Tech Bytes: eTail West 2017: Three Takeaways
As the industry remains on its path toward frictionless retail, there is one clear way to achieve this goal: embrace innovation.
There is no denying that innovative solutions are the industry’s ticket to transforming operations, and the recent eTail West conference was chock-full of ideas of how to make this transition. The hottest digital strategies that continue to shape retail run the gamut, from conversational artificial intelligence to redefined mobile strategies that center on personalization, virtual reality and digital payments.
However, being tech-savvy is not enough for survival in an increasingly digitally-driven world. Equally important is a strategy that can support these initiatives for the long-term, and set the tone to embrace future solutions yet to evolve.
With an eye toward putting retailers on the path toward innovation-driven transformation, here are three key takeaways from Etail West:
Integrate innovation into corporate culture. With so many disruptors at the industry’s fingertips, retailers must be more nimble than ever when it comes to adopting innovation. However, when companies fail to change their culture, processes, even individual associates’ daily tasks to embrace digital disruption, creating an innovation-driven enterprise will remain a mere pipe dream.
To support its innovation efforts, NY&Co. has appointed a head of innovation technology who is responsible for working with a team that embraces change, tests solutions and learns from small scale projects. However, this group is more than an isolated team. Their efforts have transitioned into a mindset that’s transforming an almost century-old specialty chain into a strong competitor. “We test and invest in new solutions, a move that doesn't let emerging technology get so far out of reach,” Chau Banks, the chain’s executive VP, CIO and channel integration, said at the conference.
Pursue truly personalization-based programs. Anyone can send a targeted email to encourage consumers to shop. However, its messages that “speak” to a shopper on a personal level that are bound to get the job done. Called program-based shopping, this concept uses collected shopper data to create customized engagement with individual shoppers.
JustFab is testing this concept with customized videos. Based on merchandise that was “abandoned” in their online shopping cart, JustFab shoppers are receiving short videos personalized with their name and “forgotten” product, as a reminder to complete their transaction. The test, which was launched among 10% of its shopping base, started about a month ago.
Don’t forget to test, test, test. With so many technology solutions and disruptors influencing the path-to-purchase, retailers are inundated with options to pursue — and not all initiatives will be winners. However, all projects deliver actionable insights that retailers can learn from and apply to other programs. For this reason, “we are always conducting tests and using our findings to tweak and retarget our efforts,” explained Lindsey Morgado, director, customer strategy, Hot Topic. “You should always be learning something.”
Too often however, retailers are preconditioned for success — making failures hard to bear. Take a lesson from industry leaders who have “been there and done that:” Not every plan is going to work great. But the key is keep trying.
“You can’t be afraid to fail,” said Chris Woodard, VP, customer journey management, FreshDirect. “The good news is you don’t have to invest $1 million into an innovation project. Start small and do what you can. If it works, great! If not, learn from your mistakes and try something else. Just keep scratching at the surface.”
Etsy’s Q4, annual sales surge in 2016
A combination of new initiatives contributed to strong sales momentum as Etsy closed out 2016.
The marketplace for handcrafted goods, which just ended its second year as a public company, reported that gross merchandise sales (GMS) were $865.2 million for the fourth quarter ended December 31, 2016 — a jump of 16.7% compared with the fourth quarter of 2015. The company credits this growth to an 11.8% year-over-year (YoY) increase in active sellers and 18.8% year-over-year growth in active buyers.
The company also saw its mobile visits grow. Mobile engagement was approximately 65% compared with approximately 61% in fourth quarter 2015, and flat compared with third quarter 2016. Mobile GMS was approximately 49% compared with approximately 44% in fourth quarter 2015, and flat compared with third quarter 2016.
YoY conversion rates increased across desktop, mobile web and mobile app for the fifth consecutive quarter. During the fourth quarter, the YoY growth in mobile GMS together with the strength in overall mobile conversion rates resulted in a slight narrowing of the gap between mobile visits and mobile GMS. Mobile app and mobile web GMS each continued to grow significantly faster than desktop GMS during the fourth quarter.
On an international level, GMS was 30.4% in fourth quarter 2016, up from 29.2% in fourth quarter 2015, and flat compared with third quarter 2016. This growth was largely driven by U.S. buyers and international sellers, as well as between buyers and sellers outside of the U.S., both in the same country and cross-border. GMS growth between international buyers and sellers in the same country remained the fastest growing category of international GMS, the company reported.
For the year, total revenue was $110.2 million, up 25.4% YoY, driven by growth in both markets and seller services revenue. Meanwhile, gross profit for the fourth quarter was $73.2 million, up 26.9% YoY. Gross margin was 66.4%, compared with 65.6% in fourth quarter 2015.
Looking ahead to 2017, the company is on track to launch Etsy Studio, a market dedicated to craft supplies, in April 2017. It will also continue to support its Shop Manager tool, a centralized portal that allows sellers to track orders, manage inventory, view metrics and statistics, and have conversations with buyers.
The company is also improving and streamlining the checkout process with a new multi-shop checkout service and the upcoming launch of guest checkout. “Multi-shop checkout enables buyers to complete purchases from multiple sellers with Direct Checkout in one simple transaction,” the company said. “Guest checkout will allow buyers to make purchases from sellers without creating or signing into an Etsy account.”
“These announcements underscore our bold, ambitious efforts to support creative entrepreneurs and we believe they create new long-term growth opportunities for Etsy,” said Chad Dickerson, CEO, Etsy.
Report: Aldi launches online in China
Aldi is ready to introduce its brand to price-sensitive Chinese shoppers.
The German discount supermarket chain plans to start selling online in China this month, a move that will expose Chinese consumers to a selection of German wine, snacks and breakfast products, Reuters reported.
Aldi will sell its own brand products via online platform Tmall Global, operated by Alibaba, and will use its Australian suppliers to serve the Chinese market, according to the report.
A soft launch, which will sell merchandise to a limited audience, is set for March 20, followed by a full launch event in Shanghai on April 25, Reuters reported.
To read more, click here.