Stop iterating and start innovating.
That was the general theme of Wednesday’s inaugural Emerge conference from Onestop Internet, held at Google’s Los Angeles campus in Venice, Calif. A crowd of about 100 executives from apparel, retail and technology services companies descended on the binoculars-shaped compound for the summit.
“Technologies have proliferated pretty dramatically,” said John Tomich, chief executive officer of Onestop, which builds out online stores and handles fulfillment for companies.
Yet, many retailers and others online are still introducing services and digital features that only build upon old ways of doing business, pointed out Brian Solis, a principal analyst at research firm Altimeter Group. “We’re bringing to the customer all this rooted legacy…that’s ruining the experience for the new customer,” Solis said.
Dumping an entire catalogue’s contents online and calling it e-commerce is an example of what won’t work for the new breed of customer, he said. This new consumer is ageless and has developed shopping habits anchored in the “ego-system,” as Solis dubbed it. And the primary trait of this habit is that customers want product when they want it.
“The on-demand economy is more important than the sharing economy,” Solis added.
And there are other challenges, too. Millennials and the digital-age customer can’t be as easily swayed as previous generations of buyers. “Consumers are becoming increasingly difficult [for marketers] to influence,” said Alexis Fritzsche, Google’s agency development manager.
Still, digital is where the opportunity lies, Tomich said. “There are more channels, more people and it’s more expensive from a media standpoint to acquire those customers,” Tomich added.
Successful brands are the ones that know how to stop thinking only about online shopping carts and are able to sift through big data sets, and then make informed and strategic decisions based on the information. “The shopping cart functionality is becoming quite ubiquitous,” Tomich said. “The value is really in the ecosystem and the data.”
It comes down to refining traffic, product and pricing, service and personalization, according to Robert Dillon, Google’s director of global display sales and strategy.
Traditional views of in-store traffic patterns and pricing has now been forever altered by digital because product and information is available on demand via the Internet and social media. Moreover, the rate of change has accelerated with mobile commerce. “This little device,” Dillon said referencing a cell phone, “has dramatically changed the shopping landscape and it will never go back the way it was.”
“Mobile moments” — Google speak for that point in time when mobile queries surpass desktop — had its own moment last year when said instances occurred across a number of categories, including shopping. Mobile queries overtook desktop on Thanksgiving and on Black Friday as well as the following Saturday and Sunday of 2014. The one exception remains Cyber Monday when most shoppers are at work.
And the time people are spending with digital has gone from about three hours in 2010 to more than five hours in 2013 and it’s now coming up on seven hours, Dillon said.
Meanwhile, some retailers are innovating by building better bridges between digital commerce and the more traditional bricks-and-mortar experience.
The Adidas and Intel partnership on adiVerse is one example, Dillon said. The adiVerse digital display’s wall of shoes boosted the number of stockkeeping units in-store without having to keep the actual inventory on site. Customers can rotate a shoe or cleat or view the item in multiple colorways. The adiVerse technology takes the average 200 sku’s in Adidas stores and enlarges the offering to about 4,000 sku’s. And the topline results are staggering: stores that have the display have seen a 45 percent increase in overall sales.
Staples, Dillon said, is another example of a retailer that has expanded its inventory without actually growing store’s footprint. The office supply chain added in-store kiosks for online shopping, which allows the company to purchase less inventory and reduce store footprints by roughly 50 percent moving forward.
However, executives at the conference agreed adding technology to stores or on Web sites shouldn’t be done just for the sake of being digital because customers ultimately dictate the rate of technological changes at the end of the day.
Following that general rule is how Homes.com has managed to drive mostly organic traffic to its site. The online home shopping resource sees more than 20 million visitors to its Web site monthly and most of those people are still accessing the site from desktop computers. Should that shift to mobile in the next few years, Homes.com will follow suit, said Grant Simmons, vice president of search marketing.
“We’re following the users,” Simmons said. “We’re not defining what the users should use.”