Shopper Culture

The Role of D2C in an Evolving Commerce Market

For many years, direct-to-consumer (D2C) was the unicorn aspiration of brand and marketing managers in the western world. Having people care enough about a product to seek it out online was a tease that compelled  many brands to collectively waste billions in investigating a way to have a direct commercial relationship with your customer.

The goal was obvious. Cut out the middleman. Access full margin, data, and consumer information. Create a reason for that expensive, under-performing website we so lovingly built.

We saw mainstream brands of all kinds, from beauty to beer, rushing to create "active online relationships" with a view to one day commercializing them through direct purchase and delivery.

People love their beer. In fact, it’s one of the few fast-moving consumer goods (FMCG) categories where people love the brands. But that love is at the bar, in the fridge, in a glass or bottle on a warm summer afternoon, in the moment. It doesn’t extend enough to want to order directly from the brand (unless they're selling a keg, then, well, maybe).

Recent data shows online marketplaces are consumers' preferred places to shop. This preference underscores the reason that D2C remains a unicorn for most brands. Choice is a key driver of the chosen retail environment. It doesn’t have to be large, just relevant (and ideally curated) choice. D2C does not offer choice, while online marketplaces do.

The Back to School Issue of The Checkout is Now Available!

This year's Back to School issue of The Checkout explores how the rise in eCommerce is impacting the back-to-school and back-to-college shopping season. 

Who is back-to-school shopping on Amazon Prime Day and what are shoppers buying online?  What online methods are consumers using to plan for their shopping trips? Are shoppers using new services such as grocery delivery or voice-activated shopping for their back-to-school needs?  

In this issue, we answer these questions and highlight three key trends influencing the back-to-school shopping season:

1. Amazon Prime Day has become the unofficial kickoff to the back-to-school and back-to-college shopping season

2. Back-to-school shoppers are price-focused shoppers 

3. Younger, multicultural shoppers are leading adoption of new eCommerce services 

For answers and more information on these trends, download the 2018 Back to School issue of the The Checkout here. 

Image Source: Unsplash  

Audio Fashion: Using Music to Personalize Shopping

The menswear company, Eison Triple Thread, just released an app that recommends its users’ clothes based on the music they listen to. The app connects to a user’s Spotify account and analyses their ‘most liked’ music genres and favorite artists. With this information, the app claims to understand the emotions behind a user’s style choice with the ability to recommend the best possible fashion style for them. This is just one of many ways personalized commerce is manifesting in the world.

As personalization continues to grow and evolve in commerce, people will expect services to create individual experiences. Accor Hotels used traveller’s biometric data to suggest their ultimate destinations. L’Occitane is using machine learning to personalize their mobile site. These as well as the Eison Triple Thread example shows there are a multitude of ways to infuse personalization along the shopper journey.

Contributed By: Lukas Quittan, Integer London

Image Source: Unsplash

Alibaba’s New AI Stylist Reshapes Fashion Retail

Alibaba is no stranger to retail innovation. The Chinese company, after all, is one of the highest grossing e-commerce retailers in the world and behind new happenings like the prominent shopping holiday Single’s Day. This July, however, Alibaba propelled retail in a surprising direction: Artificial Intelligence.

Alibaba has released what it calls an “AI stylist,” installed as part of a concept store in collaboration with American clothing brand Guess. From July 5-7 at Hong Kong Polytechnic University, passersby were free to roam the collection and, of course, seek recommendations on their garments from the digital stylist.

The AI boasts a set of cutting-edge features, most notably a “smart mirror,” a virtual shopping cart, and of course, intelligent style recommendations. With compatible product tags attached to store merchandise, the smart mirror is capable of recognizing an item — including its color and size — and displaying these details on an accompanying screen. The virtual shopping cart, on the other hand, enables shoppers to select merchandise and seamlessly add it to a virtual shopping cart, eliminating the need to physically carry items around the store. The AI stylist even offers recommendations to shoppers based on items that shoppers have previously picked up or bought.

This intelligent fashion stylist has two main implications for shoppers, as well as Alibaba.

Glossier: A People-Powered Beauty Ecosystem

Trailblazing an on-site social commerce model, the beauty company Glossier has broken the conventional rules of online shopping. Where traditionally most retailers and brands have focused their eCommerce ecosystem on breadth of choice, Glossier has brought a consumer-centric experience to life, offering breadth of connections.

A New Method to Lure the Customer

Taking the good of the in-store shopping experience, accounting for the bad, and adjusting to build the best place for customers to visit, learn, engage and shop in the world, Glossier has taken their brand out of the equation. Glossier's business model empowers customers to share their knowledge with other customers. Why? Because what a brand says about a product no longer matters. What matters is what the customers say.

Glossier’s original platform, intothegloss.com, provides a community for skincare seekers to connect with peers sharing similar needs within the world of beauty. Users can access interviews with ordinary people providing tips, tutorials and product reviews for a variety of brands across the category. Whether you want to know “How To Do Your Makeup In the Heat” or hear tips for healthier skin from an organic facialist, ITG serves as an authentic content haven.

GDPR: Its Impact On Shoppers and Marketers

The General Data Protection Regulation (GDPR) goes into effect on May 25, 2018. Created to provide more control and better privacy protection to European Union residents, the GDPR compliance regulation affects all companies that are either marketing to or collecting data from EU consumers.

What US Marketers Need to Know?

Even if you work on US brands, your marketing may still be reaching shoppers from the EU—in fact, the terms used in the legislation are “data subject” and “natural persons,” which include non-citizen residents of and visitors to the EU for the duration of their stay. Therefore, consider that your next email promotion could reach U.S. citizens who are traveling or spending time living abroad and be subject to this legislation.

Also keep in mind that the GDPR can apply to brick-and-mortar as well as e-commerce. For example, shoppers paying with a credit or debit card, providing personal information such as a name or shipping address, or participating in a customer loyalty program can all fall under GDPR protections.

As far as financial penalties, non-compliance can lead to a maximum penalty of 20 million euros or 4% of your total global revenues, whichever is greater.

What Can Shoppers Do?

Taking Back Control of the Omnichannel Purchase

We’ve moved beyond the age of eCommerce as being a separate entity from brick-and-mortar retail. Increasingly, the two are becoming one and the same, influencing decisions across channels and even individual retailers. Shoppers no longer think of eCommerce and in-store as separate experiences or merely transaction points, and as marketers, neither can we.

We can see this in recent statistics concerning Click-and-Collect (or buy online, pick up in store) shopper behavior, which shows that after making selections online, 69% of shoppers will purchase additional items in store when picking up their online purchase.

Or consider mobile search in store, which we’ve seen develop as a standard shopping behavior over the past several years. As Bloomberg reported this past holiday season, 49% of shoppers will first turn to Amazon.com for a product search. From our research, we know these searches often happen in conjunction with an in-store experience when shoppers are in the aisle.

It might seem challenging to start meeting shoppers everywhere at every touch point with relevant content to move them to transaction. However, there are two fundamental steps brands are taking to ensure they’re guiding today’s eShopper in just the right moments.

1. Enhanced Content

Amazon started incorporating a more advanced version of its “A+” manufacturer content this year, which includes enhanced content like engaging videos, beautiful imagery, and other immersive content that allows product pages to feel like native brand experiences.

Amazon Continues To Reshape The Retail Landscape

Amazon is testing “free 2-day delivery” using its own shipping service in Los Angeles, signaling even further displacement of online retail by shifting more control of the shopping experience and e-commerce channel to Amazon, which already owns 43% share of the market.

What many do not realize is that this is not a new initiative. Amazon started developing this latest enhancement in shipping capabilities two years ago in India with the goal of lowering costs and relieving warehouse backups. Even more importantly, the move not only gives Amazon greater control over more of the touchpoints affecting customer experience, but also provides wider options to merchants using the platform to sell products locally.

In the near future, it will not just be mail carriers who will feel the pressure to deliver; retailers will continue to lose sales to Amazon, which has more power to drive lower costs and convenience for customers. In the meantime, while Amazon makes the move to grow its logistics and operations capability, other carriers like UPS and Fedex have already expanded their own local and regional capabilities by partnering with convenience stores and other locations that hold packages and allow for safe pickup – offering more flexibility to customers who may not want a stack of boxes sitting on their porch.

What all of this means for shoppers is that prices will continue to fall for basic necessities found on Amazon, while specialty stores like The Home Depot will maintain themselves as destinations for those looking for specific items. Meanwhile, retailers like Walmart, which have the size and scale to compete on price, will continue to thrive while smaller stores may be forced to find an e-commerce niche to continue their relationship with customers.

Contributed By: Dennis Wakabayashi, Integer Dallas

Image Source: Amazon Press Kit

New Year, New Resolutions for Shoppers and Retailers

The new year is a time when consumers reflect and reset goals for the year. It's also a time when we see shopper behavior adjust, reset and get back on track with routine.

But 2018 is bringing about change not just among consumers and shoppers but also among retailers.

CVS announced is will end airbrushing in ads for its beauty products while Walmart announced closure of over 60 Sam's Club stores to help put focus more on ecommerce operations. Will shoppers be inspired to change their ways knowing that these retailers are as well? We'll have to see what 2018 has in store.

Contributed By: Kira Walstrom, Integer Denver

Image Source: Stock Snap

The Checkout: Holiday Edition

This year’s Holiday Checkout issue helps brands and retailers connect with consumers at the right time, on the right channels, and with the right message. We delve into three main topics: differences between men and women, mobile behaviors among general consumers, and habits of digitally-savvy Hispanics. By examining what consumers are thinking, feeling, and doing across the customer journey during the holiday season, we reveal low-hanging fruit on ways to improve audience targeting and engagement.

This issue brings to life the differing value equations that men and women have around quality, cost savings, time savings and experience. Additionally, we explore the exponential growth of mobile phone usage—115% year-over-year—during the holiday shopping season. When seeking information on what to buy, time-crunched consumers are going to their phones and have high expectations for their experience on digital interfaces. Hispanics, specifically, are bona fide digital deal finders, especially when it comes to offers delivered via their mobile phones, email, and social media. Find out more by downloading The Checkout: Holiday Edition.

How Brands Can Optimize for Seasonal and Commercially-Driven Events Like Prime Day

Retailers and brands are not just focused on getting their fair share of major holidays, they are finding ways to make the most of the down season. Prime Day is one such example. These new "holidays" can have a big impact on brands, so how can brands optimize their presence during these events?

Integer's eCommerce thought leader, Nicole Vinson, joins Profitero's Keith Anderson to discuss just this on the Profitero Podcast Series. Click here to listen to the podcast which covers topics including:

• How brands can optimize for seasonal and commercially-driven events like Prime Day
• Why prioritizing product content for mobile and voice devices is becoming so important
• Emerging marketing and merchandising vehicles that brands can leverage, such as Amazon Media Group (AMG)

Image Source: Profitero Podcast

The Checkout: Back-to-School

More shoppers will be getting out their wallets this back-to-school season; 67% of shoppers report that they will be doing some form of back-to-school shopping this year, up from 57% in 2015. And while most of this shopping will be done at mass retailers such as Walmart or Target, online retailers like Amazon are starting to gain a larger share of back-to-school dollars.

Back-to-school shopping will see some other changes this year--many of which are lead by younger shoppers and their desire for experiences and tech-savvy nature. We are seeing more shoppers prioritize things like fun back-to-school shopping experiences, and Online has received the highest satisfaction score of any channel.  

To find out more about shopper behaviors during this back-to-school shopping season, download the most recent issue titled The Checkout: Back-to-School found here. 

The BTS Retailer Race

Back-to-school is one of the most important seasons for retailers, and this year is no different. Historically, mass retailers like Walmart have captured the most shopper traffic with 64% of shoppers indicating it's their primary BTS shopping destination according to last year's back-to-school edition of The Checkout. While mass will likely maintain its position as number one channel this year, it appears that others channels are gaining traction during this season. 

For example, Amazon is reporting 35% year-over-year growth in just the first two weeks of the season. The retailer anticipates growth as high as 80% this season, a huge jump compared to last season's sales growth of 20%. Beyond online, other non-traditional channels like drug and dollar are also upping their BTS game. Walgreens introduced the Me to We program this year that allows shoppers to purchase the for-profit’s school supplies and then track the impact they are making by entering an on-pack code on a dedicated website. While Dollar General created a dedicated BTS section of their website that features deals and ideas on things including lunch boxes, fashion, and supplies.

With so many options for where to shop for BTS and so much retailer support, it can be hard for today's busy family to choose where to shop. Will shoppers stay true to mass or we will begin to see shoppers start to spread their spending across various channels? It may depend on the value the retailer brings to shoppers. Are they offering convenience like Amazon? Support like Walgreens or value like Dollar General? With so many options and the high paced lives of today's shoppers its very likely shoppers may seek out different retailers for different BTS needs.

Image Source: YouTube Walgreens video

The Interconnectivity of Our Smart World

“Related to items you’ve viewed...”

“You may also like…”

“Top picks for you…”

These are just a few of the phrases shoppers encounter when browsing the web as online retailers use data and technology to deliver a hyper-personalized shopping experience. Online retailers are also providing convenience through offerings like two-day shipping and one-click ordering. Shoppers are growing accustomed to this level of personalization and convenience.

As a result, brick-and-mortar retailers are working to meet shopper expectations by adding technology to their stores. For example:

• Walmart is testing robotic shopping carts that scan shopping lists and lead shoppers to the corresponding items.
• Lowe’s is using augmented reality to create an in-store navigation app.
• Fashion label Rebecca Minkoff is leveraging RFID and digital touch screens in its high-tech dressing rooms.

These tech-driven in-store innovations show no sign of slowing down as shoppers grow more receptive to technology. They also provide retailers with an opportunity to collect shopper data and use it to enhance the in-store shopping experience. As technology continues to make its way in-store, how will the shopping journey change?

To read more about this and the examples noted above, download our white paper, 10 Years in Shopper Culture, here. 

Image Source: Chain Store Age

The Innovative Power of Amazon

Amazon originally set out to disrupt the way we consume literature, but the company has grown into an eCommerce giant with an abundance of capabilities. Amazon still influences our content consumption, but it also affects the way we shop and go about our daily lives. Shoppers have grown accustomed to the array of products and consumer reviews on Amazon.com as well as its signature two-day shipping. They’re even starting to welcome Amazon into their homes in the form of the company’s AI assistant, Alexa.

Amazon is now making its way into the brick-and-mortar space, purchasing Whole Foods and testing physical concepts like Amazon Go. At the same time, traditionally brick-and-mortar retailers are expanding their eCommerce capabilities to combat the growing competition from Amazon. Many of these shifts are convenience-focused and creating more on-demand options for shoppers.

To read more about the innovative power of Amazon over the past 10 years, download our white paper, 10 Years in Shopper Culture, here. 

Image Source: CNET