5 “Aha!” Moments From Shoptalk 2018

Shoptalk 2018 has just ended. They position themselves as the World’s Largest Conference for Retail & Ecommerce, and truth be told, that is no exaggeration.

You all know what is hot in the industry right now: AI, machine learning, conversation commerce and so on. But… I’m not going to dive into that since you can read about these literally everywhere. Though these hype terms come and go, you shouldn’t ignore them. Instead, keep them in mind and watch them. For instance, voice-activated ecommerce is most probably going to be a revolution similar to mobile but happening quicker. However, as Peter Cahil from Voysis put it:

Currently, this way, you buy products you don’t even care about, e.g., toilet papers and detergents.

But as stated, you will read about these everywhere else.

What I would like to share with you are my “5 Aha!” Moments that I had during these 4 busy days.

Here’s a quick list of 5 “Aha!” Moments From Shoptalk 2018:

1. China is the new origin of innovation
2. Local adaptation is the key to global expansion
3. Your online team can act faster
4. Leverage your customers to drive traffic and engagement
5. New retail brands are being built online first

Let’s dive in.

The “Aha!” Moments

1. China is the new origin of innovation

I happened to attend 2 sessions which covered either the Chinese market or a company from this country, and I was literally blown away by the numbers.

China is huge, and these numbers say it all:

• Half of the world’s largest public internet companies are located in China
• China accounts for 42% of worldwide e-commerce transaction value
• China’s mobile payment volume is 10 times that of the US
• There are 98 Unicorns in China (compared to 106 in the US)
• There are more than 160 cities in China with a population of over 1 million people. (According to Hans Tung, Managing Partner at GGV Capital, for the past 40 years, China has added a city of New York’s size every single year)
  China with its population 4 times the size of the US is leading the way in payments and e-commerce
  What is even more fascinating is that China is not only huge but also incredibly fast at implementing innovation. Here are two good examples:
• BingoBox operates more than 300 cashier-less stores around China (compared to a single store run by Amazon Go)
• Compare the level of recommendations at Alibaba and Amazon as described by Deborah Weinswig, Founder & CEO at Coresight Research. She says, “I bought paintbrushes at Amazon, and it recommended me more paintbrushes, while Alibaba, after the very same purchase, recommended me experience – a painting class.”

Uber was founded in 2009 and is now worth $51B while its Chinese counterpart Didi which was founded three years later has already hit a $56B valuation

BingoBox expanded into 30 cities in just 6 months and now there are more than 300+ Boxes in operation.
Zia Wigder summed up Hans Tung’s presentation:

The pace of China is so fast that Hans Tung’s presentation was not up to date the moment he finished it.

To get a grip on Chinese innovation, I would advise you to subscribe to 996 blog (you may also try Walk The Chat blog to get a glimpse into a completely different type of e-commerce platform).

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2. Local adaptation is the key to global expansion

MANGO is a European fashion brand that operates in more than 105 countries and sells online in more than 80 of them. Roger Graells, Global Online Sales Director at MANGO, shared his insights on the ecommerce challenges and opportunities that brands face when expanding into new markets.

What he stressed much is that when you expand into a new market, you need to focus on local adaptation, which includes:

• Translating the whole website into the local language
• Charging users in local currencies
• Enabling local payment methods (like PayU in Poland, Sofort in Germany or Cash on Delivery in Russia where it can account for 95% of your orders)
• Provide a range of local delivery methods (time of delivery is crucial here)
• Coming up with customer friendly return policy

E-commerce globalization challenges part I: product range, competitiveness of operations, price policy, brand guarantee, integrate and complement channels

E-commerce globalization challenges part II: localization has no limits, local adaptation and service to the customer: language, local currencies & payment methods, a range of delivery options, easy returns, customer care & post-sale service
Expanding to new local markets is not easy but is manageable. Before entering any particular market, remember to research competition thoroughly as local players can be incredibly strong (e.g., eBay couldn’t stand its ground in Poland against Allegro – the local behemoth).

3. Your online team can act faster

The online world is growing at an extremely fast rate – no doubt about that. However, when I listened to Adam Goldenberg, Co-CEO at TechStyle Fashion Group, as he went into the details of their brands’ successes, I got the impression that most of the online teams are not fast enough in their approach to testing and iterating everything they do.

TechStyle Fashion Group manages four brands: JustFab, ShoeDazzle, Fabletics & FabKids. The company was founded in 2010 and has already managed to hit $700M+ in revenue.

Now, guess how many website iterations for improving user experience they have managed to test in a year?

I don’t think that your guess was anything near 2,000+ – the number that Adam mentioned. Well if you do not have a continuous process of website evolution, then that is a goal you should consider setting.

TechStyle’s teams approach traffic acquisition in a similar, agile way. They design and test a whopping 35,000 ad creatives every year and verify 150 TV commercials. In just 16 days from the start of their new year’s advertising campaign, they were able to come up with a creative and a landing page that were 2 times more effective than those that were served on the first day.

Annual stats of agile acquisition strategy at TechStyle: $125M+ media spend, 150+ iterations of TV Commercials Tested, 2k+ website iterations tested, 35k+ ad creatives designed and tested

Fabletics New Year’s Campaign: after 16 days the winning ad and landing page variation had a 2x customer acquisition efficiency compared to day 1.

4. Leverage your customers to drive traffic and engagement

One of the most popular ways to promote online stores and brands is by engaging influencers in social media. However, the real power lies in empowering your customers/clients to do that job on a way bigger scale. Remember that just as Emily Weiss (btw. Emily is on our list of the best ecommerce influencers), Glossier’s Founder & CEO said:

People are looking for other people’s experiences when they are in the exploration phase

Therefore, the best way is to encourage your customers to share their experience with your brand on your social media platforms.

For example, Poshmark has designed their platform in a way that every seller spends half of their time promoting other sellers. They have created a community where you have to help other sellers if you want to gain followers and succeed at Poshmark. With this approach, they have become one of the largest generators of pins on Pinterest.

The Poshmark community spends 25 minutes per day in the app, opening it 7-9 times.

MATCHESFASHION.COM is another extraordinary example from the fashion industry that leverages user-generated content to sell their products. As Urlic Jerome, CEO of MATCHESFASHION.COM, stated – 50% of their website is content, and this content drives 35% of their revenue. For example, you can shop directly from posts of users.

Check out on your own how MATCHESFASHION.COM, Poshmark, Glossier and Ascena’s brands engage their users on a daily basis.

5. New retail brands are being built online first

Taking a look at the data describing the 10 biggest companies in the world by market capitalization, you will notice that 70% of them are from the online/tech sector.

7 out of 10 biggest companies in the world by market capitalization are from the online / tech world.

If you think about the launches of retail brands in the recent years, you will realize that most of them began in the online world. Think of Chewy, JustFab or Fablitics; all these companies indentified an underserved customer segment that could benefit from better product/service offering.

The online sector is a better starting point because of two main reasons:

1. You get nation-wide access to the market right from the first day
2. You can iterate fast and regularly (As Max Wittrock, Co-Founder of mymuesli, said: “We change sentences on our website every hour, but it’s incredibly tough to apply this kind of thinking and action to the offline world”)

Having attained a strong online presence, some of these brands then go into the offline world to create their first stores. What is really interesting is how they usually perceive their physical locations. Usually, they don’t treat them as a way of customer acquisition since this can be achieved at a lower cost online, but as a way of loyalization to bring a higher LTV.

For example, Fabletics opens its stores in the areas with the highest density of their clients. Apparently, they have noticed that customers in the regions with physical store locations spend 2.8 times more than customers in areas without such stores.

Summing it up

I really had a great time at Shoptalk 2018. There was a lot of great, interesting content, which was very impressive. The event gives you a chance to meet great people and chat with retailers, innovative tech companies, best thinkers and influencers. Kudos to the organization’s team for making it all happen.

I will definitely go to Las Vegas for next year’s Shoptalk. However, I wish they could cover just three additional things:

1. More time to explore the exhibition hall. It would be great to have about 3-4 hours of time dedicated to exploring the exhibition hall. Sessions were great, but if you wanted to attend the ones that you were interested in, there was simply not enough time to explore all the great companies that were showcasing their products.
2. More presentations on China and more speakers from China. This country has been developing at an incredibly fast rate as indicated by the tremendous statistics. We are excited about Amazon doing cashier-less stores and having them on Keynote on day 1. However, they have only 1 physical location with experimental store while Bingobox in China has over 300. So, frankly, which story should be presented on the main stage?
3. Stage level monitors. If you are seated in the first rows to have a chance to take some nice photos, your neck really hurts after looking at the slides which are just under the ceiling. Couldn’t this be made a bit more comfortable, Shoptalk team? 😉

And you should definitely check out our wrap-up video from Shoptalk 2018! If you weren’t there watch it to be sure that it is worth visiting Shoptalk 2019! And if you were, you can remind yourself the best moments from Las Vegas and see our teammate Adrian how to beatbox 😉

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Music promoted by Audio Library https://youtu.be/1LVgg1YoT6U

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