Retailers Revamp Staffing As Consumers Shift To Online Shopping - 12/5/19

From the Simplr studios in San Francisco, this is your daily briefing.  

Introduction

With your Retail E-Commerce Briefing for today, Thursday, December 5th, I'm Vincent Phamvan.

As online shopping grows, many retailers are revamping their staffing to better keep up in a fiercely competitive retail landscape.  

First, here are some retail headlines.  

Paid Social Ads Account for 45% of Online Budget on Cyber Weekend

For Cyber Weekend, retailers put 45 percent of their online media budgets into paid social ads, helping to generate 33 percent of total revenue during the weekend. Last year, both of those metrics were less than 15 percent according to digital ad agency, PMG. On Thanksgiving Day, social channels boosted their share of conversions to 30 percent this year from 16 percent in 2018. Black Friday broke records for retailers as revenue, return on investment, click-through rates, cost per thousand, and cost per click metrics surpassed forecasts. PMG’s research reveals just how significant social commerce has become for retailers as they aim to reach mobile shoppers during the holiday season.

ThirdLove Tests Personalization

Popular disruptor lingerie brand, ThirdLove, knew personalization was critical to improving the customer experience. Using the personalization engine, Dynamic Yield, which was acquired by McDonalds this year, ThirdLove was able to show different homepage experiences to consumers and test new messaging and strategies. The company has since run 50 tests and improved critical metrics like conversions, average revenue per user, and click-through rate. Their director of product growth said,  “It takes a lot to get someone to make a purchase when they’ve only seen an ad on Facebook...You have to be intentional to overcome those barriers.” The company saw a 23 percent increase in average revenue per user, a 3 percent uplift in conversions, and a 6 percent increase in click-through rate. ThirdLove says they have plans to come up with more nuanced ways of testing site personalization.  

Pop-ups Becoming Key Strategy for Digitally Native Brands

Pop-ups are rapidly becoming a key strategy for many digitally native brands, with analysts saying pop-ups are becoming an increasingly important part of the $3.8 trillion dollar U.S. retail market. Online brands are able to utilize the data they get from their customers to focus their efforts on getting strong sales. The plunge into data-driven pop-ups comes as both digitally native brands and pop-ups are seeing strong growth and many established retailers are struggling with declining sales and higher operating costs. Unlike traditional retail stores, pop-ups don’t have to worry about appealing to a wide audience. The shops can be built to appeal to a narrow audience for a short window of time, and along the way introduce more customers to the brand and gather more information about their likes and dislikes. According to chief industry analyst at NPD Group, Marshal Cohen, pop-up shops are a force to be reckoned with because they allow brands to experiment with concepts quickly and build closer connections to their customers with personalized service.

Retailers Revamp Staffing As Consumers Shift To Online Shopping

Early data shows that online shopping will account for a larger percentage of total holiday sales compared to previous years. Foot traffic to U.S. stores fell about 6 percent on Black Friday as more people ordered online or went to stores on Thanksgiving Day. Online sales reached $7.4 billion dollars on Black Friday, up from $6.2 billion dollars last year, according to Adobe Analytics. E-Commerce is expected to account for about $170 billion of the roughly $730 billion in total holiday spending this year according to the National Retail Federation.  

Some chains, including Target, Walmart, and Best Buy have posted strong sales in recent years by adapting to the consumer shift to online shopping. They use their stores to handle deliveries or convince shoppers to pick up orders rather than waiting for an Amazon package. Target says it now sources 80 percent of its online orders from stores, not warehouses.  

Retailers are rethinking their staffing to keep up with new competitive challenges, as well as attract workers and control payroll costs. Under a new staffing system at Target, more workers are responsible for the full chain of tasks needed to keep their department well-stocked and shoppers happy. Target also added technology on hand-help devices to guide workers through the store more efficiently to gather or send out online orders. Target has also promised to raise its minimum wage to $15 dollars by next year.

Walmart also uses stores to fulfill its online grocery orders and is increasingly relying on stores for other types of e-commerce orders, although most are shipping from warehouses.  

A Target executive said, “I think the biggest change is the introduction of online and digital retail into stores.”

Closing

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Thanks for listening to this latest episode of the Retail E-Commerce Briefing. Until next time.