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Amazon quietly tests letting customers shop from third-party websites

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Until now, the company has kept shoppers inside its ecosystem.

The pandemic was unkind to many businesses, but others saw it as an opportunity to fine-tune their e-commerce business.

Take Amazon. It saw a surge in revenues and profits during 2020 and 2021 — up 220% at one point — and has managed to maintain double-digit growth in its e-commerce sector each year since.

While e-commerce still accounts for a small minority of overall retail revenues (around 16% in 2024, according to the U.S. Department of Commerce), there are a few dominant players.)

Walmart, Target, and eBay are a few of them. But the uncontested leader is Amazon, which commands nearly 40% of the market, according to Statista. In fact, the other nine of the top 10 retailers combined add up to barely 22% of the market.

Historically Amazon has preferred to keep customers inside of its ecosystem, a “walled garden,” as it’s known in the tech world.

A man with a bank card in his hand sits at his laptop and looks at deals on Amazon's online shopping site. Lead.

Amazon is the dominant e-commerce platform, accounting for around 40% of revenue in the sector.Image source: picture alliance/Getty Images

How ‘walled gardens’ benefit tech companies

In general, keeping customers inside an ecosystem gives a company more control over their experiences. By the way, Amazon is not alone in this practice. Plenty of other companies do the same thing, including Apple, X, and Facebook, to name a few.

In the case of Amazon, the walled garden structure gives the company total control over what users can see and do on their sites. It controls the advertising that can be shown on its site, and it controls all the data it collects.

Amazon is able collect data about customers’ shopping habits and product preferences and then target them with ads and special offers.

It all gives Amazon a competitive advantage that has helped it remain the dominant player in the e-commerce space.

Despite Amazon’s dominance, some brands have chosen not to make their products available on the platform. Now Amazon is testing how it can make some of these products available via its platform anyway.

Amazon testing a way for customers to ‘shop directly’ from brands

Amazon recently revealed it is testing a new feature called “Buy for Me” among a subset of users in the Amazon Shopping app.

The feature, which is currently in beta, “helps customers discover and seamlessly purchase select products from other brands’ sites if those items are not currently sold in Amazon’s store,” according to a company announcement.

Amazon is testing a limited number of brand stores and products. It plans to roll out to more customers and expand offerings based on feedback.

Customers who currently have access to the feature can search for specific brands in the Amazon Shopping app, and in some cases they’ll see relevant results from Amazon and third-party sellers. They might also be shown additional products from other stores in a separate section of search results labelled “Shop brand sites directly.”

Customers can link directly to these sites, or in some cases, customers will see a link to Buy for Me.

Amazon says it is not charging brands a commission for these transactions.

“We’re always working to invent new ways to make shopping even more convenient, and we’ve created Buy For Me to help customers quickly and easily find and buy products from other brand stores if we don’t currently sell those items in our store,” said Amazon Shopping Director Oliver Messenger.

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Dana Sullivan Kilroy has been a writer and editor for more than 20 years. Her work has appeared in publications including The New York Times, Real Simple, Self and Outside and on digital platforms including BabyCenter, Everyday Health and WebMD. You can email her here.

Sourced from TheStreet

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AI Shopping Agents Are Here: They Will Reshape Retail And Advertising

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By Jason Goldberg

In 2007, Steve Jobs stepped onto the stage and, with his now-legendary “one more thing” moment, unveiled the iPhone. Few realized at the time that this device would usher in an era that fundamentally transformed commerce, reshaping how people discover, buy, and interact with products. Fast forward to today, and another transformative shift is on the horizon. Perplexity’s launch of “Shop Like a Pro” may be the tipping point for a new era: AI Agent Commerce. Much like the iPhone wove the internet into the fabric of everyday life, AI shopping assistants are poised to embed artificial intelligence into the heart of our shopping experiences, forever changing the retail landscape.

AI agents, once a speculative idea, are becoming reality as industry giants like Amazon, Google, Apple, OpenAI, and Perplexity pour resources into this burgeoning space. These companies envision a future where the friction of shopping—endless comparisons, scrolling, and decision-making—is replaced by seamless, personalized assistance.

Picture this: You ask Alexa to find the perfect winter coat. Alexa doesn’t just offer a list; it considers the weather in your location, your past style preferences, your budget, and customer reviews to present the ideal option. Or, imagine Perplexity’s recently unveiled “Shop Like a Pro,” where AI curates product suggestions based on social proof, your unique tastes, and emerging trends, allowing you to make a purchase with one click directly from its platform. Meanwhile, Google Lens now lets you snap a picture of a product and instantly discover where to buy it, compare prices, and check inventory—all in real time.

Feature Image Credit: NurPhoto via Getty Images

By Jason Goldberg

Jason “Retailgeek” Goldberg has been a Forbes contributor since 2018, covering commerce, retail, and shopper marketing. He’s covered commerce topics including public retailers’ earning reports, US Department of Commerce retail forecasts, and emerging trends in e-commerce, social commerce, and the impact of artificial intelligence on retail. Read More

Follow me on Twitter or LinkedIn. Check out my website.

Sourced from Forbes

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Why Your Brand Should Pivot From DTC to Retail—and How to Do It Right

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By Jason Vaught

The move isn’t without risks, but CPG companies can mitigate them

Direct-to-consumer brands are rethinking their channel strategy, specifically a return to retail, and for a handful of good reasons. While the pivot takes a contrarian stance on the “unavoidable” takeover of online commerce, smart brands are leaning into national retail relationships with a physical and digital footprint.

On the surface, the timing of this shift seems odd. Considering the pandemic’s acceleration of ecommerce sales, many assumed retail revenues would fall off the cataclysmic cliff to certain death. But immediate revenue potential doesn’t always equate to profitability. When considering the burn rate consumer packaged goods brands are experiencing in the DTC model, the proof is in the non-GMO, sustainably packed pudding. There is unavoidable evidence for a CPG brand’s need to pivot.

Within the DTC realm, underlying factors negatively affect the ability of moderately priced CPG and fast-moving consumer goods (FMCG) brands to show black on their profit and loss statements. While we weigh the scale differently for each category, the outcome is predominantly the same. The removal of third-party cookies, the low barrier to entry, and the supply and demand of digital DTC marketing platforms create a challenge for almost every CPG sector.

Whether you’re a new brand challenging a category, an existing brand that transitioned away from retail, or an existing DTC brand looking to pivot for the first time, you’ll need to learn how to navigate the return-to-retail terrain and what it takes to succeed on both physical and digital shelves.

Why pivot to retail?

Retailers are constantly innovating, creating seamless integration between their online and IRL storefronts. This integration presents two primary reasons for getting your hands on the in-store action.

First, your brand can embrace a retailer’s online opportunities. Retailers want brands committed to supporting and performing in-store, in-app and online; pivoting to retail presents opportunities to leverage a retailer’s first-party data for specific consumer targeting. Second, the numbers don’t lie: Projections for 2024 suggest 72% of retail sales will occur offline.

No matter how you slice it, brick-and-mortar stores are still the predominant driver of purchases. Brands willing to buck the DTC-only trend are reaching the largest consumer demographic while establishing deep, sustainable relationships that can lead to future online opportunities.

Why pivot away from DTC?

On the flip side, there are reasons to shift your attention. Whether choosing to promote through organic brand strategies, taking the paid ad approach or a combination of both, the high customer acquisition costs of DTC are not attractive to investors looking for a scalable brand.

There’s also the limitation of DTC reach: With 74% of shoppers making purchases in-store, building mainstream brand awareness exclusively online is nearly impossible. Even successful DTC brands, such as Bulletproof, eventually reach a point where they need partners like Whole Foods to further their growth and meet revenue expectations.

And there’s the false assumption that DTC leads to greater customer loyalty than working with traditional retailers. In fact, the most prominent form of brand loyalty is when the consumer views your products across many digital and physical touch points.

When not to pivot

Not every brand is ready for retail. With retail partnerships comes responsibility. To win in retail, you must have your ducks in a row:

  • Supply chain: Do you have the capability to support retail growth consistently?
  • Proof of concept: Can you guarantee a good sales velocity to keep your distribution?
  • Legal compliance: Are you ready to meet the contractual obligations?
  • Capital: Do you have enough funding to support the channel?
  • Competition: Within a retail environment with multiple and different competitors, is your brand differentiated and competitive? Do you lose an advantage only available online?

There are plenty of failed examples where a DTC company poorly shifted to retail commerce. While the details differ, the overarching theme is always the same: These brands wrongly assumed their existing awareness and marketing were enough to support these channels.

How to pivot successfully

Retail brands must take a strategic approach, provide product differentiation and have the resources to compete against the big-name, traditional brands that dominate their category. Whether it results from being too ambitious or simply a lack of experience, many brands may fail against existing retail shelf competitors.

Moving from the DTC approach to traditional retail isn’t without risks, but CPG companies can mitigate these risks by addressing four areas.

Establish the right partner(s)

On the other end of the CPG channel spectrum are consumer brands trying to be everything to everyone. As such, these brands approach all physical retail partners for their product category without considering how one affects the other. Having too many retail partners can cause shelf dilution, capital constraints, having too many promotions to manage or losing distribution due to poor product-shopper fit.

Develop a concise value proposition

Being concise in your product messaging is a practice that should exist across all consumer channels, but it’s especially true for in-store presentations. With limited attention spans and competitors sitting within your product’s line of sight, the speed and eloquence with which you communicate your point of differentiation matters.

Customer loyalty is constantly at odds with the retail environment, so engaging in this form of commerce requires more attention to how effectively your packaging design and in-store presentation reach the consumer.

Prepare your supply chain

In DTC, being out of stock may lead to a preorder. In retail, however, it leads to a lost sale.

Supply chain mishaps are risky for your brand and the retailer. Whether direct-to-retailer or through a wholesale channel, overhaul your supply chain to ensure consistent on time in full rates for customer orders so you are a reliable vendor and good partner. Help your buyer ensure you have enough orders in the system to cover any incremental volume coming from a promotion or big event you know is coming up.

Prepare data to support the channel

Assumptions serve no purpose when engaging in commerce with national grocers and retailers. To enter any retail door, you must have consumer data proving why your brand will be a top category performer.

The modern retail store has advanced insights from internal point-of-sale data and eye-tracking technology. Brands mirroring this data-driven intentionality will build stronger relationships with their retail partners.

The most predictive consumer data comes through testing buyer behavior in a simulated environment—we call this purchase intent testing, where we separate what consumers say they want from how they make buying decisions while at a retail shelf. This test measures the effectiveness of the packaging and its ability to lead to purchase selection, which commonly happens in 3-12 seconds.

At this stage of the buyer journey, we simulate these choices by inserting your product into a set of leading products you are likely to compete with. We then measure the performance of various packaging design candidates in the marketplace.

 

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SmashBrand

The benefits of retail partnerships

Having looked at the why and the how, let’s look at what success looks like after winning in retail. Here are five ways that retail differs from a DTC strategy.

Greater reach and wider brand awareness: Walmart received more than 230 million visits in 2022. Even though this number is down from prior years, 1% of this figure is more visitors than nearly every DTC brand receives to its website.

Access to valuable customer data and analytics: While not every brand asks, retail partners can provide deep insights helping you understand who buys your product and who does not. Collectively, you can better meet the needs of consumers who match your buyer persona.

Opportunities for product innovation and co-branding: Whether through white-label products or cross-brand collaboration, creative co-branding opportunities only happen when you work with the retailer.

Building a loyal customer base through in-store experiences: The more we push to a digital world, the greater consumer desire for a curated retail experience becomes. In-store demonstrations encourage greater brand resonance, so you get two for the price of one in your shopper marketing: direct influence on the in-store sale, plus a broader brand awareness driver, which may halo to other stores and channels.

It opens the door to click-and-mortar: Being on Target.com is not nearly as powerful as being available within their app for in-store pickup. As retailers innovate, click-and-mortar will continue to grow, and you will want to be part of this action.

Ready to transition into retail?

If you are a CPG brand currently using or weighing a DTC model, it may be time to consider a pivot back to retail. These partnerships offer opportunities to reach a larger consumer demographic, establish sustainable relationships and embrace online opportunities. By engaging in retail action, brands can achieve long-term growth and success.

Feature Image Credit: Mattes/Getty Images

By Jason Vaught

Jason Vaught is the director of content and marketing for SmashBrand.

Sourced from ADWEEK

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We ask marketers: how can brick-and-mortar retailers thrive in 2023?

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By Sam Anderson

While we’ve recently lost some high-street retail brands, many are still kicking. How are they surviving – and how will they flourish amid continuing permacrisis? We asked 7 commerce aces from The Drum Network.

During the height of the Covid-19 pandemic, there was plenty of well-justified concern about the continued existence of brick-and-mortar retail. Since then, we’ve seen evolutions in the shapes of (and footfalls in) towns and cities; accelerated hybridizations like smart stores; and, despite an IRL bounce-back, continued shifts toward online retailers.

What are the features of this evolving environment that marketers should be paying the closest attention to? In the long run, is brick-and-mortar dead – or an indelible part of life? Read on for our experts’ answers.

Martin Ryan, vice president of retail, EPAM

Retailers must urgently adapt physical spaces to meet current and anticipated sales demand. This often involves a multi-year effort due to lease inflexibility.

The future will see the development of new store formats, heavily edited store assortments, and some closures. This includes fewer but bigger stores that mix product and experience; a proliferation of smaller stores in convenient locations; and, for some sectors, automated and cashier-less stores and collection points. The store mix will be designed to work on an omnichannel model.

Retailers will continue to experiment with live-stream shopping and remote advisory to ensure the attention of new customer demographics.

The shift from physical to less profitable online sales will cause retailers to scrutinize marketing spend that promotes these channels. They will seek compensating benefits, like retail media revenues. Understanding store conversion rates enable marketers to compare online and offline ROI and build a mix of advertising spend.

Retailers will adopt customer data platform projects, implementing technology to survive in a post-cookie world, where tiny signals from consumer devices and behaviour are processed by AI models to provide probabilistic knowledge about individuals.

Martin LeBlanc, architect & principal partner at Sid Lee Architecture

From a design perspective, brick-and-mortar retail spaces in 2023 need to centre excitement. What’s the incentive to visit? What sort of memories will be created? For Concepts in New York City, for example, we designed a VIP store-within-the-store to offer guests an experience that wouldn’t be possible online.

There are plenty of opportunities for retail spaces to be both reflective of and supportive of the communities they’re located in. This means the prioritization of accessibility but also the inclusion of elements that reflect the city and its people. Something as simple as integrating the work of a local artist goes a long way in cultivating a sense of connection, which is of course the goal when competing with the digital world.

Carly Johnson, vice president, group director of strategy (North America), Momentum Worldwide

Brick-and-mortar retail is in a strong position to not only survive the future but embody what shoppers have always loved about ‘retail therapy’. Looking at the facts alone, despite continued growth in online shopping, in-store still accounts for around 80% of purchases. This past year, brick-and-mortar retailers opened twice as many stores as they closed.

The volley between in-store and online has crystalized how shoppers want to shop. Hybridized shopping has become the sweet spot for most, leveraging the convenience and reach of online with the speed and experience of in-store. There’s a tremendous benefit to mastering this hybrid approach: educate and inspire shoppers online, then convert them in-store where it’s much harder to ‘leave their cart’.

The experience in physical retail cannot be underestimated. Emotion drives behaviour; brands and retailers must create experiences that illicit emotions first. Emotion AI is a form of artificial intelligence that marketers should be paying attention to; it allows us to better understand human emotion while shopping through text, speech and facial expressions. When done responsibly and thoughtfully, it can deliver a more personalized and tailored experience.

Kit Bienias, performance director, growth, Brave Bison

E-commerce plays an influential role in driving store footfall. Readily available reporting tools allow marketers to connect the dots between online and offline. And leading ad networks have released a slew of products designed to drive consumers in-store.

Marketers can propel their brick-and-mortar stores forward through pivoting marketing efforts and leveraging the right tools: ingesting store visit and sale data into ad platforms; rolling out local campaigns in search; and adjusting automated bidding strategies to optimize to omnichannel performance KPIs.

Marketers must recognize the importance of online adverting to influence consumers’ offline behaviour. The sooner you start connecting the dots, the sooner you’ll reinvigorate brick-and-mortar stores.

Chris Dowse, strategy director, Jaywing

It’s a funny time for brick-and-mortar stores. During the pandemic, there was a longing for the freedom of shopping in person – something we didn’t know we’d missed until it was taken away. However, as lockdowns become a distant memory and household budgets become squeezed by cost-of-living increases, expect to see physical retail dial up its experiential role and become more of a wrapper for ‘event’ or treat purchases to bring cheer among the economic gloom.

With the steady increase of workers returning to city centre offices, there’s value in the benefit and convenience of hybrid online and offline services such as in-store click and collect, rather than gambling on being at home for deliveries while on endless Teams calls. The brands that will thrive will be the ones who truly understand their value and the role they play in customers’ lives: convenience and reliability or indulgence and experience.

Becky Simms, founder and chief executive officer, Reflect Digital

The common thread in any commerce setting is the customer. Their needs and desires for a personal approach do not change depending on the setting; their need to feel valued and connected to a brand is constant.

Retailers need to double down efforts to know their customers and personalize experiences, whatever the setting. Thinking about how they can connect a customer journey with in-store tech and provide a rich, personalized experience based on data (that the customer understands they hold) is an exciting prospect. The much-loved loyalty card schemes from retailers like Boots and Tesco place those brands one step ahead. The key will be in the execution.

Holly Ford, head of consumer communications, Evoke Mind + Matter

Covid-19 changed the nature of retail, catapulting e-commerce forward faster than all expectations. In 2021, the UK high street experienced an average footfall decline of 38%. As consumers were forced online, retailers responded by doubling down on their online business and contracting their brick-and-mortar retail footprints.

Lockdown may be over, but the genie is out of the bottle. While certain demographics will always want a physical connection with their favourite retailers, the most successful brands will evolve to a ‘phygital’ approach, offering an optimized blend of experiential and e-commerce to drive equity, loyalty and long-term growth.

Feature Image Credit: Eric Muhr via Unsplash

By Sam Anderson

Sourced from The Drum

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How To Start An Online Boutique In 2022

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By Kathy Haan,  Kelly Main

Retail e-commerce sales in the U.S. will reach $1.06 trillion in 2022. With more people buying online than ever, starting a boutique is a great side hustle idea; the average income for e-commerce boutique owners is $6,013 per month. Getting started is easy, but it takes time to have all the pieces in place for a successful online boutique. We’ll even show you how to start an online boutique on a budget.

Step 1. Decide on a Niche

A niche is a specific type of product you focus on. When starting an online boutique, it’s important to choose a niche so you can stand out in the enormous sea of e-commerce businesses. Do some research and figure out what type of products you want to sell. Consider your interests, what’s popular in the market and which gap you can fill.

Some niche ideas include:

  • Cashmere clothing and gifts
  • Vintage-style costume jewellery
  • Children’s wall art
  • Plants and gardening tools
  • High-end stationery
  • Ship and boat model kits
  • Custom-fitted shapewear

One of the biggest mistakes entrepreneurs make when deciding on a niche is chasing saturated markets. The niche you choose needs a captive audience, but yours must have an edge to compete in a dominant category. How will your products differentiate from the hoard of the same products sold by other boutiques?

Before choosing a name, it’s best to check to see if the domain is available to purchase. You can do this using a site such as GoDaddy. Otherwise, you can check its availability but wait to purchase the name in step five through your e-commerce platform.

The name you choose must be easy to spell, memorable and catchy. While you can choose a domain name ending in something other than .com, it’s easier for customers to remember your site when using .com instead of .biz or .info.

Step 2. Set Up Your Legal Entity

Setting up your legal entity will determine how you’re taxed and what liability you have as the owner of the online boutique. The most common legal entities for small businesses are sole proprietorships and limited liability companies (LLCs).

Sole Proprietorship: As the name suggests, this is a business owned by a single person. There’s no paperwork required to set up a sole proprietorship, but you will need to register your business with the state and get a tax ID. This is the simplest way to set up a business, but you’re personally liable for any debts the business accumulates.

LLC: An LLC offers some liability protection for the owner, and it’s easier to get bank loans and other funding as an LLC than as a sole proprietorship. To set up an LLC, you’ll need to file Articles of Organization with your state and get an employer identification number (EIN) from the IRS. Most states offer this ability 100% online with little to no wait time to incorporate. You can also use an online business filing company, such as BetterLegal or Inc Authority, to do the filing for you.

Step 3. Make a Business Plan

Many small business owners skip the step of creating a business plan. While not required, it’s a good idea to have one in place to track your progress, determine the feasibility of your boutique, understand both your customer and competition, pivot and secure financing.

Your business plan can include sections such as:

  • Executive Summary
  • Business Description
  • Products and Services
  • Market Analysis
  • Target Market
  • Marketing Plan
  • Financial Plan
  • Business Structure and Ownership
  • Legal Requirements
  • Operations and Management

You can find templates for your business plan by visiting the U.S. Small Business Administration site. Not only can you access help online, but the SBA also has Small Business Development Centers (SBDC) to assist you on your entrepreneurial journey. These networks provide advice, mentoring, workshops and small business grant opportunities.

Step 4. Source Suppliers and/or Materials

Finding reliable product suppliers for a price you can afford is half the battle of running an online boutique. Find a supplier or wholesaler who offers quality products, on-time delivery and excellent customer service.

To find suppliers, search for terms such as “wholesale” or “product supplier” and include the type of product you’re looking for in your search, such as “clothing supplier.” You can also check out trade shows in your industry to meet with suppliers and get product ideas.

Sources for products include:

  • Alibaba
  • DHgate
  • Mable
  • Oberlo
  • Tundra
  • Abound
  • Boutsy
  • Handshake
  • Etsy Wholesale
  • Faire
  • Bulletin
  • IndieMe
  • RangeMe
  • LA Showroom
  • FashionGo
  • Stockable
DHgate.com home page

DHgate can be a great source of wholesale goods for your boutique.

Step 5. Create an Online Store

To establish your store, you first need an e-commerce platform. You can either use a hosted platform, which is a turnkey solution that includes everything you need to launch and maintain your store, or an open source platform, which requires a bit more technical know-how to set up and maintain. Open source platforms provide far more customization options than what you’d find with a hosted platform.

The platform you choose will determine the features and functionality of your store, so it’s important to choose one that offers the features you need to run your business. Read our e-commerce platform guide for recommendations.

For ease, we’ll show you how to set up a Shopify boutique. It offers a free 14-day trial.

  • Go to Shopify.com and create an account
  • Install product apps (e.g., print-on-demand apps)
  • Select a theme and customize it with your branding
  • Add products
  • Add, delete and customize web pages
  • Organize your menu
  • Set up a custom domain name
  • Set up shipping
  • Create a test order
  • Choose a plan and publish

Please note that while it’s free to create an online boutique with Shopify’s free 14-day trial, you will need a plan in order for your site to be professional with its own custom domain name and ad-free hosting. This is the case for every quality ecommerce site builder, including Weebly, Wix, Squarespace and WordPress.

Step 6. Market Your Online Boutique

Now that you have your online store up and running, it’s time to start marketing it. There are a number of ways to market an online store, and the best approach depends on your budget, target market and goals.

Common marketing strategies for online stores include:

  • Search engine optimization (SEO)
  • Paid advertising (Google Ads, Facebook Ads, etc.)
  • Social media marketing
  • Content marketing
  • Email marketing
  • Affiliate programs
  • Influencer marketing
  • Loyalty programs (create buzz through existing clients)
  • Trade shows
  • Press coverage

 

Feature Image Credit: Getty

By Kathy Haan,  Kelly Main

Sourced from Forbes Advisor

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The Future of Retail

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Sourced from The Atlantic

These trends are reshaping how retail businesses serve their customers, and local shops are poised to win big over larger competitors.

The retail industry is rethinking every detail of the shopping experience, redefining not only how we shop and sell, but the incredible advantages that local, independent retailers have right now. The boutique on your town’s main drag, the shoppable post that appears in your social media feed, and the marketing email sending you to an online store may all come from the same retailer. And that retailer is fundamentally different than it was a year ago.

The rise of the local, independent shop is the future of the retail industry.

To help retailers identify and lean into those strengths and strategies, Square teamed up with Wakefield Research and surveyed 1,000 consumers and 500 retail owners and managers about the retail industry challenges and trends that capture where they’re headed in 2021. What it found was eye-opening: The who, what, where, and why behind our shopping experience is going through a metamorphosis, revealing a big opportunity for local retailers to make a name for themselves and beat larger competitors.

Square analysed the survey results, gathered insights from its retail experts, and interviewed leading creative retailers to identify the top retail trends for local businesses to explore this year. All data cited below comes from the survey results. For a more in-depth look at these 2021 retail industry trends, download the full report.

1. Retailers are taking on larger players by moving online

Independent retailers can connect with customers locally, and gain exponential reach by selling online in addition to maintaining their local presence. Today, shoppers make 43 percent of their monthly retail purchases online, and retailers are meeting those needs, with 88 percent now selling online.

As many retailers are changing their business models, going online increases the odds of success. In fact, among retailers selling online, 58 percent of their revenue comes from online sales. The first move to sell on a new channel underscores the importance of retailers using digital tools to continue to innovate. “That is the tipping point where you really need to run the operations of your business digitally,” says David Rusenko, head of e-commerce at Square.

2. Blending online and in-store shopping creates more meaningful experiences

Despite the mass move to e-commerce, over nine in 10 consumers still crave the thrill of shopping inside a physical store. Of those shoppers, nearly half say they miss browsing and getting out of the house, while two in five say they miss instantly getting the item they bought.

Even though retailers are digitizing their operations, it’s not an all-or-nothing approach. “We’re seeing that online experiences are less of a replacement for in-person interactions, but more of a complement to them,” says Megan Karande, product marketing manager for Square for Retail. Customers still want to experience the joy of walking into a store and finding the exact item they want on the shelf, or discovering a product completely serendipitously.

Local retailers have a clear advantage here and can engage customers at every step of the in-store experience while also connecting it to their online presence. Whether it’s revamping the in-store and curb side pickup experience or rethinking the store layout, the physical store isn’t going away, and in-store engagement strategies will only become more valuable this year.

3. Same-day delivery can give local retailers an edge over big-box stores

Nearly three out of four shoppers prefer delivery over pickup when shopping online. However, only 37 percent of retailers are offering same-day delivery. While shipping delays and supply-chain issues are more common now, local businesses have an opportunity to get products out faster than big e-commerce players by offering same-day delivery.

Local retailers are closer to customers and can set up the necessary systems to get products to them faster, leading to more sales. “What often happens is that when you start to offer something like same-day delivery, it encourages larger basket sizes,” says Rusenko.

4. Social selling and e-commerce go hand in hand, and it’s giving local retailers a clear advantage

Local retailers have a more authentic understanding of and appreciation for their communities, and can therefore connect with local customers better than national competitors. Whether it’s through a fully shoppable store or flash sales, social selling is made possible by e-commerce tools, helping local retailers reach more customers at a time when people are even more glued to their devices.

And selling on social media is working. Shoppers who buy items online purchased an average of eight products from social media sites every month, and 43 percent of retailers who sell on social media say that half or more of their revenue comes from social media sales.

If you’re interested in trying out social selling, see how Square can quickly help you get started, using the products you already rely on.

5. Virtual experiences are bridging the gap between the online and offline parts of a store

As customers get more comfortable buying through social media, it also opens up a whole new way to interact through those platforms. Enter, the rise of virtual experiences. Over one in three retailers are going to invest in livestream shopping this year, while 35 percent are also going to implement virtual-reality shopping.

These investments can lead to richer experiences for customers and more informed purchase decisions. And they’re more accessible than you might think.

How are retailers engaging customers virtually? One way is through livestreaming, which is when products are shared with customers over live video. It can be as simple as using a tablet to show customers what’s in store through a virtual shopping appointment, or by using social media to showcase the new stock that just arrived.

Virtual reality is another strategy that retailers are using to help customers experience products before adding them to their carts. As consumers now need more options to safely try on and try out items before buying, virtual-reality technology can be an effective way to improve the overall try-before-you-buy experience.

6. The borders between industries are blurring

The pandemic not only sparked business pivots, it fast-tracked the industry mashups that were already taking place. For instance, some restaurants are selling branded merchandise, and some retailers are offering digital services. And nearly three out of five shoppers say that they’re likely to buy from retailers and restaurants that are selling different items from what they typically sell.

“We’re seeing that the defined, straight vertical lines of your retail business versus your restaurant versus your services business are all blurring,” says Rusenko. “You’re seeing restaurants selling groceries (which are a typical retail offering) or retail businesses selling services like online cooking classes or Zoom calls and so on.”

7. Retailers are stepping up to the plate with community initiatives

Communities breathe life into local businesses, and both customers and owners recognize that harmony.

Retailers are deepening their connections to the areas they call home through a variety of ways. Seventy-seven percent of retailers are planning on participating in more community initiatives this year, with around one in three retailers saying they’re going to partner with local businesses”, provide supplies for local events, and support minority-owned businesses.

8. A real-time view into store inventory is opening up new possibilities

From selling on social media to launching an online store, retailers are experimenting with multiple ways of meeting the evolving needs of customers. This new omnichannel landscape is thrilling, and retailers are realizing that having a handle on inventory is the only way they can continue to sell across different channels.

Over half of retailers say inventory management is harder because of the pandemic. Not only have consumer needs changed, but supply-chain issues are slowing down the ordering process, making it harder to pinpoint the exact amount of inventory you need and when, and then passing that information along to customers.

To combat the increased complexity, 74 percent of retailers are planning on investing in real-time inventory management software to get more precise about their stock. In fact, over one in three retailers interested in real-time inventory software are already using it in their businesses. This is a key moment for retailers to invest in inventory software or upgrade what they currently use to meet the changing needs of their business.

Local retailers are tapping into the qualities that make them unique, reworking them, and using them to their advantage as consumer needs flip. The future of retail lies in the power of local businesses.

To incorporate these retail industry trends into your business, it all starts with digitizing your operations, and then you can try out new ways of selling. When you find an approach that fits, you can give customers exactly what they need and yourself the room to try new things. When you get to that space, where you can pull the levers that work for your store, your future is wide open.

Sourced from The Atlantic

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How the pandemic has re-shaped the family shopping agenda

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By Rimi Atwal

As part of The Drum’s Retail Deep Dive, Netmums managing director Rimi Atwal argues that by comparing and contrasting pre and post-pandemic family mindsets, brands can effectively target this demographic.

The pandemic has driven seismic change in virtually all aspects of our daily lives – from workplace norms, to the provision of education; from travel to entertainment, and how, why and when we shop.

At Netmums, we conducted in-depth quantitative and qualitative research into the lives of UK families to mark our 20-year anniversary at the end of 2019.

Although we didn’t know it at the time, our insight captured the priorities for UK families in that key moment immediately preceding the pandemic, and the dramatic impact it would have on our lives and values.

To fully understand the shifts that have taken place for all UK families, Netmums conducted further research in May 2021. We revisited the questions we had posed 18 months previously and were able to track how families’ priorities and lifestyles had changed, and what new factors are shaping how they spend their money and time.

It became immediately apparent that attitudes to shopping and spending have shifted significantly. In our 2021 survey, 34% of parents say, ’since the pandemic I have changed the brands I buy’, 59% agree ’since the pandemic, delivery efficiency and cost is most important to me’, and 65% say now that, ’price is usually my first consideration’.

Digging deeper into our insight, the story is a complex one. Obvious pressure points like cost and convenience come to the fore, but even more striking is the shifting sense of family priorities and concerns – from global to local, outwards-facing to inwards-facing, and from environmental to social.

Global to local

A core 2019 finding was 90% of parents declaring the environment a key consideration in their everyday purchasing decisions.

However, in 2021, the environment has fallen down the pecking order. When asked to rank family priorities:

  • 82% cited equal opportunities for their children
  • 76% said managing screen-time
  • 65% said environment/climate change

By 2021, 66% parents, ‘wish brands and retailers made it easier to purchase sustainably and ethically‘ – down from 75% in 2019. Today, less than half (48%) of parents agree ‘I would be prepared to pay a little bit more if a brand I like demonstrated a real commitment to the environment‘.

In terms of global issues, today, social inequality and mental health emerge more frequently than environmental concerns, probably as a direct result of the way the pandemic has emphasised the impact of social inequalities on health outcomes and underlining the importance of good mental and physical health.

Outward-looking to inward looking

In 2021 family worries about the outside world have been replaced by a focus on improving and investing in self, the family unit and the home. Parents cite ‘family bonding time’ as a key priority and emphasise their desire to invest in special occasions and spend more on family time:

  • 61% are focused on getting fitter
  • 50% are planning to spend on home improvements
  • 68% want to invest in more family events/entertaining
  • 52% want to save money

Greater ambivalence to tech as a positive force

Another emerging trend is a shifting attitude to technology in our lives – just three per cent of parents want to buy more tech in 2021, compared to the 76% of parents in 2019 who enthused technology made their lives easier through time-saving solutions like online shopping and internet banking.

Moreover, 76% of parents cited managing everyone’s screen-time as a major challenge in their lives in 2021, versus the 52% of parents in 2019.

Lessons for retail brands

It’s not surprising that the past two years have shifted the dial on family spending behaviours and priorities. But as we emerge from the third national lockdown, what can retail brands do to connect with UK families and align with their new priorities?

Judging by successful campaigns recently created by Netmums for high profile family brands, it’s clear that marrying brand credentials with what families want right now, is key.

Our recent Quorn campaign is a strong example of a brand who understands the mindset shift. While the campaign maintains its pre-existing focus on sustainability, it also positions the brand as one that easily enables healthy eating and family time. Bringing this concept to life, are family cookalong videos, co-created with Netmums’ editorial team and celebrity chef, Lisa Faulkner, with Netmums users joining virtually from their own kitchens.

Family stalwart brand, Fairy, is another example of a brand demonstrating clear understanding of an evolving customer mindset. The ‘Fairy Cares’ campaign, set to launch in September, will empathise with families’ challenges post-pandemic by offering both practical advice and resources, and emotional support. At the campaign’s heart is a clear commitment from Fairy to support all parents, boost their inner confidence and help celebrate family moments at a time when traditional support systems are reduced and anxiety at an all-time high.

And building out of 2021’s key insight that 98% of parents rank family health and wellbeing as their top priority, Petits Filous’ partnership with Netmums in creating a ‘Happy Healthy Kids’ hub, has been a resounding success. Delivering on parents’ needs for fun and healthy lifestyle ideas for the whole family, from healthy snack recipes to activity ideas, Petit Filous is positioning itself as the brand that will keep kids healthy and happy all year round.

As these brand partnerships show, connecting with a family-focused customer base must be about positioning the brand as the answer to what families need, right here, right now. And the only way to find out what families need, right here, right now, is to ask them and listen to what they say and how they feel.

For more on the reinvention of retail, check out The Drum’s Retail hub, where we explore everything from livestreaming e-commerce to AR shopping and conscious consumerism.

Feature Image Credit: Netmums 

By Rimi Atwal

Sourced from The Drum

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Unlocking the virtual reality for the in-store shopping experience of the future

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By Stefano Hatfield

As brands and consumers seek a return to the physical retail space post Covid-19, the technology that has enabled ecommerce to fill the gap as stores were closed will play a vital role in the recovery of that same bricks-and-mortar retail. Shoppers, particularly in the UK, want a “connected shopping” experience.

The pandemic has obviously hit the UK high street, but shoppers are ready to return, particularly if the ease of online shopping is blended with the richness of the in-store experience. Some 40% of UK shoppers use their mobile in-store to look up more information on a product. And there is a huge increase (80%) among Gen X shoppers who say they will use augmented reality (AR) in shopping over the next five years.

These are the headline findings of a new report, ‘Future of Shopping’, based on a global survey of 20,000 shoppers by trends agency Foresight Factory, for Snap Inc. Technology, rather than sounding the death knell for bricks-and-mortar retail, has led to an irreversible shift to omnichannel that genuinely benefits both shoppers and retailers.

As we have seen over the past 18 months, when new technologies are built primarily around human behaviour, rather than imposed because of internal business needs, their impact can be positive. Yes, online shopping has disrupted bricks-and-mortar retail over the past two decades. However, technology has also helped retailers navigate the increasing overlap between online and physical environments, now a part of our lived experience.

The report reveals that consumers worldwide feel their shopping experience has been greatly enhanced by camera technology and accompanying digital innovations. It is clear that shoppers are keen to get back into stores, but they also want to keep all the advantages of technology when they return; for example, instant access to stock information or home delivery service.

Britons seem more wedded to online shopping, particularly for clothes, than others. Some 44% plan to do the majority of clothes shopping online, above the global average of 38%. Only 34% of Brits said buying in-store was their favoured method of shopping – compared with 43% globally. But nearly half (49%) of Brits missed the social aspect of shopping and more than half (51%) found the inability to try on products frustrating.

This desire to blend online and in-store highlights how vital the mobile phone has become across the shopper journey and explains why the new consumer habits forged in the pandemic are here to stay. However, consumers have missed the social component of physical shopping, so e-commerce advertisers need to greater humanize their brands online.

The report identified several other key takeaways:

Growth in e-commerce during Covid-19 will be sustained

81% of UK shoppers are expecting to do the same amount or more online shopping in the next 12 months compared to last year, with only 19% indicating they plan to do less.

A post-lockdown return to physical retail

Shoppers returning to store post-lockdown will seek the social and tactile experiences they have missed in the last year, albeit combined with the convenience and safety of shopping online. But bricks and mortar stores must act fast to ensure they do not lag behind shopper expectations.

Technology will drive shoppers into stores

Some 35% of global consumers would visit a store specifically if it had interactive virtual services such as a smart mirror that allowed them to try on clothes or makeup.

Mobile will connect brands and consumers across the shopper journey

One in three global consumers choose the mobile phone as their preferred shopping channel, and 50% of Generation Z and millennials say they never go shopping without using one. These trends will only continue, not least in the area of price comparison.

Virtual testing could accelerate e-commerce further

Some four in 10 consumers globally state that not being able to see, touch, and try out products puts them off online shopping. Retailers will therefore need to invest heavily in try-before-you-buy technology to help encourage purchase and reduce the potential need for returns, by enabling consumers to more tangibly engage with products.

Shoppers will demand widespread AR

Within five years we will see a 57% increase in Gen Z shoppers who use AR before buying. Significantly, 56% of consumers who have used AR when shopping claim it encouraged them to make a purchase. The mobile phone will be the core tool.

New technology could reduce the number of online items that are returned annually by up to 42%. The study estimates that the cost of online returns now amounts to around $7.5 billion each year – and £377m in the UK alone.

Resale platforms cement their position as a credible alternative

Four in 10 consumers globally have bought and sold something via resale platforms, which attract shoppers searching for cheaper prices and unique products. Second-hand goods no longer come with stigma, but are a more desirable, sustainable alternative. Retailers like Levi’s, Ikea and H&M are moving into the branded resale space.

The key trends identified above talk to the blurring of consumer needs and expectations across physical and digital shopping channels. They reflect shoppers’ primary demands (beyond pricing): convenience, social interaction and product testing.

Ed Couchman, general manager, UK, Nordics and DACH, at Snap Inc. says: “People thought the internet and technology was a threat to physical retail but this report clearly shows that those who harness the benefits of tech are best placed to thrive post pandemic. Shoppers want to read reviews, compare prices and try on items using AR – but they also enjoy the experience of going into a shop, speaking to staff, and looking at items. They want the best of both worlds.”

The ‘Future of Shopping: Global Report 2021’ from Snap is available here

By Stefano Hatfield

Sourced from The Drum

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‘E-commerce is expensive’: How invisible technology and infrastructure overhauls will save retail

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By KAYLEIGH BARBER
Aside from DTC brands, there has been a slower adaptation of e-commerce from retailers and shoppers alike. That is until the pandemic hit, forcing the vast majority of stores to close and leaving online shopping as one of the few retail options.

With that came a scramble from retailers trying to figure out how to keep customers spending with them when their e-commerce operations had been second fiddle for so long. Meanwhile, platform giants in the space, like Shopify, grew even more, seeing an opportunity to step in as the technological partners that in-person retailers never had to think much about.

In the latest episode of The New Normal, editor-in-chief Cale Weissman of Digiday’s site Modern Retail and Digiday Media president and editor-in-chief Brian Morrissey discuss the dramatic changes that have roiled the retail industry as a result of the pandemic and who the winners and losers are in the upheaval.

‘The hottest company is Shopify’

As Shopify was on the rise, it clamped onto the DTC and digitally native brands that were also building their businesses and served as the e-commerce platform that many of them used, Weismann said. This is because Shopify acted as a cheap, turnkey solution that brands could add their own personalisation’s to and share in an open market, making it a great solution for marketers new to online sales.

“Now we get to March and all of these other companies are realizing, ‘I need to have a marketplace on my website,’” said Weismann, who added Shopify has been garnering more business from retailers who either didn’t have an e-commerce operation or were not prioritizing that business line.

Next for Shopify, Weismann said, is figuring out how to better serve brands that have grown to be multi-million dollar businesses on the platform. As they’ve grown, these brands are now looking for better, white label tools that give them more control over the sales process and help save money during each transaction. Shopify created its Shopify+ platform for this purpose, which Weismann said remains a work in progress.

Competing for the online market share

Coming as a surprise to no one, with in-person stores closed, online shopping has been booming and Amazon and Walmart are two online marketplaces that are reaping the rewards.

Weismann said that despite Amazon running into some supply chain issues early on, the company had a very healthy second quarter, growing sales by 40% year over year. But with that success, come opportunistic competitors — and Walmart pounced.

Walmart has spent a lot of time over the past few years building out infrastructure for different kinds of online shopping, pioneering the By Online, Pick-Up In Store (BOPIS) model. But during the pandemic, the company found particular success in its online grocery business.

“E-commerce is expensive,” said Weismann, “and if your bread and butter is cheap things, it’s really expensive to facilitate that.” That’s why online grocery businesses are going to be unprofitable for a really long time. Walmart, however, is leagues ahead of everybody else because they’ve put in the investment to make the margins on groceries better, he said.

DTC is on the rise, at least for a little while

As the recession took hold and the advertising market pulled back spending, online inventory became cheap, making it really easy and inexpensive for a slew of new DTC brands to get in front of consumers at scale.

But this ad space bonanza is going to subside at some point, Weismann said, and when that happens, there will be a reckoning.

With little money out in the world for investments, DTC brands are “focused on their economics achieving profitability and there is no way that all of them will [continue to] exist” once traditional advertisers return and the ad prices start creeping back up again, he said.

An identity crisis in retail

Weismann also said he expects that retail will return and people will shop in-store again, but for brands that have a “boring store experience,” they will need to rethink that decision.

Brand and destination identity are no longer going to get people through the door as people worry about health and safety. Therefore, customers are not going to think about that brand in the same way anymore.

For the DTC brands who built stores, however, their retail locations often serve more in a marketing capacity where customers could interact with the brand in-person, he said, adding he expects this is the direction that retail will have to go in in general, versus a warehouse with racks after racks of items.

“A lot of the thinking right now is about, ‘How do we redesign [stores] so it’s a place to show off our brand versus a place to sell things and make that profit,” Weismann said. “A lot of places with hundreds or thousands of locations will have to cut down.”

By KAYLEIGH BARBER

Sourced from DIGIDAY

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The Uberisation of Customer Service Will Kill Retail if we don’t Change

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It’s a weird thing to get used to. For years, it was accepted that if you want food delivered to your house then you can only buy certain kinds: pizza, Chinese food, or some other form of fast food or takeaway.

Your options were limited. Now, UberEats means you can order anything, anywhere. In a new city? No problem: it’s like having all those old, paper menus from the door knob right in your pocket.

I don’t think we quite understand how much this has changed customers’ expectations — not just of food, but with anything. One in 10 Australians aged over 14+ have used an on-demand food delivery service.

It’s only a matter of time before those customers bring those same expectations for quick, trackable delivery to other items.

Like retail.

If consumers can order a cheeseburger through an app and have it delivered to their mouth within 30 minutes, why is it still such a massive headache for retailers to deliver a pair of shoes the same way?

Of course, there are plenty of reasons why. The existing retail and delivery network is a mess; retail chains aren’t logistically or financially set up to support that type of cost structure. The list goes on, but ultimately those excuses don’t matter. If consumers want it, they’ll flock to those who offer it. Which means retailers need to make some tough choices.

A decade ago, we started talking about how online retail would dominate everything — now more than half of all online shopping experiences in the United States begin at Amazon. Now, the next step is happening. If retail wants to stay relevant, it has to offer same-day delivery. And not just same-day delivery. It has to offer same-day delivery with the same type of rapid deployment and tracking that anyone can get in an UberEats’ app.

This is really the last true pain point that’s holding retailers back. A study  conducted in 2018 found only 3 per cent of retailers with both a physical and online presence offering same-day shipping. Just consider these statistics from Roy Morgan:

  1. Nearly 2 million Australians use delivery services of any three-month period
  2. The average waiting time is 32 minutes
  3. 97 per cent of Gen Z shoppers abandon their online shopping cart if they aren’t happy with delivery

It’s that last one that should have you worried.

The good news is that this isn’t as expensive a venture as it once was. True, same-day shipping can be achieved; but it comes at the cost of rethinking some of your existing business practices.

Here’s what you need to change:

Turn your Stores into Fulfillment Centres

It isn’t enough to just consider how back-end inventory systems can be consolidated and connected. Instead, stores need to turn into fulfillment centres for modern delivery programs.

Shops need to fit differently into your cost structures, going forward. Think beyond normal profit and loss.

Offer more Shipping Options

The conversion rate for online shopping carts drops like a cliff as fewer shipping options are offered. Plug into as many networks and providers as you can.

Make Returns Transparent and Easy

Put this front and centre in your shopping experience — make returns easy. Give customers nothing to lose by buying from you.

Remember, this is an expectations’ game that you can’t afford to lose. Your customers are judging you against every piece of technology, not just in your industry. This is an attention and convenience game, and the more you can provide them what they want, the more often you’ll win.

Feature Image Credit: Pixabay 

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Co-Founder, Shippit

Sourced from Entrepreneur

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