Online Retailer 2017 – Our Top 3 Learnings

Top3Learnings_FINALBLOGIMAGEOnline Retailer 2017 Sydney has once again come and gone. As usual, it was a fantastic event – not to be missed.

As the  Director of Strategy at Balance Internet here are my top 3 learnings from the conference.

1) In-store Digital experiences combined with powerful data analytics are a game changer

Drew Green, CEO (Indochino) spoke about the importance of optimising the showroom style customer user experience when he talked about the digital in store experience. Today’s retailers must sell a full retail experience, not just a set of products. Indochino are on track to build 40 showrooms by the end of 2018 to showcase their bespoke menswear fashion. We are seeing many of our partner retailers following suit, combining services and products to differentiate their business.

Peter Ratcliffe, Head of Digital at Retail Apparel Group (RAG) had a great debate with a couple of other retailers about bricks-and-mortar stores in the retail game. With over 400 stores across Australia, Peter mentioned RAG is looking to turn more stores into distribution centres (DC). He mentioned that if they use a Perth store as a DC, the customers can get core products the very next day. Here at Balance, we have seen great growth in in-store and online conversion with a correctly executed “click & collect” or local store DC strategy.

Krissie Millan, Vice President of eCommerce and Digital Innovation at the US-fashion brand Rebecca Minkoff delivered a very powerful and interesting session – “We’re not afraid to try new things and test, with the potential that there could be mistakes. We won’t always have positive results, but we do learn from them.”

Rebecca Minkoff has gained acclaim for its innovative adoption of technology including live-streaming fashion shows and events, smart mirrors in customer fitting rooms and real time web connected stores. It seems they have also invested heavily in advanced data analytics. “Data is an important part of our growth and it permeates to every part of the business,” Krissie stated.

We had the opportunity to present and engage with a group of retailers during our roundtable session on Business Intelligence and Advanced Analytics. The roundtable discussion was extremely interactive with many engaging questions.

If you’re a retailer interested in seeing a copy of this presentation, using our Digital Services Group or setting up your Advanced Analytics, please call us on 1300 624 368.

2) Amazon is on the way – and the digital natives are restless

The pending arrival of Amazon is a hot topic across the board. Paul Kennedy, CIO of GreenCross, Simon Clarkson, Managing Director of ChannelAdvisor,  Mirella Sago, General Manager of Styletread, Mark Coulter, co-founder of Temple & Webster had an interesting chat about what this means. Balance recently hosted a dinner for 40 retailers in Melbourne, discussing participation and creation of Marketplaces so this talk was very relevant to our customer success crew.

Mirella spoke about how Amazon will raise the bar for satisfying customers on delivery and returns, which she thinks is probably a good thing. The use of FBA and the penetration of PRIME in USA and UK is testament to the fact that doing the best you can in satisfying the customer is a massive win.

Mr. Kennedy (who knows his stuff) said retailers that offer a product or service beyond an easily price compared commodity product will be in a better position to retain customers. He gave an example of how they are offering veterinary services. I would add that creating unique bundled and configurable products that satisfy a customer’s needs are also examples of how to compete with Amazon at a product level.

Some other comments from people I trust and respect in around the conference industry validated some of my guesses…b.t.w. they are just guesses!

    • At 1/8/2017 very few people fully understand how and with/what products/services Amazon is going to enter the Australian market
    • South East Melbourne and/or West Sydney seem to be the locations of the first DC’s in Australia.
    • If they lead or fast follow with PRIME, draw a 20-50km radius to earmark territory
    • Amazon are contacting retailers and wholesalers …but it is difficult the other way around. Many enquiries are met with radio silence.
    • Certain categories and verticals will be targeted and if your retail operation is in this space….bunker down. I have heard all sorts of rumours about wine, nappies, and toys. None validated.
    • If you plan to or use FBA you will probably get a priority ticket to the ball game.

The team at Balance Internet have visited the USA twice in 2017 with a huge focus on assisting our retail partners in understanding marketplace/space participation and creation. We presented at Online Retailer on this topic and would be happy to share our thoughts with you.

Call us on 1300 624 368 and setup a meeting with one or our customer success team.

3) Visual and Voice Search will improve conversion and could be disruptive

Search is fundamental to eCommerce conversion rates. People that search are up to 10 times more likely to convert than a tyre kicker – this is not a fact just a qualitative observation. When search is poor, and fails to lead the customer to the product or service they want, the sale will not be closed. When it’s difficult for a consumer to find what they want, they’ll bounce off your site and probably go to a competitor.

I’m a sucker for new ideas and new technologies that are tipped as industry disruptors. The buzz of all things “IoT” is really interesting to watch unfold. I chased down a couple of sessions and conversations with a particular focus on Voice Search and Visual Image based search which are evolving in quality and accuracy at breakneck speed.

Visual….

In short, Visual based search allows users to search by uploading images instead of guessing keywords on both desktop and mobile. With built-­in automated object recognition, visual search can return matching or similar items from your database. The key is the accuracy of the recognition and tagging. By looking to match shapes, styles, patterns and colors, the technology showcases products based on relevancy instead of popularity.

Very cool. And if it’s as accurate as they say … watch out.

Google and Pinterest have visual recognition technology underway so watch this space.

Voice….

This was more of a conversational item at the ORIA dinner and other breakouts. It also came up in the session I ran on Business Intelligence and AI. A study by comScore predicts that by 2020, at least 50% of all web searches will be conducted by voice. We are all familiar with the likes of Google Now and AI assistants like Siri and Alexa which popularised Voice Search. Use a phone, computer or appliance to ask questions and let AI take care of the rest. Voice Search technologies have made it necessary for retailers to re-optimise their pages in order to better handle voice-based searches. Amazon’s voice-controlled home automation speaker, Echo, is worth a look as well.

Echo has partnered with Capital One and now the bank’s customers can find their balance, make a payment, or check recent transactions via their bot Alexa. Taken to the extreme, the birth of Echo and similar devices could signal another quantum leap in retail technology, similar to the social and mobile boom of the last few years.

On that note, I’m about to buy a Google Home and get in the game (haven’t told my partner yet ) I will try and get to it configured to make my home life more fun, more secure and more productive.

I can certainly see applications for voice search in store and online. To date, the voice activation technology in retail isn’t widespread. You can see the start of this concept forming with a recent initiative from North Face. They have utilised a bot to recreate the experience of a in store conversation where you’re asked ‘Hi can I help you shop for a jacket today?’

Try it! It’s cool.

If you combine A.I. with Natural Language Processing, you can effectively humanise the digital experience. If a customer types the name of a product and it is spelt incorrectly, or just called something different to how it’s labelled on the site, the search can decipher what the customer wants and lead the customer to the product they’re looking for, increasing your opportunity to close the sale. You can also make connections around what other products a customer might like, based on their search preferences so far. It can show them items often bought or searched for together – all with the aim of getting the customer to buy everything they might be looking for in the one place. Today this is text based on most retail sites – it is likely to be voice based in the future.

For more information on any of the discussion points please contact us or call us on 1300 624 368

Till next year… James

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