTN’s Director of Product Innovation Oliver Embry discussed how connected TV can do just that for retailers’ marketing efforts. Brands that never would have considered TV advertising in the past because of its high cost and lack of targeting capabilities now have access to highly engaged television audiences through CTV. Not only can brands target their high-impact video campaigns to specific audiences, but the data loop of CTV allows brands to easily monitor performance and make adjustments on the fly as consumer and economic conditions change.