PARTNER & CONSUMER PRODUCTS SECTOR LEADER, MAZARS IN US
"Look at any business that has experienced sustainable success and you will see that they have evolved and adapted based on what they thought was needed in order to continue their path to prosperity. Digital brands are no different, in that to be long lived they will constantly adapt to changes in technology, costs and customer preferences."
An article in Adweek stated that while digital brands have been forward-thinking when it comes to ‘understanding [customers], capturing data, messaging to their consumer’ - this is an expensive pursuit and one that is not necessarily sustainable in all cases. What are your thoughts on this point?
Look at any business that has experienced sustainable success and you will see that they have evolved and adapted in order to continue their path to prosperity. Digital brands are no different, in that to be long lived they will constantly adapt to changes in technology, costs and customer preferences. Digital marketers are getting closer to being able to calculate a true ROI for their campaigns and will be in a better position to adjust marketing spend to optimize their overall budget. Metrics such as CPM (impressions), CPC (clicks) and CPL (leads) will be rolled up into overall measures. Also, as companies employ an omni-channel strategy, digital will no longer stand alone as a separate discipline. Instead, digital will become more integrated with real life experiences in brick and mortar stores and the two will become strategically seamless. Digital brands have also attracted the attention of larger brands as we saw in several acquisitions such as Walmart picking up Bonobos and Camuto Group’s purchase of Sole Society.
Scalability is a core aspect of mid-sized business models. By investing in a service such as a cloud platform they can both start small and expand as their business grows. How do you see the utilization of such platforms evolving in the future with regards to ecommerce?
In the US, service platforms have long been an invaluable resource for mid-sized businesses, allowing them to enter a market without needing to make a large capital investment, that would scare away many new entrants. With the ability to use ecommerce to sell B to C, starting a business and selling products is now more accessible than ever. However, I have seen that launching a company is not just about selling something and making a living. It is also the ability to tell your story about who you are and what you are passionate about. For example, the recent rise in awareness of the need for environmental sustainability in the fashion world is primarily being fuelled by emerging companies such as Allbirds, Everlane and others who are intent on transforming the fashion world into a more sustainable industry. Many more emerging companies are being established and they know that an optimized online store is essential to ecommerce success. Companies looking to drive the best return on investment and experience the most growth are those that are securing affordable and scalable ecommerce platforms.
As such, the future looks bright for the ecommerce platform industry. With respect to options, historically, the ecommerce space has been dominated by a select few solutions until recently when Shopify began to attract retailers with its ease of use, power and flexibility. However, there’s no shortage of platforms to meet a business’s specific needs.
How have American organizations pushed forward with business models based on further customer personalization and differentiation?
Organizations have realized for some time now that customer personalization improves the individual customer experience which, in turn, makes it more likely that they will make a purchase. Most analysts have considered the lack of a quality customer experience to be the main reason for the decline in brick and mortar stores in the US. One recent study pointed out that by 2020 the average brick and mortar store will reduce its size by 15-20%. However, it is clear that the future of retail does include brick and mortar as part of an omni-channel customer-centric strategy. Because so much information on products is now available online, customers need personalization to help curate products so that the offerings they see are those that appeal most to them, reducing the time needed to browse and shop. To do this, retailers are employing data analytics from information both captured within their point of sale systems (little data) and data related to human behaviour and interactions (big data) to increase conversion sale rates. Gathering and analysing data on your customers allows you to understand buying patterns and subsequently cross- and upsell with personalized offers. Stitchfix, a monthly clothing box subscription and personal shopping service does a great job of using feedback data they gather to personalise selections and greatly reduce return rates. Retailers are also seeing that differentiation is a tool that they can use to increase sales. Retailers gaining exclusive access to designers and brands will be in the enviable position of offering unique products and experiences to loyal customers, greatly increasing the chance of making a sale. Personalization and differentiation isn’t easy to execute, but it is essential to make retail work the way customers are hoping and, increasingly, expecting it to.