Some Favorite Posts From NextWaveSMB

We’ve been thinking hard about the next wave of technology for SMBs, and blogging about it on NextWaveSMB, a new blog brought to you by our innovative friends at Booker.

1. SMBs Reinvent the Digital ‘Experience’ to Surprise and Delight Customers

The idea of a personalized experience is especially important online, which by its nature, can be a “me too” lookalike. As Bonobos CEO Andy Dunn says, “We need to show we care about our customers as people.”

2. Delivery Becomes Strategic for SMB Retailers

How important is it for small business retailers to offer delivery? How timely does it need to be to move the needle on sales and loyalty? And can it be done economically?

3. 7 Cutting Edge Lessons For SMB Retailers From ShopTalk
http://blog.booker.com/h/i/252267906-7-cutting-edge-lessons-for-smb-retailers-from-shoptalk

ShopTalk, a new mega-event with 3,000 attendees, focused on the next wave of retail for both national and local merchants in the face of challenges from online giants such as Amazon. Here are 7 key takeaways.

4. SMB Loans Go Digital: Easier Access, Better Services, More Loans

A new breed of loan providers use a number of data sources to efficiently assess and approve SMB loans. These largely use automation and other online capabilities to process and manage loans. Some also integrate loans with marketing support.

5. Mastering Your ‘Digital Brandformation’

You can buy a lot of advertising, create a new logo and leave a trail of Tweets and “likes.” But what’s really important for building an SMB brand? For marketing strategist MJ Thornburg, it’s all about creating a bigger and better experience – or what she calls a “digital brandformation.”

6. ‘A-Comm’ : Turning Your Schedule Into a Strategic Marketing Tool

Thanks to advances in marketing automation, electronic schedules an be used most effectively to anchor Appointment Commerce and target customers with special promotions to fill last minute openings and slow days; send reminders to book again; upsell and cross-sell them on relevant products; and solicit reviews.

Are Loyalty Programs Getting Lost in the Shuffle?

Image from Technology Advice

A wide range of innovative loyalty programs are in the marketplace, and they report impressive ROI and user engagement. But are they a high priority for retailers? Many retailers (and their agencies) have been slow to commit to loyalty programs.

At ShopTalk in Las Vegas May 16-18, loyalty programs seemed to have gotten lost in the shuffle of digital solutions (i.e. omni-channel, email, artificial intelligence, email). As eMarketer Yory Wurmser noted, “loyalty programs are of mixed importance…loyalty rates are going down.” He added that programs delivering direct gains in “transactions” or “emotional” allegiance to brands and retailers will have a leg up over pure-play loyalty solutions.

Quidsi CEI Emile Arel Scott also noted the limited appeal of pure-play loyalty programs. “We have gone through so many loyalty programs,” said Arel Scott, whose company is owned by Amazon. “They are a lot of work. Better service and customer feedback are much more important than points,” he said.

“The real struggle is for brands to find a message outside of ‘25% off’ or a sale,” Arel Scott added. “The key is to continue to get more specific in messaging,” he said, noting that chats seem to hold a lot of promise in this direction.

For Index CEO Marc Freed Finnegan, it all comes down to getting customers to build an account with a retailer, where all the data can be kept. An account “remembers everything I buy. Loyalty is a leading way to get there,” he said. But so are mobile accounts and other channels that stimulate incremental revenues.

Does this mean that loyalty programs aren’t poised for success? Not really. Many of them, especially card linked offer programs, have already evolved into broader programs that provide the useful analytics, feedback and targeting capabilities that the ShopTalk panelists alluded to. But it is an ongoing battle to gain a retailer’s attention, given all the industry solutions out there.

Five Years of The Sharing Economy: A Look at Its Impact and Future

Image from Albany Law

Five years into it, the Sharing Economy — and the $15.7 billion that’s been poured into it — hasn’t completely transformed most parts of the American economy. People still get hired for 40 hour weeks, and people still order goods and services via traditional means. And reviews aren’t written for everything.

But in certain industries, The Sharing Economy –aka “On Demand,” “Gig Economy” and “Collaborative Consumption”– has had a definitive impact, just like CraigsList did on P2P classifieds. In Las Vegas, for instance, revenue per cab has fallen 50 percent since Uber and Lyft’s entry to the market in September 2015. Uber and Lyft have attracted more than 12,000 Las Vegas drivers.

In general, while investment in Uber, Lyft and AirBnB has dominated, the Sharing Economy’s rise is also poised to impact other segments that rely on hourly temp workers, such as home services, delivery, insurance and medical services. At ShopTalk in Las Vegas, CB Insights analyst Matt Wong cited research showing that Sharing Economy concepts have become a sizeable influencer of buying decisions. Nineteen percent of adults now participate in some aspect of the Sharing Economy – a rate that has doubled in three years.

Wong also found that The Sharing Economy has sharply impacted work practices – disproportionately so for Millennials, which represent 68% of Sharing Economy gigs. He also said that the commonplace idea of the Uber driver moonlighting one or two other jobs isn’t always the case. CB Insights found that roughly 50 percent of sharing economy workers tally less than 25 hours a week (and 50 percent tally more than 25 hours.)

In a broad sense, where The Sharing Economy goes from here probably depends on how pervasive its concepts are on human resources (i.e. paid vacations etc.). Longer term, we’ll look for industry shifts, especially for travel and transportation. Wong noted that GM, Hertz, BMW, Volvo, Audi, Tata and G-AC have each invested heavily in shared ride services, anticipating that the next market for their cars will be less focused on individual users. GM, for instance, has recently invested $500 Million into Lyft. Separately, Toyota and Volkswagen have announced large investments in Uber and Gett.

ShopTalk: Google and PostMates Make the Case for SMB Deliveries

Fast and Free (or cheap) delivery is being positioned to retailers and restaurants by a growing group of companies as a key strategic asset that helps them compete with Amazon. Google has entered the marketplace with Google Express. It competes against such companies as Postmates, InstaCart, DoorDash, Deliv and Uber.

There are doubters out there – especially about same day/same hour delivery. Bonobos CEO Andy Dunn, for instance, estimates that just 5 percent of his men’s wear sales would be impacted by fast delivery. The economics and logistics of the business also put off observers like ShopRunner CEO Scott Thomson, who thinks that it will be impossible to compete against Amazon for same day delivery, much less one hour delivery. “Amazon is building warehouses in every city,” he emphasizes.

But others are taking a more strategic outlook, emphasizing how delivery will aid store loyalty, and can ultimately be supported via multiple revenue models, including annual membership programs paid by consumers, akin to Amazon Prime/Amazon Now.

At the ShopTalk show in Las Vegas May 16-18, Google Express GM Brian Elliot said it’s all about sharing delivery resources across lots of local merchants. “We can build an app that lets you shop across multiple retailers and connect locally,” he said, suggesting it is like being an anchor tenant at a mall. “We can build an awesome network infrastructure of stores,” added Elliot. “We are delivering loyalty.” He also suggested that it “removes friction” from merchants since payments are processed by Google.

Elliot is also bullish on the impact of deliveries on merchants. “Studies are showing they’ve seen more volume coming through. Consumers are shopping more often,” he said. Merchants that add their inventory into the system are also more likely to be shopped by consumers searching for products. “It’s not just about delivery. The more we can leverage inventory, the more we can drive foot traffic,” he said.

The economics of a delivery network, however, depend on shared resources and working with a relatively low volume. “Staging (delivery) of 200,000 units from the back of a store….Uber is not prepared to do that,” says Elliot.

PostMates CEO Bastian Lehmann, also at ShopTalk, said that delivery is a retailer’s best friend. “It gives you something that larger companies can’t compete with” and “new customers,” he said. Since deliveries are made for one price and aren’t distance sensitive, many stores are seeing new customers coming from locations more than two miles away.

Postmates actually delivers for a combination of SMBs and multi-location stores, including Apple Store, Starbucks, Chipotle, 7-11, McDonalds and WalGreens. A consumer can search among 1.5 Million SKUs, and 50,000 stores. It also touches 50,000 merchants a month.

Lehmann notes that the company’s business model relies on a combination of merchant fees, consumer fees and/or unlimited delivery club fees. Its ability to deliver goods from any merchant drives a local “long tail.” says Lehmann. The economics, however, vary based on whether the store is in or out of network. Forty percent of its delivered orders come from out of network.

ShopTalk: The Sharing Economy’s Next Phase


Enjoy CEO Ron Johnson

When it comes to retailers, the impact of the gig economy, or sharing economy, is largely a matter of human resources. Workers are heavily oriented (68%) towards Millenials. But they are very fluid in how many hours they work It is split roughly 50/50 between those who want to spend 25 hours or more a week, and those who want to spend less than 25 hours. They are also highly fluid where they choose to work.

At the ShopTalk conference in Las Vegas, Former Apple Stores head and JC Penney President Ron Johnson, who is now CEO and Founder of Enjoy, said 20 percent of Apple Store employees who quit two years ago now drive for Uber. Johnson hopes to enlist sharing economy workers to hand deliver and set up goods, such as cell phones and beds. It is BestBuy’s “Geek Squad,” but the brands pay for the delivery.

Now in 10 cities, Enjoy represents a new wave of “personal commerce,” said Johnson. “We don’t build stores, we just hire people. We create an experience to make you fall in love with the product. You pick the time and place for a delivery appointment, just like Uber.

Also at ShopTalk, Priceline EVP of Global Operations Malle Gavet said the company’s travel and reservation reviews and booking products (Kayak, Booking.com, OpenTable, Priceline) are also geared around delivering quality experiences. “Providing Sharing and quality at the same time is the next phase of the sharing economy,” she said.

ShopTalk: ‘Digitally Native Vertical Brands’ Anchor


Bonobos CEO Andy Dunn (On Right)

The next generation of retail brands will win if they pursue a “digitally native vertical brand” (DNVB) path. So says Bonobos CEO Andy Dunn.

“Vertical brands were a huge part of the last era of retail (Zara, Ikea, Gap), aka the offline one, and now they become the driving story in the future of digital retail,” said Dunn in a Medium post.

Speaking May 18 at ShopTalk in Las Vegas, Dunn says there are 65 digitally vertical brands. Besides Bonobos, a high-end men’s fashion brand, others include Warby Parker, Dollar Shave Club, BirchBox and Jack Threads. We’re just in the “first inning,” he says.

Dunn’s definition of a DNVB is a brand that is customer-centric and highly personalized, while most ecommerce-only companies provide anonymized service with superficial, broad personalization. Nordstrom, which owns 5 percent of Bonobos, is an obvious cohort. But so is Tesla in automotive.

The digitally native approach differs from pure-play ecommerce, “where we have seen a lot of failures,” says Dunn. It is also far removed from legacy retailers and offline brands. Aside from leaders such as Nike and UnderArmour, most are unprepared to disrupt themselves and they also tend to lack their founder’s conviction.

Like Warby Parker, BirchBox (and Amazon), Bonobos is now taking its approach from online to offline. Stores are “amazingly profitable. Productivity is so great on that box,” he says, noting that the average Bonobos location is 800 square feet.

They also allow Bonobos to “sell with the highest possible customer service,” while “pulling back on marketing and technology.” Bonobos currently has 21 stores, and will open 11 more this year. But these aren’t “software companies,” says Dunn. “This is retail. It takes a long time to build. And ultimately, profits and cash-flow matter.”

Westfield’s CEO at ShopTalk: Goodbye Gap And Abercombie, Hello Ford, Events and Gyms

Mall giant Westfield, which receives 400 million visits a year, has refocused on its mission as a people driver for retailers. The 56-year-old company is ditching a horde of its “me too” suburban malls and reinvesting the proceeds in major fashion, tech and financial centers where technology aids and new partnerships with entertainment and lifestyle companies will drive its next generation.

Speaking May 16 at ShopTalk in Las Vegas, Co-CEO Steven Lowy said everything the company is doing is designed to “create move commerce. We are in the business of connecting consumers with retailers. It’s that simple,” he says “Amazon can’t do the things we can do.”

“We are building a digital platform on top of our physical platform,” adds Lowy. “We’ve gone from being a real estate company to a PropTech (Property Technology) company.”

Westfield Labs, a 50 person group, is a major player in the company’s revamp. It has developed a comprehensive grouping of mobile-oriented shopper aids and enhancements. These are being tested this year and then will be rapidly rolled out. Key features include a “searchable” mall that highlights services and specials; loyalty and payment provider programs; and delivery services.

Lowy notes that the company’s premier centers such as The World Trade Center and Century City are the new Westfield prototypes, tying together lifestyle elements for consumers. Movie theaters, event spaces for major brands such as Ford and American Express, beautiful restaurants, coffee shops and top-of-the-line health clubs like Equinox will keep high-end consumers coming to its stores, he says.

Westfield will also get rid of some brands that haven’t kept up with a true, omnichannel approach. “You may not see The Gap and Abercombie (& Fitch),” says Lowy. “The business has shifted.”

Westfields Co-CEO Steven Lowy

Westfields Co-CEO Steven Lowry at ShopTalk16 in Las Vegas