Joining Grips’ head of insights, John Fetto, on the webinar were panelists Jay Nigrelli, SVP of e-commerce at Perry Ellis, Uwe Schnetzer, professor of marketing and strategic development at the CBS International Business School and Moritz Thoma, CEO and co-founder of Grips Intelligence. The panel, moderated by Lauren Freedman, Senior Consumer Insights Analyst at Digital Commerce 360, explored actions that retailers and brands can take today to ensure they are profitable in 2023.
We highly recommend you listen to the full info-packed webinar, which you can access here, but below are five highlights from the panel discussion that we think you should know. And if you want to hear it live, fast forward to the time noted next to each question on the webcast video.
Q: How do you see the role of physical stores evolving? (Time: 25:11)
A: John Fetto: I think there needs to be a continued blurring of the lines. Retailers still operate two businesses and consumers pick up on that. They have one sale that’s online and another that’s in-store only. Give consumers the same prices across the board and enable in-store/ship-to-home as well as reserve online/try on in-store options.
Retailers also need to become more of a destination. Consumers obviously longed for the in-store experience, so give them something to experience. Lululemon has in-store yoga courses, Home Depot does kids projects on weekends. Apple does workshops everyday.
Finally, I think the physical store will go more online. Look at what Best Buy has done in building a 40,000 square foot virtual store where shoppers can click to do a live video with a floor rep similar to what they would do in-stores. I think we’ll see more of these types of trends in the year ahead.
Q: What can retailers do to be relevant? (Time: 40:50)
A: Uwe Schnetzer: Brands and retailers need to have a purpose. We see this movement especially among the young people who vouch against climate change, because continuing on the path we’ve been on is obviously not a choice. As a teacher to young people, having contact with them, discussing with them, I can see they really mean what they say. They only want employers that have a purpose and stand behind it. And they’re very sensitive to green washing. So it’s important to be relevant in the literal meaning to offer something beyond the fact that you’re a growing company and that you’re a high paying employer, but provide something of meaning, of relevance.
The more practical aspect is to be available. At the moment we have a lot of supply chain issues, we’ve had the topic of different channels–online versus offline–and no one wants that from a customer perspective. Digitalization drives convenience and if you’re not super convenient people will simply buy from Amazon when it comes to matters of factly. You need to be easy to deal with and to be available and then you’re relevant.
Q: How can brands work with retail partners while expanding their D2C business. (Time: 51:43)
A: Jay Nigrelli: I have a lot of experience working with highly distributed companies (Samsung and Perry Ellis), and currently I’ve been successful in growing DTC supporting our wholesale partners.
I think it really comes down to smart product segmentation and having retail exclusive products that are not competing directly against partners on Google SERP. It’s important to have very thoughtful segmentation. At the end of the day, if you’re selling products on your site and Amazon is selling the same products on their site and they offer free shipping, you will never expand your DTC business. So you just have to be thoughtful about what you offer your wholesale partners and what your product assortment is.
Q: What can brands do to be recession proof: (Time: 56:48)
A: Moritz Thoma: Be informed with data. Understand the competitive landscape and the products consumers want. Smart pricing strategies, smart product strategies, understanding how to play acquisition channels and finally customer retention. It’s hard to speak on a very general note, but we have seen consistent trends across the data, across marketing channels, across conversion rates for products. These are opportunities to capitalize on. Product, marketing channels and pricing would be the three levers I’d be focused on.
Q: What role will discounts play? (Time: 46:58)
A: John Fetto: Attendees responded via poll that more of them will increase sales in 2022.
Expanding the number of sales is a slippery slope. Once you start doing that consumers will get used to it and will continue to demand these constant deals and discounts. And it gets harder and harder for retailers to get out of this cycle. They did it in the early noughts right? And it took years to get out of it. I think having a more strategic approach to when you’re going to launch sales and what the focus of the sales is going to be is important–instead of once again just throwing the kitchen sink at the market to see what sticks.
You have to have a differentiated approach, such as having a different type of sales in a different time of the year. Another way is to make sure you have an assortment of products at different price points because many consumers will be scaling back or trading down if you will. If you don’t have an option for them to scale down to, they’re going to find another brand. So let them know that if you need to trade down, trade down with us and here is an option selected just for you.
That said, also give them an option to stay at the same price as before, such as offering a buy now pay later option. If you’re not adding that to your site right now, I think you should be looking into it. That way you give consumers a reason to continue to spend the same amount with you and make it very clear that they’re valuable customers. And then ramp up your loyalty program to continue giving them discounts and deals and prices that they want.
These were among some of the highlights of the panel discussion, but there’s lots of additional content and tips that were shared during the webinar so click here to get access now!