Command C’s Top 10 Trends Shaping the Future of Ecommerce

In this episode of Recommerce, Founder Sara Bacon, talks with Nicole Reed, Sales and Marketing Manager, about the top ten trends that are shaping the future of ecommerce and the retail industry. You’ll learn:

• • Why more people are buying clothes online than ever before
  • How brick and mortar store shopping is changing through technology
  • The benefits that retail tech can bring to backend operations
  • Examples of how merchants can integrate these trends into their ecommerce sites to get ahead of the curve

Full Episode Transcript

Sara: Hello and welcome to another episode of Recommerce. I’m excited to be here today with Nicole Reed, who is our Sales and Marketing Manager. We are going to talk through ten trends to know in retail tech today. Hey, Nicole.

Nicole: Hi there, Sara. Great to be here.

Sara: I’m thrilled to have you. Let’s jump right in and start talking about the first trend on your list. What is it?

Ecommerce Trend #1: More People Are Buying Clothes Online

Nicole: Well, it’s the big news coming out of Holiday 2018 which is that more people are buying clothes online.

The category of apparel and accessories saw a nice leap forward in the holiday shopping of 2018, including a nearly 8% increase year over year from the holiday season 2017 to 2018. It just goes to show that people are getting more and more comfortable and ready to buy clothes online.

Sara: That’s awesome for us. Plus it means we have a job.

Nicole: So, taking that trend number one is that more people are buying clothes online, that leads us to trend number two and number three which point to the reasons why.

Ecommerce Trend #2: Retailers Change Their Attitude About Returns

Nicole: Trend number two is that there’s been a retailer attitude shift around returns. As a result, people are feeling a lot more comfortable with buying clothes online. They’re feeling like if it doesn’t work out, there’s a path of recourse that’s not going to be too difficult.

For the longest time, retailers used to look at returns like, “This is just a part of our business where we lose.” That’s just going to be in the loss category – sometimes up to 20% of their business. That is really shifting.

One of the companies that really led the charge on this, and a lot of other companies are picking up the attitude, would be Casper Mattress. So, you buy a mattress online. That’s a little strange. Talk about something you want to touch and feel and see how it is on your body, and all that kind of thing.

You get the mattress. You can sleep on it for 100 nights, and then they still allow you to return it.

Sara: That’s fascinating, and I can imagine that, if money weren’t an object, merchants could come up with all sorts of creative ways to accept returns. But, how does a company that’s selling this significant … and I mean significant in terms of size … thing, just accept that they might get this costly product back? What do they do with that? How do they make sense of that?

Nicole: The answer that they’re coming up with is that they take mattresses that have been returned and donate them. So I’m sure there’s a tax benefit to those donations.

There’s also a community benefit, and things like that. So they’ve really created a closed-loop system, which gives customers happiness, because if the mattress didn’t work out they get to return it free of charge.

It’s not like the mattress just goes into the trash and it’s written off as loss and that’s all it is. It has a life beyond the return.

Sara: It does amazing things for their brand, right? If they’re of donating their mattresses, wow. That’s really cool. Or even recycling. Certain material, some companies may be … and I know in the past we’ve talked about this company ThirdLove, and they are a bra company and they donate their returned bras back to women in need. Just the business case for branding there is incredible.

Nicole: Absolutely. ThirdLove says, “Wear it, wash it for 60 days, and you can still return it.”

And that just goes so far in giving people the experience. I’ll say this as someone who as just purchased recently from Third Love. You start to love a bra.

By that offer, they allowed me to take the leap. Okay, I don’t have anything to lose. So let me see what this is.

Sara: I think it also speaks to the company’s confidence in their product, which then makes me more confident that I’m going to like and enjoy that product, too. You’re willing to take this back? Must be a good thing. You must be pretty sure that I’m going to want to keep it.

Nicole: Absolutely. I saw a brand the other day on Instagram, and their motto was that they have a “touch-first policy.” And it was a clothing company. I thought that was so interesting, because that’s what physical retail is. There’s always been a touch-first policy. But here we are, because I want the convenience of being able to buy it from my phone, they were assuring me that I can touch it, see how it fits, wear it around for a little bit, see how it feels on the skin, and then decide whether or not to keep it.

It’s just been a real attitude shift about returns, and what I’m really loving about it is that it benefits customers, but also, companies have figured out a way to make it work for them too. So, I think that’s super smart.

Ecommerce Trend #3: Online Shoppers Are Getting a Better Fit

Nicole: The other reason that we can really point to why people are buying clothes online, trend number three, is that online shoppers are getting a better fit. The world of ecommerce sizing technology has really grown by leaps and bounds.

I mentioned ThirdLove just now in the trend number two about online returns. Regarding sizing, ThirdLove is really interesting, too, because there’s a sizing quiz. It’s not just a quiz where you’re going to put in your standard measurements, but it’s also talking about size and shape and all of these things. I was like, “Gosh, I had no idea so much went into creating a bra.” It was really interesting.

I answered all these questions, then in order to get my final size from ThirdLove, they prompted me to enter my email. Okay, I get that. They want to make that connection.

So I entered my email. Now I’m on their email list. And as they push products my way, whenever I see a product that I like, and I click on it to learn more, it automatically highlights the size that they know would fit me best.

Sara: Wow.

Nicole: Right? So it’s like, we’re just established. They remembered who I am. They know my size. Underwear shopping, I think, for anyone, is always a little tricky, and maybe even more tricky for women. So it’s just been really fascinating to take away that barrier. You know what I mean? This is just the size for you.

Sara: The psychology of intimacy in that experience for a company that’s selling undergarments is so brilliant, and these are just kind of strategic decisions that thrill me in ecommerce.

It makes me think … not to kind of go in a totally different direction, but it just makes me think about the opportunity in ecommerce. I think it’s really easy for merchants, especially if you had a brick-and-mortar store before you had an online experience. To think about ecommerce as, “How can I recreate the brick-and-mortar experience for my ecommerce users?”

But there’s this whole other world of, “What are the infinite possibilities that are things that have never, ever before occurred in retail that are unique to ecommerce?” And that just feels like it’s checking that box, for me.

Nicole: Absolutely. I think about that a lot. For the longest time, we were saying, “Oh, no. Ecommerce is going take the people out of commerce.” It’s going to be technical, and it’s going to have an anonymous, distant feeling.

And what the trends today are really showing us is that the boomerang is coming back. People are getting back into commerce, and that the sites and companies that recognize that really build the long-term relationship with their customers.

Ecommerce Trend #4: Digital and Physical Retail Increasingly Mesh

Nicole: Trend number four. I appreciated you talking about physical retail, because that’s trend number four: digital and physical retail are increasingly interplaying. It’s interesting because they were really two distinct things for a while.

At this point, there’s just a real mix. Particularly where I want to talk about that is through looking at physical retail and how they’re bringing technology into the store.

For example, we’ve got a store in Nolita. I’m in New York City, in the neighborhood of Nolita, and there’s Reformation.

I think we all know the experience of going to get something at a store, and searching for our size, and maybe having 10 garments on our arm while we’re going through a pile of clothes trying to find our size.

Reformation has done away with that. Their store is essentially like a sample store, almost like when you go to buy a bridal gown or something like that. Like you’re trying on the sample, and then it gets fitted to you.

But with Reformation, you see the sample, and then you go to a touch screen. On the touch screen, you look for your size. So you’re no longer looking through piles of clothes to try to find that one size.

And there’s also sales associates there, and people to help you. But you can do the process digitally. And then, as you add things digitally to your shopping list, you then go to the physical dressing room and the things that you’ve selected digitally are there in the room for you to try on.

Sara: That’s really cool. I wonder, is that something a customer can kind of look at those things at home and select the items that they want ready for their dressing room when they get to the store?

Nicole: I haven’t exactly seen that specific thing, but it’s that kind of thinking that is building this new world.

There’s another thing I want to say on this idea of the digital coming into the physical retail. American Eagle is also trying out some really new, interesting things in their fitting rooms. They’ve got touch screen mirrors where, through the screen, you can keep a running tab of the clothes that you’re looking to buy, which I think is really great.

Sara: So you can see pricing, and your total and that sort of thing? Wow.

Nicole: Exactly. You can ask for different sizes. You don’t have to race out there.

Sara: Half-naked.

Nicole: The mirror also suggests complementary products for what you have. And then, Top Shop and Uniqlo, they’re trying out some things with mirrors where you can change the color. Let’s say, I’ve got on a shirt that I like, but, oh, I saw that other color, and then I press on the mirror and it shows me what it would look like in that other color maybe with the pants I’m also considering.

Sara: So smart. Yeah. It makes me want to go try it. I feel like I don’t believe it until I see it.

Nicole: The day is here, I promise. The day is here.

Trend #5: Retail Tech Builds a Smarter Backend Experience

Nicole: Trend number five, so lots of cool stuff is happening. And what we’re talking about, really, is the customer experience, the front-end experience, but one of the things that’s really revolutionary – and we talk about this at Command C – is that these kinds of leaps forward in technology are also improving the backend for retail.

So trend number five is that retail tech is creating a smarter supply chain. Inventory management is finally making sense. Particularly with all the omnichannel capabilities. It’s been sort of a coconut shell game for retailers thus far. Like, where’s the shirt that I need to find to get over to the store in Los Angeles? Or whatever that may be.

Now that’s all available in real time. There’s notifications when inventory starts to run low. Or if you need to reorder from a supplier. Basically, the backend ecosystem for retail businesses is undergoing a transformation as thoroughly as the retail industry as a whole is.

Sara: I can vouch, just from being at Command C, the uptick in clients who are really looking to optimize their backend in the past year has just skyrocketed.

We really only used to talk about optimization from a frontend or driving traffic to the site, or converting more users on the site. And now, optimization on the backend is really its own category. That is here and it is its own thing.

Nicole: And it brings a company so much more efficiency.

Sara: Yes. Conversions aren’t just about the actual transactional sale. We think about conversions also in terms of, how much time is your customer service team saving, because they don’t have to input data in three different places? Instead, they could input it in one place, and it’s shared across all the channels that need to access that data.

Interlude: You’re listening to Recommerce, a podcast for ecommerce wearable brands, navigating technical complexity, and change. Brought to you by Command C, a development team that saves ecommerce retailers from outdated tech and ineffective operations with a strong focus on Magento and Shopify Plus. You can learn more about how we help at Commandc.com.

Ecommerce Trend #6: Cross-Border Ecommerce Grows

Nicole: All right. So, next up, we’ve got trend number six, and that is that cross-border ecommerce continues to grow. There’s a company called Wild Card. They do retail payment systems, and they did a survey last year of approximately 1,000 respondents, asking about their ecommerce habits. And it turned out that over 40% of those 1,000 people said that they had bought something from another country within the 60 days prior to the survey.

Sara: Wow. That’s a lot.

Nicole: Right? That’s high. And the number one reason they cited for getting something from another country was because it was something unique.

I think this really interesting … like I know, sometimes we hear “Oh, things are consolidating beyond control” and this type thing, but yet, I very much believe people really have an interest in authentic, unique products that suit them specifically. You really see that with the growth of cross-border ecommerce.

Sara: Yes. And that’s good news in the Shopify world because Shopify Plus just released multi-currency functionality, which has been a pain point for them for a very long time. So this is coming right on time.

Ecommerce Trend #7: Mobile Matters More Than Ever

Nicole: Another trend that, and this isn’t so much a new trend, but let’s say that it’s very much trending, which is trend number seven: Mobile matters more than ever. And looking to Black Friday of 2018, just a few months ago, TechCrunch reported that the percentage of sales on Black Friday alone last year was up 23% from 2017.

Sara: Wow.

Nicole: Over six billion dollars was spent on Black Friday. And more than a third of that, 33.5%, were coming from smartphones. An additional 10% of that was coming from tablets. So you’ve got over 43% of these sales happening on mobile. Now, there’s a few reasons why mobile is so important.

One, that we all know, is that we have our phones with us all the time. So any time we go to look up something, we’re going to be on our phone.

Secondly, the 5G network is going to be coming. There’s some various reports of when that’ll be, but no matter when exactly, the point is that the network is getting better and better. So the habits we have around our phone are only going to embed themselves more deeply in our lives.

Sara: I can’t say I’m surprised by that trend, but I am still surprised by that number. It seems like every year, I’m like, “Wow. Really?” This is taking off quickly. And then the next year I’m like, “This is still taking off.”

Nicole: Exactly.

Sara: Extremely rapidly.

Nicole: Absolutely. And I think there’s also something to say for the fact that our phones themselves are getting better. Just this past year, Apple embedded the ability to do augmented reality shopping with your phone.

So, for example, Shopify released the case study on Magnolia Market, which is it’s from the show … forgive me. I forget the name of the show, but it’s a very-

Sara: It’s Fixer Upper.

Sara: It’s Jo & Chip! How could you ever forget Jo and Chip?

Nicole: You’re absolutely right. Okay. I’m so glad you remembered. Because they’re hugely popular, and they have really cool home products.

Now, you can go to their store, look through your phone, and pick a vase, and then see it in your own home.

And Apple made that possible just within Safari itself. We’re already using our phones to shop, the network’s getting faster, our phone’s capability is getting better. So mobile is on the rise, still.

Ecommerce Trend #8: Better Data, Not More Data

Nicole: Then next, we’ve got trend number eight. And this one, I think, may come as a relief to a lot of retailers. Trend number eight is better data, not more data.

Sara: Ah.

Nicole: Right? I think the message for the last few years has been “Oh, my God you’ve got to …”

Sara: Da-ta, da-ta, da-ta.

Nicole: “Know every bit and point of your data.” And data is super important, but now there’s some sanity coming to the world of data. And with the idea being that it’s more important to know the authentic, important points of the data for your business than it is to know every single last bit.

Sara: What do you mean by that, exactly?

Nicole: Well, honestly, it could be something as simple as paying closer attention to your Instagram interactions. Versus knowing level-four analytics in Google Analytics. Because I think, in the race to gather so much data, sometimes retailers and … who’s to blame them, right? We’re all wanting to get more information, or so it seems, but sometimes we kind of leapfrog over the most important things, or the most obvious things.

There’s a reshuffling here, where retailers are really taking charge of their own data and saying, “No, I’m not going to pay attention to what I need to know, and I’m not going to sweat the ten other rings that I can go down into.”

Sara: Yeah. We’re always saying that data without context is meaningless, right? Because a KPI for one company could be completely meaningless for the next company. So you have to bring context to the numbers that you’re looking at.

Nicole: Absolutely. And what do you want to grow? What’s the strategy behind what it is your company specifically wants to grow?

Ecommerce Trend #9: Omnichannel Retailers Seek Single Customer View

Nicole: Trend number nine. Omnichannel retailers work toward single customer view. So with this one, a lot’s been said about omnichannel. We are all experiencing omnichannel.

How I would explain this one is, let’s say you and I are working on a project. We’re going to talk about it via email. We’re going to talk about it in-person meetings. We’re probably going to go to lunch, and it might come up. We’re going to Slack about it. We might post about it on a bulletin board in Basecamp. My point being, a lot of different ways.

So, if one day, we’re working on this project and I say to you, “Oh, you know what, I haven’t actually registered anything about this project that you told me on email. I was only following our lunch conversations.”

You’d say, “That doesn’t really quite work for me. That’s not going to move the project forward.”

But that’s what we’re doing in retail. We’re not seeing the unification that I’m going into a physical store, buying a pair of pants and then going home and getting on my mobile phone and wondering about that jacket I also saw, and whether or not I should get it, and then looking for a promo code.

You know what I mean? There are many steps, in this omnichannel world, that create a prism of many different ways that a customer approaches a brand.

So a lot of effort, let’s say, is going to be made in technology moving forward to help retailers define a single customer view. To really see the history of the way someone has interacted with their brand over time.

Sara: That’s so cool. And so much room for innovation.

Nicole: Absolutely. Now, one thing I will say with that in mind, is that retailers will want to be on a modern platform that will be receptive to that kind of technology.

As we move forward, retail is getting complex, right? I also say it’s getting a lot of fun. I think a lot of retailers feel that way, like it’s really exciting to be able to do these cool things. But custom systems, legacy systems, and things like that are going to be burdensome.

Sara: We just did another podcast about choosing the right platform. And it’s like, you want to make sure that you’re choosing a platform where the platform itself is perpetually innovating, and rapidly releasing new features and functionality. These tools will be great, but if your ecommerce site can’t integrate with them…

Nicole: Exactly. Another area where some really cool tools are coming out is with personalization. And that’s trend number ten!

Sara: We did it.

Ecommerce Trend #10: Personalization Is Now the Price of Entry

Nicole: Personalization is now the price of entry into retail. One of the industry leaders on this has been StitchFix. They have definitely paved the road here.

When you sign up to do StitchFix, it takes about 15 minutes. They ask all sorts of questions, and it’s everything from sizing questions, to shape questions. Are you triangle-shaped? Or hourglass-shaped? Or whatnot. All different kinds of questions.

They also ask personal affinity questions. Do you like miniskirts? Or long, flowy skirts? Whatever it might be.

In that process, they come up with over 80 useful data points per customer. And then they can really build a rapport with someone. We all know StitchFix is a large company, and they had their IPO and everything. But personalization is applicable to retailers at any scale.

I think a great way to do it is through surveys. Somebody comes onto your site and you say, “Let us style you.” You start off like, “Okay. Are you going on a first date? Or are you going on a job interview?”

Just starting to build that rapport with people – that’s the kind of relationship that keep customers coming back. Like we said earlier in our conversation, it was thought that technology was going to take the people out of retail. And we’re just really seeing technology engage people in retail.

Sara: Wow. These just make me so excited to be in the world of ecommerce. It’s such an innovative space. It’s so cool. Thank you for bringing these up today.

Nicole: Thank you. It’s been a great conversation. I really enjoyed it.

Sara: Likewise. I’ll talk to you soon.