“The Other Big ‘A’ in E-Commerce.” That was the keynote to Retail West. And it hints at the latest concern in the Retail sector. That “A” is not Amazon. It’s Alibaba. But we know it may as well be both. And I’ll relay just one startling fact from Alibaba that exemplifies its commercial power.
Alibaba adopted “Singles Day” in 2009 as a way to combine entertainment, a festival atmosphere, and, well, mostly shopping–an analogue to the US’s “Black Friday.” It happens on November 11th each year. 11/11, get it? Singles day.
Well, last year Alibaba reached $17.8 billion in sales in 24 hours on Singles day.
Let’s put this number in context. US consumers spent $3.45 billion on Cyber Monday in 2016, besting Black Friday’s 2016 sales. So, Alibaba alone achieved 5x more sales than the entire US Retail economy did in 24 hours on Cyber Monday.
But given Alibaba’s need to measure itself against Amazon in the keynote’s title, the concern about Alibaba and Amazon is clear: the concentration of retail sales in a handful of companies, if not two, and the fear of competing against them.
But let’s be courageous e-commerce businesses. You have every reason to be.
Greg Buzek, the rather gregarious founder from IHL Group, gave the audience a clear message: “You do not need to compete with Amazon.” Or Alibaba we assume. He advised instead to put Amazon out of your mind and focus relentlessly on the customer (an idea that also happens to be one of Sendbird’s core values!).
“Those that focus on the customer experience in retail will succeed,” says Greg Buzek, “and those who refuse to change will be in trouble going forward.”
Top 3 trends from Retail West 2017
With that, the three main takeaways at Retail West focus on the customer:
- Direct-to-consumer sales to promote access to your customer’s desires, behaviors, likes, and dislikes in perfectly private metadata
- Big data from those observations to optimize and personalize customer experience
- Focus on the customer experience with the insights gathered from big data
As you can see, these are all interconnected. The direct-to-consumer relationship gives you direct access to consumer behavior and preferences, and, in turn, allows you to offer your customers an optimized and personalized experience. This is the synergy behind e-commerce success.
In fact, the conference had nearly a uniform focus on big data and its potential to improve and personalize the customer experience.
Our CEO, John Kim, participated in a panel discussion about “Digital Innovations that Drive E-Commerce” with a group of inspiring decision makers and CEOs: Jonathan Spier from PLAE, Kathleen Weng from ThredUp, and Anne Berger from Shutterfly. After stories from each participant, the moderator, DeLu Jackson of Conagra, turned pretty directly to data in e-commerce. How does it inform your business decisions? How do you make your data actionable?
Despite this focus on data, however, people rose to the top of discussion. Data is only as good as how it helps you add value to your customer’s experience.
During this panel, John helped me realize why Sendbird believes so strongly in chat and messaging for e-commerce: because the trend is to move away from transactions and toward relationships, the intimate and personal relationships that conversation can bring back to online commerce.
Relationships, not transactions
The clarity of the 3 key trends hit home, however, during the panel discussion, “Taking the Shopping out of Retail.” It was a perfect storm of direct-to-consumer heavy hitters: Ruth Hartman from Le Tote, Kenny Kim from Nature Box, Drew Green (CEO) of Indochino, and Georg Richter (CEO and Founder) from OceanX.
Georg Richter, with the urgency and defiance of a retail prophet, was the most forceful about direct-to-consumer: develop a customer’s trust by curating selections for the customer, by giving them gifts, by inspiring them. Far from idealistic, he believes OceanX can transform retail into a subscription economy.
Drew Green from Indochino immediately actualized Georg’s exhortations about bringing the customer joy by giving away 5 free suits. People were excited. And that’s the delight that the panel speakers think retail must create to evangelize customers for their brands. Just look at Le Tote’s website and try to tell me that it isn’t the most innovative and wonderful way to sell clothing.
If these models seem far fetched to you, I understand your apprehension. But this is the competition. Not Amazon or Alibaba. If you start to orient your sales model on educating, inspiring, and delighting your customers, instead of selling to them, then you’ll head in the right direction.
People talk about big data as a way to “listen” to your customers. This always seemed disingenuous to me because they’re not actually talking to you. Sendbird would like its chat API to empower you to start a conversation with your customer.