Business Insider’s event, IGNITION: Redefining Retail, brought together the industry’s leading experts, executives, and investors to discuss the issues and innovations shaping the future of retail.
Topics ranged from payments technology to sustainable fashion, but one line aptly summarized the state of retail today:
“Transactions used to start ecomm and end ecomm. Now, transactions can start online and end in-store, and can be enhanced by an in-app experience, and so the whole playing field is changing,” said Mary Kay Bowman, Head of Global Seller Solutions at VISA.
Without a doubt, this blurring of channels and the subsequent shift in shopping behavior was the overarching theme of the event. For multi-channel retailers looking to inform their 2020 strategies, we broke down the major takeaways from the event.
Frictionless commerce is on the rise (online and offline)
In his keynote presentation, Geoff Ramsey, Co-Founder and Chief Evangelist at eMarketer, shared six key trends expected to impact digital retail.
But it was “frictionless commerce” that came up again and again throughout the day. At its core, frictionless commerce is about fast and efficient transactions, regardless of channel.
Consumer demands have risen sharply in this area, according to Ramsey. Most American shoppers now expect faster click-to-door speeds, with 64% expecting an option for next-day shipping.
Experts are betting that as consumer standards continue to climb, brick-and-mortar transactions will feel a similar pressure to speed up—a trend that is compounded by the increasing popularity of options like buy online, pick up in-store (BOPIS).
In fact, Ramsey estimates buyers who buy online and pick up in-store will surpass two-thirds of digital buyers in 2020.
With more customers valuing quick service, sophisticated brands will realize that offering these capabilities will separate them from the pack and make them amenable to demanding, modern consumers.
Sustainability and social-consciousness matter (especially to Gen Z)
Rent the Runway COO, Anushka Salinas, announced that the company is planning to launch a brand based entirely on "recycled materials" by spring of this year.
"Sustainability is inherently part of the business model we pioneered 10 years ago," Salinas said. "We are one of the only companies out there that is telling you, telling our consumers, 'Buy less stuff' versus 'Consume more.' That has always been at the core of what we do."
The call for sustainable practices in the fashion industry is urging brands to form alliances with philanthropic organizations across their supply chain.
“72% of Gen Z says they’re willing to pay more for a product if they know that that business is inherently more socially-conscious and environmentally-sustainable.”
—Anushka Salinas, COO of Rent the Runway
But this trend isn’t limited to fashion. Instagram Shopping’s Product Lead, Layla Amjadi, said Gen Z consumers want to engage with brands who have broader conversations about social trends and causes that matter to them.
According to Amjadi, Gen Z has the ability to upend the retail landscape across verticals, and the three crucial features they value in brands are:
- Being part of the social conversation. To win over Gen Z, brands should show awareness of larger trends and fads in the world.
- Products that resonate. More than any other generation, they want to feel that products are made with their unique preferences in mind.
- Authenticity. Speaking frankly and conversationally is important for this generation, who expressly dislikes pushy sales and generic content.
Experiences will drive online sales (only if they’re authentic)
Authenticity came up when talking about experiential retail, too.
Founder and COO of lingerie brand Lively (a Shopify customer), Michelle Cordeiro Grant, drove an important point home:
Consumers still crave in-person experiences, even as they enjoy the convenience of ecommerce. The two are not mutually exclusive, in fact, they go hand-in-hand.
Retailers who can foster both “bricks and clicks” experiences have more opportunity to connect with consumers—and to sell more.
So, what hooks customers? How do physical spaces translate to brand stickiness?
“What we find is that brand is about human impact. It’s the emotion sparked when they see your logo. Yes, the bra is important. But more importantly, what does it feel or mean? For [Lively], it’s passion, purpose, confidence. Experience that drives those three words.”
Speaking alongside Michelle was Shopify’s Director of Product, Arpan Podduturi, who added, “The best kind of experiential retail are the experiences that are repeatable—not one-off gimmicks, where you take an Instagram selfie and call it a day. Meaningful experiences are where you want to go back time after time after time because the service is great, or you have a relationship with the person who works there. Repeatable value that’s different from your online experience.”
Digital fatigue is leading to a brick-and-mortar resurgence
Though Lively is a brand best known as a digitally native direct-to-consumer brand, Grant weighed in on the success her company has found through pop-ups and permanent brick-and-mortar spaces.
“Retail used to be about dollars per square foot. Today, [shoppers] don't need to come to a store to buy. They want to come to a store for human interaction. They need something to do that's not on their screen anymore,” she explains.
Cutting acquisition costs? Open a brick-and-mortar space
Experts all agreed that the exceedingly high cost of acquiring customers with digital advertising will lead to more “creative” acquisition strategies. But when seeking to cut costs, it’s surprising to hear that investing in a brick-and-mortar presence might be the solution.
Grant predicts pop-ups are the future, and reiterates that they don’t have to break the bank. She shares that her first Lively pop-up cost $10,000, including staff travel and meals—an amount that could easily be spent in a week with online ads.
Bigger companies are beginning to feel the pain of this, too. Using Casper as an example, Podduturi shares that “the cost of acquiring customers for [Casper] is roughly the same as the cost of making product, which is just crazy.”
In part, this explains Casper’s prolific move into physical retail—a tactic we’re certain to see more brands employ in 2020 as they try to bridge their ad budgets with consumer expectations.
Unified commerce will be make-or-break
More multi-channel retailers are recognizing the importance of having a single view of their customers, purchase histories, and other relevant trend lines in order to grow their business effectively.
When asked how Shopify’s technology has helped her scale Lively into a five-store operation, Grant says it’s all about data visibility.
“It’s not like we look at our ecommerce business P&L and then look at our store P&L. With [Shopify] we can easily see what’s happening across the entire ecosystem of Lively. Who our customers are. All of the age ranges. All of the geographies. The economic households. And then we can get more personalized and treat them as individuals,” she said.
The ability to personalize the in-store experience and make product recommendations is the obvious benefit to syncing your backend, but Michelle says the biggest upside of Shopify’s technology is the reprieve of not having to think about it at all.
The right technology works for retailers, so they can free up their time to focus on the brand, their customers, and the experience they want to offer.
Podduturi added that “connecting the online channel with stores is still a big pain point for retailers”, and something that Shopify’s unified commerce solution will continue to solve for in 2020.
Photography by Jin S. Lee / Business Insider