Recommerce, rebuilt digital experiences top of mind for stores
Brick-and-mortar retailers look to technology to compete with online counterparts and mold digital experiences to what resonated with consumers during the past two years.
LAS VEGAS -- The last two years were an earthquake for brick-and-mortar retailers. The survivors have dug out, and they're armed with data and insights to rebuild their digital experiences based on their customers' preferences, which also have changed.
The seismic events of 2020 also gave rise to stronger online competitors for retailers, including "recommerce" platforms that sell secondhand goods. While those were popular before the pandemic, the supply chain disruptions that still persist have made them only stronger.
Online marketplaces that specialize in particular items are on the rise, including Farfetch Second Life, which specializes in luxury handbags. Chairish, a used furniture marketplace started by Hotwire co-founder Gregg Brockway, launched in 2013 but experienced exponential growth in the past two years, as waiting periods for new furniture grew to six months for some manufacturers.
Brockway predicted those problems will ease for retailers, and for Chairish's record growth to slow.
"We don't expect to grow nearly at the same pace going forward as the world gets back to normal, but we expect it will continue in the right direction," he said.
Retail tech changes to accommodate new customer needs
One way physical retailers are challenging digital merchants is by upgraded app features. Going up against online furniture sellers -- such as Chairish in the recommerce realm, and Wayfair in the traditional e-commerce category -- Sam's Club recently added a feature to its app called Scan & Ship. The idea was to give shoppers the opportunity to scan barcodes of large items -- including furniture -- in store and have the items shipped to their homes, Sam's Club CEO Kath McLay said.
Sam's Club CEO Kath McLay discusses her company's new app features with Krystina Gustafson, senior vice president of content at Shoptalk, at the conference's keynote.
Interestingly, McLay said, customers didn't immediately pay for items after scanning them in store, with some waiting up to 30 days to buy, as they presumably comparison shopped or delayed the purchase for other reasons. That flew against assumptions the Sam's Club digital team had when rolling out the service after an "innovation jam," where product, tech and business employees submit ideas to improve customer experience. The finalists are judged, and the company funds three winners.
It's fascinating, this trend where we have to pull together, kind of online and offline, and just recognize we need to meet members' needs wherever they're at.
Kath McLayCEO, Sam's Club
Customers changed their habits during the pandemic. One-fifth of U.S. consumers bought groceries online for the first time, which accounts for a "massive amount of people," said Brendan Witcher, an analyst at Forrester Research. Now that consumers have become accustomed to finding things online, they are becoming channel-agnostic -- meaning they will pick up items in store or curbside, or get things shipped to their homes. Retailers like Sam's Club are adjusting to those preferences by blending their in-store and digital experiences into one.
"It's fascinating, this trend where we have to pull together, kind of online and offline, and just recognize we need to meet members' needs wherever they're at," McLay said.
Attracting talent becomes the priority
Such re-imagination of digital retail experiences poses another competitive problem for retailers: attracting digital talent to help build those experiences. Leaders from grocer Albertsons, Walmart and Levi's discussed the dearth of expertise to help them rebuild, post-pandemic.
"My job as the leader in this space is to make it clear that when people with the skills come to Levi's, they will absolutely be at the forefront of technology because we are doing some really cutting-edge things, and at the same time they will continue to grow and learn," said Katia Walsh, senior vice president and chief strategy and artificial intelligence officer at Levi Strauss & Co. "I will tell you that Apple is poaching from us all the time, but they are also poaching from other tech companies."
Witcher said improvements that many retailers will make to their technology stacks this year might not be flashy, consumer-facing digital experience face-lifts. Instead, they will be permanent systems and workflows that enable the new services initially rolled out in an improvised manner when stores weren't allowed to have customers.
One big example is giving stores the same backroom picking, packing and shipping software and equipment that is found in warehouses, if they're expected to ship items directly to consumers who ordered online -- or meet them curbside.
"It's not the sexy stuff that gets a lot of attention, but it is just so critical to have those tools in place if you're going to keep up, stay competitive and operate at the speed of the customer," Witcher said.
Don Fluckinger covers enterprise content management, CRM, marketing automation, e-commerce, customer service and enabling technologies for TechTarget.
