5 Retail Takeaways From Shoptalk 2022
Last week, the Shippo team enjoyed a whirlwind time in Las Vegas as we gathered with thousands of other e-commerce professionals for Shoptalk, one of the industry’s largest conferences – and it did not disappoint.
Whether it was the exhibit hall chock-full of interesting and innovative tech; the Shippo booth buzzing with conversations with partners, customers, and new friends; or the sessions tracks jam-packed with valuable industry insights, there was a noticeable air of curiosity and optimism that filled the Mandalay Bay Convention Center.
While topics spanned everything from supply chain sustainability and resiliency to crypto, Web3, and the Metaverse, here are five of the biggest themes I saw coming out of Shoptalk this year.
Resiliency Becomes More Important Than Ever In The Supply Chain
It was almost impossible to pick up a paper, turn on a TV, or scroll through social media in the last 12 months without seeing some headline on the historic supply chain crunch. And while we are starting to see signs of improvement, we’re still a ways away from feeling comfortable with the status quo again. For merchants, supply chain volatility will be present for the foreseeable future, making it increasingly important to remain agile.
According to Josué Muñoz, VP of Global E-Commerce and Global Supply Chain at Colgate-Palmolive, “Before, it was about keeping costs down. Now, you can have a cost efficient supply chain, but it means nothing if volatility comes and you can’t shift quickly.”
According to Muñoz, there are three key components to creating a resilient supply chain:
- Don’t rely on a single-source supplier. Instead, identify back-up suppliers you can turn to if things shift.
- Leverage technology that allows you to pivot quickly if circumstances change.
- Be tactical about pricing. Beyond typical pricing considerations, factor in how insurance and changing environmental factors play into your supply chain costs and adjust prices accordingly.
Live Streaming Will Be Where Impulse Purchase and Brand Loyalty Converge
Though it may bring to mind memories of late-night infomercials or that home shopping network you always scroll past, live streaming today is not your grandmother’s QVC. For one, data shows that Millennial males represent the largest group of consumers making purchases on a live stream. But more broadly, live streaming offers a unique way for brands to interact with their customers in a digital environment – and presents a massive opportunity to drive sales.
Though it has been slow to take off in the US, Deborah Weinswig, Founder & CEO of Coresight Research, shared that live streaming represents 20% of all e-commerce purchases in China.
Dozens of brands have tried their hand at live streaming, from Sephora to KitKat to Hot Topic. Nordstrom has even built its own live stream platform, as has Walmart who received significant attention for its launch of Walmart Shop Live.
What is it about live streaming that creates such interest?
- The live element creates a sense of community. Loyal customers return consistently to live streams because they want to participate in the conversation in real time.
- Live streams boost sales. Not only is the average order value (AOV) on a live stream 150% higher than regular online channels, but returns are 50% less. Why? The interactivity of the channel allows for a more informed consumer who better understands what they are buying.
- It taps into our impulse shopping behaviors. According to Wendy Wallner of Ipsos, 34% of people succumbed to an impulse purchase because the price was too good to pass up, and another 34% did so to treat themselves. Live streaming taps into these urges by offering unique products in a live setting where people don’t want to miss the opportunity to be part of the group.
If you want to try your hand at livestreaming, these recommendations from Steve Vranes, CEO of Hot Topic will help you get started on the right foot:
- Find a passionate host: You don’t need to hire a well-known celebrity or influencer to drive engagement in your live stream; all you need is a passionate host. For Hot Topic, in-store associates often play this role because they are both passionate and knowledgeable about the product.
- Offer something compelling: Whether it’s a special deal available only during the length of the livestream itself or early access to an anticipated product drop, giving your livestream attendees access to a unique offer boosts participation. For this reason, live streams are great vehicles to drop collectibles.
- Engage with viewers: The best livestreams recognize that two-way communication is critical to success, and will be actively engaged in responding to attendee questions and commentary.
Don’t Forget About The Opportunity In Reverse Logistics and Recommerce
For many merchants, returns often seem like an afterthought, but it’s actually a huge business. In 2021, returns represented $760 billion, and with the increase in online purchases, we can expect a parallel increase in returns as customers purchase multiples of the same item to test sizing or feel that the reality of the product did not meet expectations.
The problem for many retailers is that a returned item is no longer considered “new”, and therefore often ends up in a landfill or being sold at a steep discount elsewhere. But according to Irene Quarshie, SVP of Global Supply Chain & Logistics at Target, “…investing in reverse logistics will enhance guest satisfaction and improve overall profitability.”
The resulting practice of recommerce – or selling previously owned, new, or used products – is a rapidly-growing opportunity for brands, expected to top $4.5 trillion by 2030. Moreover, 86% of consumers have expressed openness in purchasing resale items from a brand, creating massive untapped revenue potential.
Though it’s not an area many retailers have experience standing up, Shoptalk panelists agree that retailers have both an opportunity and a responsibility to approach reverse differently. Companies like Arrive have built entire business models to help support companies in their reverse logistics and recommerce operations.
For an in-depth look at the consumer perspective on reverse logistics, I encourage you to download our recent 2022 E-Commerce Returns and Exchanges Report.
For Today’s – and Tomorrow’s – Consumer, Convenience is King
This trend should come as no surprise, but it’s worth reiterating: Convenience remains the name of the game in e-commerce. Whether it’s same-day, next-day, or 2-hour delivery; BOPIS, curbside, or ship from store, consumers want options.
As a retailer, it’s your job to ensure you’re providing the right product in the right place at the right time for the right price – and doing so in the most convenient way.
I listened to executives from Ulta Beauty and Tractor Supply – two very different businesses – share similar strategies around meeting consumer expectations in this new digital-first world. For both companies, consumers are looking for the brand to simultaneously institute more options for delivery while simplifying the overall process.
For example, Letitia Webster, SVP of E-commerce, Omnichannel & Master Data Management at Tractor Supply, walked through the company’s investment in creating a more efficient and omnichannel delivery in order to ensure they are always there when their customer needs them. Not only did the company remove 13 steps from its pick-up process, it introduced multiple new options for customers to address customer needs.
Capturing Industry Takeaways
More than 10,000 people attended Shoptalk this year, so we would be remiss not to get perspectives from others in the industry. Here are some of the other trends our friends and partners saw coming out of the show:
- Corey Wright, Cover Genius: “Retailers of all sizes are still laser-focused on providing the best customer experience in both digital and physical channels, but they have to do so in a backdrop of global volatility, uncertainty, complexity, and ambiguity (VUCA). Thus, retailers are focused on seeking partnerships with technology and supply chain partners that give them the greatest resilience and flexibility to operate with excellence. Many partners are looking for simple, innovative, global solutions that help deliver better customer experience while maximizing operational flexibility and minimizing cost.”
- Gary Mirsky, ShipHero: “The biggest takeaway is how fast e-commerce is continuing to grow – because of this growth, we met many people looking for more efficient ways to fulfill orders while also gaining visibility. And there was a lot surrounding new and exciting ways to sell products, both Live and through Social channels. Plus, it was just great to see everyone in person again.”
- Marco De Paulis, Whiplash: “Returning to Shoptalk to see who’s gunning for the ‘next big thing’ for the first time in almost three years has solidified my latest epiphany: D2C e-commerce, once the antidote to retail shopping and complex and expensive digital architectures, has come full circle to the point where it is re-inventing and re-building exactly what it sought to destroy. The biggest booths, largest rounds of funding, and hype train were mostly centered around composable and headless e-commerce platforms and retail-enablement for D2C brands to take their businesses and digital presence to the next level, enabling further growth for brands. The irony is quite strong, but fascinating to say the least.”
So, what does this all mean?
A common thread throughout the conference is the importance of meeting your customers’ expectations. In an industry as dynamic as e-commerce, change and iteration is constant but the impact of prioritizing our customers will never diminish. As merchants, it is paramount that we pay close attention to the shifting landscape and continue to explore how we can implement new technologies and practices into our existing operations.
For more on this year’s biggest e-commerce fulfillment trends, be sure to watch our on-demand webinar with UPS, The State of Shipping in 2022: Insights, Trends, and Hot Takes.