After chatting with and listening to retail executives at last week's Shop.org conference in Los Angeles, I left the event with the following three themes:
1. Amazon.com is a Behemoth, But We Have Brands and Communities
The overriding sense I got listening to retailers at Shop.org is that while they understand that trying to compete operationally with behemoths such as Amazon, Alibaba and Wal-Mart doesn’t make sense, competing on brand and creating a community around that brand can be a competitive advantage. Yes, Amazon beats most retailers when it comes to offering value or fast delivery, said Rebecca Kaden, partner at venture capital firm Maveron, but brands today say something about who they are and "in every generation and every economic environment, customers have always flocked to community. These customers, when you say ‘I wear this,’ it says something about who they are, and I think that we’re only going to see that continue."
This thought was echoed by Beautycounter founder Gregg Renfrew in her keynote presentation. “Individuals want to be part of meaningful change,” Renfrew said. “We're increasingly focused on businesses that do well while doing good. People want to be part of a movement.”
Building community and focusing on the customer and brand loyalty in general isn't something Amazon has figured out how to do yet, retailers believe. “For us, we really focus on the customer, the brand and brand loyalty,” said Rachel Blumenthal, founder and chief executive of kid's subscription box company Rockets of Awesome. “That's one of the areas I think Amazon either doesn’t value as much or spend as much time on.”
2. Don't Believe the Hype: Stores Are Thriving
As Total Retail's Joe Keenan reported last week, while there have been some high-profile retailers that have closed stores this year — and a number that have gone out of business and/or went bankrupt — the industry is growing, including store openings, jobs and, perhaps most importantly, sales. According to findings from two reports presented at Shop.org — the National Retail Federation's latest project, Consumer View, a quarterly report that gauges consumer behavior and shopping trends, as well as an IHL report, Debunking the Retail Apocalypse — the notion that retail is dying is a false narrative being perpetuated by the mainstream media. Some of the findings presented during a press conference on this topic at Shop.org included the following:
- there has been an increase of 1,326 store openings in the core retail segment this year vs. the same time last year (IHL);
- the three fastest-growing core retail segments (excluding table-service and fast-food restaurants) are off-price retailers and dollar stores (+1,905 stores), convenience stores (+1,700 stores), and grocery stores (+674 stores) (IHL);
- 78 percent of consumers said they're shopping at brick-and-mortar stores just as much or more than they did a year ago (NRF); and
- 49 percent of millennials said they're shopping more in stores this year compared to 2016 (NRF).
The notion that retail stores are dying was also discussed in many sessions. Even a panel discussion dedicated to online-based “cult brands” quickly veered into a discussion of the benefits of brick-and-mortar retail. All three panelists — Dave Cho, co-founder of cosmetics brand Soko Glam; Bobby Farahi, co-founder of e-commerce retailer Dolls Kill, and Joey Zwillinger, co-founder of direct-to-consumer footwear brand Allbirds — discussed their recently opened physical stores. Soko Glam recently partnered with Bloomingdale’s for shops within the department store, while Dolls Kill and Allbirds both opened stores recently in San Francisco. All of the panelists agreed that retail stores are fundamentally changing, driven by advancements in technology and shifting consumer behaviors, however, that doesn't mean they're going away. Rather, their purposes are evolving from one of a place to shop and browse to an intent-driven transaction channel.
3. The Future is Now
This thought went through my head several times this week, especially when I was in the Shop.org TechLab, which allowed attendees to experience the “technologies of the future” via custom-designed simulations in the store, home and office. It was there that I sampled some of the virtual reality (VR) immersive experiences, and was truly impressed. The VR experiences I've demoed in the past have been proof of concepts designed to help retailers envision a future state of VR-assisted shopping. To be honest, I had never really tested a true VR experience, one built in partnership with a retailer that featured actual merchandise and allowed me to connect with an online shopping experience … until now.
At the Visa booth I witnessed how a consumer can view and purchase yoga clothes from Los Angeles-based Body Language Sportswear while completely immersed in a VR experience. The experience was made possible through the Payscout VR Commerce app from global payments processing provider Payscout. The app features an integration with Visa Checkout (VCO), which allows users to register payment credentials within the service or access their existing VCO account. It was amazing.
Other notable, forward-looking tools in the TechLab? Bond, a technology that makes it easy for retailers to send beautiful, thoughtfully crafted handwritten notes to customers; Revieve, which offers digital skincare advisor technology for e-commerce and in-store retailers; and Strypes, which uses dynamic 3-D visuals to power interactive shopping experiences where brands can collaborate with customers on product design and styling.
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