Some things never go out of style
Speaking at ThoughtWorks' annual executive conference, ParadigmShift, Neiman Marcus CTO Rajeev Rai opened with a thought-starting quote from ex-chairman Stanley Marcus:
“I learned what every good shoe salesman knows, and that is: you have to learn to fit the mind as well as the foot. From this selling experience, I recognized that knowledge of the product, enthusiasm, perceptiveness, and politeness produced sales”
That’s as true today as it ever was. What has changed, however, are the tools companies have at their disposal to demonstrate product knowledge, politeness, and perceptiveness. Product knowledge is surfacing relevant information. Politeness is saving your customers time. Perceptiveness is providing convenient ways to buy. Rajeev highlighted two critical weapons in the future of retail: mobile and data. He pointed to the Stitchfix IPO as a case in point. In the launch day speech, a company spokesperson mentioned ‘data science’ 64 times and algorithm 76 times. A show for the investors? Maybe. But the careful choice of words illustrates the changing capability needs in retail: a masterful command of capturing and using data is foundational to achieving the customer intimacy retailers crave.
Black Friday weekend sales ballooned 23% to brush new highs this year, heralding a promising start to the key holiday season. It’s a bright spot in a year haunted by store closures and Chapter 11 filings. The sales uptick in the backdrop of falling foot traffic underscores the importance of eCommerce in driving retail growth. Where’d the growth come from? Mobile. Shoppers opted for screens over stores to snag deals this year. 2018 will (again) be the year of mobile. Rakuten data show that mobile sales over the full Thanksgiving week (Sunday – Friday) grew by 43% year-on-year. Additionally, the baskets were bigger - average mobile order values climbed 7%, indicating customers are growing increasingly comfortable buying more on mobile. Mobile accounted for a third of Cyber Monday’s $6B takings. The day’s volume bested globally only by China’s Singles Day - which is bigger than Black Friday and CyberMonday combined – in which mobile accounted for 90% of Alibaba’s sales.
Shopping high and low
2017 marked the continued obliteration of brands caught in 'the messy middle'. But bright spots exist at both ends of the retail runway. On the high end, luxury eCommerce strutted to new heights, with brands like Yoox-net-a-porter, Farfetch and Moda Operandi growing revenues and raising significant funding. Down the price pipe, private label brands also found growth. Amazon is quietly building its private label army. Private labels are gaining steam as consumers skew toward unbranded search terms i.e. they’re more likely to search for ‘yoga pants’ over ‘Lululemon yoga pants’. Unbranded search growth highlights the importance of unbranded search visibility and positive reviews to win big in 2018.
Top 5 - What we’re reading
- Alibaba to open brick and mortar mall in China. Link
- Many strategies fail because they’re not actually strategies. Link
- Singles Day shows China’s omnichannel advantage. Link
- Shopping mall giant Westfield being sold to French real-estate firm in $16B deal. Link
- Amazon is so good at keeping prices low it's changed how economists think about inflation. Link