Industry Insights from BoF and Shopify Executive Retail Forums
At VOICES 2021, BoF’s annual event in Oxfordshire where global changemakers come together to discuss the future of the fashion industry, Shopify Chairman Harley Finkelstein shared three of the themes the most impactful ones that emerged at BoF and Shopify’s Global Retail Executive Forum series in New York, London and online. Watch the video above.
Throughout 2021, business leaders from companies as varied as MatchesFashion, Ralph Lauren, Tom Ford, Browns, Bloomingdales, ta, Allbirds, Neiman Marcus, Christopher Kane, Saks Fifth Avenue, Nordstrom, Alighieri and Machine A have been invited to connect under Chatham House Rule to share insights and learnings with each other, and the opportunities and challenges they see in the marketplace.
Shopify is well positioned to inform the fashion industry about retail trends that are helping businesses through this time of disruption – its partnership base now accounts for 10% of the total global e-commerce market share.
“[Shopify] Merchants saw $6.3 billion in sales over the Black Friday and Cyber Monday weekend of 2021. That’s a 23% year-over-year growth” , Finkelstein told VOICES in a conversation with BoF’s Imran Amed. “It’s a proxy for independent retail. We are trying to arm the rebels, the independents, the entrepreneurs. This weekend, they are the winners.
Below, BoF shares more information on the most common themes raised by Finkelstein, drawn from the series of global forums that took place in London, New York and online.
Insight 1: Mobile browsing moves to in-app commerce, New York
BoF and McKinsey & Co.’s 2022 State of Fashion Report found that 37% of fashion executives cite social commerce as one of the top three themes that will impact their business in 2022. Indeed, in its Future of Commerce 2021 report, Shopify found 54% of young consumers who buy from independent retailers discover brands through social media and, crucially, 28% of young consumers now transact within these channels. social media.
The importance of the rapid evolution of in-app commerce has been discussed by retail executives at every retail forum. One executive in New York called the change “[retail’s] second, a big paradigm shift from mobile browser to native apps. Consumers are spending more and more time online, but in fewer and fewer apps, which means social networks and marketplaces are taking a bigger share of e-commerce spending.
It is not necessarily about the return on investment as it was before. Now that’s brand sentiment.
Online, short videos are proving to be the main driver of data consumption, accounting for more than three-quarters of data consumed in 2020. As a result, businesses must continually invest in new content, but ROI focal points change. .
“It’s not necessarily a question of return on investment as it used to be. Now it’s brand sentiment,” one participant said. “It’s the engagement, the awareness, the consideration — those kinds of purpose and equity scores that we worked with the research company to do. It’s not about the direct click-to-purchase — it’s more about how that content creates engagement. Is this the right audience we want in the future? »
Another participant explained how their acquisition strategies had to pivot in order to effectively take advantage of emerging social and gaming spheres. “The most important thing for us is to move to social photography first. Now we know [to] shoot social media first. […] We make sure what we do is adaptable. It is the environment in which we place it.
Insight 2: Supply chain disruption requires collaboration and innovation, online
The State of Fashion 2022 reports that around half of global businesses experienced supply chain disruptions in 2021, with one in eight severely impacted. Similarly, 49% of fashion executives reported supply chain disruptions as the top theme impacting their business in 2022.
In his VOICES interview, Finkelstein pointed out that transparency with consumers can effectively prepare customers for delays, using Black Friday sales as an example. Adding that although supply chain shocks are widely felt, some companies are better able to weather them.
“While the complexity of the supply chain puts pressure on every business, the missing part of the story is that many direct-to-consumer brands have much stronger margins than big brands. Last year , we saw Black Friday shopping start 19 days before [the event]. This year it started about 28 days early. By prioritizing [consumer trust], brands have made sure consumers know what to expect.
The increasing complexity and cost of supply chain and distribution management was a topic that dominated the first Retail Forum. Significant new logistical challenges are accompanied by new economic challenges. “Containers are now seven times more expensive,” said one participant. “But designers have already priced their products [before the increase in cost]. Not only are we sticking to the price we sold nine months ago, […] we always face the pressure of chargebacks or responsibility for shipping delays, global prices.
In discussing ways in which participants are adapting to operational challenges, the focus was on technological yet sustainable solutions. “What interests me the most is blockchain technology – the only way to have a sustainable world,” said one participant. “Forget sustainable fabrics – to be on the blockchain, people know where your product is from.”
The new supply chain perspective is about doing less, but making more sense.
“We’re all trying to talk to the consumer and manage our supply chain at the same time,” said another executive, acknowledging the complexities shared by all retail players. “For me, the new supply chain perspective is about doing less, but making more sense. The future is about shrinking the supply chain, rethinking cycle counting, but amplifying other aspects […] work to include and [collaborate] more effectively with your supply chain partners.
Throughout the forum, the need and willingness to work together to support each other was a constant theme. “Shipping, supply chains, […] these are the areas where brands can form alliances,” said another participant. “Those are [topics] where brands can come together and really force change.
Insight 3: Flexibility and consumer choice are key to success, London
Providing customer choice is now a critical component of success and forces retailers to examine the entire value chain to increase flexibility and find opportunities for efficiency from the point of access to sales channels and operations. .
“Physical sites are becoming distribution centers and online stores are also becoming sort of catalogs. Retail is mixing, which is a good thing,” Shopify’s Finkelstein told VOICES. “Our most recent integrations and partnerships are [indicative] of this idea of retail everywhere. From TikTok to Instagram and more recently Spotify, top brands truly understand that there is no silo between digital and physical. It is only retail.
The Retail Forum in London focused on the topic of operational and channel flexibility, and leaders began by discussing the long-term need to link online and offline commerce capabilities. Many cited the need to recalibrate physical stores to function as fulfillment centers, with one participant asking, “How can we create more fulfillment centers for what could be the next pandemic or crisis?”
The best brands truly understand that there is no silo between digital and physical. It is only retail.
Another participant highlighted the physical store’s ability to provide powerful data capture on consumer journeys and shopping habits, with connected app tracking intent and driving more meaningful interactions in stores. physical stores.
Many businesses have turned to online communication tools and apps to connect associates directly with the end consumer, requiring retail associates to upskill. “The way customers felt the service and brand came to fruition was massively enabled by technology and it’s got us through the pandemic so successfully,” said one attendee. “This continuity between the channels has been maintained.”
But a number of participants cited the main challenge was “the animosity between stores and e-comm,” leading them to think up new ways to incentivize retail staff with a commission structure.
Indeed, despite the continued disruption facing the global industry and the complexity of innovation, independent businesses must adopt to survive. The tone of the forums was consistently upbeat and action-oriented.
As Finkelstein concluded to VOICES, “[Shopify] is more optimistic than ever for the future of retail, commerce and brands. We’ve seen what consumers want and we think the rebels are winning.
This is a sponsored feature paid for by Shopify under a BoF partnership.