In Chicago, retailers put the hard sell on each other
We stop by this year's annual Shop.org summit, where digital retailers met to press the flesh with old friends and new -- and perhaps make a sale. The chatter at this year's show? Two words: customer experience.
CHICAGO—It was all smiles and back slaps in the sunny Lakeside Center at McCormick Place yesterday evening as retailers glad-handed with each other over hot hamburgers and cold beer.
They were here for the annual Shop.org summit, a three-day event that's one of the biggest on the retail calendar, attracting leading players and emerging names in a world in which everyone seems to be urging you to "Add to Cart."
ZDNet dropped in to preview some of the latest offerings from the vendors here, which are selling wares that promise to make transactions faster, product searches more personal and retail data more discerning. It's no easy task to sell to a seller, sure—but underneath, fears that the good old days of throwing up an online storefront and raking in the profits are over have retailers scrambling for an edge in customer experience.
"The overall growth rate for e-commerce is still high—14 or 15 percent—but it's declining," said Blair Lyon, vice president of marketing for the digital marketing optimization company Monetate. "It's a real quandary."
Lyon, 43, said his company was working to address the pressures that Apple and Amazon have placed on retailers to offer a seamless customer experience. The Philadelphia-based company introduced two new products at the show, an e-mail personalization service and a unified display advertisement tool. Both aim to reduce the jarring experience that sometimes occurs when a retailer begins to use data to personalize communications.
"The problem we're having is that the engaged online customer is more demanding than ever," Lyon said. "Consumers are now expecting these smart, relevant experiences everywhere. That's not easy."
Graeme Grant agrees. The 43-year-old chief operating officer for CQuotient, a Boston-based e-mail marketing firm, said that nuance is key when it comes to staying in a customer's consideration set.
"You have to know the whole person," he said. "You have to know what they just bought. And you need to be context-sensitive—you don't want to offer free shipping to someone who is already purchasing something in your store."
The big risk in personalization? The "creepy" factor, in which personalization gets too personal. (We're looking at you, Facebook.) But the business opportunity for these communications remains massive, Grant acknowledged.
"They have a ton of retail data," Grant said of his target retail customers, "and they have barely scratched the surface."
That is precisely the basis for the business model of True Fit, a Boston-based company that helps people buy apparel online that is sized appropriately. The company aims to do away with the crap shoot involved in trusting a manufacturer's size claims, and co-founder Romney Evans, 35, was on hand to pitch the company's software to his own potential customers walking by.
"We're able to triangulate the data—consumer feedback on their body shape and items that already fit them, product specifications direct from thousands of manufacturers, and sales and return tracking data—to do predictive analytics, machine learning, to give the user a personal fit rating for each item," Evans said. "It's really all about confidence. Really only 10 to 15 percent [of apparel] is sold online, and the biggest barrier is unsure fit. People don't want to deal with the hassle."
Convenience is the name of the game for Nashville-based OHL (it stands for "Ozburn-Hessey Company"), which specializes in direct-to-consumer fulfillment for a number of major retailers, many of them household names. Despite some 34 million square feet of warehouse space across the United States, the company is still growing, thanks to the ever-increasing use of free shipping to attract online customers.
"For example, I was in New York last Saturday, in Zara, and I saw a winter jacket I liked," said Katie Fredericks, 25, a senior marketing analyst for the company. Instead of purchasing the jacket in the store and hauling it around town, "I whipped out my phone and ordered it then and there. It was back in Nashville, on my doorstep, by Wednesday."
That instinct is precisely what Oracle wants to capitalize on. The enterprise technology giant, riding high after its OpenWorld conference in San Francisco last week, was on hand at the show to push its omnichannel offerings.
"Everybody has a store in their pocket," said Srini Rangaswamy, 40, the solutions market director for commerce in Oracle's retail unit. "You want that store to be customized to you. If it's not, your attention is lost. You lose the experience."
Which translates to lost revenues, he said. "A customer told me, 'I want to make it easy for them to give me money,' " Rangaswamy added, chuckling.
Which is exactly the reason that brought Nikolaj Baer, 32, the chief technology officer for the content management and e-commerce company Web Cube, to Chicago. His San Diego-based company makes turnkey online platforms for mid-to-large size brands such as Dunlop Motorcycle and surfing outfitter Ripcurl, giving them social, mobile and search competency in a single product.
It all comes back to the "e" word, he said.
"Even if you jam your solutions together, you'll never have that consistency of experience," he said. "Brands need to position themselves for people to do research."
He shrugged his shoulders. "My wife only buys online now," he said. "And I do, too."