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Last month we attended the NRF Online
Merchandising Workshop in LA, and it was a great opportunity to catch
up with our customers, meet new retailers, and hear some great presentations
from VF Corporation, Zazzle, Julep Beauty, Backcountry, eBags and more.
The one-on-one conversations with Merchants and the keynote presentations
carry the same themes across companies of all sizes and across verticals. With
only 125 days left (and counting) until Black Friday, these conversations provided
some great insight in to what’s top of mind for retailers during the most
stressful time of their year, and a sneak peek in to what they will deliver this
holiday season.
Some of the most popular topics were:
When to
start promoting for holiday: seems like a funny conversation to have in
July, but a number of retailers said they already
had their holiday shopping gift guides live on their site, and it was
attracting a significant portion of their onsite traffic. When it comes to
timing, most retailers were questioning when to begin their holiday promotions
-- carefully balancing when to release pricing and specials, and knowing that
customers are holding out for last-minute deals and price drops. Many retailers
noted the frustrations around transparent pricing by Amazon and a few other
mega-retailers last year, publishing their “lowest prices of the season” as
early as October – ensuring shoppers that those prices were the best they could
get all season long. Many retailers felt their hands were forced to drop prices.
Others kept their set pricing with negative customer reaction, causing some to
miss their holiday goals. The pressure is on, and most retailers identified
November 1 as their target start date for the holiday promotions blitz. Some
are even waiting for the big guys to release their “lowest prices of the season”
guides and will then follow suit.
Attribution
is tough – and a huge focus: understanding the path to conversion is a
tough nut to crack, especially in the new omnichannel world where consumers use
multiple touchpoints to make a single purchase, and internal management wants
to know hard data. This has lead many retailers to invest in attribution; carefully tracking their online marketing efforts to determine what gets
“credit” for the sale, instead of giving credit to the “last click.” Retailers
noted that it is very difficult to determine the numbers when online and
offline worlds collide – like when a shopper uses digital channels for research
and then makes a purchase in a store. As one of the presenters from The North
Face mentioned in her keynote, a key to enabling better customer service and satisfaction
when it comes to converged online and offline sales is training the in-store
staff, and creating a culture where it eventually “doesn’t matter what group
gets the credit” if they all add to the sale. No doubt, the area of attribution
will be a big area of retail investment in the coming years.
How to plan
for the converged world: planning
to ensure inventory gets where it needs to be was another concern. In conversations with retailers, we advised
them to analyze customer patterns: where shoppers purchase items, where the
items were sourced from and even where items are returned. This analysis is very valuable in determining inventory plans. From there, retailers can more accurately plan
and allocate inventory to support both the online and offline customer behavior. As we head into the holiday season, the need
for accurate enterprise-wide inventory visibility, and providing that
information to associates, is even more critical to the brand-wide customer
experience.
Improving the
search / navigation / usability of the site(s): Aside from
some of the big ideas and standard holiday pricing pressure, most conversations
we had centered around continuing to improve the basics of the site. Reinvesting in search and navigation came up
time and time again (FitForCommerce blogged about what
a big topic it was at the event as well). Obviously getting shoppers on their
path quickly and allowing them to find what they need fast is critical, but it
was definitely interesting to hear just how much effort is still going in to
honing the search and navigation experience. Adding new elements to search and
navigation like typeahed, inventive navigation refinements, and new navigation
categories like gift guides, specialized boutiques and flash sales were top of
mind, in addition to searchandising and making search-driven product
recommendations. (Oracle can help!)
Reducing
cart abandonment: always a hot topic that is top of mind for every
online retailer. Getting shoppers to the cart is often less then half the
battle; getting them to click “buy” and complete the transaction is much more
difficult. While retailers carefully study the checkout process and where shoppers
tend to bounce, they know that how they design their checkout page is critical.
We’re all online shoppers in our personal lives and we know how frustrating it
can be when total prices are not transparent (i.e. shipping, processing, taxes
is not included until the very last possible screen before clicking that buy
button). Online retailers are struggling with where in the checkout process to
surface the total price to be charged to reduce cart abandonment, while not
showing the total figure too early in the process that it keeps shoppers from
getting to checkout altogether. Recent research shows that providing total
pricing prior to the checkout process dramatically reduces cart abandonment –
as it serves as a filter to those shopping within a specific price band. Much
of the cart abandonment discussion leads us to…
The free
shipping / free returns question: it’s no secret that because of Amazon
and programs like Prime, consumers expect
free shipping, much to the chagrin of the smaller retailer. The reality is that
if you’re not a mega-retailer, shipping is an expensive part of doing business
that doesn’t allow most retailers to keep their prices low and offer free shipping. This has many retailers venturing out on
the “free returns” path, especially in apparel. A number of retailers we spoke
with are testing a flat rate shipping fee with free returns to see if they can
crack the price threshold where shoppers are
willing to pay for shipping with an added service. But, free shipping
remains king.
Social ads
and retargeting: they are working, but do they turn off
consumers? That’s the big question. Every retailer we spoke with during a
roundtable on the topic said that social ads and retargeting (where that pair
of boots you’re been eyeing on a site magically follows you around the Internet)
work and are meeting campaign goals. The larger question many retailers are
asking is if this type of tactic is turning off a large number of shoppers,
even if these campaigns are meeting their early goals. Retailers also mentioned
that Facebook ads are working very well for them, especially when it comes to
new customer acquisition, serving as a complimentary a channel to SEO when it
comes to engaging new customers.
While there are always new things to experiment with in retail, standard
challenges are top of mind as retailers scramble to get ready for holiday. It
will undoubtedly be another record-breaking online shopping season, but as
retailers get more and more advanced with each Black Friday, expect some exciting
things. This excitement needs to be backed by sound solutions and optimized
operations. Then again, consumers are expecting more than ever, so I don’t doubt
that retailers are already thinking about the possibilities of holiday 2015…
and beyond.
Customers who read this article, also found value in the following stories:
Personalization for Retail: http://blogs.oracle.com/retail/entry/personalization_for_retail
Shop Direct User Experience Focus Drives Sales:https://blogs.oracle.com/retail/entry/shop_direct_user_experience_focus
Making Waves: Australian Online Retailer SurfStitch: https://blogs.oracle.com/oracleretail/entry/surf_stitch
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