Last week, BoF and Shopify invited industry leaders to a guided discussion on how to optimise retail networks. The event was designed to create a forum in which retailers could share experiences with their peers and identify the prevalent themes facing the retail industry, before discussing best practices in tackling them.
Combining BoF’s independent analysis with data-driven insights drawn from Shopify’s partnership base, which now represents 10 percent of the total global e-commerce market share, the group discussion sought to shed light on how networks can be transformed to become customer-centric, channel-agnostic and agile enough to capture growth opportunities.
Hosts Imran Amed and Harley Finkelstein were joined by C-suite representatives from Allbirds, Farfetch, Depop, Kering, Nordstrom, Ralph Lauren, Warby Parker, Neiman Marcus, A-Frame, Altuzarra and Rent the Runway.
A number of key themes emerged from the discussion conducted under Chatham House Rules, which precludes the attribution of statements made by specific individuals or companies. Following the conclusion of the third executive roundtable, BoF and Shopify will publish the 10 most impactful insights garnered from the series, to share industry-specific thought leadership that can assist the fashion and retail industry in navigating continuing disruption and transformation.
Now, BoF shares some highlights from the first executive forum: How to Optimise Retail Networks.
Increase Operational Flexibility in Retail Networks
Providing customer choice is now a critical consideration for success, requiring retailers to increase flexibility and agility across sales channels, operations and points of access. For instance, 54 percent of consumers have shifted more of their spending online since the pandemic was declared in 2020, according to Shopify’s The Future of Commerce 2021 report.
The forum began with a discussion about the long-term necessity of bridging online and offline commerce, with examples of operational strategies including BOPIS and BORIS — buy online, pick up in-store, and buy online, return in-store. While popular retail strategies that leverage empty stores and under-utilised staff during national lockdowns, attendees spoke about the longevity of the solutions post-Covid-19, with one participant asking: “How can we spin out more distribution centres for what might be the next pandemic or crisis?.”
The conversation moved on to discuss social media’s role in connected retail strategies, with Shopify’s The Future of Commerce 2021 report finding 28 percent of young consumers — those aged between 18 and 34 — purchased via social media. One attendee said their business had “dabbled” in Instagram checkout, but that it proved immaterial and inconsequential to the business. However, participants acknowledged that while social commerce is still only nascent in the West, it often attains the highest conversion rates for APAC businesses, especially in China with the ubiquity of WeChat.
The evolution of traditional attribution models applied to digital commerce as an entity, beyond social media, led one attendee to say how aspects like store revenue attribution are “measures of the past yet something we’re still held to account by.” Instead, they proposed different measures of attribution, linked to storytelling.
Reconsider Store Performance Metrics to Include Media Value
Attendees later discussed how they measure in-store success, which has evolved as retail stores are increasingly seen for their media value and role as community hubs with service touchpoints and spaces for immersive experiences. The value of success varied across attendees, but all played a role in the financial justification of bricks-and-mortar.
One participant focused on the role the store plays in understanding customer satisfaction both on and offline, measuring consumer experiences through NPS (Net Promoter Score) as their criteria for success and performance metric. “We usually send a survey in the days after the transaction and measure it online and offline” they said. The data collection then provides an additional opportunity to re-engage customers.
The physical store [can] provide powerful data capture on consumers’ paths to purchase and shopping habits.
The conversation moved on to highlight the physical store’s ability to provide powerful data capture on consumers’ paths to purchase and shopping habits, and the role the store might play within that journey. An app, for instance, can enable store associates to interact with consumers and track the role bricks-and-mortar might have played in enabling an online sale after visiting a store. The emphasis is placed on the experiential piece within the consumer’s journey, with the store a point of inspiration and community if not where the point of sale occurs, which “justifies the physical location.”
While other attendees said it could create a “negative experience” if a consumer leaves a store empty-handed, they also noted their stores’ impact on driving market awareness, customer acquisition and increased sales online after opening a store in a new location.
Amplify Impact of Store Associates Through Technology
As one participant said, “a lot of what underlies our brand and customer is the relationship they have with a sales associate.” With pandemic-enforced store closures leaving store associates unable to uphold that relationship in person, their role rapidly evolved to maintain customer experience and engagement, enabled through technology.
Many businesses turned to online communication tools and apps to connect associates directly with the end-consumer, requiring retail associates to upskill and use such platforms — but the upkeep of consumer relationships online ensured the survival of many businesses. Shopify for one enables its merchants to have their own online chat function, and the sales attributed to this chat tool increased by 185 percent from March 16 to July 1, 2020.
Whether interactive clienteling saw associates assist in digital styling advice or complete sale transactions, retail associates can still provide a service to have that continuous relationship that was independent of location. “The way the customers felt that service and brand came through was massively enabled by technology and that carried us through the pandemic so successfully,” said one attendee. “That continuity across channels has been maintained.”
Finally, the conversation circled back to the theme of bridging the gap to online and offline — but from the store associate perspective. For one attendee, the main challenge lay in the “animosity between stores and e-comm,” leading them to figure out new ways of incentivising the retail staff with a commission structure. The discussion moved on to the role education played in helping sales associates feel like an online sale is equal or as good as a sale in-store.