Key Takeaways From IRCE 2017
While digital commerce is rapidly shifting, it’s nice to know there's a constant in the retail industry. The Internet Retailer Conference & Exhibition (IRCE) delivers a great event every year packed with cutting-edge content, thoughtful conversations, and predictions about the ever-changing future of online retailing.
In fact, in his opening presentation, IRCE’s Kurt Peters spoke about some of the current and future trends which resonated with retailers and technology teams alike. Peters noted that Amazon.com alone accounts for 80 percent of e-commerce growth, and that brick-and-mortar stores are closing at an unprecedented rate, with over 8,600 store closings expected by the end of 2017. Due to these trends, the points of interaction in commerce are changing and going beyond store, desktop and mobile to shopping and transacting by voice with augmented reality and, eventually, virtual reality. This will likely result in a technical transformation that will bring a nexus to services that provides retailers the flexibility they need to innovate quickly to keep up with an ever-changing and complex e-commerce ecosystem.
What was the overall theme throughout the conference? Creating a fantastic and engaging shopper experience is the most important driver for online revenue growth. Many of the conference sessions featured successful retailers educating attendees about how adding third-party e-commerce technologies help achieve optimal shopper experiences.
Mobile: Going Beyond Just a Purely Transaction Channel
We all know that mobile traffic to retailer websites has surpassed the 50 percent mark. However, several retailers at IRCE spoke of a shift in the way they think of mobile. Instead of mobile being just another transactional source, they see it as an addiction that must be fed in order to keep brands relevant and mobile shoppers engaged on a daily basis. In this model, social media and chat are essential; they bring retail brands to the shopper instead of trying to bring the shopper to the brand. For example, Mary Beth Laughton, senior vice president of digital for Sephora, talked about her team’s goal to get shoppers to play, learn and engage with the beauty brand first, which will then lead to transactions later.
Another important mobile trend discussed at IRCE was how third-party e-commerce technologies and content can transform nondescript shopper interactions into truly engaging personalized experiences. George Hanson, vice president of North America e-commerce and brand house stores for Under Armour, spoke of the three stages of the personalization continuum as detailed below:
- Data-driven optimization that is so subtle that the shopper barely knows the data is personalized.
- Athlete engagement where the shopper acknowledges Under Armour and allows the brand to actually shop for the athlete.
- Digital concierge where the shopper is an active participant in the personalization process by taking actions such as creating their own profile.
Perception is Reality
The main keynote speaker for the conference was Barbara Corcoran, real estate mogul and "Shark Tank" investor/celebrity. In her lively presentation, Corcoran discussed lessons she’s learned throughout her career, such as perception is reality, and we can control and influence perception. For example, when Corcoran started out in real estate in New York City her goal was to be the de facto real estate agent for celebrities. At the time not only did she not have any celebrity clients, she had no clients at all. However, this didn't stop her.
Corcoran began publishing listings of celebrity properties online. Even though she didn't have an exclusive on any of those listings, the perception was that she was the realtor to the stars. Soon Corcoran had a lot of celebrity clients. Retailers in the audience were on the edge of their seats because this directly applied to them. They need to build the perception (and reality) in the industry that they have a great brand, they provide innovative and terrific shopper experiences, and they often need to fight to hold on to loyal customers.
The Importance of Blended Interactions
Another interesting part of Laughton’s presentation was her description of how Sephora has pulled together a large variety of technologies to create a cohesive, virtuous cycle to blend all channels into a seamless user experience. For example, the combination of location mapping, makeover booking options, personalization, ratings and reviews, and chatbots enables a seamless omnichannel experience that increases transactions not only online, but in-store as well.
Hanson also focused on this topic by detailing the many channels Under Armour has for customers to interact with the brand, and how the company has achieved amazing benefits from blending interactions. These channels, which include UA’s websites, stores and big-box resellers, are more profitable when they're connected to the fitness, nutrition and exercise apps that Under Armour’s shoppers use on a daily basis.
Data science can bring a new level to your shopping experience, allowing your brand to interact with customers by predicting the right products based on many different data elements. Michael Zhang, vice president of e-commerce, digital marketing and innovation at Lands’ End, taught us about the power of analytics and advised that although it can be intimidating, it’s a necessity. Zhang cited one example that really impressed the audience: data science and algorithms helped online subscription and personal shopping service Stitch Fix grow to $750 million in sales in only six years.
Another presenter who touched upon this subject was Joe Milano, senior vice president of digital retail for Saks Fifth Avenue, who explained the concept of “people-powered e-commerce” and how blending the in-store associate with online tools can increase both sales and customer loyalty. This is done by providing personalization, live chat and other tools to in-store associates and tasking them with extending sales beyond the physical store, getting to know shoppers better, and building stronger customer relationships.
Performance Can’t be Underrated
We often discuss business performance, user engagement performance and content performance, but rarely are speed and online load times brought up when discussing the shopper experience and how retailers are performing. It certainly isn’t because the problem is solved. Most retailers have serious web performance issues. It’s probably more due to confusion on where do you start to bring load time into the performance discussion and what's the real impact of poor load times.
Who better to learn about performance from but George Hanson of Under Armour, the ultimate performance brand? UA has grown from $17K in 1996 to over $4B in 2016. However, with over 90 percent of its sales occurring in-store, UA is looking into how to generate more online sales. The challenge for UA is to find a way to deliver both fast and engaging online experiences that will drive conversions.
This year’s IRCE provided attendees with great insight into the constantly shifting e-commerce landscape. With the overarching theme of the need to integrate third-party technologies to provide amazing shopper experiences, we're hopeful that next year's conference includes a deeper dive into those technologies and how they can help retailers driver greater online revenue.
Rich Stendardo is the CEO of Yottaa, a web and mobile optimization services company.