Two years ago, online retail’s market share was sitting at 13.6%, according to eMarketer. This year, it’s projected to reach 21.8% by 2024 — an astonishing 60% increase in half a decade.
As eyes and dollars continue to shift to digital channels, the playbook for acquiring, engaging and retaining customers is being rewritten. Ecommerce University was developed to dig into the new, emerging and evolving trends driving this exciting era of retail. Produced by retailX, this three-day webinar series offered curated research, insights and best practices that will uncover what it takes to win in e-retail today — and in the future.
The Four Pillars of Omnichannel Success
The pandemic has made omnichannel a business imperative for merchants of all sizes. After all, omnichannel shoppers spend 10% more online and have a 30% higher lifetime value than single-channel customers, according to Matt Dornfeld, Director of Business Development – Global Omnichannel Partnerships, BigCommerce.
Even if brands and retailers don’t have a physical store, they have an opportunity to create a seamless customer-focused experience that spans across their branded ecommerce sites, marketplaces and even social channels.
During his session, Dornfeld noted that the convergence of marketplaces and advertising, along with the maturity of social commerce capabilities, have created new opportunities for omnichannel excellence. “It’s beyond wanting an omni strategy,” Dornfeld said. “We’re in a world where if merchants aren’t considering how to turn on an omni strategy, there’s going to be downstream problems later.”
To develop a strategy that delights new and existing customers alike, brands and retailers can tap into the four key pillars of omnichannel success:
- Channels: Invest in the right channel mix for your business and your target customers.
- Marketing: There are a multitude of channels and tactics that allow you to maximize customer reach and engagement.
- Operations: Integrated product, inventory and order management data improves back-end transparency and efficiency.
- Fulfillment: Tapping third-party logistics providers (3PLs) can help brands and retailers offer fast and easy delivery experiences.
SharperImage.com Gets a Big Payoff from a Headless Commerce Upgrade
The brands and retailers that were able to act quickly proved to be the most successful at turning the volatility of the past year into new opportunities. They were able to stand up new experiences, track performance and iterate on an ongoing basis. This need for greater agility and flexibility is a key reason why “headless commerce” has come to the forefront.
Put simply, headless commerce is the decoupling of the front and back end of the commerce platform. Rather than having to wait weeks or months to push updates to an ecommerce site, companies that go headless can make updates more rapidly. “Innovation requires iteration,” explained Kelly Goetsch, Chief Product Officer for commercetools. “In many cases it takes up to five releases to perfect a feature to a point where it’s generating revenue. That means if you do one new release a month, it can take up to six months before you see any value.”
That is why SharperImage.com re-platformed its ecommerce site on commercetools leading up to the 2020 holiday season. As an online-only business, SharperImage.com needed to move away from its traditional monolithic suite and onto something that supported faster, more effective decision-making. The company went through an accelerated five-month migration timeline in order to reap the benefits during a peak selling period.
“The expected payoff [of the migration] was holiday,” said Mihaela Mazzenga, CTO, SharperImage.com. “It was the reason we pushed so hard with the timeline, and we had our biggest holiday ever on this new solution. We did more sales in November and December 2020 than in all of 2019. It was a massive undertaking and a great result.”
Visual Media Optimization: How Better Web Performance Can Drive Customer Experience
They say a picture is worth a thousand words, but it also can be worth a pretty penny for your business. Many brands and retailers are seeing the value of incorporating photos, videos and other rich media components into their ecommerce site experiences. The value of doing so is clear, according to Satarupa Chatterjee, Product Marketing Lead for Cloudinary.
“You cannot rely on consumers’ imagination and guesswork,” Chatterjee advised. “They have to see it to buy it. As a result, your online buying experiences have to be highly visual and establish a meaningful connection with the buyer.”
She shared multiple data points to make her case, including:
- The human brain processes imagery 60,000X faster than text;
- Visual content receives, on average, 94% more total views than text alone; and
- The average consumer retains 80% of what they see, versus just 20% of what they read.
But rich content and images can also be a detriment to site performance. This can not only boost site abandonment rates and hurt overall revenue; it also can impact your SEO performance.
Starting in June 2021, Google will prioritize the end user experience by ranking websites according to a series of indicators known as Core Web Vitals. These metrics include Largest Contentful Paint (LCP), which is the time it takes for main content to load on a page; First Input Delay (FID), or the time it takes for a page to become interactive; and Cumulative Layout Shift (CLS), which is how much page content shifts as a webpage loads.
During her session, Chatterjee provided tips for creating engaging ecommerce experiences without risking site performance, including:
- Embrace image and video optimization to improve page load;
- Compress visual assets so they take up less bandwidth, but still display high quality;
- Convert images/videos into newer formats; and
- Automatically crop, resize and format assets specific to the user’s browser and device.
Influencer Myths, Trends and Best Practices: New Rules for Brands of All Sizes
Influencer marketing has become a critical investment for brands across product categories. In fact, it is going to be a $13.8 billion industry by the end of 2021. But as the social media universe continues to evolve, social commerce capabilities expand and new influencer categories emerge, how can brands ensure they’re focusing on the right things?
“Smart retailers should have a cross-channel strategy,” said Lindsay Jerutis, General Manager of ShopStyle Collective. “You don’t want to put all your eggs in one basket because things are changing all the time.”
During a fireside chat, Jerutis offered a multitude of best practices to help brands guide their strategies:
- Understand your audience: Which apps and platforms are they using? Which influencers do they follow?
- Know your key performance indicators (KPIs): Which stage of the buying journey are you focusing your influencer campaign on? What data do you need to track to gauge its success?
- Make strategic investments in reliable platforms: Which platforms are helping you meet your goals right now?
- Put money toward emerging platforms: Are there any new platforms your target customers are using? How can you invest in testing and learning on these new channels?
Jerutis believes that over time, more companies will realize the “ripple effect” of influencer marketing. These tastemakers not only influence the decisions their immediate followers make; they also can influence their followers’ friends, family members and peers. As the influence of influencers becomes more significant, brands and retailers must give them more creative freedom to do their jobs well.
“Giving them guidelines and strategic vision, but then ultimately giving them the freedom to create, is crucial to developing long-term loyal relationships with influencers,” Jerutis concluded.
Cracking the Code of Inventory Optimization
The COVID-19 pandemic created uncertainty in many areas of retail businesses, and inventory is no exception. Consumer demand was extremely volatile and purchase behaviors shifted based on new contextual factors. For example, office closures and the shift to working from home caused sales of dress clothes to plummet.
Although the “new normal” is forming before our eyes, retailers are still attempting to optimize their inventory and crack the ultimate puzzle: figuring out what to buy, how much to buy, where to put it and when. During their dynamic discussion, Mark Garland, President and CEO and 4R Systems, and Adheer Bahulkar, who is a Partner in the Consumer and Retail Practice at Kearney, discussed the urgency surrounding planning accuracy.
“The cost of this uncertainty is extremely high,” Bahulkar explained. “We’ve seen consistent data across a wide range of retailers that with an out-of-stock event, there is at least a 33% chance that it results in a lost sale.” At the same time, though, overstocks can be just as harmful, especially for grocery retailers that create more waste when items aren’t purchased.
The ultimate goal, according to Garland, is to meet demand in the most profitable way possible.
“Optimization is an approach of dealing with uncertain outcomes,” noted Garland. “Forecast uncertainty is risk. How do you convert that risk into reward?” Garland added that optimization can lead to numerous business benefits, including sales increases of up to 2% or more.
Retailers need to calculate the trade-off between out-of-stocks and overstocks, taking into consideration:
- Product economics: Margin, carrying costs, etc.;
- Demand factors: Mean demand and forecast variability; and
- Supply chain parameters: Lead time, case size, review period, etc.
Data and analytics solutions that combine machine learning and AI capabilities can help retailers optimize their supply chain and merchandising decisions. This is key for retailers as they strive to make the best use of their inventory investments.
“There are finite inventory dollars and finite shelf space,” Bahulkar said. “Even online, shoppers can’t see beyond what they find on the screen. If you’re going to take a risk, you always want to bet your dollar on the faster-moving product. That’s how data and analytics can help you make those decisions.”
All sessions from Ecommerce University are available for on-demand viewing for a limited time. Register and watch the sessions now!