The Future of Retail Part II: Retail as an Experience

Posted on by Jennifer Ryan
BORN Views
The Future of Retail Part II: Retail as an Experience

We continue our exploration of the current and future shape of retail around the globe as brands commence the lengthy road of recovery for some and normality for most.

What will the new retail landscape look like? Now that the wide scale lockdowns are mostly over, supply chain issues and staffing woes still abound, hampering a return to retail as we knew it. How will brands adapt to these new consumer behaviors and are they here to stay? Read on.

Physical Stores Still Have Their Place

Despite the normalization of online shopping and home delivery during lockdown, many consumers were counting the days before they could walk through the doors of physical stores again. Tomorrow’s retailers still need to win hearts and minds in the real world and shouldn’t give up all their store space just yet. 

One of the reasons for this might be just how much people love browsing. Shopping online tends to be goal-based and transactional, but people browse in-person not only because they need something, but because they enjoy it. A study by Michael Guiry,1 Associate Professor of Marketing at West Chester University of Pennsylvania, suggests that for some of us shopping forms part of our self-concept, cementing, and playing back, our ideas of who we are. Although customers appreciate the best efforts of online retailers in creating browsing journeys, they are still only a facsimile, lacking in the excitement and sensory details that are so much part of the experience in real life. 

For all the news headlines on the rise and rise of online shopping, most retail is still taking place in physical spaces. In the US, by February 2021 it had settled at around 15% of sales.2 And although many retailers have closed branches and reduced shoppable space they’re unlikely to get rid of it completely. The digital and physical stores of the future will have a symbiotic relationship, with digital driving footfall to physical stores that support online sales.

A Future Of Experiential Retail

Real-life shopping at its best isn’t just about making a transaction, it’s about entertainment, about entering a different space and socializing with friends, family, and community. Physical retailers can offer many of the things we’ve all missed during the pandemic: the excitement of new discoveries, human connections, personal service, sensory moments. These experiential retail experiences, powered by new technologies, will be center stage in the next couple of years as retailers try to tempt consumers back, and with footfall likely to be reduced, they will be looking to squeeze every drop of value out of the customers who come through the door. 

For example, Nike, always ahead in experiential experiences, have launched Nike Rise in Guangzhou, China and in Seoul, South Korea: technology-driven retail hubs that work with the Nike App to create experiences powered by customer data.3 Dick’s Sporting Goods in the US opened its biggest-ever store in the spring of 2021 in a bid to drive deeper engagement with customers. The ‘House of Sport’ site in Victor, New York includes an indoor rock-climbing wall, golf driving bays and a putting green, as well as a health and wellness shop and a track and turf field.4 

In London, with the pandemic still on everyone’s minds, Lush’s redesign of its Oxford Street store includes tech innovations imported from its Shinjuku store, with QR codes and video displays creating an interactive experience that doesn’t have to be hands-on – no mean feat for a cosmetics retailer.5 Meanwhile, shopping mall Westfield London is launching Situ Live, a ‘discovery playhouse’ where customers can try out new products.6

In the post-Covid world, retailers will be looking to use technology to examine footfall, drive sales and create new customer experiences. LiDAR technology uses infrared light to sense movement, meaning that retailers can measure footfall and dwell time as well as analyzing the success of visual merchandising and customer engagement, tracking individuals with no loss of privacy as only an outline is ever recorded. Simultaneous Localization and Mapping (SLAM) technology can help anyone with a smartphone navigate around a mall, but it can also be utilized by furniture retailers. IKEA’s newly revamped IKEA Studio app not only enables the user to see a chosen piece of furniture in situ in their home, it allows them to redesign the entire room.7 In-store QR codes can provide product information, special deals or an easy way to buy online in a bid to lessen the practice of ‘showrooming’, i.e. looking at goods in physical stores before buying them at a lower price from an online competitor. 

Local Shopping For Local People

Repeated lockdowns and the shift towards home working has meant a new focus on shopping locally. In the UK the number of independent stores grew in the first half of 2021 for the first time since 2017,8 able to take advantage of government support measures, such as business rates relief and furlough schemes, as well as deals on rent offered by landlords keen to fill spaces vacated by failing chain stores.

There’s an opportunity for local main streets to evolve to serve new needs: a return to the times before out-of-town malls and retail parks. Even before the pandemic, city planners across the world including Paris, Barcelona, Portland, and Melbourne were responding to climate change by encouraging ‘15-minute cities’, creating blocks where people can access all their everyday services within a short walk or bike ride, reducing traffic and pollution and creating more space for trees.9

Larger chain retailers are already responding to new patterns of hybrid working. In the UK Sainsbury’s has recently announced a new partnership with Itsu, Leon and Wasabi, trialling ‘lunch stands’ across 300 stores, aimed at consumers working from home or in the office. Sainsbury’s Food for Later category planner Frances Hughes said: “As a hybrid style of working becomes more normal, we’ve been working hard to analyze customer needs when it comes to their lunchtime meals…the introduction of the in-aisle lunch stand makes it easily accessible for anyone to pick up an affordable and balanced meal, no matter what your daily ritual is.”10

Downtown Areas Need New Purpose

Downtown areas that were once busy with office workers are significantly quieter since the pandemic. In the future they will need to find new reasons to attract visitors and fill space, with shops, grocery stores and restaurants alongside medical centers, community, leisure, housing and workspace. 

There needs to be a greater emphasis on flexibility and sharing, finding purpose for underused spaces, and providing the amenities that communities need, supporting small businesses, creatives and social enterprises who might otherwise find it impossible to have a physical presence. And it’s the perfect time for experimentation, finding out what works as we move into our post-pandemic future. In some ways the lasting effects of Covid could give a new lease of life to physical retail locations that had been declining over the years. 


But it’s not just down to stores and other businesses to create the successful downtown shopping areas and main streets of the future. Governments and landlords will need to work with them to create areas suited to local communities and their changing needs. They also need to relook at rates and rent models that have decimated businesses unable to operate during lockdown. The alternative is yet more businesses going under, boarded-up shops and the hollowing out of retail areas. Some landlords have already offered their retail tenants turnover-based rents in a bid to save main streets. In the UK, the government are under pressure from within their own party to reform business rates, and the opposition Labour party has already announced their wish to scrap them in favor of a new system that increases the digital services tax on tech giants.11

Footnotes

  1. Defining And Measuring Recreational Shopper Identity, SpringerLink, https://link.springer.com/article/10.1177/0092070305282042
  1. State Of Retail, National Retail Federation, https://nrf.com/topics/economy/state-retail
  1. Nike’s Latest Retail Concept Powered By The Pulse Of Sport, Nike News, https://news.nike.com/news/nike-rise-retail-concept
  1. Dick’s Sporting Goods Just Opened A Massive Store With A Virtual Driving Range And Outdoor Track. Here’s A Look Inside, CNBC, https://www.cnbc.com/2021/04/09/dicks-sporting-goods-new-store-has-a-driving-range-and-outdoor-track.html
  1. In Pictures: Lush Oxford Street Reopens With Innovative Global Concepts, The Industry.Fashion, https://www.theindustry.fashion/in-pictures-lush-oxford-street-re-opens-with-innovative-global-concepts/
  1. “It’s Not A Store, It’s A Venue”: How Situ Live is Transforming The Way We Shop, Charged Retail Tech News, https://www.chargedretail.co.uk/2021/05/19/its-not-a-store-its-a-venue-how-situ-live-is-transforming-the-way-we-shop/
  1. IKEA’s Fancy New App Lets You Design Entire Rooms, Wired, https://www.wired.co.uk/article/ikea-studio-ar-app
  1. Independent Retail Sector Returns To Growth, Drapers, https://www.drapersonline.com/news/independent-stores-benefit-from-chain-closures
  1. The 15-Minute City – No Cars Required – Is Urban Planning’s New Utopia, Bloomberg, https://www.bloomberg.com/news/features/2020-11-12/paris-s-15-minute-city-could-be-coming-to-an-urban-area-near-you
  1. Sainsbury’s Launches News In-Aisle Concept With Over 20 Lunch Meals, The Grocer, https://www.thegrocer.co.uk/sainsburys/sainsburys-launches-new-in-aisle-concept-with-over-20-lunch-meals/660142.article
  1. As Macy’s and Sephora Flee the Mall, Will Other Retailers Follow?, The Motley Fool, https://www.fool.com/investing/2020/02/13/as-macys-and-sephora-flee-the-mall-will-other-reta.aspx

The Future of Retail Part I: Navigating Today’s Landscape

Posted on by Jennifer Ryan
BORN Views
The Future of Retail Part I: Navigating Today’s Landscape

Nothing could have prepared retailers for Covid. Since the pandemic forced the first widespread lockdowns in living memory, some have collapsed, the pandemic hastening their demise after a lackluster few years. Others survived but are changing their business models and spaces, looking for new ways to maintain sales and profits. A third set are buoyant, having seen online sales rocket. All have been deeply affected by the events of the last couple of years and are no doubt wondering what the future will bring. 

Whether 2022 sees the last of the lockdowns or not, Covid has changed the way we live and shop for good. The pandemic has not only accelerated digital transformation, it has also necessitated a total rethink of the future of retail in all its aspects: online and in-store, local, downtown or mall, delivered to your door or click-and-collect. Retailers now need to carve out a successful future in this new normal, with agility baked into their operations so they are well placed to respond to changing situations. But what will the new retail landscape look like? Now that the widescale lockdowns are over, what new consumer behaviors are here to stay?

Competition Heats Up Among The Giants: Amazon And Walmart 

Apple, Facebook, (Google) Alphabet, Microsoft Amazon and Walmart all saw huge increases in sales and profits since the start of the pandemic. Amazon saw almost every aspect of their business rise, from web services to streaming to home delivery, accounting for 41% of all US online retail sales in 2021.1 The company has opened Amazon Fresh grocery and convenience stores and is now moving into its own branded FMCG products with Aplenty. Expansion is inevitable, but the brand is keeping quiet about its plans. 

Meanwhile Walmart’s ecommerce sales grew 74%, leading them to hire more than 235,000 store associates2. Having largely left the Marketplace part of the business dormant for some years, it spruced up its offering, undercut Amazon for commission on some items and reached 70,000 sellers, projected to increase 146% by the end of 2022.3 Amazon’s marketplace is still far bigger, expected to have more than 3 million sellers in the US by the end of 2022 and 7.5 million globally according to Marketplace Pulse. But Walmart has physical stores, which means successful online vendors could find opportunities to sell offline too. The company also apparently has plans beyond retail and is aiming to develop its services in advertising sales and healthcare, where it will be jostling for position once more with main rival Amazon. 

A Permanent Shift Towards Online Shopping 

Consumers have grown to rely on online shopping, not only for essentials like groceries and toiletries, but also for goods and services to keep them entertained at home. During lockdown the winners were those businesses who, like Amazon and Walmart, were able to meet the surge in demand while maintaining a high level of customer service, as well as those who could quickly pivot their offering in response to changing customer needs. 

All the surveys and statistics agree that the shift towards online shopping is likely to be permanent. According to IBM’s U.S. Retail Index, the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years.4 A Qubit survey polling 1,500 US and UK customers in July 2021 found that nearly 86% planned to continue shopping as they had over the last 12 months5, despite physical retailers re-opening, and the intent was clear in all age groups. McKinsey reports that ecommerce remains at around 35% above pre-Covid levels.6 But online shopping brings slimmer margins and moving forward retailers will need to find ways of increasing basket spend and keeping warehousing and delivery costs down, as well as creating experiences that keep customers coming back for more.

Creating experiences fit for the future

BORN has worked with several leading retailers to ensure their online customer experiences are optimized for this new environment. Brooks Brothers, America’s oldest retailer needed to become ‘far more than a store’. Now they have reimagined the online experience, removing friction and telling the brand story more effectively. It’s easier for users to discover new products, educate themselves on the options available and become part of the loyalty scheme to reap future benefits. 

Meanwhile, world-leading luxury watch brand Rado needed to create a better experience for mobile. The BORN team redesigned the mobile interface, enhancing the content and navigation to provide a better showcase for products and tackling content management and eCommerce functionality. These retailers are future proofing their online experiences, ensuring that they measure up to customers’ ever-growing expectations. 

Delivering For Customers, And The Environment

Efficient delivery comes at a cost, to customers, the retailer and to the environment. But it’s also key to the convenience of online shopping. What could it look like in the future?

Click-and-collect has solid advantages for retailers, driving footfall to physical stores where customers may make additional purchases as well as being a low-carbon option. Businesses finding themselves with an abundance of space are dedicating an increasing proportion to fulfilling click-and-collect orders. 

Speedy home deliveries are more of an issue. The problem with next-day deliveries is that it means half-empty vans are doing the same trips, sometimes multiple times a day. That ‘last mile’ comes at a high carbon cost. There’s a commonly held view that people will insist on speed, but a study for a major retailer in Mexico found that slower shipping was acceptable to 71% of customers if they were told it meant saving a certain number of trees, calculated to be equivalent to carbon emissions caused by faster shipping.7 The author of the study is hoping that giants like Amazon or Walmart might take note for the future; in the UK ASOS are already offering reduced shipping rates and a discount code for ‘no hurry’ delivery.8  Perhaps consumers who expect super-fast delivery, can be weaned off it in the interests of the environment, at least for the most part. 

Amazon are beginning to invest in electric vehicles for the ‘last mile’, with their robot delivery system Amazon Scout operating in four US states and the business further developing the technology in the UK.9 For an even more futuristic, if rather terrifying option, ANYbotics and Continental’s concept combining driverless shuttle vehicles with robot delivery dogs looks uncomfortably like something from dystopian TV series Black Mirror.10

Footnotes

  1. Amazon Clobbers Competition, Accounting for Over 40% of US Retail Eccomerce Sales In 2021, eMarketer, https://www.emarketer.com/content/amazon-clobbers-competition-us-retail-ecommerce-sales-2021
  1. How Walmart is Responding to Covid-Related Challenges, Forbes, https://www.forbes.com/sites/edwardsegal/2021/09/01/how-covid-repeatedly-put-walmart-to-the-test/?sh=4b190a6617bd
  1. How The Pandemic Helped Walmart Battle Amazon Marketplace For Sellers, Reuters, https://www.reuters.com/business/retail-consumer/how-pandemic-helped-walmart-battle-amazon-marketplace-sellers-2021-04-14/
  1. COVID-19 Pandemic Accelerated Shift To E-commerce By 5 Years, New Report Says, TechCrunch, https://techcrunch.com/2020/08/24/covid-19-pandemic-accelerated-shift-to-e-commerce-by-5-years-new-report-says/
  1. Consumers Plan To Keep Shopping Online, Despite Stores Reopening, Fashionunited, https://fashionunited.uk/news/retail/consumers-plan-to-keep-shopping-online-despite-stores-reopening/2021081257089
  1. US Consumer Sentiment and Behaviors During The Coronavirus Crisis, McKinsey & Company, https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/survey-us-consumer-sentiment-during-the-coronavirus-crisis
  1. How To Shop Online More Sustainably, NY Times Wirecutter, https://www.nytimes.com/wirecutter/blog/shop-online-sustainably/
  1. How Does Your ASOS No Hurry Delivery Service Work?, ASOS, https://www.asos.com/customer-care/delivery/how-does-your-asos-no-hurry-delivery-service-work/
  1. Is Amazon’s Scout Delivery Robot Coming to the UK and Europe Soon?, Pocket-lint, https://www.pocket-lint.com/gadgets/news/amazon/153671-is-amazon-s-scout-delivery-robot-coming-to-the-uk-and-europe-soon
  1. This Robot Delivery Dog Can Bring Your Parcel Right To Your Doorstep, Mashable, https://mashable.com/video/driverless-vehicle-deploys-robot-delivery-dogs

What’s in a name? Facebook, Meta, and trust in the metaverse

Posted on by Jennifer Ryan
BORN Views
What’s in a name? Facebook, Meta, and trust in the metaverse

Towards the end of October 2021 Facebook announced big news: the corporate business was changing its name to Meta, while Facebook the social media platform would remain. 

Mark Zuckerberg has solid reasons for the rebrand. The company needed a broader title, now that it also includes Instagram, Whatsapp and Oculus VR as well as mobile web analytics company Onavo, and Messenger precursor Beluga. Meta reflects a new focus on the metaverse and demonstrates the ambition to lead the way in this future digital realm. As an aside, it’s also worth noting that Facebook the social media site is more popular than ever, but it’s not attracting young people like it used to. A shrewd operator like Zuckerberg knows that it’s better to shift focus when a successful product is at its peak rather than on the decline.

All of this makes sense. First imagined in a 1990s sci-fi novel and conjured up in movies from Total Recall to Wreck-It Ralph, the future metaverse is an exhilarating concept, a place of boundless possibilities and experiences. Zuckerberg wants his company to be its guiding light. Yet many people are sceptical. Was this really the deciding factor for the name change, or was it to distance the business from negative press? 

Trust in Facebook was already low after testimony from whistle-blower Frances Haugen hit the press, telling of polarizing algorithms, understaffing in key areas concerned with safety and a culture that ignored known problems. The rebrand hasn’t helped its cause. A survey by SightX reported that 37.5% of respondents did not believe the name change would bring any real changes to the organization. Many believe it was because of poor public perception, rather than to better fit the company’s future goals and vision. Still, 2022 is a new year and as people start to see the metaverse taking shape they may be more accepting of the reasons behind the rebrand. 

The good, the bad, and the need for regulation

Like Coca-Cola, Facebook the platform is nigh-on universal; open to anyone with internet access. Most of us have been Facebook users at one time or another and have had largely positive experiences. We’ve enjoyed its window into the lives of friends, family and colleagues, the way it has re-connected us with those we had lost touch with and enabled groups of people from all over the world to create communities around niche interests. But there’s no ignoring the bad stuff.

That bad stuff has been coming from all angles. Privacy and a lack of transparency over user data is one issue; the company’s low tax contributions is another. Cloning competitor apps like TikTok (Instagram Reels), and Snapchat (Facebook Stories), has also attracted criticism. Content moderators brought a lawsuit after reporting poor working conditions and post-traumatic stress disorder; some have now been compensated for their experiences. 

But the biggest concerns are to do with the disconnect between Facebook’s mission statement of bringing the world closer together, and the real-world damage caused to individuals, minority groups and sometimes entire nations because the business hasn’t done enough to take down and prevent the spread of fake news and harmful content.

A Wall Street Journal investigation found that changes to Facebook’s content algorithm stoked division and did not do enough to reduce Covid 19 vaccine hesitancy. In addition, Instagram was harming the mental health of teenage girls. UK natural beauty company Lush recently took the radical step of quitting Facebook and Instagram alongside Snapchat and TikTok, citing the negative impact the social media sites have on young people’s mental health.

Comments made by ex-members of Facebook staff together with the company’s own leaked research and that of many other organizations also suggest that not enough is being done to deal with misinformation and malign content. Former Facebook executive Chamath Palihapitiya didn’t pull any punches about the seriousness of the issue, saying ‘We have created tools that are ripping apart the social fabric of how society works’. 

Meta/Facebook stress that they make robust efforts to deal with negative content. The company has just announced the development of a new AI which is quick to ‘learn’ to spot harmful content, rather than taking months of training. 

However, the company has been criticised for placing too much emphasis on reacting to problems and not enough on preventing them. So far, AI does not seem to have been able to spot harmful content before the damage is done. Is it possible to do enough? And how can they be confident about policing behaviour in the future metaverse, with its billions of tiny interactions in every moment? We just don’t know the answers yet. 

Meta’s Horizon Worlds platform may provide a clue as to how moderation of the metaverse might work. Users in this colorful virtual space can report harmful behavior and send recorded data from their device as evidence. They can also activate a ‘safe zone’, a personal space where they can take time out and mute, block, or report users if necessary. Users can be suspended or permanently excluded if they are found to be breaking the rules. Community Guides with their own avatars inhabit the space and keep an eye on things. It’s a mostly reactive rather than preventative approach, but then it’s hard to see how prevention could work. Though some warning signs can be noted, we can’t – yet – predict crime in the way shown in Minority Report.

People might just have to accept that a future virtual world, like social media, reflects society and so will never be perfect. Techdirt editor Mike Masnick put it like this: content moderation is impossible to do well at scale, because in a situation where there are billions of interactions, even if 99.9% of content decisions are ‘right’, the 1% of ‘wrong’ decisions could still represent thousands of negative experience. It will be up to individuals to decide how much time they want to spend in the metaverse and, to a degree, how to keep themselves safe.  

But more regulation will be needed. Businesses exist to make money; it’s governments who must take charge of putting in measures for the sake of the public good. Future metaverse users will be under constant surveillance. VR headsets will be tracking what users see, hear, feel and how they react, both physically and mentally. This puts current concerns about how much Google and Facebook/Meta know about us in the shade. In the metaverse, users could be subject to a constant deluge of exceptionally nuanced marketing that taps directly into the emotions felt during virtual experiences. It needs regulation to ensure that users can control who their data is shared with and always know when they are being marketed to, whether they’re watching a video or talking to an avatar. Somehow, limits for manipulation, whether political or commercial, need to be set, so that people are free to enjoy the metaverse without fear of exploitation. 

The metaverse must be built

The consensus is that the Metaverse should be built by communities, rather than by one corporate entity with a guiding hand at best, or ultimate power at worst. Even Zuckerberg seems to agree, stating in his Meta Founder’s Letter that ‘The metaverse will not be created by one company. It will be built by creators and developers making new experiences and digital items that are interoperable and unlock a massively larger creative economy than the one constrained by today’s platforms and their policies’. Though it’s hard to see Facebook’s name change to Meta as anything other than an attempt to ‘own’ the space. 

Just in 2021, Meta spent $10 billion developing metaverse technologies. The company is creating 10,000 jobs in the EU as part of its growth program. It recently invested more than $50 million in non-profit groups to help ‘build the metaverse responsibly’. Other major players turning their attention to the metaverse are Epic Games, creator of Fortnite, Pokémon Go developer Niantic, graphics technology company Nvidia, blockchain-based virtual world Decentraland, Microsoft, and Apple. 

Meanwhile Elon Musk believes that his own Neuralink brain interface products will eventually offer a better way to experience virtual reality than spending much of the day trying to move around in a VR headset.

So, the issues of the future metaverse, the problems around trust, privacy, transparency, manipulation, and possible harassment are not just Meta’s to solve. All the more reason why it’s important that government regulations keep up with the technology. 

The metaverse will transform our lives. It could enrich our day-to-day experiences, and even reduce our environmental impact by allowing us to be ‘present’ in the office, ‘attend’ concerts hundreds of miles away, and ‘travel’ to see the world’s sites without ever leaving our homes. 

Like the internet in general, and social media in particular, the metaverse will hold a mirror up to our world. There’s extraordinary potential for good, and equally for bad. Meta and others cannot just go through the motions. To create trust, companies need to demonstrate that they are truly doing all they can to keep users safe. 

Above all, metaverse businesses and governments must work together to build the metaverse we want – a creative, inspiring space worthy of exploration, a place where we feel safe and protected, but have the freedom to make up our own minds. 

  1. Founder’s Letter, 2021, Meta, https://about.fb.com/news/2021/10/founders-letter/
  1. Facebook Wants To Attract Young People, But Gen Z Teens Say It’s A ‘Boomer Social Network’ Made For ‘Old People’, Insider, https://www.insider.com/facebook-gen-z-teens-boomer-social-network-leaks-2021-10
  1. This 29-Year-Old Book Predicted The ‘Metaverse’ — And Some Of Facebook’s Plans Are Eerily Similar, CNBC, https://www.cnbc.com/2021/11/03/how-the-1992-sci-fi-novel-snow-crash-predicted-facebooks-metaverse.html
  1. Facebook Whistleblower Hearing: Frances Haugen Calls For More Regulation Of Tech Giant – As It Happened, The Guardian, https://www.theguardian.com/technology/live/2021/oct/05/facebook-hearing-whistleblower-frances-haugen-testifies-us-senate-latest-news
  1. Facebook’s Name Change Receives Poor Marks In New Poll, Forbes, https://www.forbes.com/sites/edwardsegal/2021/10/29/facebooks-name-change-receives-poor-marks-in-new-poll/?sh=30c5c49a444b
  1. Facebook Will Pay $52 Million In Settlement With Moderators Who Developed PTSD On The Job, The Verge, https://www.theverge.com/2020/5/12/21255870/facebook-content-moderator-settlement-scola-ptsd-mental-health
  1. The Facebook Files: A Wall Street Journal Investigation, https://www.wsj.com/articles/the-facebook-files-11631713039
  1. ‘I’m Happy To Lose £10m By Quitting Facebook,’ Says Lush Boss, The Guardian, https://www.theguardian.com/business/2021/nov/26/im-happy-to-lose-10m-by-quitting-facebook-says-lush-boss
  1. Ex-Facebook Executive Chamath Palihapitiya: Social Media Is ‘Ripping Apart’ Society CNBC (via YouTube), https://www.youtube.com/watch?v=MakEIlvlyfE
  1. Our New AI System to Help Tackle Harmful Content, Facebook/Meta, https://about.fb.com/news/2021/12/metas-new-ai-system-tackles-harmful-content/
  1. Horizon Community, Oculus, https://www.oculus.com/facebook-horizon/community
  1. Masnick’s Impossibility Theorem: Content Moderation At Scale Is Impossible To Do Well, Techdirt, https://www.techdirt.com/articles/20191111/23032743367/masnicks-impossibility-theorem-content-moderation-scale-is-impossible-to-do-well.shtml
  1. Founder’s Letter, 2021, Meta, https://about.fb.com/news/2021/10/founders-letter/
  1. Facebook Says It Expects Its Investment In The Metaverse To Reduce Its Profits By ‘Approximately $10 billion’ This Year, Insider, https://www.businessinsider.com/facebook-metaverse-investment-reduce-profits-by-10-billion-2021-10
  1. Investing in European Talent to Help Build the Metaverse, Facebook/Meta, https://about.fb.com/news/2021/10/creating-jobs-europe-metaverse/
  1. Building the Metaverse Responsibly, Facebook/Meta, https://about.fb.com/news/2021/09/building-the-metaverse-responsibly/
  1. Breakthrough Technology For The Brain, Neuralink, https://neuralink.com/

Elon Musk Sits Down With The Babylon Bee, The Babylon Bee (via YouTube) https://www.youtube.com/watch?v=BaRKd4U6Ixg

Why Retailers And Consumers Are Embracing The Buy Now, Pay Later Trend

Posted on by Jennifer Ryan
BORN Views
Why Retailers And Consumers Are Embracing The Buy Now, Pay Later Trend

As the popularity of online shopping continues, buy now, pay later (BNPL) platforms are becoming a popular way for businesses to offer their customers flexible payment options. Though larger companies traditionally used this service, BNPL is becoming increasingly popular with companies of all sizes.1 Providers like Klarna, Affirm, and Afterpay enable shoppers to purchase products online from participating merchants and pay for them through a series of installments, often interest-free.2 This app-based hybrid version of layaway and credit is growing in popularity with retailers and consumers alike as brands like Amazon, Walmart, and Target offer installment plans to increase sales.

Buy Now, Pay Later is Gaining Momentum 

The continued growth of online shopping resulting from the pandemic has catapulted BNPL into the mainstream. While BNPL was gaining popularity leading up to the pandemic, BNPL deals exploded when retailers were forced to close brick and mortar stores. Covid-19 produced a shift in consumer spending habits as an increased number of consumers spent more time at home and embraced e-commerce.3 BNPL generated almost $100 billion in transactions in 2020 as millions of shoppers financed their purchases.4 The pandemic left millions of consumers out of work and in need of greater flexibility with their purchases, which increased the demand for easy online financing options. Unlike credit cards which were intended to be used multiple times, BNPL solutions are applied to individual transactions, which appeals to consumers wanting to make less of a financial commitment.

Advantages for Consumers

Consumers are more likely to make significant purchases if they can pay for them in installments rather than the total price upfront. Popular among people under thirty with tight finances and less available credit, consumers welcomed the ability to delay payment for goods and access financing.5 Many consumers see BNPL as an appealing alternative to racking up another high credit card balance. BNPL services claim they are a better alternative to traditional banking and credit cards because it is easy for consumers to get approved for this type of loan, even with a low credit score.6 Provided consumers stick to the payment terms, BNPL offers the chance to pay in interest-free installments. Though BNLP offers many advantages to all parties involved, consumers should ensure they understand the repayment terms. Late payments have the potential to affect an individual’s credit score, and customers who default on their payments may be banned from future purchases.7 BNPL is a loan, and consumers should plan their purchases with their income and expected expenditure in mind. 

Advantages to eCommerce

Just as BNPL is a preferred payment method for many consumers, it can also be useful for businesses. By integrating BNPL, companies can attract new shoppers, improve customer relations, and increase sales. It is important to provide many different payment options to give customers their preferred choices and appeal to as many potential first-time shoppers as possible.8 Consumers increasingly utilize BNPL platforms, which means companies willing to work with BNPL providers will appeal to a new set of customers. Millennials and Gen Z are more likely to use BNPL platforms when shopping online than any other age group, so if a business is interested in attracting these age groups, they should strongly consider using a BNPL platform.9 Additionally, customers are more likely to return to a business that offers BNPL options, and with so many companies providing this service, it is essential to remain competitive. 

BNPL delivers a quick and straightforward payment process and is a viable alternative to traditional payment methods. BNPL platforms allow a business to get paid in full immediately, while the consumer has the instant gratification of receiving the product directly at a low upfront cost. In exchange for providing interest-free loans to customers, these platforms take only around 5%-6% of the purchase cost from retailers.10 If the customer does not make the payment on time or the payment is not collected, businesses do not have to worry about lost revenue. 

Why Buy now, pay later platforms can be a valuable tool for both businesses and consumers. The potential for BNPL platforms to drive sales and increase income with no risk to the company is an appealing prospect, and customer demand for this payment method is high. While consumers must be mindful of their purchases and not spend beyond their means, BNPL can be a great way to finance items if used responsibly. With research from Kaleido Intelligence estimating that online consumers will double the amount of money they spend using BNPL to $680 billion by 2025, there is a massive opportunity for businesses to profit.11 BNPL is here to stay for the foreseeable future.

Footnotes

1) https://www.paymentsjournal.com/buy-now-pay-later-what-businesses-need-to-know/

2)https://www.wsj.com/articles/when-to-buy-now-pay-later-and-when-to-just-pay-now-11631957401

3)https://www.cnbc.com/2021/09/21/how-buy-now-pay-later-became-a-100-billion-industry.html?utm_term=Autofeed&utm_medium=Social&utm_content=Tech&utm_source=Facebook#Echobox=1636972847

4)https://www.forbes.com/sites/ronshevlin/2021/09/07/buy-now-pay-later-the-new-payments-trend-generating-100-billion-in-sales/

5) https://www.paymentsjournal.com/buy-now-pay-later-what-businesses-need-to-know/

6)  https://www.investopedia.com/buy-now-pay-later-5182291

7)https://www.wsj.com/articles/when-to-buy-now-pay-later-and-when-to-just-pay-now-11631957401

8)https://www.paymentsjournal.com/buy-now-pay-later-what-businesses-need-to-know/

9)​​https://www.cnbc.com/2021/08/07/why-millennials-and-gen-zs-are-jumping-on-the-buy-now-pay-later-trend.html

10)https://gocardless.com/en-au/guides/posts/how-does-buy-now-pay-later-affect-your-business/

11)https://www.businesswire.com/news/home/20200922005066/en/Buy-Now-Pay-Later-Digital-Spend-Led-by-Klarna-PayPal-Afterpay-to-Double-by-2025-Reaching-680-Billion—Kaleido-Intelligence

Assessing The Pillars of Modern Digital Infrastructure

Posted on by Antony
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Assessing The Pillars of Modern Digital Infrastructure

Seeking to better understand customer experience expectations of digital commerce, Avalara commissioned business intelligence platform PSFK to research key trends and technologies along the purchase journey. The resulting five-chapter report features Avalara customers, partners, and thought leaders.

What did we learn?

Consumers expect retailers to have ecommerce and mobile capabilities. Their expectations are high; they bank on researching each stage of the purchase journey online. Real-time accuracy and transparency are essential, as is a seamless experience.

There’s a lot at stake. Global ecommerce totaled more than $3.5 trillion in 2019. By 2023, online retail sales in the United States alone are expected to reach $969.7 billion.

To succeed in this increasingly crowded field, retailers must deliver an exceptional customer experience at all stages of the customer journey, from discovery to post-purchase support. Technology is a key component of success, helping to build trust and therefore loyalty.

Mobile has elevated expectations: Consumers count on retailers to deliver a true omnichannel experience, tailored to them, no matter how they shop. Retailers that sideline mobile risk alienating a growing portion of the market. Mobile sales have doubled since 2015 and are expected to account for 44% of ecommerce by 2024.

In short, retail today must be “digital-first, fluid, and agile,” as the current pandemic has highlighted. In recent months, retailers reliant on physical stores alone were often unable to connect with customers. Those with an established online and mobile presence could meet consumers where they were — at home or on the move.

No matter the circumstances, the more agile a retailer’s overall digital infrastructure, the better the experience for customers passing through these five stages:

  • Discovery
  • ‘Store’ experience
  • Shopper education and assistance
  • Payment and tax
  • Fulfillment and support

Discovery

Consumers shop across all digital platforms in today’s hyper-connected world, including through social channels as well as through Alexa, Google Assistant, or Siri. Managing customer relationships is key. A dynamic outreach with visual search streams and shoppable content helps retailers rise above competitors. 

‘Store’ experience

To convert browsers to buyers, ecommerce retailers need more than an online storefront; the whole shopping experience must be streamlined, secure, and increasingly, curated. An adaptive homepage and social shopping options help provide the experience consumers crave, as does augmented retail. People respond well when given the option to virtually try on products.

Shopper education and assistance

Online shoppers are increasingly coming to expect personalized support at key moments, as they might receive in a brick-and-mortar store. They value well-timed expert opinions. Authentication tools and Artificial Intelligence (AI)-powered chatbots help customers navigate product catalogs and retailers understand when human interjection is necessary.

Payment and tax

Checkout must be seamless on the front and back end. Customers are one step closer to a purchase when their payment information is automatically (and securely) provided. Other best practices include offering one-click purchase options, digital layaway options, and in-cart optimization. Currency conversions aid cross-border sales, as do accurate tax and customs calculations. To foster trust, reveal shipping, tax, and other applicable charges up front.

Fulfillment and support

What happens after a customer clicks “Buy now” is an integral part of the customer experience. Flexible delivery options, including in-store pickup and returns, are a must in the age of near-immediate gratification. AI and machine learning can help streamline logistics and reduce costs. Customer loyalty can be fostered with product setup, ongoing support, as well as programs that encourage customer evangelization.

Exceed expectations

Exceeding expectations is key to successful digital commerce. Gain deeper understanding. Get the report here.

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Welcome to BORN’s Partner series! Through this program we look to highlight thought leadership from our vast array of technology partners. Follow along using the hashtag #thisisBORN and #BORNpartner!

Today, we’re thrilled to call attention to our longtime partner, Avalara. Avalara utilizes the PFSK platform to help assess which components of modern commerce infrastructure are some of the most essential. We hope you get a broad overview in this highlight post and explore deeper at Avalara’s site for the full white paper.

5 Tips for Success for B2B eCommerce Retailers

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5 Tips for Success for B2B eCommerce Retailers

Last week’s blog post, centered around the rise of B2B eCommerce outlined the immense potential traditional business retailers have by adopting a digital-first strategy. In this article, we’ve gathered our top 5 insights B2B brands can leverage to further develop and grow their B2B offering, to take advantage of the recent surge in online transactions.

Attract customers using organic and paid marketing

An organic, as well as paid marketing media strategy that involves an SEO strategy, will help drive relevant users to your website. This could take the form of social media marketing, display and banners ads, emails, and press releases to drive traffic and generate leads using content offers.

Focus on stellar customer experience

Traditionally, a B2B purchase involves far less emotional appeal compared to a B2C one, and they also involve many more stakeholders in a relatively standardized purchase journey. However, rest assured that customer experience is still at the top of the list of important factors to lock in a B2B sale. 

  • A fast, responsive and easily navigable website that offers intuitive search results that can also be accessed from multiple devices is key. Optimization for mobile is a trend in B2B eCommerce that most organizations are adopting to reach the millennials involved in the purchase process. An omnichannel strategy can also help in gathering data around the customer’s preferences. W. W. Grainger, which scores in the top tier on distributor B2B surveys, recently introduced a visual search on its mobile app1. 
  • Order approval workflows should be able to accommodate multiple parties and roles in the buying committees.
  • Personalization and user journeys are equally important to take into consideration. Unique personal content such as personalized product catalogs will appeal to your customer’s needs. Further, adjust cross-selling and upselling suggestions based on the user’s purchase history. 
  • Sales teams have to be rearranged. With marketplaces taking a chunk out of traditional B2B sales, sales teams have to be reconfigured to offer personal connection, advice, broader expertise and build relationships2. According to a Forrester Research study, 68% of B2B buyers prefer doing business online versus with a salesperson, and when they engage with sales, they want that experience to be in a more problem-solving, consultative manner3.
  • Take customer feedback into account. Reliable customer support both during and after-sale is vital. Existing customers are a goldmine of feedback. 
  • AI and automation are increasingly being put to use to take the drudgery and paperwork out of the purchase process. Chatbots that are available 24/7 and also upsell and cross-sell products. At Genesys, the chatbot feature resulted in a whopping 50% less cart abandonment4. 
  • More information on product pages, different product views, and supporting information such as videos are even more important in B2B eCommerce, especially if you’re selling in bulk. More information will reduce communications, returns, and complaints5.

Pick the right B2B eCommerce technology platform

The architecture for your site is based on both customer need and maturity. Is it commerce-led, content-led, side-by-side or a pure headless model? Choosing the right platform that can handle all your needs can make or break your online offer. Developing an MVP (minimum viable product) can also shorten time to market and leave room to develop features based on feedback from customers. 

Flexible ordering, payment and pricing options

B2B customers need much more leeway with their ordering and custom pricing options as opposed to B2C customers. You have to be able to take purchase orders and credit applications into account and offer digital invoices, various payment methods, and a real-time snapshot of inventory. Incentivize new customers with free trials, reduced shipping costs, or a money-back guarantee. You can entice existing customers with easy order replenishment or loyalty rewards for repeat purchases such as discounts, tiered incentives, access to new features or a complimentary service.

Use social media marketing and user-generated content

Social media can not only be used to drive customers to your site but also for customer engagement. LinkedIn and Twitter are highly popular with B2B companies in regard to connecting with their audiences through text, podcasts, and video, gaining insights via feedback, providing thought leadership, and learning about their buyer persona. They can help funnel the customer from the education and awareness stage towards actual promotional content. Intel (@Intel) with its 4.8million followers is a great example of a B2B Twitter presence6. Publishing customer reviews are another way of establishing authenticity and credibility by driving user-generated content7.

As a leading systems integrator for platforms such as SAP Commerce Cloud, Salesforce Commerce Cloud, Adobe Commerce, BigCommerce, Shopify Plus, commercetools, VTEX, and Elastic Path, BORN Group is well-qualified to assess and advise you on the best platform to meet your unique needs.

For more information around BORN Group’s B2B offerings, please visit here.

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Footnotes

1. Grainger eyes a big future for its new mobile visual search tool, Nov 2019, Digitalcommerce360.

2. In 2021, B2B Marketing And Sales Become More Human, Thanks To Tech, Forrester Research, Nov 2020, https://go.forrester.com/what-it-means/ep193-b2b-marketing-sales-predictions-2021/

3. The Death Of A (B2B) Salesman, Forrester Research, May 2017, https://go.forrester.com/what-it-means/ep12-death-b2b-salesman/

4. The Total Economic Impact of the Genesys Omnichannel Engagement Centre Solution, Forrester, Feb 2016, https://genbin.genesys.com/old/resources/TEI_Case_Study_Genesys_-_2052016_FINAL.pdf

5. Rethink the B2B Buyer’s Journey, LinkedIn, https://business.linkedin.com/content/dam/business/marketing-solutions/global/en_US/campaigns/pdfs/rethink-b2b-buyers-journey-v03.09-eng-us.pdf

6. 5 Top B2B Brands Delivering Exemplary Twitter Engagement, Toprankblog.com, Sep 2019, https://www.toprankblog.com/2019/09/exemplary-twitter-engagement/

7. The Rise of B2B Product Reviews,  https://business.linkedin.com/content/dam/me/business/en-us/marketing-solutions/resources/pdfs/linkedin-crowd-b2b-product-review-book.pdf

Personalization: The Key to Creating an Exceptional Customer Experience

Posted on by Antony
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Personalization: The Key to Creating an Exceptional
Customer Experience

Personalization has come a long way from only addressing the customer by name in a direct marketing email that arrives in your inbox – of all the digital strategies being talked about in the race to better customer experience, and thereby setting your brand apart from the competitors, personalization has now grown to be the most paramount.

It has been shown time and again that personalization drives engagement and builds relationships with the customer, making it one of the most important tools in a marketer’s toolbox. A whopping 91% of consumers are more likely to shop with brands who recognize them by name, remember their preferences, and provide them with relevant offers and recommendations1. A customer that is seen and heard and feels special is one that will return.

As opposed to the customization of products or services to suit a particular individual, personalization is the tailoring of an experience based on the customer’s previous buying behavior and preferences. The holy grail is to offer the customer an intelligent and contextual, and therefore superior customer experience, which in effect creates more value for the business.

In the past, marketing communications was mostly one-way. The new approach using data to ground insights begins a conversation with the customer.

The underpinning of personalization is data. Most of this data already exists within an organization in the form of the technology that enables every sale – sales and support information can be folded into customer data platforms (CDPs) and enterprise resource planning (ERP) systems, unstructured data in the form of positive or negative feedback, reviews and social commentary consolidated into reputation management systems – all that data just needs to be harnessed, analyzed and put to work not just as the end of the shopping funnel but throughout the customer journey.

Here are a few paths to personalization of the customer experience:

  • Personalized home page, navigation, and copy: New visitors need to be targeted with tailored messages, pages, and navigation compared to returning visitors or regular customers because they aren’t very familiar with the brand or the website. Personalized pop-ups and greetings are one way to do this. Encouraging social sign-ins are another. By understanding target customers’ pain points, interests, and problems, you can also target relevant copy for different segments, thereby increasing conversion. Knowing device types also means mobile users can be offered a different experience compared to those using a tablet or laptop.
  • Location targeting/geofencing: Visitors from different countries are segmented and these segments to allow for personalized pages and experiences. A US apparel brand could have different sizes, not to mention currencies, compared to the UK site. Geolocation targeting also enables daily or seasonal weather-related personalization. One new development is geofencing which puts a ‘virtual fence’ around a physical location. Geofencing triggers a command to the mobile phone when an individual enters or leaves a geofence. Whole Foods launched geofences around their competitors’ locations. When a customer using the Whole Foods app came into or left the geofence, they would receive ads with store-specific offers2. The campaign is said to have had a post-click conversion rate which is more than 3x the industry average. 
  • Predictive personalization: Amazon, followed by Youtube and Netflix, made the ‘Recommended for you’ feature famous. These days, many brands suggest options while the customer is buying or even at checkout to upsell their products and increase average order value. Uniqlo measures neurotransmitters in their UMood kiosks to gauge customers’ reactions as they are shown different clothing items in kiosks. The AI algorithm then uses that data to recommend products3.
  • Retargeting: Google Ads offers brands the ability to remarket their product to visitors who visit their website in other locations. Since they have already shown interest in the brand, retargeting offers another avenue to complete the sale. Conversely, personalization also means that the transition from clicking from an ad to get to your website is seamless and the text matches to suit.
  • Category specific offers: Just as with initial contact, segmentation offers a chance to target specific offers to specific customers. One effective example is how Sephora used to announce all their products to all their customers, but now they send only relevant information with their behavioral-based email program4.
  • Gamification: Using gamification in your brand marketing strategy helps brands know their customers better through features such as quizzes or creating user profiles and avatars. Awarding points is another method can keep consumers loyal. Makeups and skincare brands such Sephora’s skincare quiz or Roadrunner Sports’ “Which Nike shoe fits your personality” are great examples of gamifying your commerce experience to drive return traffic5.
  • Video tutorials and inspiration: Offering how-to videos and tutorials post-sale turns customers into repeat customers. Technology has made it easy to offer personalization even in video and editing techniques mean that text in a video can be customized for easy consumption. Inspiration areas are used by many brands’ websites to guide customers through their product line.
  • Lead generators: Displaying offers free trials or discounts tactically are a useful feature to generate customer leads and keep them on your page. An exit discount pop-up box is one way to do this.
  • Omnichannel delivery: Features such as ‘Continue watching’ and ‘Watch from the beginning’ made popular by Netflix are also being used by retail brands that have a presence on different channels. Headless CMSes can enable shoppers to switch between devices for a seamless experience while also remembering their preferences. Neiman Marcus, for example, remembers your size when you return6.
  • Chat and customer support: AI and machine learning is being used especially with chatbots which can gather data and segment customers, especially if you don’t have the resources to offer round-the-clock support. Information and predictive analysis can be pulled up for customer-facing employees for an enhanced customer service experience. 

More brands are offering hyper-personalized experiences at every customer touchpoint. With enough data, customers can be shoehorned into each segment of one. However, personalization can make the marketing mix more complex and such complexity is both time and resource intensive. Therefore, A/B testing is a key factor to check efficacy before embarking on individual personalization strategies.  

Furthermore, using customer data for the purposes of curation and interaction is treading a fine line – brands would reap the benefits if they were to make their processes transparent, respect data privacy, and safeguard customers’ data while doing so. In the end, personalization is as much about customer behavior and their needs as it is about their data.

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Footnotes

1. Accenture 2018 Personalization Pulse Check. https://www.accenture.com/_acnmedia/PDF-83/Accenture-Pulse-Check-Infographic.pdf 

2. Thinknear Location Score Index, Q4 2017. http://info.thinknear.com/rs/835-JWB-681/images/Thinknear_Location_Score_Index_Q4_2017.pdf?utm_source=&utm_medium=&utm_campaign=&utm_term=&utm_content=

3. AI In Retail: How Tech Is Changing The Customer Experience, Forbes.com, March 26, 2019. https://www.forbes.com/sites/forbestechcouncil/2019/03/26/ai-in-retail-how-tech-is-changing-the-customer-experience/?sh=47f31dc1958a

4. Accelerating Agility: eCommerce Marketing Lessons from Sephora, Bluecore.com, https://www.bluecore.com/blog/accelerating-agility-ecommerce-marketing-sephora/

5. Roadrunnersports.com, https://www.roadrunnersports.com/blog/quiz-which-nike-shoe-best-fits-your-personality-free-rn-or-free-rn-flyknit/

6.  5 Outstanding Omnichannel Retail Examples In Fashion, Intelistyle.com, https://www.intelistyle.com/omnichannel-retail-best-examples-fashion/