eTail West Insights: AI, CX, Mobile, Amazon and Email
by Paula Jeske
Recently, I traveled to the Palm Desert to attend the annual eTail West conference February 26th through March 1. This year’s meeting attracted more than 2,300 eretailers and suppliers, primarily from the U.S. and Canada. Representatives from companies of all shapes and sizes flock to this 4-day event to listen, learn and share through a series of small-to-large group panels, as well as roundtables for problem-solving or pure networking. More B2C than B2B, there’s a highly entrepreneurial feeling around this show. I had the opportunity to speak to folks from behemoths like Dell and Avery Label to start-up/pureplay/catalogers to established mid-size brands and manufacturers looking to up their game in the swiftly changing world of ecommerce. After 3.5 days of sessions, the most popular topics included:
Artificial Intelligence (AI) and Machine Learning (ML)
The most tangible example most of us will immediately relate to are all the new home smart speakers like Alexa & Google Home. What’s really moving the needle for many eretailers, though, is the ability to personalize the customer experience through use of the behavioral data our customers provide us. For example, the ability to personalize category pages for every shopper, including recommendations, has shown to improve conversion by as much as 20%! However, Unbxd reminds us that AI doesn’t create trends – humans do—and AI needs the human “touch,” or insight, to properly guide the learning. Unbxd advises us to listen and build affinity; learn and re-order; and cater to all shoppers. Eretailer, Adore Me, has utilized AI & ML to build a data driven approach toward inventory; they have grown from $1 million to $84 million business in four years! A general summary is that AI can be difficult to harness, but worth the effort to institutionalize into your site. Still, don’t replace your humans.
On the flip side, there was much discussion on the “humanization” amongst a growing world of AI & ML, and the opinion that companies have turned to data to avoid fear. We’ve all experienced “analysis paralysis.” Experts believe it takes qualitative alongside quantitative insights to be more effective. After all, we should think like people, not marketers! Tie your social efforts to the customer experience and look at your customer’s response for integration. A note on social: It was great to hear the reminder that you must generate demand online, not just awareness. Facebook, Instagram, Pinterest – are not just “talk” anymore. Many are figuring out how to create demand, and customers are responding with their wallets. It was refreshing to hear key retailers talk about how retail is NOT dead, but it needs to step up its game to make it personal for the customer. If you have bricks and mortar presence, what is going to make it extra-special to be instore? West Elm put a coffee shop in one of their stores--sound familiar, Barnes & Noble?--and it’s pulling in a new demographic. Small stores can still send a personal email after a store visit; can midsize-to-large retailers make that happen, too? What should you be paying attention to in order to grow?
Great experiences and fair prices.
Tell your story; create and coordinate your merchandise calendar with a marketing calendar, building the story around key products, then surprise and delight!
Define your brand purpose and develop a Customer First culture. Technology enables
It’s here and it’s now. It’s not really a discussion; it’s business as it must be. If you are not optimized for mobile from a shopping AND communication aspect, you are leaving money on the table. Criteo and others shared some good stats and suggestions:
Mobile web usage up to 35.5%
Tablet usage is moving to smart phones, partially because of bigger screens
Death of the desktop false - more research is needed
Desktop users comes back 50% more often than mobile
Consumers are using what is convenient
Consider your own app. You have a lot more control in your app, and are not at whim of Google
Good design matters
Many brands are experiencing greater than 60% of their traffic via mobile rather than desktop. I believe we all understand that addiction to our phones = big data. Take advantage of the reliance consumers have on their phone to capture tons of data and create personalized experiences whenever possible.
The topic no one has an answer for, but the overall verdict is this: if you can test, you should – but “know thyself AND thy customer.” Pureplay start-ups with proprietary products shared how they are “stealing smart from Amazon:”
Pull reviews from Amazon and add to your website. One example of information you can re-use.
Use the search terms report on Amazon - it gives you top keywords.
Amazons algorithms are all built toward what is best for the customer. What are you focused on?
Claims of making 10-15% return on ad spend – is it worth it? If your site conversion is 2% and Amazon is 20%, some say it is.
One of my roundtable partners questions its necessity for $1 million in sales.
Other new brands have started on Amazon, and now have completely pulled out.
The number one pain is how to track if someone visits your site but then buys from Amazon. There is currently no simple solve for this. Consider RFID; it can track through the process and product tagging is “not that expensive,” as per one pureplay panelist. Another big pain is how to protect MAP – you need brand registration. Realize there might be limitations (you must have the intellectual property). Still, you must be vigilant and watch it every day. Have a clear policy and get software that helps monitor. SO - will Amazon overrun retail? According to BlueCore analyst Jared Blank, “NO,” but they will dominate in the next 5 years. Ten to 15 years from now, who knows? Think back 15 years ago; what was in the forefront then? Where are they today? Today’s facts:
Amazon dominated 3% of overall retail sales, but 90% of retail sold offline
Amazon has had 20% growth year after year for all but one year since its inception
Offline to online sales are accelerating, with grocery and apparel as the biggest winners
Amazon dominates US marketplaces over all other marketplaces because of Amazon Prime penetration
How do you mitigate the Amazon risk? It’s extremely unlikely they will dominate retail in 10-15 yrs. In 3-5 years, it is extremely likely they will continue to grow retail revenues by 20% YOY. What to do?
Do not focus on price or convenience; rather, have a unique value proposition. Compelling experiences, entertainment aspects, unique brand experiences are not Amazon’s specialty.
Sell to Amazon, as in be acquired. They just bought Rain. Will they buy Nordstrom? They are not a fixer-upper buyer.
Create a Sustainable High-Quality Niche Business
May I say, my friends, that THAT is what catalog marketing has always been. We, as humans, will always crave a personalized experience.
This channel is still king, but open rates are declining. What’s next?
Gen Z likes texting
Web Push notifications are the newest fastest growing channel and is much bigger than email in countries like Brazil. Very popular with a younger demographic.
More personalization – not just “Hi Paula,” but segmentation and product categorization to improve engagement
The longevity of an email inbox is still preferred for transactional communications, so make sure you are capitalizing on this.
My prediction for email ranges from “email will be dead one day,” to “Gen Z will grow into it.” Return your thought process back to “know thy customer” and stay in touch with the channels they use. Unanimously, the top drivers to ecommerce I heard from the attendees are (in no particular order) Email, Paid Search, and – OH MY – Direct Mail! How many times did I hear, “IT WORKS!” Catalogs are not dead; in fact, their use as a web driver is growing! Email is still one of the best communication tools you have. Bricks and mortar is evolving, yet it can’t continue to exist the way it’s been. Our human demand for a tactile experience isn’t gone, but it is evolving. Investigate how AI and ML can improve your customers’ experiences. Remain vigilant around Amazon, whether you are involved or not, and differentiate yourself. Don’t be afraid to reach out to experts to help you navigate and improve your performance in the digital and print space. Lett Direct remains steadfastly focused on helping our clients spend smartly and be profitable. In closing, I’d like to share some of my favorite random quotes from speakers at this year’s conference, which I feel will resonate with us all: “Testing without segmentation is a waste.” “A wise man changes his mind; a fool never does.” “Make it Insta-worthy.” (make it shareable) “When the tide goes out, you see who is wearing swim trunks.” Paula Jeske has over 20 years of direct marketing experience from both the client and supplier side, digital and print. With a background in print, web, email, data/CRM & video, she has passion and knowledge for cross-channel marketing, and now heads up Lett Direct’s business development activity. Paula is always available for a direct marketing conversation – or music, dogs, wine and boats. Reach out to her at firstname.lastname@example.org.