For years, Amazon has been considered retail’s public enemy No. 1. Of course, retailers understand the impact and influence of Amazon at a high level, but retail futurist and consultant Doug Stephens spotlighted a harrowing statistic during his keynote presentation at the second annual Aptos Engage user conference in Hollywood, Fla.: 60% of all e-Commerce growth is going straight to Amazon, with 40% left for everyone else.
Despite Amazon’s retail dominance, Stephens noted that the rest of the industry has ample opportunity to compete and thrive if they focus on the online giant‘s weakness: the customer experience.
In his keynote, “Re-engineering Retail,” Stephens pointed to virtual reality, 3D printing, connected devices and conversational commerce as game-changing technologies that will comprise the “store of the future.” However, he noted that many retailers are so focused on the idea that retail stores will wither away as online grows, they are missing the real transition that needs to happen within stores. He argued that while media used to drive people to the store, media now is the store. With shoppers able to browse for and purchase items everywhere they look, retailers have to implement many of these newer technologies to make the physical store a necessary part of the customer experience.
“If the model for stores was really so redundant, if it was insane to have all this money tied up in store locations and people, then why would all these pureplay online retailers open stores?” Stephens asked. “Right now, Amazon is threatening to open thousands of stores, and if stores were so useless, why would they do that? They recognize, like everybody recognizes, that you can’t fully actualize as a brand until you have a physical, visceral, emotional connection with your consumer. We can’t replace the idea of serendipitous discovery...that feeling where you walk into a store and you’re just blown away at how beautiful it is or how accommodating the people are.”
The essence of a successful in-store experience revolves around “serendipitous discovery,” Stephens explained. “Think about the store as a story.” He pointed to brands like Pirch, an appliance and home goods retailer that creates a sensory experience. All appliances are plugged in and activated so shoppers can roam through the store, test appliances and even feel the water pressure on different showerheads.
To create these experiences, retailers need to rethink how much inventory they should have in stores and, ultimately, how they measure the success and value of each location. Instead of focusing on dollar-per-square-foot and store-level conversions, Stephens predicted that retailers will instead track whether a store helped create “converts,” or dedicated brand fans.
“As long as you’re obsessed with dollar per square foot, you’re going to play it safe,” Stephens said. “You’re never going to take products off the floor in favor of great experiences.”
Retail Execs Share Singular Commerce Success Stories
The battle against Amazon was a theme that pervaded throughout the entire Aptos event. In fact, a select group of senior retail executives attended a full-day workshop on “Strategies for Growth in the Age of Amazon,” to brainstorm and discuss the latest trends, including innovative CRM tactics; how to compete against Amazon Prime; how to use technology to solve the store’s “identity crisis”; and learning the capabilities, and potential impact, of Alexa.
In various sessions, executives from retailers including Pier 1 Imports, The Paper Store and Windsor delved into their omnichannel success stories, and how the Aptos Singular Commerce cloud platform facilitated their order management and warehousing strategies.
For example, as part of its “1 Pier 1” omnichannel strategy, Pier 1 Imports scaled its systems to increase total SKU count by 250%. The home furnishings brand also has expanded the scale of its fulfillment capabilities: 20% of all online orders now are picked up in the store.
“I have to protect my investment,” said Matt Johnson, VP and CIO of Pier 1 Imports during a presentation. “[Up to] 58% of the capital the company has invested in IT in the last six years has gone to digital transformation. Additionally, there’s a lower cost of ownership. IT costs are high. There’s a popular methodology of run, grow, transform from an IT strategy, and we’re doing way too much of the run, very little of the growth and hardly any transform, and we need to change that.”
Johnson noted that the retailer needed to simplify its IT ecosystem under one platform to accommodate its growing help desk staff and complex system of registers.
Aptos Strives To Become An Industry Partner
In an effort to be more than just a retail technology vendor, Aptos has made a multimillion-dollar investment in Aptos Labs — an innovation development team of POS, customer engagement and order management experts within the Aptos organization who help build and refine the mobile-first and unified commerce services platform.
“It’s not just about new, it’s about taking the current generation of products forward,” said Ian Rawlins, Strategy Leader of Aptos during the presentation. “This isn’t a ‘this or that’ conversation. This is an ‘and’ conversation. This is a journey, for some people they’ll be aggressive in a pivot. For others, it might take a long time, and that’s okay. Both environments continue to move ahead based on what we’re trying to do here.”
Over the past year, Aptos has seen a 29% year-over-year increase in revenue, expanding to 10 new countries worldwide, and adding 120 new employees and 14 new partners to its business community. During a press conference at the event, CEO Noel Goggin noted that Aptos customers will see many more partners being added to this community in the future.
“You will definitely see a lot more partner focus,” Goggin explained. “We have more than 20 partners and are growing. Our strategic direction is to add value to our customer engagements, and offer support and complementary solutions and services.”