Illustration by Diego Blanco
How is AR/VR shaping the future of ecommerce? In crowded digital marketplaces, how can you stand out from the competition? And is it possible to manufacture that all-too-elusive “hype” for a product launch?
These are just a handful of the questions that industry leaders discussed at Shopify Plus’s Commerce+ event in 2019. A global thought leadership conference, the exclusive and invite-only event brought together the fastest-growing brands to build connections and share best practices.
This year, Commerce+ is back, but with a new format. Hosted on October 13th, 2021, Commerce+ is a digitally open event that will include product announcements and insider insight from ecommerce experts around the world.
Wondering what you can expect to learn? Here are the best lessons and strategies that came out of the last Commerce+ event.
Table of contents
- Validating your ecommerce strategy to investors
- How AR will transform the online retail space
- Building hype while creating standout brand experiences
- Creating customer-centric experiences
- Strategies to future-proof your brand
- Using customer service to create moments of delight for brand loyalty
- How DTC brands build customer loyalty
- Gymshark and Flow share their secrets for brand discoverability
- The future of retail spaces is in human connection
- Stay ahead of the curve
Validating your ecommerce strategy to investors
Like any industry, ecommerce might as well be its own nation. It has its own unique culture and language, with buzzwords like “personalization,” “omnichannel,” “A/B testing,” and “conversion rates” holding weight for insiders but almost nothing for outsiders.
So, what happens when you have foreign visitors who don’t speak the same language as you? And what happens when those visitors just happen to be your investors or clients?
That was the subject of Zack Werner’s Commerce+ talk. As the founder & CEO of the Maze Group—a digital consultancy that creates enterprise value for companies by using technology, data, and ecommerce tactics—Werner works primarily with financial professionals, including investors from what he describes as “old legacy” settings.
“They’re very different worlds, [so] there’s often this weird communication gap,” he explained. Things get lost in translation, and if the people holding the purse strings don’t understand what they’re investing in, they’re unlikely to fund it.
Forget the jargon and let numbers do the talking
Werner provided the example of asking a retail client to invest in technology that offers dynamic personalization in order to improve conversion rates.
“Here's where the problem begins, because…what they hear [is] ‘this person wants to spend millions of dollars to accomplish something I don't understand at all, and they should be able to do it without this new shiny toy that cuts into our margins,’” explained Werner.
To break through this barrier, Maze relies on a mutual language that both ecommerce experts and investors are fluent in: numbers.
Werner and his team employ an incredibly detailed financial model to illustrate potential ROI to investors. It outlines the total project costs (including the cost of investing in the software) against the opportunity size in terms of actual EBITDA uplift on a 24-month period and total enterprise value.
Everybody in that room needs to work in harmony to create an amazing outcome for the company, which is everybody’s goal,” said Werner. “My hope is that we, as practitioners, can continue to bridge that divide by speaking a language that crosses the table.”
Watch the full video: Validating Your Ecommerce Strategy To Your Investors
How AR will transform the online retail space
40% of shoppers would be willing to pay more for a product if they could experience it through augmented reality. On top of that, 71% of shoppers would spend at a store more often if it offered AR technology.
Once upon a time, customers were unlikely to invest in a $7,000 lamp without seeing the lamp in person. That all changed with the use of augmented reality (AR) in online shopping, which doesn’t just let customers see a detailed multi-dimensional version of the lamp—it gives them the opportunity to “place” a photorealistic 3D model in their home.
Home furnishings isn’t the only category AR is shaking up. Customers are more likely to purchase any product if they can try it out first, and it’s estimated that as many as 19% of shoppers already utilize AR and virtual reality (VR) for this purpose.
When Daniel Beauchamp, head of AR/VR at Shopify; and Ryan Walker, co-founder of furniture brand HORNE, sat down to discuss the use of AR and VR in ecommerce at Commerce+, it was still in its infancy. In fact, it had only been a month since Shopify AR had been launched. Yet, the key takeaways from their talk still hold strong.
Augmented reality can be more affordable than traditional photography
Compared to traditional photoshoots—which require renting a location, hiring a photographer, spending a few days shooting, and ending up with only a handful of images—augmented reality can be surprisingly affordable.
“Costs of [photoshoots] add up,” said Walker. That’s just part of the reason why HORNE now relies on AR instead of traditional photographs for products including its $7,000 Serge Mouille light.
Now, 3D designers create a rendered world in which we can place objects and move them around and really choose exactly how we want everything to look.”
AR can be used to create products
In traditional product design, sketches are sent to a manufacturer, who then creates a prototype. But the process can be painstaking and involve many time-consuming rounds of revisions. “The feedback loop can be kind of slow and take a long time,” said Walker.
Enter AR. Merchants can now get a 3D model of a concept and preview it “as though it were there in front of you before you even sent it off anywhere to get it manufactured,” explains Walker. This allows ecommerce merchants to be more responsive to customer demands and market trends.
AR has the potential to lead to higher conversion rates and reduce return rates
According to Walker, the five products the company launched with AR are the top-viewed products on HORNE’s website.
“I think people are really enjoying engaging with those products. Once we can have a little bit more data to collect and analyze, I really [expect] to see that their numbers have gone up,” said Walker.
If we checked back in with Walker now, we’re confident his prediction would be correct. According to 2020 research by Vertebrae—which specializes in AR and 3D ecommerce—conversion rates increase by 90% for customers engaging with AR versus those that don’t.
Building hype while creating standout brand experiences
Usually associated with flash sales or product launches, “hype” is difficult to define—and even harder to manufacture. Streetwear brands and technology giants tend to be the masters of hype, seemingly effortlessly building anticipation for limited-release footwear or the latest phone.
But when Nick Annacone, COO of Kith, and Nate Brown, Creative Director at Studio Institute, met at Commerce+, they agreed that hype isn’t just about marketing or making sales—it’s about creating an experience and telling a story.
Here were their top tips for making sure your product or brand is one people can’t stop talking about.
Don’t choose collaboration partners based on clout
Lifestyle brand Kith has become known for its collaborations with brands such as Levi’s, Tommy Hilfiger, and Versace. Yet, “collaboration” is a word founder Ronnie Fieg doesn’t like.
“The word ‘collab’ is so watered down,” he told Complex magazine in 2014. “Collaborations work when you bring out products that you wouldn’t normally see and you both bring different audiences to the table.”
That’s why Kith focuses on partnering with brands it feels it has true synergy with—rather than choosing collaboration partners based on name alone.
“I think the reason [collaboration as a concept] has gotten diluted is because it’s just slapped names beside each other these days, and there may or may not be a genuine story behind it,” explained Annacone.
We look back at brands like Nautica, Tommy Hilfiger, and Polo in its heyday, and we look at these brands like they are legacy brands. They’ve withstood the test of time. That’s what we look to partner with because that’s where we see ourselves going—being around for 50 years. That’s obviously the goal.”
Remember that business and art are not mutually exclusive
Brown, who has worked with names including Beyoncé, Kanye West, and Jay Z, along with brands such as Nike, says that when it comes to building hype and developing campaigns or products, it’s important to approach it in the same way a pop star would.
In other words, music may be “art,” but it’s also a business.
“The most successful artists are businessmen and women, and the most successful brands are some of the most creative in the world,” said Brown. “The creative process doesn't dampen or hinder the financial or economic goals of what that product might be.…We just don’t look at [creative goals and business goals] as exclusive from each other. We look at them as just married throughout the whole process.”
Watch the full video: The Business of Building Hype
Creating customer-centric experiences
It doesn’t matter whether you only operate online or have an omnichannel experience that includes brick-and-mortar stores—the only way to build a successful business is to do so with your customer’s experience top of mind.
Connect with customers through consistent brand experiences
Australia toilet paper brand Who Gives a Crap has managed to transform a utilitarian product into one that customers tell their friends about—and even subscribe to. But it wasn’t a matter of marketing “softness”; the fallback marketing tagline that most loo rolls rely on.
Instead, Who Gives a Crap has developed a cheeky brand image (you won’t find a single puppy or cloud in its advertising) to sell its recycled paper rolls and donates 50% of its profits to sanitation projects in developing countries.
This is key in an era when consumers are seeking out sustainability. According to a 2020 report on how consumer preferences are being shaped by sustainability, global IT company Capgemini found that 66% of consumers are choosing to purchase products and services based on their “environmental friendliness.”
At every touchpoint, Who Gives a Crap customers are given reminders of how they’re giving back, from when they first visit the website through to the delivery and unboxing experience.
“Everything that we do is focused around making our customers feel really good,” explained Megan Olney, Head of Customer Experiences of Who Gives a Crap.
We want [customers] to feel excited about the fact that they’re supporting us. We want to sprinkle through these really awesome moments where our customers [feel] fairly good for choosing to buy from us.”
Creating consumer trust is critical
When it comes to selling new products or experiences, you’ve got novelty working on your side—but it’s consumer retention that will dictate the future of your business.
That was the experience of GlamCorner, a designer dress rental company. When GlamCorner launched in 2012, fashion rental was still a novel concept that came with challenges, said Dean Jones, co-founder and CEO.
We didn’t really have our version of a margin of error. If we got anything wrong, people’s level of skepticism would be more amplified than if it was just a regular online retailer that messed up,” he recalled.
Making sure the experience felt high-end and familiar to consumers was critical to GlamCorner’s success. Jones said they only bought high-quality designer items, worked closely with carriers to manage logistics, and recognized early on that they would even have to build their own laundry facility.
“We realized that items had to arrive clinically—clean off the rack and smelling like fresh-washed bedsheets,” said Jones. “We never want one of our customers’ items to arrive and, if it looked tatty or looked unclean, they’d say, oh, ‘It’s just a rental.’ Like if you rent a car.
“The bar was really high for us there that we had to invest in really early on for the business model to work. “But also, in the end, it was driven by what the customer wanted. [We] blew our customers’ minds early on and remained consistent with that.”
Watch the full video: How to Create Customer-Centric Experiences
Strategies to future-proof your brand
When Shopify's Mark Bergen, delivered his Commerce+ presentation on what businesses can do to prepare their brands for uncertainty, there’s no way he could have predicted what the following year would have in store, including a pandemic, supply chain breakdowns, shipping bottlenecks, and an increase in fraudulent activity online.
Ecommerce may be booming, but now it’s more important than ever to future-proof your business by providing the best experiences for your customers. Here was Bergen’s top piece of advice on how to do it.
Take advantage of automation to deliver a consistent brand experience
Environmentally responsible shoe brand Allbirds is a pro at delivering consistent experiences. As a digitally native brand in 2014, it started mobile first. Its physical stores, however, were a natural extension of the brand, with clean lines and a focus on building community. Bergen believes, however, that Allbirds’ “secret sauce” is relying on technology.
Using Shopify Flow automations, the brand can enhance everything from merchandising to its customer brand experiences. The automations recognize when a customer hits a buying threshold and sends through a discount code for their next purchase. Then, the system initiates a message to customer service suggesting sending through a personalized postcard to that customer.
[It’s] all automated in the background,” said Bergen. “From my perspective it provides a consistent experience as I would expect to be treated by a brand I care about, and they didn’t have to do anything.”
Bergen’s bottom line? Let the technology do what it’s designed to do so you can dedicate your time to thinking about your brand, your products, and the types of experience you want your consumers to have.
Watch the full video: 4 Strategies to Future-Proof Your Brand
Using customer service to create moments of delight for brand loyalty
The old adage that “the customer is always right” isn’t necessarily true. Yet the experience customers receive has the potential to make or break brands.
According to recent research by PwC, 32% of all customers would stop doing business with a brand they loved after one bad experience. More tellingly, 73% say that after price and product quality, experience is the most important factor in their purchasing decision. Customers are also willing to pay more for good customer service and experiences—42% say they’d pay more for a friendly, welcoming experience, while 65% of US consumers say a positive experience is more influential than great advertising.
Ben Farren, CEO of SPOKE, and Joel Jeffery, CEO of Desmond & Dempsey, discussed how their brands prioritize stellar customer service to maintain brand loyalty and appreciation. The key takeaway from their talk?
Creating moments of surprise pushes the customer experience to the next level
“We try to [get customers as close to a frictionless and easy purchase as possible], then punctuate that with surprises or maybe more cheesy moments of delight throughout,” said Farren of SPOKE’s approach.
These moments also don’t have to be digital. Sleepwear line Desmond & Dempsey surprises its customers across their channels, including through the offline experience. Deliveries come with handwritten notes, as well as a physical Sunday morning paper.
“We decided actually what we wanted to do is actually take it offline, and we’re asking people to relax in their pajamas and actually sit down and read, spend a good amount of time on a Sunday flipping through this amazing piece of content that we produced,” explained Jeffrey.
His team also went through all the people who review the company and selected some to send flowers and handwritten notes to. “It wasn’t necessarily just the people who’d spent loads of money,” he said. “It was people who genuinely loved the product or had an issue with the product that we were able to fix. We also did the same thing with sending gift cards to people and the response was phenomenal.”
Watch the full video: Creating Moments of Delight for Brand Loyalty
How DTC brands build customer loyalty
The world of ecommerce, as it turns out, isn’t that unlike online dating. Just like singles can swipe left or right, brands now exist in a space where the competition is just a click away. “Ghosting” too, doesn’t just apply to romantic relationships gone awry. It can also feel the same when a shopper abandons their cart, or makes one purchase, never to return again.
How do you even know that you’ve lost a customer, and how do you win them back?”
This was the question Liz Segran, staff writer at Fast Company, posed to Karla Gallardo (CEO of Cuyana), Matt Scanlan (CEO of NAADAM) and Cheryl Kaplan (President of M.Gemi) during their Commerce+ presentation on how brands can cultivate customer loyalty—and make sure the relationship goes the distance.
Have a multi-channel strategy
When shoe and accessories brand Kaplan first launched, it was online only. The challenge? People typically want to try footwear on and physically feel the quality.
To overcome this hurdle, Kaplan knew the shopping experience would need to be frictionless. It upped the ante by offering free and fast shipping, free returns, easy exchanges, and great customer service. It also made sure that it was where its customers were, both online and offline. But this didn’t necessarily remain static. Kaplan said that when M.Gemi launched just half a decade ago, it relied on pop-ups in retail spaces and influencer marketing. By 2019, it had moved from micro-influencers to Instagram Live, and from physical stores to a mobile truck showcasing product.
In terms of marketing and where you show up, I think one of the biggest things that we’ve learned is that the world changes so quickly,” she said.
Make sure you stand out from the competition
It’s not enough to take a multichannel approach. The product you’re delivering needs to match your marketing promises, which has been the focus for apparel brand Cuyana. Gallardo says that the two things that have been key to establishing customer loyalty are top-notch quality and having the best price per wear.
When our customer is happy, she not only comes back for more, but also she tells her friends,” said Gallardo.
Determining its unique value proposition is also what has allowed fashion brand Naadam to improve its customer retention.
“The ultimate objective for our business is brand awareness,” said Scanlan. “We all know brands that start to tip the scale on brand awareness and everyone's like, ‘Oh s––t, yeah. Heard of that.’ I think it takes time, I think it takes focus. I think it takes having something unique about that proposition, whether it’s quality or supply chain or intention.…I think we know that if we just keep our heads down and just keep on doing what we know we do better than other people, then at least we have a chance to do it right.”
Watch the full video: 3 DTC Brands on How They Build Customer Loyalty
Gymshark and Flow share their secrets for brand discoverability
On the surface, it may seem like activewear brand Gymshark and bottled water company Flow Hydration have little in common. But both share the same marketing challenge: How can you differentiate your brand and stand out when you’re selling a product in a crowded category?
In discussion with Hana Abaza, Director of Marketing at Shopify Plus, Gymshark’s Chief Brand Officer, Noel Mack, and Flow Hydration’s Chief Marketing Office, Krissie Millan, discussed how they attracted new customers by exploring different social channels.
Know your marketing proposition
Before you can even launch any marketing campaign—regardless of whether it’s in print or online—you need to have a clear understanding of your brand’s unique selling propositions, said Millan. In the case of Flow Hydration, it was learning that its water ranked highly in consumer testing as one of the best-tasting bottled waters on the market, and leaning into the sustainability element of its brand pillar.
Understanding our product attributes really helps us to differentiate ourselves within a crowded space,” she said.
Experiment with different channels—but make sure you invest in the right spaces
When Commerce+ took place in 2019, TikTok had around 500 million monthly active users. Today, it’s one of the most downloaded apps, with over one billion monthly users. Here are some more stats from the TikTok team at Shopify:
- 25% of TikTok users say that they purchase or research a product after watching TikTok
- 50% of users said they discover new products through advertisements posted by a product or brand
- 61% of TikTok users feel that advertising on TikTok is unique from top social and video platforms
- 43% of heavy TikTok users feel that the “advertising” on TikTok blends in with the content
That’s why Mack’s thoughts on emerging social media channels, such as TikTok, resonate even more now. An early adopter, Gymshark already had 1.2 million followers in 2019, compared to Nike’s 150,000 followers. As of September 2021, Gymshark now has 3.3 million followers.
“One of our strengths is that we know where are consumers are hanging out online,” said Mack. But while it may be tempting to create a video for Instagram and repurpose it for Facebook or TikTok, Mack cautioned against doing so. He explained that audiences for each vary, and that Gymshark has specific tones, dependent on the platform. It’s also critical to understand that users interact with different platforms in different ways. While a drawn-out intro may work for a YouTube video, it would lose users’ interest on Instagram, for example.
“You have to drill down deeper and figure out what works on the platform. People move 50% faster through [Instagram] stories than they do through the feed,” he said.
I’m always asking our teams, ‘Is that thumb-stopping content? Would I stop on that and watch it?’ That has to happen in the first two seconds.”
Watch the full video: Gymshark and Flow Share Their Secrets for Brand Discoverability
The future of retail spaces is in human connection
In 2021, ecommerce may be outpacing physical retail in terms of growth, but physical stores continue to dominate in terms of actual sales.
One element that’s often lost during online shopping is human connection, which online retail marketplace Appear Here founder Ross Bailey understands is critical to building brands. Here’s what else we learned during his presentation.
Human connection will continue to be important in retail spaces
Bailey reported that in 1990, 92% of leases were 10 to 20 years in length, creating an enormous financial burden. Currently, the choice is between pop-up retail versus long-term retail, with future potential for pay-as-you-go spaces.
But while the average lease time of physical brick-and-mortar stores has gone down significantly, this doesn’t mean people are no longer in physical spaces.
I think that stores are about belonging and gathering places, discovering. They’re ultimately about human interaction,” said Bailey.
Post-pandemic, regaining this sense of trust with customers will be more important than ever. And as the Appear Here model illustrates, the future of brick-and-mortar stores will look much different than it has in the past.
Watch the full video: The Future of Retail Spaces Is In Human Connection
Stay ahead of the curve
Hosted on October 13, 2021, this year’s Commerce+ event promises to bring together the fastest-growing brands and industry leaders to share exclusive conversations, build connections, and pave the way for the future of commerce.