By Adam Forrest, Director of Product Marketing
In today’s Top 5, we take a look at the continued trend of online retailers opening physical store locations, a new way to think of omni-channel and, likely to no one’s surprise, we explore some of the news around the latest Apple devices.
Here are some of the top items I read to help inspire new thoughts for you this week.
Summary: Rent the Runway is one of the latest examples of an online retailer opening a brick-and-mortar location. Founded in 2009, the company offers designer gowns, purses and jewelry for one-time rentals.
My thoughts: Online retailers opening physical store locations seems to be the understated trend of 2014, and Rent the Runway is just the latest example. But Rent the Runway has a unique business model. With a physical location, they open the door to a slew of new opportunities to better engage their customers, while also increasing operational efficiencies. Though my wife hasn’t tried Rent the Runway (yet), I can imagine a bit of a panic might ensue if a dress ordered for a big event arrives the day before and doesn’t fit or you just don’t like it; there’s no time to ship it back and get a new one in time. With a physical store location, this could be avoided since consumers can try things on first to find the right fit and the right style. And similar to the experience of trying on bridal gowns, Rent the Runway can offer sample dresses to try, letting their customers place their order for delivery after they’ve confirmed they found the one they want to rent. These stores could also lend themselves to becoming pick-up points for orders placed online, as well.
Summary: According to the Retail Gift Card Association, almost 77% of U.S. consumers have given a friend or family member a gift card in the past year, and nearly 90% have received gift cards over the same period. And going forward, there will be continued adoption of newer gift card options, such as mobile gift cards and e-codes.
My thoughts: Though there are some consumers that believe gift cards to be impersonal, gift cards have only grown in popularity. Every grocery store, pharmacy and convenience store seems to have that large shelf of gift cards, conveniently located right by the check-out lanes. This is a reflection of the last-minute behavior of today’s shoppers. When these shoppers find they’ve waited too long to order a gift online, they look to gift cards instead as a quick and easy option. Knowing that, it makes sense that gift card purchases tend to increase significantly in the last week leading up to Christmas. What will be interesting to see around this year’s holiday shopping season is how many e-codes will be purchased vs. physical gift cards.
Summary: The iPhone 6 brings with it a slew of new features and functionalities, including the mobile wallet, a faster processor and an even bigger screen. But perhaps the most exciting part of the recent announcement is that the iPhone 6 enables mobile payment capabilities with Apple Pay, along with a Touch ID API, allowing developers to incorporate biometrics-secured, one-touch log-in and checkout in apps. What does this mean? Retailers can create apps that enable an iPhone 6 user to just put their finger on the home button on the device to complete the purchase.
My thoughts: Smartphones have become transcendiary devices; consumers can use their smartphones throughout every part of their shopping journey, enabling a seamless shopping experience. And the new Apple devices illustrate that it’s becoming more important than ever for retailers to focus and invest in mobile to truly take advantage of the new customer engagement opportunities and make shopping even easier for consumers. Apple Pay, which combines Touch ID with NFC capabilities, eliminates the need for consumers to open their physical wallet or manually enter payment details, a username and password before they can complete the transaction. Retailers that enable mobile engagement opportunities will find that it accelerates the consumers’ ability to make a purchase, which translates to productivity and increased profits for retailers.
Summary: Macy’s latest annual report shows that the company refers to itself as an “omni-channel retail organization operating stores and websites.” But the interesting point is that it no longer reports sales by channel. This is the future of a unified commerce model; one step further than omni-channel, unified commerce puts the customer experience first, ensuring they have access to product pricing and availability whenever and wherever they choose to look.
My thoughts: This article caught my eye for one big reason: unified commerce is nothing new. It’s just a more accurate way to describe bringing the brand and customer experience together. Omni-channel is a word that has been frequently overused because it was, for a while, the only word that even remotely addressed the seamless interaction of multiple customer touch points. And because of this, nearly every retailer has their own definition for omni-channel. By calling it a unified commerce model, I think it will help retailers overcome some internal barriers that legacy systems may have created and, as a result, we’ll see retailers go through some organizational changes that will enhance the efficiencies of their companies.
Summary: Wearables are a form of personal expression, and with Apple’s recent announcement of the iWatch, more people are considering these devices. But the difference with these new wearable pieces is that many tech companies are looking to the fashion industry to get some help to make them more appealing and less “cold,” as the technology has often been referred to.
My thoughts: Technology has become an extension of the consumer, so it makes sense that retailers and fashion designers want to help personalize those devices. Just think of the number of unique smartphone cases you see just walking through a mall; it’s all about personal expression. And now, as smartwatches increasingly enter the market (thank you, Apple), there could be a new opportunity to engage with customers, both from a product offering perspective as well as with the overall shopping experience. But the smartwatch market is largely unknown. Because of that, I think this holiday season will be the ‘testing’ season for retailers get a feel for the smartwatch market. Once they have that insight, retailers and designers will be able to pursue a real strategy for 2015.