9 Critical Insights from National Retail Federation 2021

“During the holiday season, we surveyed about 355 US businesses who have a turnover of $20 million and over, and we found that one in five of these businesses fundamentally changed how they do business. And 2020’s tough environment, it was really a catalyst, but it was a catalyst for positive change and adaptation, and the investment in more online and mobile channels that these businesses made… the increase in digital channel engagement from 2020 also meant that brands collected a lot more data on their customers than they otherwise would have. And the challenge there was that they didn’t quite have the right expertise or the technology ecosystem to really understand who their customers were, what their preferences were, and what to really do with that data, [or] how to store it and how to process it, and really, how to use it to keep the customers engaged.”

“First of all, we collect first-party data through Wi-Fi login. So, we have 166 million users of the Wi-Fi in various places via our customers all over the world. And we’ve been through this many years ago with GDPR, which I think was the first really heavy hitting legislation and helping our customers in Europe. And it’s safe to say that when that first happened, there were digital bonfires all over, because there were piles of data with unknown or shaky rights attached to them. And one of the things we were able to do is work with customers and say, well, look, if you know that you’ve not got the rights, it needs to go. And if there’s some uncertainty, let’s try and refresh those rights via the Wi-Fi login.”

“The iOS update… it’s slightly terrifying when you think about it. The statistic that I saw is about 70% of iOS users currently share their data. Right? And that’s going to potentially drop to about 10% to 15%. That is a staggering drop that you’re going to see. And so how do we work through that? … Loyalty programs, CDP, how do we get the data, understand it, and make sure it’s easily accessible throughout the organization?”

“It’s an area that I think we’d like to continue growing. We want to make sure that when we think about our value proposition, that it’s not just about putting product on our site, but it’s about brands reaching millions of customers. We’re set up, I think, to help our vendor partners not only move excess inventory or launch a new product quickly because of our flexible business model. But also, just to expand their reach. We also provide real-time insights using our vendor portal. So again, data insights, the analytics are very, very important. So real-time sales information for brands about a product, size, location, all important parts of what we’re trying to provide.”

“That’s going to be a really important thing for brands going forward, is what type of data stewardship do you show to your customers and how transparent are you about that data stewardship? Because let’s face it, every day it feels like there’s another story about another hack, another breach, another this. And so, customers are getting, I think, increasingly sensitive and aware here in the United States.”

“I think a key focus for the retail sector this year should be really putting the customers at the heart of the organization and earning the right to use their data, and use this data as their competitive advantage, and ensuring that there’s value exchange for their customer to be able to, one, provide their consent, and also, come back to a brand. And when a brand can really understand who their customers are and meet them with contextually relevant, in-the-moment, personalized experiences across any touchpoint, digital, physical, online, in-store, they’re really meeting customer expectations.”

“That’s been a little bit of where we are, it’s been siloed, it’s been fragmented. So, I’m bringing it all together and really understanding that that data is our most… one of our most valuable resources and one of our most valuable elements to the brand. Of course, we have great product, great design, but for us, it’s: How do we make sure that we are getting that data through a loyalty program? How are we feeding all the various different systems? How are we clear on who’s doing what, when and how with the data as well?”

“Customers need to be central to an organization, and their data needs to be accessible across different systems to be able to deliver that in-the-moment, contextually relevant personalized experience for each individual customer, especially when they react with a brand across many different touchpoints, not just one touchpoint, but whether that’s going to be via digital channels or a physical store or even a call center. And when brands prioritize customers, that means they know unique attributes about that customer that no other brand knows.”

“A Customer Identity and Access Management Solution, or a CIAM solution, is really designed to help your business understand who your customers are and how they want to be treated. And what does that really mean? So, it provides the technology… that allows brands and retailers to build an easy way to help identify and remove the friction for customers coming into your brand. It also helps you understand how they want to be engaged. So, when you think about knowing who someone is, what kind of devices they use, what channels they want to be communicated on, what their preferences are, and the consent to use that data, to personalize the experience in a digital way consistently, it helps you increase your conversion rates, and more importantly, it helps you drive retention because you’re able to be consistent with the delivery of services to them across the journey.”

“If, say, for example, a brand hasn’t prioritized the identification of their customers across different channels and actually capture that consent, they have no way of using that data to personalize and move away from discounts and offers… In-store customer identification is still an opt-in as something that we see happening more and more, where brands are now starting to prioritize the identification and often capture across every channel, not just the digital channel, but especially in-store, too. Because — let’s face it — the majority of transactions still happen in physical stores. E-commerce is a vitally important channel, but if you look at our industry, having an omnichannel presence is incredibly, incredibly valuable because it gives your customer the option of going anywhere for your brand.”

“If you walk in a Walmart, instead of it being post-purchase where you’ve used loyalty, we know the second somebody gets there because we detect them from the Wi-Fi presence. We’ve seen a shift more towards the safety element, and we integrate with cameras both 3D and 2D, so we can do occupancy management and really understand how many people are in a store or an area of a store at any given time. And clearly the whole social distancing has driven that, and you’ve probably seen it yourself [where] people stood on the front with clipboards of giant calculators trying to work out how many are in a store at any given time. And we can automate all of that.”

“Retail businesses are complex because it’s not just completely online. There is an offline component to this in the sense [that] they have physical retail stores. So how do you identify someone when they come into an area? How do you combine that data together, utilize the purpose of that data to engage in both the digital and physical worlds, as well as optimize your business for a customer-centric experience… the need to truly understand who your customer is, how they want to be treated, and use that data in a purpose-built way to design customer experiences that are truly impactful… as you think about what a CDP is really helping a business do, it is that unification of data.”

“Zulily is unique in that in order for a shopper to access our incredible deals, we currently require an opt-in email address. This, along with thousands of other variables, enable our machine learning and data science teams to personalize that 1:1 shopping experience I was talking about earlier across all of our cohorts, such as new activations, reactivations, and so forth. So, the deep knowledge that we have of our customer, what device she likes to use, what her first purchase was, how she engages with us, with what product events, curated themes, categories, brands, geography, how she found us, etc. — all are inputs into the experience that we’re trying to create uniquely for her.”

“[Retailers] found it challenging to keep their customers engaged outside of what they could offer on discounts and different offers. And we saw this across the industry, that mass discounts were promoted to either clear stocks or keep customers coming back to a brand. But this also opened up opportunity because what it also meant… a lot of these brands, about 38% to 40% of them, [are] moving away from these discounts and using online or digital personalization to grow their online presence. And almost 59% percent of these businesses said that loyal customers contributed to more revenue in 2020 than they did in previous years.”

“Thinking about things like a loyalty program, of course, is critical for us because of that first-party data and really giving a reason for the customer to give us the data that we need to provide that more personalized experience… They understand what we’re doing with their data and how we’re doing it, and we make it worth their while in terms of… it’s not just about coupons and promotions and things like that… you saw a lot of retailers really trying to pull back on the batch-and-blast kind of the same promotion for everyone and get a lot more surgical with that. And that’s certainly something that we’ve been trying to do.’”

“This competitive advantage, together with how brands use loyalty, can be used to win and retain customers in 2021 and offer a value exchange for that customer, for their opt-in, and for them to continue giving that opt-in and also offer that experience that a customer can’t get anywhere else. So, when we advise brands on loyalty, it’s more than just points and prizes — it’s about what you have to offer for your customer that they can’t actually get anywhere else.”

“When the pandemic hit, like a lot of retailers, it was really difficult, right? … We had a small store base… and so, for us, it was just, I think, a master class in agility and flexibility, quite frankly. And so, there was a lot of strategies, and one of the things that I would say that Hanna is really good at is being nimble and being agile… We had a big business around swim and, of course, spring break, which in the beginning of the pandemic and currently right now, not a lot of people are going on spring break and going on vacations as much. So how do we be a lot more sensitive to our customers where they are in the moment, with home schooling and all of the things that everyone’s facing? … One of the things that we just leaned into was a lot around our customer messaging and our customer communication that was so important for us just to try to provide value-added content, whether it’s blog posts, to keep kids entertained, or to do things around surprise and delight.”

“We aim to reach and build an emotional connection with our customers by using data and insights to reach them on the right channel, at the right time, with the right message and most importantly, personalized just for them. We’re also always going to continue on earning her trust… We have an opportunity to do so through technology and innovation, through transparency. We want to build great experiences for our customers’ future… Zulily has an opt in member base. So, for us, it’s about driving engagement via compelling communication. It’s important as we do that that we select the best content, the right events, the contact method, the frequency of communication for each member in order to drive a very personalized experience.”

“I think that the biggest challenge that retailers have got is building trust again and again, trust from the consumer to feel safe and come back to store. And as I said earlier, to then give them a feeling of safety when they’re there, that they’ll come back again and again. But the second thing I’d say is around the experience because people have got so used to shopping online. If you’ve got a store that doesn’t give some sort of experience, then you’ve just got a very expensive distribution channel. So, thinking about how those consumers interact when they’re at that store will be important in winning mindshare. And I guess it’s going to be about understanding that there will be a new normal, people’s behaviors will have changed. Maybe there’ll be more local shopping, and maybe there won’t, who knows? And I think it’s important that retailers are in a position to be able to get the data to understand that because whatever they were used to, it will be different. And if you don’t have ways of collecting that data and understanding it, then you’re working in the dark.”

“So, there were some technology investments that we made, really trying to evolve and modernize our technology stack, especially around communication, that was helpful. So, one of the things that we actually just accomplished, probably about middle of the year was transitioning to Emarsys, standing up a lot of other different technologies. And so, we’ve had some great success there. But it’s really been an important thing to try to say ‘How do we maintain and stay nimble and stay agile for 2021?’”

“Those brands who had all of this data, they also invested in more customer-centric technology to store and process that data and then use that data to personalize the digital channels that customers were engaging in 2020. And because of that, they also invested in different online marketplaces, so being present in marketplaces like eBay and Amazon to ensure that relevancy and availability for their customers if they didn’t quite have that direct link to their customers.”

“As a business we don’t hold very much inventory, which means the priorities from a product strategy standpoint are about driving fresh new product for our moms or for our customer experience, which means innovating on our platform through technology and leveraging the agility in our business model. I’ll give you a few examples. We launched a marketplace model a few months ago with a test of the wine category. This was designed as a way to lean into product categories that are highly relevant to our customers and develop a different way for brands to connect with the Zulily customer automatically by using a marketplace approach. We also started to unlock and act as a fulfilment service for brands who previously may not have worked with Zulily. We can start to leverage our millions of customers to benefit brick and mortar brands, maintaining their brand equity while using the scale of an online retailer to reach those customers who are likely to shop their brands through our personalized shopping experience.”