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Hollywood, FL APRIL 4 – 6, 2016 APRIL 11, 2016 Hollywood, FL APRIL 4 – 6, 2016 This weeK, the FuNg Global Retail & TechNology team atteNded the Demandware XChange ’16 Conference in Hollywood, Florida. The annual show has become a techNology aNd cultural pheNomeNoN, growiNg every year aNd attractiNg capacity crowds. It brings together leadiNg retailers, iNNovative techNology compaNies, partNers and employees. This year, the emphasis was oN how to leverage uNified commerce to drive growth and transformation without disruption. DemaNdware, the iNdustry-leading provider of eNterprise cloud commerce solutioNs, now operates over 1,500 digital commerce sites for 331 customers aNd over 400 millioN shoppers worldwide. DemaNdware Commerce solutioNs supported 92 orders each secoNd this past holiday seasoN. Below, we recap the show, highlighting some of the excitiNg thiNgs we saw aNd heard. PREDICTIVE RECOMMENDATIONS Retailers looking to Keep up with consumer demand for individualized and seamless customer experiences have a New techNology optioN to coNsider. Demandware’s predictive recommendations and email intelligence technology is changing the relatioNship betweeN customer aNd braNd. The platform leverages data scieNce to deliver product recommendations that create personalized site experiences, while the predictive intelligence engine worKs with a retailer’s existing email solution to choose the optimal coNteNt for each email recipient. DEBORAH WEINSWIG, MANAGING DIRECTOR, FUNG GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917 .655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 1 Copyright © 2016 The Fung Group. All rights reserved. APRIL 11, 2016 In additioN, Newly introduced merchaNdising eNhaNcemeNts eNable retailers to drag and drop products withiN category grids and provide advanced search and filter capabilities withiN products aNd categories. The types of data used to drive personalized recommendations include: • Behavior: product views, category views and checkout starts. • TransactioNs: liNe-item details, subtotal and order total. • Catalog: inventory, price and customer attributes. The recommeNdatioN rule coNfiguratioN allows retailers to set specific product rules. This allows them to avoid, for example, recommeNding sale items or items that are curreNtly out of stock. True ReligioN’s Director of E-Commerce, Julie Ting, discussed the results her compaNy has seeN siNce implemeNting the cloud- based solution. Specifically, she said the tool has helped True ReligioN increase engagement, loyalty and coNversioNs. So far, the compaNy has experienced increases iN time oN site, page views per session, add-to-cart rate aNd cart rate coNversioN. It has also seeN improved product sell-through rates: for example, wheN customers were shoppiNg for tops, the compaNy saw aN iNcrease iN sales of the bottoms that were recommeNded with them. DISTRIBUTED COMMERCE The rise of social aNd mobile eNgagemeNt has accelerated the democratization of retail, forcing retailers to push their unique brand experience beyond their physical and virtual walls in order to maKe the journey from iNspiratioN to purchase as seamless as possible. DemaNdware expects mobile’s share of e-commerce to grow from 2.6% to 15% by 2017. The company said that social media is now mobile-first aNd that maNy emergiNg engagement platforms are mobile oNly. To uNderscore the poiNt, DemaNdware Noted the desKtop/mobile usage ratios of four of the biggest social media platforms: • FacebooK: 32% desKtop/68% mobile • Twitter: 14% desKtop/86% mobile • Instagram: 2% desKtop/98% mobile • PiNterest: 8% desKtop/92% mobile Social commerce is growiNg, and Demandware estimates that it represented 5% of all online retail revenue in 2015. Retailers in Internet Retailer’s Social Media 500 raNKiNg recorded a collective $3.3 billioN from social shoppiNg iN 2014, up 26% from 2013. Also, consumers arriving at retail sites from social networKs spend an average of 8.2% more time shoppiNg oN those sites thaN other shoppers do. According to TiffaNy BlacK, Head of Commerce Business Development at PiNterest, 93% of Pinterest “pinners” use the site to plaN for purchases. GardeNer’s Supply CompaNy was approached by PiNterest and Demandware iN 2015 to be a first mover oN Buyable Pins, aNd the brand has DEBORAH WEINSWIG, MANAGING DIRECTOR, FUNG GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917 .655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 2 Copyright © 2016 The Fung Group. All rights reserved. APRIL 11, 2016 experienced sigNificaNt success with them: • Visits, orders aNd reveNue from PiNterest grew 30% faster thaN they did for the overall business. • The company saw 12 times more traffic aNd five times more reveNue from PiNterest thaN it did from the Next largest social platform. • SiNce lauNching Buyable Pins, 50% of all referral traffic from PiNterest has come from them. • The company has over 4.2 millioN piNs; every New seasoN gets a curated PiNterest board. DemaNdware aNNouNced that it had established global strategic partNerships with PiNterest and Salesforce.com that let users sell to coNsumers via “Buy Now” buttons in social aNd service chaNNels. The initiative empowers retailers aNd braNds to sell products on new digital channels without losing connection to a central commerce platform. ENHANCING THE STORE EXPERIENCE AND UNIFIED COMMERCE PLATFORM The iN-store experieNce is evolving aNd becoming more digitally integrated. This is maKiNg it ever more importaNt for retailers aNd braNds to have a siNgle platform across touch points, operations and customer data. Initiatives such as buy online, picK up in store have created a closer tie between the store and online chaNNels. And, accordiNg to DemaNdware, 60% of iN-store sales are iNflueNced by digital. Companies such as True ReligioN are iNtegratiNg digitally to improve customers’ experiences. Store associates at True ReligioN locatioNs iN Beverly Hills aNd New YorK will soon be wearing Apple Watches, enabling them to share a virtual, endless aisle of products with shoppers. The associates will also gain access to information about customers’ prefereNces regardiNg products and forms of communication. The True Religion app (BaNd) enables employees to access its inveNtory system to quicKly locate the exact items customers are seeKing. Since the sale eNds up oNline, one challeNge True ReligioN has faced is figuriNg out how to compeNsate aNd motivate store associates for any purchase that results from an iN-store experieNce. The Limited is also piloting new iN-store techNology; store associates usiNg iPads caN scaN items to fiNd them in inveNtory aNd theN order them online. Charles Tyrwhitt is testiNg a 65-inch touch-screeN TV iN its stores that caN be used to locate aNd order inveNtory aNd show styles to customers. At the conference, all three retailers discussed DEBORAH WEINSWIG, MANAGING DIRECTOR, FUNG GLOBAL RETAIL & TECHNOLOGY [email protected] US: 917 .655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 3 Copyright © 2016 The Fung Group. All rights reserved. APRIL 11, 2016 the importaNce of haviNg a uNified commerce platform that presents all online and iN- store data in a single view. Customers Now shop across several chaNNels, and it is importaNt for retailers to recogNize the differeNt touch points aNd accurately tracK customer aNd iNveNtory data. To help oN this froNt, DemaNdware is lauNchiNg a unified business function in North America this fall that will allow retailers a real-time view of their iNveNtory. ROADMAP FOR GROWTH In this New era of retail democratizatioN aNd disruptioN, retailers must rethinK their strategic aNd operatioNal approaches in order to achieve growth. To gaiN iNsight iNto retailers’ strategic priorities, the Economist Intelligence Unit surveyed 300 retail executives iN November and December 2015; 75% were C-level maNagers and 25% were seNior vice presideNts, vice presideNts or directors. The study broKe the respoNdeNts iNto high-performing and low-performing groups. High performers, represeNtiNg just uNder oNe-third of survey respoNdeNts, represeNted compaNies that were above their competitors based oN three metrics: same-store sales growth, margiN and iNventory turNover rates. Among the high performers, the top three strategic iNitiatives for reveNue growth over the Next three years were geographic expansion, strategic partnerships, and new stores and formats. Geographic expaNsioN was the top priority amoNg those surveyed, cited by 43% of high performers and 33% of low performers. Columbia Sportswear, a vertically iNtegrated sportswear braNd, is oNe compaNy that has relied oN globalizatioN to fuel growth. It has expanded its direct-to-coNsumer preseNce with websites that operate in dozens of geographies around the world. Time to marKet was also cited as an important factor in terms of geographic expaNsioN, and Uniqlo was recognized on this froNt for its expansioN into 17 couNtries in just four moNths. High performers in the study also said they have allocated more resources to strategic partnerships in order to experimeNt with techNologies that will allow them to better align with shiftiNg coNsumer tastes. For example, UNder Armour partNered with, and ultimately purchased, MyFitNessPal, aN app that allows coNsumers to tracK their fitness activity. As a result, UNder Armour caN now seNd coNsumers product iNformatioN aNd promotions based on their fitness progress and interests. Other strategic partnerships include Tory Burch and Fitbit, Whole Foods MarKet and Instacart, and American Apparel and Postmates. DEBORAH WEINSWIG,
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