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2019 E-Commerce Outlook Guide

Retail Touch Points – 16 experts share their insights into top digital retail trends for 2019.

The saying goes that “What happens in Vegas, stays in Vegas.” By contrast, what happens in e-Commerce doesn’t stay within the digital sphere; increasingly, it affects virtually all segments of the retail industry.

The new world of retail is an intersection of digital and physical. An increasing number of e-Commerce pure play companies are seeing the real benefits of moving into the brick-and-mortar realm. But physical retail is getting a much needed update from the next frontiers of technology, featuring AI, voice commerce and visual recognition solutions.

Retailers and solution providers are working to adapt the store shopping experience to the reality that consumers are entering store aisles led by their smartphones. But when it’s time to expand operations beyond U.S. boundaries, companies are embracing e-Commerce, which has broken down borders, making global retailing a practical reality for retailers of all segments and sizes. And even though stores are still where the vast majority of transactions take place, it’s the rare shopper journey that doesn’t include at least one digital touch point.

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BACK TO BASICS: HOW TO GET CUSTOMERS TO PURCHASE AGAIN
Jeffrey Neville, Senior Vice President and Practice Lead, BRP

It’s no secret that returning customers are better for your business than new customers. Studies have shown that a returning customer is less expensive to convert and has a higher average order value than a new customer.

However, the e-Commerce industry continues to focus mainly on the acquisition of new customers by adopting the latest technologies and marketing strategies. While this is necessary to remain competitive, there is simply no substitute for having loyal patrons.

Enhancing The Post-Purchase Experience

By crafting a post-purchase experience to minimize stress and maximize convenience, retailers make an investment in a sustained relationship with their customer. After a customer clicks “buy,” they enter a phase of uncertainty, where they are unsure whether their product will arrive on time or whether it will appear in one piece. Retailers who provide the right clues and reassurances can turn this period into a powerful moment of trust for the brand. Customers who shop without a sense of risk will feel more comfortable making repeat purchases in the future.

Read to full article to see Jeffrey’s suggested 8 best practices for optimizing the post-purchase experience.

Read Full Article: 2019 E-Commerce Outlook Guide

How Jet is targeting fashion brands to gain an edge over Amazon

Glossy – Walmart-owned e-commerce platform Jet.com is looking to stand up tall against stiff competition in the online retail world. As part of its larger rebrand, Jet has launched a new fashion and beauty experience aimed at giving customers a more focused look at apparel than they might receive at other multi-brand e-commerce platforms.

Jet will now offer customers a rotating curated collection of trends, with carefully chosen pieces from a variety of brands inspired by a particular theme. For instance, one of the first collections available is called For the Record and features clothes from Versace, Guess, Dr. Marten’s and more inspired by the grungy, punky aesthetic of the ’90s indie music scene. Another section contains editors’ picks of striking pieces all in the color red from brands like Michael Kors and Calvin Klein.

“Specializing in a niche audience or product segment and outperforming the online giants is a smart strategy for Jet.com. However, outperforming Amazon, even in a narrow segment, is a daunting endeavor,” said David Naumann, vp of marketing at BRP Consulting.

Daunting as it may be, the narrowed focus has allowed Jet to create something with more personality and more character than its competitors. This approach allows the brand to simplify the path to purchase for consumers by removing the need to sort through pages and pages of products and allowing them see entire outfits and complementary pieces in one place.

For Jet, trying to compete with Amazon at its own game is a fool’s errand. Amazon has far too much of an advantage for Jet to overcome it as a general online retailer of choice. But Jet is not trying to compete with Amazon on its own terms.

“Most customers think of Amazon as the first place to start their product search, and changing these entrenched habits is very difficult,” Naumann said. “Awareness is the biggest challenge, as Jet.com is not top of mind for consumers. It will take a significant investment in advertising and promotions to increase the awareness of Jet.com. Once they gain traction on awareness, they need to impress shoppers with a personalized and frictionless shopping experience so they are inspired to buy on Jet.com instead of Amazon.”

Read Full Article: How Jet is targeting fashion brands to gain an edge over Amazon

Multichannel – Luxury Memo special report

Luxury Daily -There are many theories, explanations and predictions for how the way people shop is changing. But one undeniable reality is that customers no longer shop through single channels.

The rise of digital, the fragmentation of retail options and the dissolution of brand loyalty have all contributed to the rise of multichannel retail. Multichannel, or omnichannel as some call it, simply means that a brand or retailer is integrating the various channels of its business, such as bricks-and-mortar stores, social media and ecommerce, into one cohesive path.

This trend has been incredibly influential over the last few years, with brands across the luxury world radically reorganizing the way they do business to capture shoppers across touchpoints.

“Shopping today is all about digital, digital and digital,” said Brian Bunk, principal at Boston Retail Partners retail consulting firm, Boston. “With the advent of mobile commerce, consumers expect to shop whenever and wherever they want.

“The customer journey continues to evolve as consumers move across channels to research, purchase and review products with easy access to merchandise and information right in the palm of their hands,” he said. “According to a recent research report, Retail’s Digital Crossroads: The Race to Meet Shopper Expectations, digital influences up to 75 percent of all in-store visits and mobile is leveraged in almost half of all in-store shopping experiences.”

“A major trend is a focus on a holistic and personalized customer experience across any and all touchpoints,” Boston Retail Partners’ Mr. Bunk said. “Too many omnichannel efforts have failed because their main focus was on a technology or solution versus focusing on the desired customer experience.

“For many retailers, there should be more of a focus on the personalized digital experiences within the store, and the capabilities to support anywhere, anytime, anyhow shopping that customers now desire and expect,” he said. “Buy online, pick up in the store (BOPIS) is simply the table stakes for retailers, and the key is to execute it flawlessly.

“With increasing expectations, we are also seeing new twists on the BOPIS model to provide customers options, such as buy in-store, ship to home; buy online, ship to home; and buy anywhere, ship or pick-up anywhere.”

Read Full Article: Multichannel – Luxury Memo special report

Online retailers are competing to win over hot new designers

Glossy – Emerging designers, particularly those who have built up social media followings, are now seen as keys that can unlock a new customer for the retailers that carry them. Online retailers like Net-a-Porter, MatchesFashion, Moda Operandi and the e-commerce sites of luxury department stores are competing on newness, exclusivity and an ability to discover the next big names in fashion to give customers a reason to shop there and to keep coming back.

On Thursday, Net-a-Porter launched a new program called “The Vanguard,” offering a rotating pool of designers access to a guided mentorship program led by Net-a-Porter executives and team members. It entails business strategy and marketing support, social media production, PR and technology resources. In exchange, the designers will sell their collections exclusively through Net-a-Porter. The first four designers to participate in The Vanguard are Les Reveries, Ruh, Gu_de and Martinez. All the brands are international, which speaks to Net-a-Porter’s ongoing mission to attract a global customer, and some speak to emerging customer trends: Ruh, for instance, is a sustainable clothing brand for modest apparel targeting Muslim consumers, while Gu_de is a locally made, Korean-based handbag brand.

“The Net-a-Porter buying team selects brands based on design and directional brand perspective. We pursue brands that we believe have the potential to grow into meaningful businesses,” said Lisa Aiken, Net-a-Porter’s retail fashion director. “With social media, we’re seeing new brands make a larger impact in fashion within a shorter period of time.”

“You have to take care of luxury customers, especially online,” said Ken Morris, principal analyst at Boston Retail Partners. “They want to feel like they’re being catered to, like they’re unique, like they’re in on something other people aren’t. Exclusive collections from up-and-coming designers is a differentiator.”

Read Full Article: Online retailers are competing to win over hot new designers

The Great Retail Digital Divide

The traditional retail model is being disrupted as consumer expectations and shopping behavior rapidly evolve. A customer journey that remains in only one channel, whether online, mobile or in-store, is no longer the norm. Customers expect to move in and out of multiple channels, including in-store, online, mobile, and social media, and they expect a seamless and frictionless transition from one channel to another. This creates a new requirement for retailers to host a single shared shopping cart that moves with the customer.

Customer expectations are only going to continue to rise, fueled by the upsurge in mobile shopping over the past few years. This is driving demand for increased digital capabilities bundled with personalization in the store. Unfortunately, we are seeing that retailers are not always keeping up with customer expectations. This gap between consumer demand for digital capabilities within the store and most retailers’ current ability to support this is what we call the ‘great digital divide.’ Consumers say that digital influences up to 75% of pre-store visits and is leveraged in 46% of their in-store shopping experiences; however, less than half of retailers deliver on the most important digital capabilities that customers desire.[1]

To support this desired experience and increased capabilities, retailers need a robust order management solution that can serve as the anchor for the single shared shopping cart and operate as the brains of a unified commerce platform.

The success of a unified commerce solution requires a common commerce platform leveraged across all customer touchpoints. The centralized order management system is key, as this is the brains of the unified commerce platform.  It provides the needed customer order visibility, order orchestration and routing optimization across channels, allowing retailers to engage their customers however they choose, and meet and exceed customer expectations.

While there are many challenges to implementing an effective unified commerce solution, the cost of doing nothing is steadily increasing and may mean the difference between success and bankruptcy. Unfortunately, the ‘great digital divide’ is likely to only increase as customer expectations grow.  Customers expect a single cart that crosses all touchpoints and using your OMS as the brains of the operation may be the most effective approach to meet these needs.

If you haven’t already moved to a unified commence platform, now is the time to act. We suggest you start by looking at a unified order management system. For more information on how to bridge the ‘great digital divide’ with an order management system, we recommend reading the BRP Special Report: OMS – The Brains of the Operation.

I appreciate your thoughts on this topic.  Please share your opinions and comments below.

Brian

[1]The Retail’s Digital Crossroads: The Race to Meet Shopper Expectationsreport conducted by Incisiv and sponsored by BRP and Wind, stream, 07/24/18, https://brpconsulting.com/download/2018-retail-research-report/

Customers Demand Digital Capabilities of Retailers

Convenience Store Decisions – BRP finds less than half of retailers are providing the digital capabilities customers desire. According to a new report from Boston Retail Partners (BRP), retailers are not keeping up with customers’ digital demand. This gap between consumer demand for digital capabilities within the store and most retailers’ current ability to support this is the ‘great digital divide’ that is plaguing the retail industry.

Many retailers have cobbled systems and processes together as a ‘just get something done’ approach in an attempt to deliver a seamless customer experience across channels. The unfortunate result of this quick fix approach is a ‘faux’ omni-channel model that doesn’t execute as promised and risks disappointing customers.

“While retailers understand the importance of moving to a unified commerce model, executing the strategy is challenging,” said David Russo, vice president, BRP. “It can be a daunting project when considering the scope of a commerce platform that enables and supports every customer touch point—in real-time. The answer may be utilizing an order management system as the platform for unified commerce.”

To download OMS – The Brains of the Operation, visit: https://brpconsulting.com/download/2018-oms-special-report

Read Full Article: Customers Demand Digital Capabilities of Retailers

New Report from BRP Retail Consulting Firm Offers OMS Solution to Solve the Great Digital Divide

Consumers state that digital influences up to 75% of pre-store visits but less than half of retailers deliver these capabilities

Boston, MA – August 29, 2018– According to a new report from BRP, retailers are not keeping up with customer expectations.  This gap between consumer demand for digital capabilities within the store and most retailers’ current ability to support this is the ‘great digital divide’ that is plaguing the retail industry. BRP published the special report OMS – The Brains of the Operation, based on the 2018 POS/Customer Engagement Benchmarking Survey, to address retailers’ need to find a solution to meet rising digital expectations.

Consumers say that digital influences up to 75% of pre-store visits and is leveraged in 46% of their in-store shopping experiences; however, less than half of retailers deliver on the most important digital capabilities that customers desire.[1]  To meet rising customer expectations, retailers can no longer rely on legacy systems that are not designed to accommodate today’s retail environment. Retailers realize that unified commerce is a retail imperative, but execution on that strategy is challenging. The answer may be utilizing an order management system (OMS) as the platform for unified commerce.

Many retailers have cobbled systems and processes together as a ‘just get something done’ approach in an attempt to deliver a seamless customer experience across channels. The unfortunate result of this quick fix approach is a ‘faux’ omni-channel model that doesn’t execute as promised and risks disappointing customers.

“While retailers understand the importance of moving to a unified commerce model, executing the strategy is challenging,” said David Russo, vice president, BRP.  “It can be a daunting project when considering the scope of a commerce platform that enables and supports every customer touch point – in real-time. The answer may be utilizing an order management system as the platform for unified commerce.”

To fix this problem, retailers need to rethink old paradigms and adopt a new approach to unified commerce. To support this desired experience and increased capabilities, retailers need a robust order management solution that can serve as the anchor for the single shared shopping cart and operate as the brains of a unified commerce platform.

To download OMS – The Brains of the Operation, visit: https://brpconsulting.com/download/2018-oms-special-report

About BRP

BRP is an innovative retail consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants’ deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm’s unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. BRP’s consulting services include:

Strategy | Business Intelligence | Business Process Optimization | Point of Sale (POS)
Mobile POS | Payment Security | E-Commerce | Store Systems and Operations | CRM
Unified Commerce | Customer Experience | Order Management | Networks
Merchandise Management | Supply Chain | Private Equity

For more information on BRP, visit http://www.brpconsulting.com.

[1]The Retail’s Digital Crossroads: The Race to Meet Shopper Expectationsreport conducted by Incisiv and sponsored by BRP and Wind, stream, 07/24/18, https://brpconsulting.com/download/2018-retail-research-report/

Will Department Stores and Specialty Retailers Join the Custom-sized Apparel Bandwagon?

While there hasn’t been a big push for large apparel retailers to offer custom-sized clothing yet, as made-to-measure startups like Indochino, eShakti and Sumissura gain traction, that will likely change. Today’s consumers expect personalized services and products that are one-of-a-kind. With custom-tailored and designed garments now offered at a fraction of historical bespoke clothing prices, it has created a lucrative niche. Department stores may opt to open stores-within-a-store or pop-up shops with some of these custom-made brands or go direct to overseas suppliers and disintermediate the startups.

Customers will accept a couple weeks lead time for most apparel items, especially if it is custom made for them, as it is worth the wait. Obviously, there are exceptions, if a customer needs a dress for a special event this weekend, she will need to buy something off the rack.

Impact on Margins and Inventory

On an individual item perspective, margins are not necessarily better on custom made clothing than mass produced products. However, you can ensure your overall margin rates on custom made apparel, as you won’t have any obsolete inventory or inventory markdowns. These brands can also increase the overall margin by selling complementary accessories. Tailored clothing can move to more casual styles and rather than customize sizes, consumers can customize the fabric or what is printed on the fabric. For example, Nike and Vans are currently offering custom designed sneakers and consumers are willing to wait 2-5 weeks for the shoes. With 3D printers becoming more agile and affordable, one day we may see most products being built to order with markdowns and obsolete inventory becoming a thing of the past.

Check out this story on PBS about the progress being made on 3D printers: How 3D printing is spurring revolutionary advances in manufacturing and design

As always, I appreciate your feedback on this topic.  Please share your thoughts and opinions below.

Ken

How will Google bust into brick and mortar?

RetailDive – It’s reportedly only a matter of time before the tech giant signs the lease on its first permanent store — and just what its physical strategy will look like remains to be seen.

It’s reportedly only a matter of time before Google signs the lease on its first permanent brick-and-mortar store. Last week, unnamed sources told The Chicago Tribune that the tech giant was mulling a two-level 14,000 square foot space in the city’s meatpacking district.

While Google hasn’t responded to Retail Dive’s request for information, nor has it spoken publicly to other publications, retail insiders aren’t holding back speculation over what a move into physical retail could mean for Google. In the past, the company has experimented with pop-up shops and other store-in-store concepts, but a commitment to a physical store of its own will make a brick-and-mortar strategy critical. Just what exactly that will look like has yet to be seen.

On the topic, the discussion forum RetailWire asked its BrainTrust panel of retail experts the following questions:

What kind of brick-and-mortar strategy, if any, makes the most sense for Google to support its hardware lineup? What lessons should Google take from pushes by Apple and Amazon into physical retail?

Do what Amazon did: Buy your physical footprint

Ken Morris, Principal, Boston Retail Partners: Physical stores make perfect sense to showcase Amazon’s current portfolio of tech products. It seems like a smaller footprint than 14,000 sq ft would make more sense, however, maybe they will lease some of the space to brands that are selling innovative products on Google Marketplace. Eventually, I expect Google to follow the lead of Amazon and expand its product portfolio significantly by adding private label brands of multiple product categories beyond technology.

I saw the barge idea in Portland and that was an ill-fated idea. Maybe acquiring a retailer with stores in key markets as a way to accelerate its physical presence — just like Amazon acquiring Whole Foods would be a better approach.

Read Full Article: How will Google bust into brick and mortar?

Can Conversational Commerce Fulfill Its Potential In Retail?

Retail TouchPoints – The remarkable growth of voice-assisted devices over the past year has expanded what “conversational commerce” truly means for retailers. While the term had largely been used to describe chatbot activity just a few years ago, voice now gives retailers yet another shiny toy to fulfill consumer needs — and hopefully create a new shopping channel. As such, there are high expectations around the technology: voice shopping is expected to account for $40 billion in U.S. consumer spending by 2022, according to a study from OC&C Strategy Consultants. However, for such a figure to be achieved, retailers must still surmount some high barriers.

It’s true that enthusiasm for the technology itself is high— voice-activated devices are set for 50% U.S. sales growth from the 2016-2017 period to the 2018-2019 span, according to NPD Group. Yet despite this popularity, interest in — or even awareness of — their commerce functionalities remains low.

“As much as retailers have made great strides over the past couple of years in being nimbler and more agile, this is such a unique technology that they will still struggle with,” said Jeffrey Neville, Senior VP and Practice Lead at BRP Consulting in an interview with Retail TouchPoints. “The thought of doing a pilot of a customer service/voice commerce program is going to be difficult because it’s so different. There’s a tendency to overthink the impact of something like this on their customers. As far as the base technology goes, you can get partners or cloud-based third-party applications to do a lot of the groundwork, but from a data integration standpoint and from an understanding of how you build and manage these tools — that’s going to be a struggle.”

“A big discussion in this space is: ‘Do we want the customer to think they’re speaking with a real human being or do we want the customer to realize that this is convenience with Watson or some other AI technology?’” said BRP’s Neville. “That’s a decision retailers have to make right now. Any AI using voice is probably going to mess up the conversation at some point, and the customer is going to realize that they’re talking to a computer.”

“If you look at apparel or luxury, you’re seeing companies like Burberry and Tommy Hilfiger use chatbots to be able to play the role of a stylist and provide fashion advice,” said Neville. “That’s where you may start seeing that relationship building through a chatbot, versus the stylist you’re used to going to at Polo Ralph Lauren. Not to bring this back to Amazon, but the Echo Look can take a picture of you in an outfit, and the long-term theory is to be able to combine this conversational commerce and voice shopping with image recognition. As you start to mix the concepts of being able to have a conversation with a computer-based stylist, and then having that computer-based stylist also be able to recognize patterns and colors, and making recommendations out of the existing retailer’s catalog, there’s some cool opportunities that retailers can tap into.”

Read Full Article: Can Conversational Commerce Fulfill Its Potential In Retail?