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From Omnichannel to Customer Experience: Insiders Discuss the Good, Bad, and Ugly Ahead for E-tail

Posted by Lisa Roberts at 10:11 am in Merchandising, Personalization
the good the bad and the ugly title

Last year saw the emergence of a number of retail trends that will have a significant impact on e-commerce in the years ahead, most notably the broader push of mobile payments with the release of Apple Pay and emphasis on personalization across channels for brands and retailers.

Even though we’ve seen more and more major brands significantly investing in technology over the past year, 2014 also revealed some major frustrations with the space. The online and mobile shopping experiences are still really only being defined, and if we are being honest, their experiences are far from ideal. Online conversion rates still hover below 5% on average, and cart abandonment continues to rise, reaching as high as 74% average last year.

With this in mind, we asked several industry experts and veterans what opportunities they were most excited about in e-tail right now, and what challenges and difficulties still existed.

 

The Emerging Opportunities

One of the interesting trends that we heard from a number of insiders that excited them when looking ahead was improved correlation and optimization between online and offline efforts, even for companies that originated as digital first.

“What most excites me is the way the natively digital brands, or perhaps what we might call ‘digical’ brands (digital first and physical second), has moved from a crazy idea a few individuals had some years ago and become an emerging movement,” offered Andy Dunn, Founder and CEO of Bonobos and founder of Red Swan Ventures.

Dunn adds that the mix of content and commerce working together also presents an opportunity that is only now beginning to be realized successfully, pointing to what one of his angel investments, Into the Gloss, is accomplishing with their store, Glossier, as well as their offline pop up store efforts.

A lot of the discussion focused on where omnichannel approaches are heading, the good and the bad.

“In fashion retail, the continued growth of pure play retailers taking segment growth away from the multi-channel retailers has been very cool,” says Eric Brandt, former VP of e-commerce operations at Express. “It puts into question the public’s real appetite for omnichannel efforts. I think that the omnichannel efforts are necessary, but they may only allow retailers to hold position.”

Scott Lux, former VP of ecommerce and omni channel at Diesel, echoed the sentiment:

“Omnichannel is not something you can just implement and be done,” he says. “Channels have been around as long as retail and it goes back to proving the best customer experience regardless of channel or platform.”

Many of the experts we talked to repeatedly emphasized customer experience, both among those companies that they felt were excelling, and among the biggest challenges that the industry still needs to tackle.

“I still think that Nordstrom doesn’t get the credit they deserve,” says Lux. “They will succeed because they have always put the customer experience and customer service first. From their use of data and analytics, partners, acquisitions, and the culture to try new capabilities all in the name of delivering an amazing customer experience goes unrecognized. To me they are leading the charge in pushing for the most unified and innovative commerce experience.”

 

The Persistent Problems

The growing pains of integrating new technologies and e-tail optimization for major brands were felt most severely in the resulting poor customer experience, and in 2015, our experts expect to see added emphasis on improving that experience, especially in areas of personalization and discovery.

As Lauren Freedman, president of e-tailing.com, expresses, she was frustrated by the “poor user experiences that still persist among some retailers, from search that is nonfunctional hindering finding product; checkout that is hampered by too many clicks; inefficient login tools; and visual dynamics that fail to engage consumers and deliver sales.”

Likewise, Dale Edman, VP of ecommerce at Wasserstrom, feels the biggest challenges still lie in “curation/discoverability — with so much information it’s difficult to find just the right product, in any category. Try to buy headphones on Amazon, there are thousands of choices, all with inherent tradeoffs,” he notes. “How do I discover that unique gift, or item that may not generate the most sales, but be just what I’m looking for?”

That doesn’t mean that the emphasis retailers have put on technology isn’t without merit or opportunity. In fact, rising above the current poor online interactions and offering truly unique customer experiences remains one of the most impactful routes towards differentiation and customer loyalty, if brands are willing to invest the necessary resources.

“A great software engineering team isn’t just possible at a clothing company, but it’s necessary,” attests Dunn. “In a ‘digical’ world, you can’t outsource your technology or make it a second class citizen. It must be an equal partner. Technically this is the full technology stack: this includes data science, dev ops, product management, and user experience teams as well.”

And paradoxically, that investment in technology may be best realized when it disappears from the customer experience altogether.

“Brands like Apple and Burberry are doing some really cool things to integrate tech and commerce, but that said, I think in 2015 we will see some real pioneering brands work to keep that technology out of the view of customers,” offers Rick Wittenbraker, co-founder of Stage One Capital and CMO at Howler Brothers. “In a world increasingly filled with wearable technology and the ‘Internet of Things,’ I think many consumers will find refuge with brands that are embracing them as people and not living metrics. Be intelligent and use technology, but don’t let it get in the way of developing customer interactions.”

“Engage with content, relevant discussion and value-add service that build loyalty, affinity and dependence upon your niche expertise,” he adds.

As we look at what to expect this year in e-tail, customer experience — whether through improved search and discovery, more attuned personalization, exciting online/offline integrations, or simply more intuitive design and development — strikes as both one of the biggest pain points facing the industry and one of the greatest opportunities for brands to excel.

“We have nailed efficiency online, but the sizzle of the selling floor is still not perfected online, to truly excite the consumer in a way that a properly merchandised store can accomplish in an instance,” says Freedman. “Maybe that’s not the goal, but I think there’s a missed opportunity.”

Request a demo to see how Edgecase is addressing these opportunities and challenges.

lisa roberts
ABOUT THE AUTHOR

Lisa Roberts is a 15-year Ecommerce vet who’s worked with technology innovators, including Edgecase, who are building real solutions for hard retailer problems. Her experience working inside a retailer, agency-side and vendor-side give her a unique perspective on how to innovate at the pace of consumer evolution while remaining focused on delivering proven results.

Follow Lisa Roberts on Twitter @lisadoesaustin

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