MAY 2018 | DIGITALCOMMERCE360.COM/IR THE HOTTEST E ...advertising.digitalcommerce360.com.s3.amazonaws.com/2019-IR/lin… · COVER STORY 3 » CONTENTS features SPONSORED TECHNOLOGY

Insider's Guide to IRCE | GDPR's impact on retailers | Paid search strategies

MAY 2018 | DIGITALCOMMERCE360.COM/IR

a publication of

THE HOTTESTE-COMMERCE STARTUPS

HOW HOLLAR, M. GEMI, CHEF’D, BURROW AND OTHERS ARE THRIVING IN THE AGE OF AMAZON.

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3 » CONTENTS

features

SPONSORED TECHNOLOGY FOCUS

41 TECHNOLOGY WILL TAKE CENTER STAGE AT IRCEIRCE exhibitors will showcase their newest tools at the world’s largest e-commerce conference.

THE SECRETS OF STARTUP SUCCESS

Even with Amazon and Walmart looming over e-commerce, there’s still room for newcomers to build successful businesses.BY DON DAVIS

WHAT EUROPE’S NEW PRIVACY LAW MEANS FOR E-RETAIL MARKETERS

The General Data Protection Regulation, or GDPR, will force retailers, marketers and other technology companies to be more mindful of the data they collect— and it may also change the way they market.BY ZAK STAMBOR

GET SMART ABOUT SEARCH

While some of the largest players in e-commerce dominate paid search, there’s still room for retailers with sound strategies to drive strong results using the channel. BY JAMES MELTON

05 GREETINGS

Room for growthDespite Amazon’s ever-growing shadow, there are still plenty of opportunities for other online retailers to grow.

07 BUZZ

Lowe’s and 1-800-Flowers experiment with Apple’s new Business Chat for iPhones feature; Facebook’s privacy protection lapses drive some consumers away.

09 OPERATIONS

How retailers ensure their sites are always onMerchants are using a variety of techniques to avoid facing the fallout that results when a site goes down.

49 VIEWS

On-demand services to the rescuePayoneer’s Scott Galit explains how e-retailers can use an on-demand workforce to meet a host of their needs.

52 DISCUSS

Will retailers change their Facebook marketing strategies?Experts weigh in on what Facebook’s privacy fails might mean for retailers’ use of the marketing channel.

departments

DIGITALCOMMERCE360.COM/IR

VOL.20 | NO.5

MAY 2018

31 BIG IDEAS FROM THE BRIGHTEST MINDS IN E-COMMERCE

The e-commerce industry has never been more competitive. Mary Wagner, Internet Retailer’s editorial director, live content, explains how IRCE’s content can help merchants succeed online.

29 INSIDER’S GUIDE TO IRCE

The 2018 Internet Retailer Conference & Exhibition runs from June 5-8 in Chicago. This 20-page guide highlights the key sessions on the industry’s hottest topics.

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Publisher: Jack Love [email protected]

CEO/President: Molly Love [email protected]

Vice President, Sales & Product Development: Tom Duggan [email protected], 312-572-6250

Editorial Director: Allison Enright [email protected]

Editor: Zak Stambor [email protected]

Editor, Technology: Katie Evans [email protected]

Editor at Large: Don Davis [email protected]

Senior Editors: April Berthene; [email protected] Bill Briggs; [email protected]

Managing Editor, B2B E-Commerce: Paul Demery [email protected]

Director, Research Strategy: Fareeha Ali [email protected]

Research Analysts: James Melton, [email protected] James Risley, [email protected] Jessica Young, [email protected]

Associate Data Analyst: Jonathan Love [email protected]

Researcher: Joel Smith [email protected]

Project Manager, Research: Laura Berrigan [email protected]

Editor and Publisher, InternetHealthManagement: Mark Brohan [email protected]

Editorial Director, Conferences: Mary Wagner [email protected]

Production Director: Thomas Chambers [email protected], 312-362-9531

Director, Marketing: Erin Dowd [email protected]

Vice President, Digital Strategy: Farnia Ghavami [email protected]

ADVERTISING MANAGERS

Midwest, Canada, International: Cindy Wilkins [email protected], 312-572-6247

Northeast: Nancy Bernardini [email protected], 312-572-6276

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West: Dave Cappelli [email protected], 312-362-0063

Research Sales Director: Steve Rogers [email protected], 312-572-6263

Classifieds & Product Showcase: Thomas Moore [email protected], 312-946-2049

LAST MAY OUR COVER STORY explored how Amazon was eating into the market of just about every retailer that sells online. That trend hasn’t ceased; a year later, Amazon’s market share has only grown.

And, since the retail giant bought Whole Foods, its tendrils now stretch significantly further offline as well.

But despite Amazon’s ever-growing shadow, there are still plenty of opportunities for other online retailers to grow, as detailed in this month’s cover story, “The secrets of startup success.” The story is based on an Internet Retailer-exclusive study of 72 retailers that began selling online since 2015. Those merchants increased their online sales by 112.2% in 2017 over 2016, by Internet Retailer’s estimate. That’s far above the U.S. e-commerce market growth of 16.0% in 2017.

So how’d they do it? While each startup’s story is unique, the story finds some common threads between them. Many of the merchants generating the best results have done so by offering consumers unique products that are better and/or cheaper than the competition, as well as finding creative ways to take advantage of digital marketing opportunities to get their name known at a reasonable cost.

Innovative thinking will also be center stage next month at the Internet Retailer Conference & Exhibition in Chicago. To help you navigate the show, this issue features our annual “Insider’s Guide to IRCE.” The guide leverages our editors’ expertise to identify the key sessions that we’re looking forward to attending at this year’s show.

ZAK STAMBOR, Editor

VERTICAL WEB MEDIA | Chairman: Jack Love | CEO/President: Molly Love Executive Vice President: Kurt T. Peters

Volume 20, Number 5Internet Retailer (ISSN 1527-7089) is published monthly by Vertical Web Media LLC, 125 S. Wacker Drive, Suite 1900, Chicago, IL 60606. Periodicals Postage Paid at Chicago, IL, and additional mailing offices. (USPS 019-477)POSTMASTER: Send address changes to Vertical Web Media, P.O. Box 29, Congers, NY 10920. For advertising information, call 312-562-9527. Mail subscription orders or changes to Vertical Web Media, PO Box 29, Congers, NY 10920. For subscription information, call 800-371-1777.For editorial reprints or web rights, contact Chaz McCrobie-Quinn at 312-362-0107 or [email protected].

The views expressed herein may not be concurred in by editors or members of our editorial board. No part of this magazine may be reproduced in any form by microfilm, xerography, or otherwise, or incorporated into any information retrieval system, without the written permission of the copyright owner. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax or other professional service. Internet Retailer is a registered trademark used herein under license.Subscription prices: USA/U.S. possessions: $102.95 annually; Print editions are not available for Canadian and international addresses. Canadian and international subscribers can receive a free digital subscription. Direct any editorial inquiries, manuscripts or correspondence to Internet Retailer, 125 South Wacker Drive, Suite 1900, Chicago, IL 60606. Phone: 312-362-0107.

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5 » GREETINGS

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LOWE’S COS. INC. AND 1-800-FLOWERS.COM Inc. are among the first retailers

experimenting with Apple Inc.’s new Business Chat for iPhones feature.

The feature enables iPhone owners to use their Messages app to interact with retailers.

Here’s how it works: An iPhone user searches on her iPhone for a retailer, such as “1-800-Flowers.” The smartphone results display a list of related suggestions, including related websites and apps, Google results and store locations in the Maps app. Near the top of those suggestions for participating merchants is the option to message 1-800-Flowers.

format many shoppers prefer, says Gihad Jawhar, vice president of digital development at Lowe’s.

“Messaging platforms provide customers with another way to engage with a brand that is often faster, more efficient and more per-sonal than other channels,” Jawhar says. “More and more, customers are showing that they prefer the convenience of messaging customer service versus making phone calls. Our support for Apple Business Chat makes messaging exponentially more powerful for our customers and our customer service agents.”

Lowe’s worked on deploying Apple Business Chat for nearly a year, Jawhar says. In that time period, the retailer tested the technology and trained its customer service representatives on how to use it. Lowe’s initially deployed Business Chat in select U.S. markets to examine consumer response. A few weeks later, the retailer expanded the program nationwide.

When a shopper messages Lowe’s via Business Chat, the message goes directly to one of its customer service agents or to a chatbot. The chatbot will answer common customer questions, which allows agents to answer more complex questions, Jawhar says.

TEXT FOR HELP

Consumers can text Lowe’s and either a customer service agent or a chatbot will respond within the chat.

Source: Internet Retailer survey of 999 consumers conducted in April

A consumer can then tap on the Messages icon, which opens a text window within the Messages app where she can text 1-800-Flowers. After she sends her message, a customer service agent will reply via text.

“At 1-800-Flowers.com, we are always looking for innovative ways to enhance the shopping experience, so we are very excited to support Apple Business Chat, which provides a powerful new avenue for connect-ing with our customers wherever and whenever they choose,” says a 1-800-Flowers spokeswoman.

The feature enables Lowe’s to communicate with shoppers in a

Facebook has been under intense scrutiny since March, when the New York Times, The Observer of London and The Guardian detailed how data firm Cambridge Analytica improperly used Facebook data to create voter profiles. To examine how consumers feel about Facebook and the ads that appear on its platform, Internet Retailer in April conducted a survey of 999 consumers with Toluna. Consumers could select multiple responses to the questions.

Consumers aren’t using Facebook as much as they used to

Marketers should take note that one- quarter of consumers said they are less likely to click on a Facebook ad than they were just a few months ago. And it may also be harder to target shoppers because nearly 34% said they are less likely to share information on Facebook.

While the majority of consumers have not changed their Facebook usage, nearly 35% of consumers are using the social network less often than they used to. And roughly 12% have changed their privacy settings to limit the amount of information that advertisers can access.

Has your Facebook usage changed in the past two months?

Have your behaviors changed when you are on Facebook over the past two months?

No, it has stayed the

same

Yes, I am using it

less often

Yes, I am using it

more often

Yes, I changed my privacy

settings

52.6%

34.7%

13.3%

11.8%

No changes

Yes, I am less likely to

share information

Yes, I am less likely to

click on an ad

Yes, I am more likely to share information

54.6%

33.6%

25.0%

9.0%

5.8%Yes, I am more likely

to click on an ad

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ONLINE SHOPPERS ARE PURPOSE-DRIVEN. they’re looking for convenience; they want to quickly find what they want,

buy it and leave. That means any e-commerce site slowdown can have wide-ranging implica-tions that could cause them to lose confidence in a brand and may even prevent them from visiting the retailer’s site again.

Take, for instance, web-only audio-visual retailer Spectrum Audio. Roughly four years ago, the retailer’s site went down for about 15 hours. The situation led at least one customer to grow concerned that the retailer wouldn’t send the order so he filed a claim with his credit card company. That resulted in a chargeback, which occurs when a retailer refunds what is believed to be a fraudulent transaction that’s charged to a consumer’s payment card. Chargebacks not only involve the merchant’s direct loss, they also come with interchange fees that merchants pay to credit card issuers.

“I can’t say I blame him when he couldn’t access a website that he had ordered from the night before for almost an entire day,” says John McCann, the retailer’s CEO and founder.

The situation occurred when the retailer was using a custom-built site using a version of Magento CE that it hosted on its own dedicated servers, which it managed in-house. Dealing with downtime, as well as the headache of trying to keep the site up and secure, was one of the primary reasons Spectrum Audio recently moved to a BigCommerce Pty. Ltd. cloud-based e-commerce platform, he says.

McCann is hardly alone. From the merchant’s perspective, uptime is paramount, says Brian Dhatt, chief technology officer at BigCommerce. After all, retailers invest heavily in attracting and retaining customers, and site downtime can completely deteriorate the relationships they have tirelessly worked to create.

Half of consumers expect a website to load in 2 seconds or less and every extra 100 milli-seconds results in roughly a 1% drop in sales, according to a recent study by website monitor-ing and optimization firm Apica. The report also found that 40% of shoppers abandon sites that take longer than 3 seconds to load.

“As many have learned the hard way, an inability to meet customers’ expectations means

BY MAURA KELLER

HOW RETAILERS ENSURE THEIR SITES ARE ONLINE, ALL THE TIMEMERCHANTS ARE USING A VARIETY OF TECHNIQUES TO AVOID FACING THE FALLOUT THAT RESULTS WHEN A RETAIL SITE GOES DOWN.

9 » OPERATIONS

pages to load, according to a 2017 study of 23 e-commerce websites by mobile commerce vendor Mobify.

THOSE SHOPPERS WHO DON’T CONVERT may never return. That’s why Abdur Chowdhury focused on building a site that can support rapid growth and that won’t go down when he launched Aura, a company that sells connected digital picture frames at AuraFrames.com, in October 2016.

“The domino effects of downtime can be devastating,” says Chowdhury, the retailer’s CEO and co-founder. “A potential customer may decide to buy from a competitor instead of us, tell friends about the bad experience he had or never return to our site.”

Aura’s market is seasonal so downtime during critical periods, such as Mother’s Day or Christmas, could have a significant impact on Chowdhury’s business.

However, the retailer hasn’t had to deal with those issues; since Nov. 1, 2016, Aura’s e-commerce site has experienced only 33 min-utes of cumulative downtime. The limited time the site has been down has almost exclusively been a result of outages in Amazon Web Services (AWS), the secure cloud services platform that supports the website’s storage, content delivery and other operations. “This problem is hard to get around when you use cloud computing like AWS,” Chowdhury says. “We’re proud that none of our downtime has resulted from oversight or weaknesses on our end.”

To ensure the site is functioning properly, the retailer uses a third-party monitoring system that tests nearly every aspect of the site. That process ensures the Aura team is correctly processing information from one step to the next, so it can identify if and when there are breakdowns in the system.

TO FURTHER OFFSET DOWNTIME FOR AuraFrames.com, Chowdhury has taken care to build his company’s retail website in the simplest form possible. The site doesn’t use personalized database lookups in the critical path of the site pre-checkout.

That stands in contrast to many other e-commerce sites that are designed with database connections, which means a web page

that customers will go elsewhere, and that loss in sales could prove detrimental,” Dhatt says.

With the e-commerce landscape growing increasingly competitive, retailers can’t afford to turn potential customers away, which is why many are turning to a range of solutions—from shifting to a cloud-based e-commerce platform to using content delivery networks—to ensure that their sites are up and running, all the time.

“Beyond the obvious loss of sales when the front end goes down, it is a productivity killer for every department,” McCann says.

WHILE EVERY E-COMMERCE SITE HAS a unique set of challenges it must deal with to accom-modate customer expectations, there are some common threads, Dhatt says.

For instance, every retailer should be ready for a sudden traffic surge that stems from an appearance on a national TV show or a mention by a celebrity influencer, he says. Retailers that are unprepared to handle the increase in capacity could experience slow load times, or worse, have their site crash entirely.

“While it’s impossible to always predict when a site will see a traffic surge, there are points where an increase is assumed, and can be planned for accordingly,” Dhatt says. “Merchants can work with their platform provider to run advanced load testing on their servers, and those providers can adjust server capacity limitations ahead of a traffic spike if tests show existing server capacity to be inadequate.”

Slow load times are a common frustration for both retailers and consumers—particularly given the growing number of consumers accessing websites through mobile devices. And the implications are wide-ranging. For instance, a slow-loading site can hurt a retailer’s organic search ranking because Google’s algorithm favors sites with fast load times. Even if a shopper navigates to a slow-loading site, 53% of mobile site visitors leave a page that takes longer than 3 seconds to load, according to Google analytics data. Each additional second a consumer has to wait makes it less likely they will wait for the page to load.

Moreover, shoppers who make a purchase spend 12.7% of their web visit waiting for pages to load, while consumers who don’t convert spend 23.4% of their mobile visit waiting for

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chief technology officer at online footwear and apparel retailer Karmaloop. He should know. When the retailer’s sister site, Shiekh Shoes, sells a new release of Kanye West’s Yeezy sneaker line, the shoes sell out minutes after they’re released.

“We once saw almost 100,000 visitors come to the site in a matter of minutes,” he says, noting that’s roughly 100 times the site’s normal traffic peaks. “Bot traffic can overwhelm the checkout process of the site. These are very high-profile product releases and it looks bad on our brand for the site to go down during these times.”

A bot is a software application that runs auto-mated tasks over the internet, usually repetitive tasks that would be difficult for humans to do with great speed such as buying multiple new sneakers when they’re released.

To deal with those challenges, Karmaloop moved its hosting to the cloud using vendor Rackspace, which also enables it to quickly and easily scale the site. Working with Rackspace helped Karmaloop implement bot detection and mitigation services such as using PerimeterX, he says. That helped the retailer overcome the automated buying issue.

RETAILERS CAN AVOID ISSUES BY being proac-tive, says Richard Grove, information technology manager at Find Me a Gift, a U.K.-based novelty gift retailer. That often means planning ahead when launching updates and changes to ensure that they have minimal impact on customers.

“[Downtime] not only affects the sales that would’ve gone through during that time, but it affects the customers who are beginning their shopping journey on your site,” he says. “It doesn’t matter if your site is up 99% of the time, if they get a bad experience when they visit it will form a lasting impression,” Grove says.

For instance, Findmeagift.co.uk recently experienced an issue when a vendor the retailer works with to produce content on its category pages made a change to its domain name system, which contains the records that direct a computer to the server that hosts that site.

“It directed it at the wrong server,” Grove says. “While the vendor was able to roll back

grabs information from a database and inserts that information into the web page each time it is loaded. In the online retail environment, businesses will leverage database-driven sites to make sure they are displaying the most current prices, offers and services. However, each integration provides a potential point-of-failure, which can ultimately impact consumers’ ability to make a purchase.

Aura’s approach has allowed it to place its entire site into Amazon CloudFront, a global content delivery network (CDN). A CDN is a network of servers located in different parts of a country—or the globe—that stores files to be used by website visitors. A CDN helps speed up a website in part by shortening the distance between the person visiting a site and the server delivering the content.

“We avoid individually looking up and retrieving information for each site visit which would take a lot of time and deter customers from completing the checkout flow,” Chowdhury says.

Amazon CloudFront enables AuraFrames.com to handle a large number of website visitors with few web servers, Chowdhury says. He has also limited the number of external vendor services the site uses to decrease the chance that the site will encounter glitches, or go down, for reasons beyond Aura’s control.

“This lets us handle a large influx of customer demand and traffic without interruption,” Chowdhury says.

Properly monitoring a site, especially the product and checkout pages, is critical to the business. AuraFrames.com monitors the site’s order page and confirms it is working every five minutes, 24 hours a day.

“With real-time analytics we can identify a problem and respond immediately,” Chowdhury says. “Our goal is to minimize customer frustra-tion to reduce the likelihood of cart abandon-ment and closed sessions. Above all, it’s about the user experience.”

DEALING WITH A SUDDEN TRAFFIC SURGE can be challenging for retailers. “New [product] releases bring a lot of traffic, both legitimate and automated bot traffic,” says Denis Ivanov,

‘THE DOMINO EFFECTS OF DOWNTIME CAN BE DEVASTATING.’ABDUR CHOWDHURY, CEO AND CO-FOUNDER, AURA

13 » OPERATIONS

The retailer has only needed to use the holding page once in the last nine years, which was in the early hours of the morning that it migrated its e-commerce site to a new, more scalable platform, he says.

Working with Akamai has helped the retailer avoid issues, he adds. “By serving the vast majority of our content, and in some cases entire pages, from Akamai’s global network we have significantly reduced the volume of site requests that our infrastructure and applica-tions have to deal with,” Warne says.

Previously, if a consumer requested a page of AO.com’s website, the retailer would serve it straight from its own infrastructure. That put a significant strain on AO.com’s servers and, in the worst case, some customers would receive a much slower response, degrading their experiences.

With Akamai, the consumer first requests the page from Akamai’s vast global network. If Akamai doesn’t have a copy of the page, it forwards the request to AO.com’s infrastruc-ture. However, if the page is stored at Akamai already (because another consumer has recently requested it), Akamai responds to the customer and AO.com’s infrastructure doesn’t even know the request was made. And, because Akamai has servers around the world, the consumer receives the page from the closest one to him, which also helps make the response a little bit quicker.

Warne believes trying to deliver a web plat-form without the right technology partners is one of the biggest mistakes retailers make when trying to avoid downtime.

“Cost control is important in retail businesses, but there are some solutions that are bang-for-buck far more rewarding than internal invest-ment can ever be,” Warne says. “Tight budget control coupled with a lack of clarity of the impact downtime has on a customer’s view of your business is a dangerous combination.”

MAURA KELLER IS A FREELANCE REPORTER BASED NEAR

MINNEAPOLIS.

the change within a short period of time our connection continued to try to communicate with the incorrect server, due to caching, for 45 minutes before eventually getting the site back to working.”

To avoid that type of issue in the future, the retailer is in the midst of implementing a backup system that it can activate if a vendor makes an error in the future.

MERCHANTS SHOULD ALSO INVEST in real user monitoring, web analytics and infrastructure monitoring, says Ari Weil, senior director of product at content delivery network Akamai Technologies Inc.

“Ensure that you unify the three types of information to understand how infrastructure issues change visitor and app behavior, and all of the permutations where one change cascades into others,” Weil says. “Review industry data from other similar events to predict how your historical data may change given recent market trends and behavior. For example, how did an event like [Amazon Prime day] trend from three previous years to the current year? How did back-to-school perform? How did similar indus-try-specific events affect visitor behavior?”

Doing so can help retailers anticipate demand during peak events. Additionally, retailers should have a plan in place to look at the issues that caused a website failure, deter-mine how it happened and establish a plan to prevent similar issues in the future.

For instance, home appliances and electronics retailer AO.com uses an agile development approach to offset downtime. That means the retailer makes thousands of software releases per year to regularly improve the experience of its website, says Adam Warne, IT director, AO.com. “But when downtime has been required for large-scale maintenance or during an incident, we can put a holding page up for customers so we can at the very least have some brand presence.”


THE SECRETS OFSTARTUP SUCCESS

Secrets

Secrets

Secrets

Secrets

Secrets Secrets

Secrets

Secrets Secrets

This article is an excerpt from Internet Retailer’s “The E-Commerce Startups” report. Learn more at www.bitly.com/IRstartup.

15 » THE SECRETS OF STARTUP SUCCESS

BY DON DAVIS

It’s tough to make a buck in e-commerce these days, even for retailers with famous names and deep pockets.

Yet even with Amazon.com Inc. capturing more than 30% of U.S. online retail sales and powerhouses like

Walmart Inc. investing heavily in e-commerce, there’s still room for new-comers to build successful businesses—if they can offer something different, better or cheaper than the competition, or if they can creatively take advan-tage of digital marketing opportunities to get their name known without blowing a lot of cash.

That’s the conclusion that emerges from an Internet Retailer study of 72 retailers that began selling online since 2015. Those 72 e-retailers increased their online sales by 112.2% in 2017 over 2016, by Internet Retailer’s estimate. Those that have been selling online since 2015 posted a two-year compound growth rate of 117.3%. That’s far above the U.S. e-commerce market growth of 16.0% in 2017 and 14.0% in 2016.

How did they do it? Mainly by offering a unique product or service, or by targeting categories where profit margins are high.

More than half, 53%, of the 72 companies in this study sell products they developed themselves, such as earwax removal products from Eosera Inc. or handmade Italian shoes from M. Gemi. By controlling the supply of the products they sell, they can avoid the profit-sapping competition that ensues when many retailers offer the same merchandise online.

Another way to succeed—even when selling products supplied by other companies—is to offer convenience, unique merchandise or low prices. Examples include the ready-to-cook meal-kits from Chef’d Inc., the one-of-kind home décor pieces and fine art offered at 1stdibs Inc., and dollar-store merchandise sold by Hollar.

A third strategy is to identify product categories where profit margins are inflated. Warby Parker, which was founded in 2010, showed the way by significantly undercutting the prices of conventional eyeglass retailers. Other entrepreneurs, such as the founders of luggage maker Away and sofa company Burrow, have followed that model by offering products of their own design at prices far below those of incumbent retailers.


Even in the Age of Amazon, there is still room for entrepreneurs to succeed in e-commerce. Here’s how they’re doing it.

Success

Success

SuccessSuccess

Success

Success

SuccessSuccess

Success

Success

have elevators, I saw a huge need for a piece of furniture like this,” says Russell Markus, vice president of marketing at Burrow, which was founded in 2016 and officially began selling online in April 2017 after a presale test.

Burrow is not trying to differentiate by offering the cheapest furniture—a three-seat couch costs $1,095—instead, it emphasizes that its direct-to-consumer model reduces the cost to the buyer. “By delivering our couch directly to you, we’re able to remove all retail markups and over 70% of standard shipping costs. That’s over $600 in sofa savings to you,” the retailer’s website explains.

A particularly successful way of getting out the word about Burrow has been through podcast ads, Markus says.

Listening to a podcast is like listening to someone tell you a story, and that provides an intimacy that can make a podcast host very influential, Markus says. When the brand buys ads on podcasts that the listener might hear before the show begins or that the host reads during the broadcast, it goes further by offering hosts a Burrow couch. The idea is for the host to put together the couch himself and gauge its quality. Burrow also provides resources so hosts can answer questions about Burrow products. “We’re not looking for paid endorsements,” Markus says. “We genuinely want these people to try out our product and to talk truthfully about it.”

Success

However, one strategy is not as open to startups as it once was: raising lots of venture capital and spending millions on marketing to establish a new online brand. Amazon’s growing dominance is mak-ing investors less confident that new online retailers can grow into the kind of billion-dollar businesses they seek. That’s slowing the flow of cash to e-retail startups and forcing newcomers to find low-cost ways to attract customers.

DIGITALLY NATIVE BRANDS

There are exceptions, and a handful of the 72 newcomers have attracted a lot of venture capital. A prime example is Essential Products, a company founded in 2015 by Andy Rubin, who played a major role in developing the Android operating system. Venture capitalists have poured $330 million into Essential Products, which has promised to develop superior mobile phones and other devices.

Another example is Eero Inc., which has raised $50 million and promises to make home Wi-Fi work better. Eero and Essential are examples of what some call “digitally native, vertically integrated brands”: they’re digitally native in that they sell online from the start, and vertically integrated in that they develop their own products.

These are the types of startups that many investors favor these days. Of the 10 companies in this study that raised at least $10 million in venture capital, seven are such digitally native brands.

But a lot of startups are thriving without raising a lot of cash. In fact, the 10 retailers that have raised more than $10 million grew their 2017 online sales at a lower rate, 88.0%, than the 62 others, which collectively increased web sales by 134.3%.

GIVE IT A TRY

One example of a newcomer getting out its name in innovative ways is Burrow, which makes modular furniture, such as sofas and sectionals. The retailer is targeting young, relatively affluent urban adults: 70.5% of its visitors are under 45, and more than a third are 35-44, an age when many consumers are moving from one home to another. Designed for the urban lifestyle, Burrow’s furniture arrives in 50-pound boxes—two boxes for a one-seat chair, three boxes for a two-seat couch and so forth.

“As someone who lives in New York City, who is consistently moving into buildings that don’t always

Burrow wants consumers to try out its furni ture. To make that possible, it has set up lounges in four high-end shopping malls in the New York area where shoppers can relax on Burrow sofas and sectionals.


Burrow also wants consumers to try out its fur-niture. To make that possible, it has set up lounges in four high-end shopping malls in the New York area where shoppers can relax on Burrow sofas and sectionals. The lounges feature a button that shop-pers can press to launch a video chat with a customer service agent to learn more about the furniture. The company, which sold $3 million online in 2017 and says it is growing 20% month over month, plans to expand to more malls this year, Markus says.

THE LOW-COST ANGLEA startup that is seeking to differentiate itself by offering low-cost, private-label items is Brandless Inc. Every item the retailer sells is $3 (though some may be sold in bundles, such as four mugs for $12). The e-retailer has trademarked the term “BrandTax,” which it defines as the hidden markup consumers pay for national brands. Brandless claims its prod-ucts are anywhere from 40% to 370% cheaper than comparable products from major brands.

Investors were sufficiently intrigued to invest $50 million in Brandless. Hollar, which also caters to the price-conscious, has raised $47 million. Hollar aims to bring the dollar store to the web, and its prices do in fact start at $1.

Hollar sells a mix of its own goods, in many cases sourced from factories in China, and goods from such well-known brands as Dove, Disney and Mattel purchased at deep discounts from liquidators. In 2017 it opened up Hollar.com to other merchants that can sell on the site, with Hollar taking a commission.

“We needed a larger breadth of inventory on the site,” says Thanh Khuu, a co-founder who is also chief technology officer and president. “We will always have a first-party component to the business.

But third-party sellers allow us to offer many more products without having to invest significant additional dollars.”

HARD-TO-FIND MERCHANDISEThere are other ways retailers can sell products that aren’t available on Amazon other than making them themselves. For instance, retailers can cultivate relationships with suppliers to offer merchandise that’s either unique or not yet available online.

An example is Hibbett Sports Inc., a regional chain of sporting goods and apparel stores that began selling online in July 2017. Half of the retailer’s business comes from the sale of sneakers and much of those sales occur when big brands launch new footwear, says Bill Quinn, the retailer’s vice president of digital commerce.

By participating in big brands’ sneaker launch programs, retailers like Hibbett, Finish Line and Foot Locker can differentiate themselves from Amazon, as the big names in sneakers often initially release their products to specialty retailers. The Hibbett.com website plays up those relationships with sneaker suppliers by offering a launch calendar that shows when new shoes are coming from brands like Nike, Adidas and Reebok.

1stdibs offers a different kind of unique product assortment: high-end furniture, jewelry and art sourced from 4,000 dealers, about half of them out-side of the United States. Typical items include a pair of 1970s French lounge chairs that sell for $15,500, or an 1880s Victorian necklace for $1,950.

18 » THE SECRETS OF STARTUP SUCCESS « 18MAY 2018 | DIGITALCOMMERCE360.COM/IR

“Amazon clearly has won the battle for the $50 customer,” says Cristina Miller, the retailer’s senior vice president of dealer relations. “But who is going to win the battle for the $5,000 customer? 1stdibs is extremely well positioned to win that space.”

1stdibs, which leads the startups in Internet Retailer’s analysis with $200 million in 2017 online sales, has ties to dealers going back to its founding in 2001 as a website where dealers could display their products and generate leads from interested buyers. The company redesigned the site to allow buyers to make purchases online in 2016, after four years of testing a Buy button on some products. “We built the e-commerce platform around the success of that button,” Miller says.

Miller says the e-retailer caters to two types of customers: architects and interior designers on one hand and affluent consumers around the world on the other. The specialized services it offers include verifying the authenticity of every item, offering a guarantee against fraud and handling shipping for items that can be valuable, bulky and fragile.

“To do what we’re doing, serving someone buying a $15,000, fragile chandelier that needs to be rewired, I won’t say Amazon would never do that,” Miller says. “But we feel pretty good vis-à-vis Amazon.”

Another way to attract consumers online is to offer specialized expertise, such as knowing the value of a consumer’s Rolex watch. Govberg Jewelers, which operates three physical stores and began selling online in 2016, offers a mobile app that will tell a consumer what his watch is selling for—and what Govberg will buy it for. For example, the app might say the watch is worth $6,200 and that Govberg would buy it for $5,000.

“We have to make money,” says Danny Govberg, the retailer’s owner and president. “Being transparent will bring us more customers.”

LEVERAGING AMAZONOne sure way to get a product in front of a lot of shoppers quickly is to sell on Amazon. That helped Beard Bro quickly build sales of its plastic beard-trimming aide.

In its first year in business, the startup sold $1 million on BeardBro.com and Amazon. But that didn’t last, says president Michael Brunett. In 2017, sales fell to $127,000. The culprit: copycats that saw the Beard Bro tool selling well on Amazon and copied it, Brunett says.

While Brunett says he has a patent on the design of the comb-like plastic Beard Bro, attempts to fight knockoffs in court have proven costly and ineffective. “The name of the game is to sell as many as you can as fast as you can because if your product is selling a lot it’s going to be copied,” he says.

Brunett subsequently expanded into other personal care products, such as shampoos and shaving balm. He also has developed a product called Doo Drops, a tablet that’s dropped in a toilet to neutralize bath-room odors. Because it’s a chemical product, and not plastic, he’s hoping it will be harder to replicate and to import for knockoff artists based abroad.

Meanwhile, he’s expanded sale of his products offline, onto the store shelves of organic grocery chain Natural Grocers, a subsidiary of Vitamin Cottage Inc. that operates 142 stores in 19 states.

Saje Natural Business has taken the opposite approach, moving online from offline. The retailer only began to sell online in a significant way in 2015, more than two decades after opening its first physical store selling plant-based oils designed to improve health. Saje began selling on Amazon in January, in part because Amazon’s product pages now allow it to provide the kind of educational content, imagery and multimedia assets that fit with its brand strategy.

The retailer, which operates more than 70 physical stores in its home base of Canada and in the United States, was also responding to research showing that many of its customers were researching and shopping on Amazon. “This was definitely driven by our desire to meet our community where they are,” says Katie Drechsel, Saje’s vice president of marketing, digital and customer experience.

Where consumers are shopping and researching today is the web, and the internet’s global reach allows creative thinkers to turn their concepts into big businesses with remarkable speed. There can be little doubt new online retailers will emerge in the years ahead providing value to consumers in ways we can only guess at today. l

[email protected] @DONDAVISIR


ay 25 is circled on the calendars of just about every retailer, technology executive and business that in any way interacts with European consumers. That’s the day a European privacy law, the General Data Protection Regulation (GDPR), takes effect.

The regulation empowers consumers by forcing retailers, marketers and others to explicitly state to consumers in the European Union’s 28 member countries how they’re collecting, using and storing consumers’ personal data such as their name, location, IP address and—perhaps most importantly to retail marketers—identifiers that track consumers’ web and app use on their web-connected devices. While there is a carve-out for businesses that can demonstrate a “legitimate interest” to the data, such as for direct

PRIVACY LAWWhat Europe’s new

means for e-retail marketersThe General Data Protection Regulation, or GDPR, will force online retailers and technology companies

to be more mindful of the data they collect—and it may also change the way they market. b y z a k sta m b o r

M


to streamline the settings in its privacy center and has begun offering “refreshers” for users as they use the social network. For instance, it may post a pop-up in the news feed to inform users how they can check their settings. In Congressional testimony last month, Facebook CEO Mark Zuckerberg said that the changes Facebook is making in response to the GDPR will be available worldwide. But, when pressed, he declined to clarify if the social network would grant consumers around the globe the same rights guaranteed to European users under GDPR. A Facebook spokeswoman notes that “regardless of the GDPR, we’re constantly working to improve our controls and product designs to make sure we’re giving people information on data collection in a way that’s most useful to them.”

Beyond the technology giants, other com-panies are also adjusting their operations in the ramp-up to May 25. In March, for instance, Drawbridge, an advertising technology ven-dor that tracks consumers across devices, announced plans to shift its EU partner services division to its New York City office as it shutters its European operations. In shifting its business away from Europe, Drawbridge aims to avoid the challenge of obtaining European consumers’ consent to access data and conduct services such as targeted advertising without having a clear consumer-facing touch point where they could interact with consumers.

But despite the serious consequences for brands that violate GDPR, a large share of retailers and other companies aren’t ready for the regulations. For instance, only 33% of North American firms are fully compliant with GDPR, according to a February survey by Forrester Research Inc. In part, that might reflect a cost-benefit calculation that merchants are mak-ing, says Fatemeh Khatibloo, a Forrester analyst. “If I’m a retailer and only a small fraction of my revenue stems from European subjects, I might just decide the potential risk outweighs the benefits and pull out of the market,” she says.

marketing purposes, like email marketing, GDPR leaves a lot of gray area that regulators have yet to map out. At the same time, GDPR gives consumers the right to access the data that retailers and others store about them, the right to correct inaccurate information and the right to delete their information (also referred to as the “right to be forgotten”).

A failure to comply comes with serious costs because the regulation has teeth; the regulation carries stiff fines of 20 million euros or ($24.7 million) or up to 4% of a company’s annual global revenue. That would amount to more than $7.11 billion for a company such as Amazon.com Inc., which generated $177.87 billion in revenue last year.

Because of those fines, every retailer, mar-keter and technology company that interacts with European consumers needs to understand and evaluate the data they’re collecting and housing, says Doug McPherson, chief administrative officer and general counsel at programmatic advertising technology company OpenX. “GDPR is the most significant regulation of advertising in the history of digital advertis-ing,” he says. “The regulation isn’t just about marketers in the EU—it has a global reach and everyone has to come to grips with that.”

Already, the regulation is changing the way that some businesses operate. Google, for instance, last year simplified its privacy dash-board in an effort to make it more user-friendly and stopped mining data within consumers’ Gmail emails to deliver personalized ads (while the company says the move was unrelated to GDPR, experts believe otherwise). The search giant also launched a consumer- and business- facing site that aims to explain the control that consumers and businesses have over the data Google gathers on them and details how Google secures its data.

Facebook, which is under intense scrutiny in the United States and around the world for its data security practices, is also attempting

21 » WHAT GDPR MEANS FOR E-RETAILERS

take a risk-based approach because there’s no way that if they start today they’ll be fully compliant in time. However, they can look at where they have the greatest risk. Then they can establish a framework that enables them to tackle that area.”

To start, retailers should address the consumer-facing components of the regulation, such as the need for their privacy policy to clearly and concisely grant consumers the rights guaranteed to them under GDPR, such as the right for consumers to access their data and the right to be forgotten, he says.

“People will test the rules and retailers need to be ready,” he says.

Beyond those consumer-facing areas, companies need to evaluate the way the gather, handle and manage data, says Brian Dhatt, chief technology officer at e-commerce plat-form BigCommerce Pty. Ltd., which has been working on GDPR both as a marketer seeking to drive brands to use its platform and as a platform that serves retailers.

About a year ago, BigCommerce began taking inventory of its data flow to understand how it could accommodate GDPR regulations, such as the right to be forgotten. It also formed an internal compliance team that began evaluating the applications its platform interacts with to ensure that they are GDPR-compliant to avoid potential liability.

That’s sparked a cultural change, Dhatt says, as BigCommerce has had to reevaluate the vendors that its platform interacts with to ensure that they’re compliant; BigCommerce works with a wide array of vendors, such as social plug-in company AddShoppers and social media dashboard SumAll, to expand the number of tools it offers merchants.

“We spend a lot of time evaluating them,

That’s because GDPR “throws a wrench in the way that Americans market,” she says. “Americans are fast innovators when it comes to marketing and advertising. That results in tools such as cross-device IDs to enable them to use one-to-one marketing. But that approach is antithetical to the European way of thinking because European consumers have a fundamental right to privacy.” Cross-device IDs are technologies that enable a retailer to track a consumer from his smartphone to tablet to his computer. A retailer can use it to present a shopper an ad on his smartphone based on something that he looked at on his computer.

The regulation means U.S. retailers that market to European consumers have no choice but to adjust their strategies if they want to continue selling to those shoppers, she says. “Behavioral targeting and advertising have to change,” Khatibloo says. “Retailers have to back up to segment-based marketing, rather than one-to-one marketing. But that may not be such a bad thing; GDPR is a great force function for marketers to take a step back and evaluate whether the benefits of intense personalization are worth it.”

The prescription to take a step back and evaluate the data that retailers are collecting and housing is a process that every brand that interacts with European consumer data has to engage in, says Greg Sparrow, senior vice president and general manager at CompliancePoint, a compliance and risk mitigation consultancy.

“If retailers market and sell to EU nations and capture EU consumers’ personally iden-tifiable information, they have to deal with it,” he says. “Given the limited time left before GDPR takes effect, those retailers should

‘GDPR IS THE MOST SIGNIFICANT REGULATIONOF ADVERTISING IN THE HISTORY OF DIGITAL ADVERTISING.’DOUG MCPHERSON, CHIEF ADMINISTRATIVE OFFICER AND GENERAL COUNSEL, OPENX


interviewing them, assessing their stances on security and compliance. It slows down the process, but it gives us a greater sense of comfort and control over the data.”

It has also caused BigCommerce to avoid working with some startup vendors that it might otherwise would have because they lacked clear compliance plans. “Merchants place trust in us,” Dhatt says. “And we have to ensure that we’re doing everything we can to uphold that trust.”

Consumers also place trust in retailers. And GDPR gives them the power to act if a brand doesn’t comply with the regulation. Just as vendors like BigCommerce have to ensure that the vendors they work with are compliant, retailers also have to take those steps.

While GDPR may force some retailers to change their strategies, it won’t necessarily change their practices. Take personalization. While Forrester’s Khatibloo suggests GDPR may spell the end of one-to-one marketing practices, it doesn’t spell the end of personalization provided retailers use personalization in a GDPR-compliant manner, says Jack Carvel, general counsel at personalization vendor Qubit.

In fact, GDPR expressly allows for “profiling” of data, which it defines as “any form of automated processing of personal data consisting of the use of personal data to evaluate certain personal aspects relating to a natural person, in particular to analyze or predict aspects concerning that natural person’s performance at work, economic situation, health, personal preferences, interests, reliability, behavior, location or movements.”

Retailers that use personalization to provide consumers with a better experience may enable them to claim a legitimate interest in using that

data, Carvel says. However, to make that claim retailers need to ensure that the personalization isn’t invasive and doesn’t deal with specific profiles and instead leverages actions such as browsing habits to tailor the website content. GDPR will lead consumers to expect something in return for retailers using their data, such as a better on-site experience, he says.

At the same time, even if retailers continue to collect and process data without obtaining a consumer’s consent, they need to be transparent about what they’re doing and why, Carvel says. That puts the onus on retailers to justify their practices, which he believes is a good situation to be in.

Beyond GDPR, retailers also need to develop a plan to deal with an updated version of the EU’s ePrivacy regulation that aims to align the various online privacy rules that exist across the EU member states. Working in concert with GDPR, ePrivacy aims to give internet users control over their data and to force businesses to protect consumers’ data. In particular, it will bolster regulators’ ability to police data tracking through cookies and users’ ability to opt out of data collection.

And GDPR and ePrivacy are just the start of a global data privacy movement, says Derek Lackey, president of the Direct Marketing Association of Canada, noting that GDPR and ePrivacy are likely to serve as models for governments throughout Asia, Latin America and Canada.

That means retailers need to adjust the way they operate, Qubit’s Carvel says. “They need to evaluate and ensure that their practices make sense,” he says. “That might result in some short-term pain, but ultimately it should produce a better experience.”

[email protected] | @ZAKSTAMBORIR

23 » WHAT GDPR MEANS FOR E-RETAILERS

Amazon.com Inc. spends a lot on paid search ads. The e-commerce giant devoted an average of $37.6 million per month to paid search ads in 2017,

according to estimates from search marketing firm Kantar Media (formerly AdGooroo). That’s over $14 million more than the average monthly paid search spend by Walmart Inc., the sec-ond-biggest spender among the Internet Retailer Top 1000, and more than $2 million more than the combined spending of Home Depot Inc., Macy’s Inc., Wayfair Inc. and Overstock.com Inc., which were the third, fourth, fifth and sixth most prolific spenders last year.

That spending enables Amazon to flex its mus-cles by ensuring that when a consumer searches for a product online, one of its ads will appear to help drive the shopper to Amazon.com. For the most part, those ad dollars are flowing to Google’s text ads. However, Amazon is slowly changing the

GET SMART

B Y J A M E S M E LT O N

ABOUT SEARCH

While some of the largest players in e-commerce dominate paid search, there’s still room for retailers with sound strategies to get results using the channel.

24 » GET SMART ABOUT SEARCH

it ranked fourth among desktop PLA clicks, behind Walmart.com (7.2% of PLA clicks), Kohls.com (4.6%) and Target.com (4.0%). Amazon.com also led in mobile text ad clicks, with a 9.1% click share, and it was fifth in mobile PLA clicks at 2.9%.

In certain product categories, “Amazon is now a major player in PLAs and that’s affecting results for everyone else,” says Jim Leichenko, Kantar Media’s product manager. “Amazon has the resources and ability to transfer its domi-nance in text ads to PLAs.”

Amazon is hardly the only retailer with a sharp focus on search advertising. Search adver-tising is an increasingly important component of online retailers’ digital marketing strategies, and its growth shows no signs of slowing down. In 2017, marketers’ spending on search ads grew almost twice as fast as total digital advertising spending and more than five times faster than the overall U.S. advertising market.

Merkle says total paid search spending in the United States—which includes spending on Google, Bing and Yahoo Gemini—increased 20.4% in 2017 compared with 2016, and the

way it allocates those paid search dollars. After several years with zero investments in Google’s fast-growing and increasingly effective Product Listings Ads, Amazon began testing the format in December 2016. The retailer’s spending on those ads continued through 2017 but remained limited to select product categories. Digital marketing agency Merkle RKG found that Amazon’s PLA spending has been highest in the home goods product category. Amazon also has been buying PLAs for product categories such as novelty gifts, furniture, athletic apparel and office supplies.

That helped Amazon dominate online sales during 2017’s Cyber 5—the five-day stretch that runs from Thanksgiving Day to Cyber Monday—in part by becoming a major player in the PLA market. Amazon.com captured 11.9% of U.S. Google desktop text ad clicks and 3.2% of desktop PLA clicks from Black Friday to Cyber Monday (Nov. 24-27) among 2,500 top retail product keywords, such as “laptops,” “shoes” and “uggs,” analyzed by provider Kantar Media.

During what was the first Thanksgiving weekend that Amazon.com used Google’s PLAs,

Source: Merkle RKG

n COST PER CLICK

n CLICKS

n SPEND

Google Paid Search

Desktop

Google Paid Search Phone

Bing Product Ads

Google Text Ads Google PLAs Google All Paid Search

Bing and Yahoo Gemini

19.4%

2.3%

22.1%

2.3%

19.4%

22.1%

7.7%

-2.0%

5.5% 6.5%7.5%

14.4%

1.9%

30.5%33%

5.5%

16.4%

22.7%

5.7%

13.9%

20.4%

14.3%

31.9%

50.7%Demand rises for paid search ads and prices reflect it in 2017


desktop and mobile. On mobile, it led the way with an 11.5% click share. However, the retailer put less emphasis on text ads; it only had a 1.0% click share on desktop text ad clicks and a 1.2% click share on mobile text ad clicks. The approach is consistent with Walmart’s overall paid search marketing strategy, Leichenko says, which suggests the retailer has ceded text ads to Amazon to focus its efforts on PLAs, which typically have a better click-through rate.

Paid search ads brought in only 2.1% of Amazon.com’s web traffic in 2017, according to an Internet Retailer analysis of data from web traffic measurement firm SimilarWeb Ltd. But Amazon.com’s traffic is huge—esti-mated by SimilarWeb to be about 1 billion monthly visits in 2017. That means consum-ers clicked on a search ad and arrived on Amazon.com roughly 21.2 million times on any given month last year. Only three other retailers in the Internet Retailer Top 1000— Lenovo.com, PowerEquipmentDirect.com and Williams-Sonoma.com—had more paid search visits in 2017.

For Amazon, paid search is just one part of a huge and fast-growing marketing budget. In 2017, Amazon spent more than $10 billion on marketing, according to its most recent annual report. That was more than double what it spent in 2014.

To compete with a company the size of Amazon, retailers have to identify the spots where they can win. Take Lamps Plus Inc., which is putting a big emphasis on mobile.

number of clicks jumped 13.9%. Those trends carried over into the first quarter when paid search spending rose roughly 21% and clicks increased about 13%.

By contrast, overall spending on digital advertising grew 11.9% in 2017, versus the entire advertising market, which grew a scant 3.7%, according to advertising intelligence company Standard Media Index. As more retailers devote more ad dollars to paid search, they’re driving paid search prices up, with the overall cost per click rising 5.7% last year (and about 7% in the first quarter), Merkle says.

However, growth in paid search spending means increased competition for consumers’ attention. If retailers want to be found on search engines, they need to have a solid paid search strategy, and merely throwing money at Google and buying up keywords will make any retailer go broke. That’s why research found in Internet Retailer’s recently released “Best Digital Marketers in E-Commerce Report” examined multiple metrics—including a retailer’s monthly paid search spending, the percentage of site traffic that comes from paid search campaigns, and overall spending for each website visitor that comes from paid search ads—to find the most successful retail search marketers.

Just as Amazon dominates text ads, Walmart Inc. dominates Google PLAs. And, if Amazon wants to dominate PLAs, it will have to knock Walmart off its perch as the leading retailer in the space, Leichenko says.

For instance, during the Cyber 5, Walmart.com made a major PLA push on

For Amazon, paid search is just one part of a huge and fast-growing marketing budget.

$10.07

$7.23$5.25$4.33

FY2014 FY2015 FY2016 FY2017

5.7% 5.7%4.9%4.9%

FY2014 FY2015 FY2016 FY2017

Amazon’s marketing spending grows

Percentageofnetsales

Amountspent($ billions)

Source: Company reports


The retailer is increasingly focusing on mobile PLAs and, in areas where Lamps Plus has stores, local inventory ads, says Angela Hsu, senior vice president of internet business and marketing for Lamps Plus.

“LIAs allow us to display inventory availabil-ity at the nearest Lamps Plus store along with the store’s address, hours and directions,” Hsu says. “As we increase our spending on LIAs and our mobile campaigns in close distances to our stores, we see call volume to those stores increase—more customers are calling about the products they saw in our ads.”

In addition to providing a boost to its stores, Hsu says the spending on mobile LIAs has ben-efited the company’s online sales. The mobile approach to paid search, she says, meshes with the retailer’s overall approach to marketing.

“Our overall strategy is ‘mobile first’ in website design, speed and marketing,” Hsu says. “For mobile advertising, we take into account shoppers who use multiple devices to research and then purchase via desktop or at a nearby store. We don’t use the typical metrics to measure the success of a mobile campaign.”

Lamps Plus drives especially high paid search visits and percentage of traffic from paid search, according to Internet Retailer’s research. Lamps Plus received an average of 2.9 million paid search visits in 2017, up 561.8% from 438,219 in 2016, according to an Internet retailer analysis of data from SimilarWeb. Paid sources repre-sented 26% of its average monthly visits in 2017, compared with an average of 11.3% for Top 1000 retailers that invested in paid search.

Mobile campaigns are also an increas-ingly important piece of home improvement giant Home Depot’s paid search advertising strategy. That’s because smartphone ads enable the retailer to reach consumers who are not at home or, for other reasons, not in front of a computer, says Drew Keenan, senior director of media strategy.

“Mobile is a critical intersection point,” he says, because it connects online shoppers with local stores and online ordering, often when they are already out of their homes. To work well, he says, the ads must do a good job of helping customers find both stores and individual products.

Home Depot’s paid search strategy has a heavy emphasis on Google’s text ads, PLAs and

Customer match: This feature, launched in 2015, enables an e-retailer to upload lists, which are then matched with data from matching Google accounts.

What’s new? Until recently, Customer Match supported only email list uploads. But last December it rolled out the ability for marketers to upload phone numbers and mailing addresses as well.

Demographic targeting: Advertisers can reach specific groups of people based on things like age range, gender, parental status or household income.

What’s new? Google began rolling out demographics for search ads (DFSA) in fall 2016. DFSA lets search advertisers adjust their ad buys for factors like age ranges, gender and household income.

Remarketing Lists for Search Ads (RLSAs): Ad buyers can customize search ad campaigns to reach consum-ers who have previously visited their websites, and tailor ads to reach those visitors when they’re searching on Google and search partner sites.

What’s new? Starting in July 2017, consumers on a retailer’s YouTube remarketing lists could be added to that retailer’s RLSAs.

Similar Audiences: Powered by Google’s machine learning, the Similar Audiences feature uses search trends to help advertisers find people who are looking for the same things as customers already in a retailer’s RLSA lists.

What’s new? This feature, which was already available for Display Network ads, was rolled out for Google Search and Google Shopping in May 2017.

Targeting is crucial to paid search success

Effective targeting is crucial to retailers’ successful paid search campaigns,

experts say. Google’s AdWords platform allows advertisers to target their

ads based on factors such as keywords, geographic location, language and

device used. In recent years, Google has added features to allow advertisers

to target specific audiences.

Those features are becoming increasingly important. Google’s targeting

products audiences accounted for more than 34% of Google search ad

clicks in the first quarter, up 15 points from the same period a year earlier,

according to Merkle RKG. In part, that reflects Google’s push

to roll out more tools that retailers and other marketers can leverage.

Google’s audience targeting options include:


such as how to determine what size to buy, and the pros and cons of gas versus electric, or a tank versus tankless model.

Leveraging all of the technology that’s available is key to many of the most effective paid search marketers’ success. Case in point: direct-to-consumer online mattress brand Saatva Inc.

Ricky Joshi, co-founder and chief marketing officer, says he has been especially impressed by Accelerated Mobile Pages (AMP), which can be used to create faster mobile landing pages and can be used in conjunction with Google AdWords.

AMP uses open-source website publishing technology designed to improve the perfor-mance of web content and advertisements. The technology is the product of Accelerated Mobile Pages Project, led by Google.

In terms of its ad spending with Google, Joshi says, text ads have always worked well for Saatva, but PLAs have not been a big part of its paid search strategy because the format hasn’t produced results to justify the added cost versus text ads.

Saatva plans to continue boosting its paid search spending. It also expects to spend more on other kinds of digital marketing, specifically social media, video and display ads.

Saatva received an average of 886,157 paid search visits in 2017, up more than 644% from 119,065 in 2016, according to an Internet retailer analysis of data from SimilarWeb. Paid sources represented 26% of its average monthly visits in 2017.

While the biggest names in e-commerce, such as Amazon and Walmart are investing a lot in paid ads on Google and other search engines, Internet Retailer’s research finds there are many small and midsized merchants driving strong results by picking their spots carefully and investing smartly.

In Internet Retailer’s ranking of the top search advertisers, only 20% of the retailers had 2017 web sales of more than $1 billion. Roughly 44% had 2017 web sales of less than $100 million and 22% had web sales of less than $25 million. What that means is that even small players can be among the best at deploying paid search strategies with a big return on investment. l

[email protected] @JM_INTERNETRET

LIAs, he says. He sees the latter as an important tool for connecting shoppers—especially mobile shoppers—with the thousands of SKUs that Home Depot offers in its stores.

This year Home Depot plans to bolster its paid search audience targeting tools. Better targeting, Keenan says, allows Home Depot to deliver the kinds of ads most relevant to the various audi-ences it wants to reach. Those ads, he says, can be aimed at different kinds of consumers based on factors such as demographics, geography and where they are in the buying process.

For example, an affluent baby boomer who needs a water heater might see ad messages that emphasize installation and other services—based on the idea that the boomer knows what he wants and probably wants to get the project finished the same day. A millennial looking for the same item might get informational content,

Amazon.com Inc. $37.56

Walmart Inc. $23.06

Apple Inc. $8.73

Home Depot Inc. $7.50

Macy’s Inc. $7.46

Wayfair Inc. $6.28

Overstock.com Inc. $5.19

Google Play $5.13

Best Buy Co. Inc. $4.90

Cimpress NV $4.53

Source: Internet Retailer, Kantar Media

Top 10 paid search spendersMonthly average 2017 (in millions)

Better targeting allows Home Depot to deliver the kinds of ads most relevant to the various audi ences it wants to reach.


FROM THE EDITORS OF

Navigate e-commerce’s biggest event with this guide to must-see conference sessions on the industry’s hottest topics.

INSIDER’S GUIDE TO

IRCEINSIDER’S GUIDE TO

In the following pages you’ll learn the ins and outs of IRCE and our staff’s picks for can’t-miss sessions and events. Our hope is you use this guide to get the most out of your IRCE experience.

executives share with us about their challenges, successes and the issues that keep them awake at night are what drives IRCE content development.

We collect ideas for sessions based on our staff’s reporting throughout the year. Then the agenda team shapes these ideas with the goal of making them deliver the greatest impact and takeaways for attendees. The agenda team—composed of Mary Wagner, who’s been part of IRCE agenda planning since year one, Denise Power of Emerald Expositions, and me—then works to identify and recruit speakers who can lend their expertise on the identified topics. There’s no pay-to-play content on the main stage, or in track sessions or workshops at IRCE—and that’s a point of pride that some other industry events can’t claim. The topics addressed at IRCE are featured because they matter, the speakers on stage have personal experience with the issues they’re discussing, which is why we’re pleased to give them a plat-form to share what they’ve learned with others.

Planning for IRCE 2019 will begin almost immediately after IRCE 2018 concludes. But don’t think for a moment that our editors won’t be extracting session ideas from the executives they meet at IRCE 2018. E-retailers’ willing-ness to share with us and their colleagues in e-commerce their challenges and experiences are what helps propel this thriving sector of retailing ahead. l

This is the 14th edition of the Internet Retailer Conference & Exhibition, and what started in its first year as a small event held in the lower levels of a Chicago hotel has grown into the larg-est conference in the world devoted to the needs of online retailers. IRCE will take over Chicago’s McCormick Place West convention center June 5-8 for four days of workshops, track sessions, exhibits and networking opportunities.

We expect more than 10,000 e-retailers and service providers on site this year, with each seeking an edge that will improve their business competitiveness. To that end, over the last year the Internet Retailer staff and our colleagues at Emerald Expositions (the owners of IRCE) have methodically crafted a conference agenda that hits on e-retailers’ needs across many levels, from simple refinements that can help improve key business metrics to insights into some online retailers’ more complex business strategies. You can visit IRCE.com to view the complete agenda, which includes more than 130 session topics and 200-plus speakers.

Given that this is an insider’s guide to the show, I want to draw back the curtain and share some detail on how this learning-intensive conference comes together. One of the greatest strengths we have in crafting the topics featured at IRCE are the conversations we have with online retailers every day in the course of our reporting at Internet Retailer. The experiences retail

Allison Enrightis editorial director at Internet Retailer. She is part of the team responsible for developing IRCE content and recruiting speakers.

Welcome

Welcome to the Internet Retailer Insider’s Guide to IRCE 2018


Overview

its disruptive business model, technology development and social entrepreneurship. It’s built a cult following among consumers attracted by stylish premium eyeglasses at fair prices and the brand’s give-back mission that donates a pair of eyeglasses to those in need for every pair it sells.

If questioning the status quo was the spark that lit the way to the founding of Warby Parker, the same approach ignited the career of IRCE’s day one special guest speaker. Seth Godin, former business executive, internet pioneer, and intellectual provocateur, is a writer and thought leader whose 18 best-selling books cover topics such as the way ideas spread, marketing, leadership, and most of all, changing everything.

In his presentation, Godin will aim to deconstruct the complicated relationship between fear and freedom, explain how to stop hiding behind what feels “safe,” and how to get “unstuck.” It’s OK to have some bad ideas on the way to lasting change, Godin argues. “To make change happen, don’t wait for permission, just get started,” he says.

That’s the same kind of initiative that turned a remodeling project on Alon Cohen’s own home into Houzz, a $4 billion company that Wall Street has called a “trifecta of content, community and commerce.”

After Cohen, IRCE’s day two keynote speaker, and his wife and co-founder Adi Tatarko successfully tackled the task of sourcing materials and the right professionals for their own remodel, they began receiving requests for help from others. They launched Houzz.com in 2010.

Cohen coded the first version of the site, which launched as a platform that homeowners could

Big ideas from the brightest minds in e-commerceIRCE 2018’s speakers and sessions will examine the critical issues facing online retailers.

Consumers are shifting their spending online. E-commerce accounted for 13.0% of total retail sales in 2017, up from 11.7% a year ago.

In raw numbers, consumers spent $453.46 billion on the web for retail purchases in 2017, a 16.0% increase compared with $390.99 billion in 2016, according to the U.S. Commerce Department. That’s the highest growth rate since 2011.

As e-commerce grows, the industry is increasingly competitive as new players seek a piece of the pie, and entrenched ones aim to garner a bigger one. But one key for the most successful online retailers is that they never stop learning and adjusting the way they operate.

Real-time, expert-driven practical guidance is key to success and, from the start, that’s been the centerpiece of the Internet Retailer Conference & Exhibition, which is the world’s largest e-commerce event. IRCE 2018 aims to expand on that tradition with an agenda that’s packed with retailers sharing their perspectives on perennial business challenges, as well as the latest emerging trends.

TAKE WARBY PARKER, the eyewear company co-founded in 2010 by co-CEO Dave Gilboa, who is IRCE’s day one keynote speaker.

The idea that sparked the creation of the company occurred when one of the company’s founders asked the question, “Why are eyeglasses so expensive?” Turns out, they didn’t have to be–if Warby Parker could find a way to change the traditional production and distribution approach.

Eight years after its founding, the retailer is worth an estimated $1.7 billion, thanks to

Mary Wagneris Internet Retailer’s editorial director, live content, and helps lead the selection and recruitment of speakers for IRCE.

marketing of stores, products and brands. The Strategies for Top Executives track

will feature speakers examining consumer behavioral changes and how to foster innovation in-house. The track will also offer a focus on profitability, with sessions on investment valuation and contribution analysis.

IRCE’s Omnichannel Leadership track will address the challenges and opportunities that multichannel retailers face.

The B2B market is also changing, with a growing percentage of sales shifting online. Expert insights and examples in the B2B workshop will help pave the way for wholesalers, distributors and manufacturers looking online to create operating efficiencies, reduce costs and meet online business buyers’ changing expectations.

And, for the first time, IRCE will offer a workshop specifically targeting the interests of those newer to e-commerce, the New Recruit Boot Camp. This interactive workshop will overview key foundational aspects of e-commerce—from design to marketing to fulfillment and technology.

SUPPORTING ANY NEW DIRECTION that online retailers are inspired to pursue, IRCE also will feature vendors of technology solutions, and goods and services in what is the industry’s largest e-commerce trade show, featuring roughly 600 companies.

With 130 sessions, 200 speakers and an expansive range of exhibitors, IRCE attendees will be able to examine what’s working in e-commerce today, what’s new and what’s next. Beyond those sessions, IRCE offers attendees the opportunity to meet and swap ideas with the roughly 10,000 industry peers representing more than 3,000 companies. Between the evening cocktail receptions, sponsored lounges and coffee stations, attendees have ample opportunities to meet and make connections that could help take an e-commerce business where it wants to go. l

use to find inspiration for their own projects and connect with designers and builders. Eventually, consumers began asking to buy the furniture featured in the site’s photos and were directed to outside websites to buy the products. And Houzz added an online marketplace in 2014.

Today, Houzz’s website, apps, and online forum enable consumers to get design inspiration, hire professionals, and shop for products and materials for their home renovation and design projects. In his presentation, Cohen will explain how listening and responding to homeowners and home pros created a vibrant community of more than 40 million monthly unique users.

Listening to and understanding customers also is critical in the retail fashion world. Plus-size women’s clothing is a $20 billion retail market, and IRCE’s day two featured speaker on the main stage will share how her company is reinventing in the fast-growing category. Eloquii has established itself as a leader in plus-sized retailing online—revenue topped $50 million after just four years—and CEO Mariah Chase will share with IRCE attendees how her company’s distinct blend of fashion and data science is maximizing the company’s success.

IN ADDITION TO THE MAIN STAGE SPEAKERS, IRCE attendees will find inspiration and insights in the conference’s topic-focused tracks and individual breakout sessions.

For instance, IRCE’s Amazon & Me workshop will explore Amazon and its outsized influence across e-commerce. Sessions will explore the retailer’s latest changes, and offer advice on how to get the most out of Amazon while staying on the right side of its terms of service.

IRCE will also examine the latest developments in online marketing across three marketing-related tracks: The New Tactics, Brand Building and Proven Winners. Each will highlight success stories across a full spectrum of today’s most pressing questions in the online


Dave Gilboa, CEO, Warby Parker

DAY ONE KEYNOTE SPEAKER

Seth Godin, E-commerce entrepreneur

DAY ONE SPECIAL GUEST SPEAKER

Alon Cohen, Co-founder of Houzz

DAY TWO KEYNOTE SPEAKER

Mariah Chase, CEO, Eloquii

DAY TWO FEATURED SPEAKER

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companies—make a name for themselves online. Consumers’ ever-shorter attention spans require e-retailers to think creatively on how to draw them in. The e-retail speakers in this track will share how they have built brand recognition using a range of marketing methods—from the strategic use of pop-up stores to social media videos to traditional, non-digital media.

It’s a long haul from one end of the Exhibit Hall to the other. If your dogs are tired, stop and sit in at the IRCE Tech Stage, located at the center of the IRCE Exhibit Hall. The IRCE Tech Stage will feature speakers from exhibiting companies explaining their services, applica-tions and benefits. Speakers will take the Tech Stage on Wednesday, June 6, and Thursday, June 7, during Exhibit Hall hours. A final schedule of “Spotlight On” presenters will be available on IRCE.com and within the IRCE mobile app.

“Straight Talk” will help e-retailer attendees and exhibitors cut through the clutter. Select exhibitors will host their own meetings, work-shops and gatherings with invited attendees in dedicated meeting rooms at the event. A com-plete schedule of “Straight Talk” presentations and sponsors will be available on IRCE.com and within the IRCE mobile app.

IRCE’s Exhibit Hall will feature a range of amenities critical to helping attendees charge and recharge. These include a relaxation sta-tion for chair massages, game play in the IRCE Backyard and charging stations for a battery boost. Finally, early risers at IRCE can greet the sunrise over Lake Michigan as part of IRCE’s first-ever organized “fun run,” which runs right past McCormick Place along Chicago’s lakefront path. l

The Internet Retailer Conference & Exhibition in June will bring together roughly 10,000 members of the e-commerce community to learn, network and shop. IRCE is celebrating its 14th year as the largest event in e-commerce, and an infusion of new content will take place in the conference tracks, in the exhibit hall and beyond.

E-commerce newbies will want to be sure to register for the New Recruit Boot Camp pre-conference workshop held Tuesday, June 5. This workshop is designed for attendees new to e-commerce. It will deliver an introduction on topics critical to running an e-commerce business, including website design, customer acquisition, fulfillment and technology. Taking place ahead of the two main days of the confer-ence, the workshop will provide attendees with the basics to help them take advantage of the more advanced conference content and better direct their time in the exhibit hall.

The Brand Building track, taking place Thursday, June 7, will dig into how e-re-tailers—particularly newer, lesser-known

What’s new at IRCE 2018


experience our customers are looking for,” Durkin says. Dealing with changes in a pet’s diet or the loss of a pet can be stressful and emotional, which is why Chewy doesn’t automate its customer service and makes it available at all times.

“Chewy pet parents have access to us at all times, 365 days a year, 24/7,” Durkin says. “We want them to leave every conversation being blown away and thinking, ‘Wow, that was incredible.’”

In addition to providing good customer

service, consumers also expect retailers to ship them their orders quickly and painlessly.

That’s easier said than done—and consumers’ expectations continue to rise—which is why I’ve circled the session “Too fast? Too Slow? Industry Standards and Customer Expectations for Delivery.” It will feature Ken Cassar, principal analyst at e-commerce analytics firm Slice Intelligence and Lauren Freedman, president of the E-Tailing Group, discussing the latest fulfillment and delivery trends.

How economically an e-retailer can deliver products to consumers has a direct impact on market share, Cassar says. And, with Amazon.com Inc. setting the standard for fulfillment and delivery, that’s a challenge for every merchant.

The two fulfillment metrics that really count are how fast products leave a retailer’s warehouse and how quickly they arrive to a consumer’s doorstep after that. And creating a mix of options that consumer will accept—slow and cheap, fast and expensive, or something else—is critical to every e-retailer.

Offering a great online customer experience requires a lot more than having an attractive website. Customers also expect fast, frictionless order fulfillment and a high level of service.

Online shoppers want to buy from merchants that demonstrate that they understand them, care about solving their problems and can offer meaningful advice when needed.

That’s why I’m looking forward to hearing Kelli Durkin, vice president of customer service at Chewy.com, discuss the pet supplies retailer’s “high-touch” customer service during the session “Building Loyalty Through High-Touch Customer Service.” She plans to detail how the retailer hires carefully and thoroughly trains its customer service representatives.

“We want to combine the convenience of shopping online with a highly personalized customer experience, similar to what you would receive in your neighborhood pet store,” Durkin says.

That starts with hiring people who are, first of all, nice.

“Qualities like empathy and kindness are essential for providing that personalized

James Meltonis an Internet Retailer research analyst who covers online marketplaces, e-grocery and venture funding in retail technology.

Customer Experience

Highlighted SessionsWEDNESDAY, JUNE 6, 10:30 – 11 A.M. Building Loyalty Through High-Touch Customer Service

WEDNESDAY, JUNE 6, 1:15 – 1:45 P.M.Too Fast? Too Slow? Industry Standards and Customer Expectations for Delivery

Gaining loyalty and getting orders where they need to go


category-specific data that can help retailers and brands determine which marketplaces to sell on.

I’ll dive into how gross merchandise value has grown on various platforms, where the top marketplaces are located and when they launched and which marketplaces are garnering the most investor dollars. I’ll also share results from our most recent consumer surveys, which offer interesting insights into shopping behavior on marketplaces.

While I’ve been closely following the market-places industry for several years, I learn the most from experienced retailers and brands that share insights on how they’ve overcome challenges and succeeded in selling on multi-merchant portals.

I’m particularly looking forward to hearing David Sasson, CEO of OverstockArt.com, and Llef Storer, director of marketplaces at Teespring, dis-cuss why selling on niche marketplaces works for them in the session “Niche Marketplaces–When It’s Time to ‘Go Vertical.’” Many retailers focus all their attention on the larger marketplaces—like Amazon and eBay—but smaller platforms that focus on a narrow set of products offer compel-ling value propositions. This session will touch on marketing perks niche marketplaces offer that the big ones refuse to make available and whether the potential payoff is worth the risk.

I’m also eager to hear the session, “Whack-A-Mole Medalists: Making MAP Happen and Grey Be Gone!” because it covers a topic that has plagued many sellers, but has received relatively little attention. Some online marketplaces have given unauthorized or grey market resellers a safe place to thrive, eroding margins for autho-rized sellers. Todd Myers of cutlery manufacturer Wusthof-Trident of America will share how the company successfully devised a system to monitor and identify troublemakers, while using product distribution controls and other tactics to shut them down. l

Amazon’s global footprint is expanding; China’s Alibaba is courting U.S. businesses to sell on its online marketplaces Taobao and Tmall; retail chains, such as Crate & Barrel and Urban Outfitters are allowing other retailers to sell on their sites; and niche marketplaces are popping up left and right.

In short, there’s lots to discuss regarding marketplaces. And with 97% of U.S. consumers shopping on online marketplaces, according to UPS and comScore Inc. research, e-retailers need to stay on top of the latest developments. I, along with many marketplace experts and retailers, will do my best to cover ground on this booming sector of e-commerce.

I WILL KICK OFF THE MARKETPLACES TRACK on Thursday by presenting data on the $1.5 trillion industry to illustrate how marketplaces have developed into a key part of e-commerce.

Drawing on research from Internet Retailer’s first-ever ranking of the top 75 online mar-ketplaces in the world and this year’s Online Marketplaces report, I’ll highlight the leading marketplace operators that are attracting the most sellers and consumers, with new

Fareeha Aliis director of research strategy for Internet Retailer, where she oversees research and data analysis of the retail industry. In addition, she is the lead researcher of online marketplaces.

Marketplaces

Highlighted SessionsTHURSDAY, JUNE 7, 10:30 – 11:00 AM.Marketplaces in 2018 and What’s Coming in 2019

THURSDAY, JUNE 7, 1:15 – 1:45 P.M.Niche Marketplaces— When It’s Time to ‘Go Vertical’

THURSDAY, JUNE 7, 3:45 – 4:15 P.M.Whack-A-Mole Medalists— Making MAP Happen and Grey Be Gone!

Leveraging online marketplaces


Highlighted SessionsWEDNESDAY, JUNE 6, 1:15 – 1:45 P.M.Harmonize Systems for Optimum Visibility into Inventory—Everywhere

WEDNESDAY, JUNE 6, 1:45 – 2:15 P.M.A Store Pickup Ecosystem for Online Orders

Omnichannel

With a single inventory list, the retailer can now execute a buy online pick up in store and ship from store fulfillment, she says. “We feel this is the future, hopefully most organizations are working toward this,” Milazzo says.

Milazzo knows there are many ways that retailers can execute an omnichannel strategy and will discuss the benefits of having a cloud-based technology vendor do the heavy lifting for the retailer.

Of course, there’s more than one way for retail-ers to link their various channels. Retail chain Meijer, for instance, went in a different direction to merge its online and offline offerings.

Meijer has two ways shoppers can order gro-ceries online: Meijer Curbside pickup program, which Meijer is testing in a handful of stores, or via its Meijer Home Delivery program with Shipt, available in about 90% of its 230 stores.

The retailer made more than 1 million home deliveries in 2017 and the two programs are driving incremental sales, says Justin Sessink, Meijer’s manager, program development, digital shopping, e-commerce.

In addition to the benefits, Sessink will discuss some of the challenges Meijer met when using stores to fulfill online orders in the session “A Store Pickup Ecosystem for Online Orders.” l

Merging online andoffline operations

Marrying your online operations to your stores is tough, which is why many retailers struggle to tie their various channels together.

But many shoppers don’t distinguish between a retailer’s online and offline operations and demand the two work in harmony. And so it’s never been more important for retailers to offer consumers a smooth omnichannel experience.

LUCKILY, THERE ARE PLENTY OF PROVEN BLUEPRINTS that retailers can follow to help get their operations up to speed. And retailers that want to brush up on the latest omnichan-nel tactics should head to the Omnichannel Leadership Track on June 6. The track will feature industry experts and executives from retailers such as Nordstrom, Meijer and apparel retailer Toad & Co., discussing how they think about their omnichannel operations. I’m looking forward to hearing about how these retailers are making mobile location data work for stores, offering incentives for store associates that are beneficial for online and store sales, and successfully merging their online and store inventory systems.

For instance, Kelly Milazzo, vice president, operations, at apparel retailer Toad & Co. will discuss her three-year journey to achieve the retailer’s omnichannel vision in the session “Harmonize System for Optimum Visibility into Inventory—Everywhere.”

Integrating Toad & Co.’s enterprise resource planning system, in-store point of sale system and e-commerce platform put all of its store and e-commerce inventory into one system, which helped the retailer “tremendously,” Milazzo says.

“By putting it into one unified system, we have a 360-degree view of the customer,” Milazzo says. “We can interact with that customer as a single customer, which they very much are to us.”

April Bertheneis a senior editor at Internet Retailer. She follows the evolution of mobile commerce and the emergence of virtual and augmented reality in retail.


Instead, the Touch of Modern finance team collaborated with chief technology officer Steven Ou to automate the process with its tech-nology partner, Tipalti. Another area simplified by technology was the company’s use of images in email, where it cut out manual testing by patenting new software.

“Our images for each email can be constantly rotated and optimized based on what our platform learns is most popular, even though the email has already been sent,” Wu says.

I also plan to stick around for “Personalization 2.0: Making the Move to Individualization.” In that session, Brendan Witcher, Forrester Research Inc. vice president and principal analyst, will explain how retailers can better leverage the data that they already have to tailor their sites to each user’s interest.

“We are in a new era of personalization, where leading companies are moving on from outdated methodologies—segmentation, A/B testing and product recommendations—to a state of delivering experiences across the customer journey using individualization,” he says.

Witcher plans to highlight brands winning the individualization game, while also explain-ing how they’re capturing and using data to keep the personalization engines running.

Of course, whether it’s marketing, sales or technology, Amazon can disrupt even the best laid plans. That’s why I’ve also circled the ses-sion “Counter the Amazon Effect by Mastering Execution.” During the session, Edward Wong, grocery retailer Smart & Final’s chief information officer, will describe his approach to multichannel retail technology and how to avoid playing catch-up to Amazon.

“Online penetration for multichannel retailers will not be higher than offline sales for quite some time,” Wong says. “As digital drives buzz, let’s not lose sight of how to establish an operating structure for success regardless of channel.” l

Spend a few minutes in IRCE’s massive exhibit hall and you’ll quickly grasp that there’s a nearly endless stream of e-commerce technol-ogy that retailers can put to use. The options can seem overwhelming—especially when you aren’t clear what technologies actually deliver strong results. IRCE’s “Managing Technology” track, which is filled with retailers and other experts who can vouch for tools that deliver clear results, may be able to help.

WHEN EXAMINING WHICH TECHNOLOGY TO IMPLEMENT, it’s important to get into the right mindset, says Jonathan Wu, a Tomo Ventures partner and the co-founder of Touch of Modern. In “Think Like a Tech Startup: Tech Growth with Retail Efficiency,” he’ll discuss how retailers can adopt a startup-like mindset by looking at the early stages of the men’s apparel retailer.

“When Touch of Modern launched, we were working with five new vendors a day,” Wu says. But that number grew quickly. “Most retailers’ first instinct is to begin hiring an accounts payable team to handle the large amount of new vendor banking information and invoices received.”

James Risleyis a research analyst at Internet Retailer. In addition to identifying e-commerce trends, he covers web-only brands.

Technology

Highlighted SessionsTHURSDAY, JUNE 7, 1:15 – 1:45 P.M.Counter the Amazon Effect by Mastering Execution

THURSDAY, JUNE 7, 3:45 – 4:15 P.M.Think Like a Tech Startup: Tech Growth with Retail Efficiency

THURSDAY, JUNE 7, 4:15 – 4:45 P.M.Personalization 2.0: Making the Move to Individualization

How to balance costs and results

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IRI N T E R N E TR E TA I L E R

Internet Retailer is the Official Media Sponsor of

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While Attending IRCE 2018

Internet Retailer’s Win-the-Wheels raffle at IRCE gives attendees several opportunities to win prizes, with none being more popular than the GRAND PRIZE — a car, brought to you by Carvana.com, the online dealer for the new way to buy a car.

Attendees receive a “Win-the-Wheels Tour” booklet at registration or at Internet Retailer booth (#1129).

To enter the contest, you must visit the participating sponsors listed to the right, then drop off a completed card at the Internet Retailer booth (#1129).

The winner selects a car from Carvana.com ($30,000 value) that can be shipped anywhere in the United States.*

The Win-the-Wheels Booth Tour is made possible by the generous sponsors of the June issue of Internet Retailer and our partner, Carvana.com.

Take time to visit these Internet Retailer partners while attending IRCE 2018. The drawing takes place in the Exhibit Hall on Thursday, June 7 at 1:00 p.m.

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largest e-commerce trade show in the industry.Every year IRCE, which is the largest annual

event focused on e-commerce, highlights the latest advances across nearly every aspect of e-commerce from platforms to fulfillment to online marketplace management. For instance, a vendor like Bronto will demonstrate how its technology can help retailers leverage the customer data they collect to offer consumers a personalized experience.

Personalization will also headline a number of IRCE’s sessions. For instance, Scott Drayer, vice president of marketing at Paul Fredrick Menstyle, will detail how the menswear brand developed a personalized email program that uses triggered messaging and tailored recommendations to significantly boost its average revenue per email.

And Forrester Research Inc.’s Brendan Witcher will explain how retailers can use innovative tools to structure their interactions and content to a consum-er’s interests, a concept he calls “individualization.” However, he says, merchants have to be careful to

Despite the rapid growth of e-commerce, it’s never been harder for an online retailer to stand out.

To succeed, retailers must seek out new ways to streamline and improve their operations, which helps explain why 78%

of retailers are planning to boost their spending on technology this year, according to an Internet Retailer survey of 77 online retailers conducted in October 2017.

Those investments involve all aspects of an e-com-merce business—from order management systems that link a merchant’s online and offline operations to marketing tools that leverage the wealth of consumer data that retailers collect to tailor their website and app to a consumer’s interests.

Many of those tools will be on display when the Internet Retailer Conference & Exhibition’s roughly 10,000 attendees navigate the show’s exhibit hall. The exhibit hall will feature more than 600 vendors, which range from cutting-edge startups to some of the industry’s biggest names. The exhibit hall covers more than 250,000 square feet of space–making it the

will take center stage atTechnology

IRCE

Another key item on the IRCE agenda will be machine learning, a technology that uses artificial intelligence (AI) to enable computerized systems to learn and improve without human intervention. Many retailers and other businesses are bullish on the technology’s potential to transform e-commerce and other industries. For example, across all industries, more than half of enterprises are expected to spend more per year on bots and chatbot

creation than on traditional mobile app development by 2021, according to a September 2017 report from information technology research and consulting firm Gartner Inc. Chatbots, the report says “are the face of AI and will impact all areas where there is communication between humans today.”

In another example, Forest Bronzan, CEO and co-founder of Email Aptitude, an email marketing firm, and Michael Kaselitz, director of e-commerce for apparel retailer Peter Millar will discuss how to bal-ance machine learning with common sense to ensure a company’s systems are running at full potential in the session “Avoiding Pitfalls of Machine Learning with (Un)Common Sense.”

IRCE is also adding two new, technology-related exhibit hall components this year, says David Southworth, vice president of IRCE. They are:

• Spotlight On, a series of 25-minute talks by select exhibitors that will take place throughout the day on June 6 and June 7. The talks will be presented on a new Tech Stage, located in the center of the exhibit hall.

• The Straight Talk meeting room, which will give attendees the chance to sit down and hear from IRCE exhibitors about a variety of topics.

IRCE’s emphasis on technology makes sense, Southworth says, because retailers are always searching for ways to make their operations more efficient and easier to run. l

MORE THAN HALF OF ENTERPRISES WILL SPEND MORE PER YEAR ON BOTS AND CHATBOT CREATION THAN TRADITIONAL MOBILE APP DEVELOPMENT BY 2021, ACCORDING TO GARTNER INC.

Deploying personalization: Marketers give mixed grades How well are you able to personalize your customers’ experiences?

Source: Dynamic Yield survey of 700 marketers and executives from cross-functional roles in the Americas; the Europe, the Middle East and Africa region; and the Asia-Pacific region. Results released in February 2018.

17.9%

Somewhat 35.4%

Well enough 23.1%

Very well23.6%

Not at all

SPONSORED TECH FOCUS REPORT

avoid the “creepy” factor—marketing that does not respect individual boundaries that can vary greatly, depending on the customer involved. For example, if an app notifies a consumer about special offers when he enters a store, he might find that useful, while others would find it to be intrusive.

Personalization can help retailers build relation-ships with consumers, experts say, which helps explain why 92.4% of marketers believe in the value of personalization, according to a global survey of 700 marketers and other executives conducted by personalization technology vendor Dynamic Yield. However, few retailers—or other businesses—have personalization figured out: 35.4% of companies deploy only basic on-site personalization with limited segmentation, the survey found. And only 23.6% are using personalization technology at what they consider the “highest-possible level.”

SPONSORED ARTICLE

Influencers are key to driving engagement. Do you have the right technology?

ALEXANDRA FORSCHVice president at Awin US,

a performance marketing network

first three months, these campaigns

saw more than $550,000 in revenue,

a 224% jump in average order value,

a $17.10 return on investment (total

revenue to retailer divided by commis-

sions paid to publishers) and tracked

more than 5,000 codes.

DESPITE INFLUENCER

MARKETING’S GROWTH, program

compliance and disclosure

requirements—that is, making

sure advertisers and publishers

are engaging in legal and ethical

promotional tactics in line with the

Federal Trade Commission (FTC)—are

significantly impacting both retailers

and affiliate partners on a global scale.

“While rules and regulations in

this realm had remained constant for

the past decade across key markets,

legislators globally are releasing new

guidelines and laws, including Gen-

eral Data Protection Regulation, FTC

disclosure and ePrivacy,” Forsch says

“This isn’t surprising following the

global affiliate industry’s year-on-year

growth predicted to have reached $17

billion in revenue globally, as reported

in the annual Awin Report.”

Forsch says retailers should align

themselves with a network partner

that stays up to date with legisla-

tion, issuing updates to their clients

accordingly, and have the in-house

bandwidth to address these rapid-

ly-changing requirements.

“Staying on top of the latest

updates is a job in itself—one that

many retailers struggle to keep up with

independently, despite the high stakes

and consequences for non-compli-

ance,” she says. “They need a partner

that closely monitors FTC updates,

stays up-to-date on nexus tax laws

and takes a proactive approach to rel-

evant regulations, such as the General

Data Protection Regulation.”

Influencers’ power is growing

within e-commerce. Posts by

influencers—defined as people

who are well-respected in a

specific industry or the general public

and have the ability to influence

the buying behavior of others—are

responsible for a threefold uplift

in sales, according to a study by

Collective Bias and in partnership with

Inmar. And BI Intelligence reports that

affiliate marketing outperformed social

commerce and display advertising

with 15% of digital media revenue

coming from the channel.

As influencer marketing matures,

more retailers are seeking ways

to quantify their results by using

advanced influencer-centric tools,

such as cookie-less tracking or forced

exclusives coupons, to aid promotions

on social channels and to measure

the return on their investment,” says

Alexandra Forsch, vice president at

Awin US, a performance marketing

network. And that requires retailers

to emphasize internal alignment and

integration within their marketing

teams to properly attribute sales to the

channel, she says.

“The affiliate channel used to sit

in a silo, but now in-house market-

ing teams must consider it within the

context of their entire marketing mix,”

Forsch says. “Affiliate sales are often

deprioritized and attributed to other

sources, but it’s increasingly import-

ant to reward these sales to motivate

future promotion and grow those key

partner relationships.”

Forsch says retailers are also

increasingly focused on understand-

ing whether an influencer’s posts help

lead to a sale even if a shopper doesn’t

immediately click on the influencer’s

link. Tools such as cookie-less coupon

tracking technology enable retailers to

attribute sales and award a commission

when the transaction occurred offline

or without a cookie or tracking link.

“It often requires multiple

touch points before consumers

complete their shopping journeys,

and influencers regularly act as

the introductory click,” Forsch

says. “Retailers need commission-

tracking technology to acknowledge

and reward that upper-funnel

engagement.”

Digital and social content affil-

iate ReviTrage has been particularly

successful at maximizing cookie-less

coupon tracking across numerous

verticals. For example, several brands

provided ReviTrage with a unique

offer for at least two weeks. Within the

We power connections.

$16.3 13k 260 180billion in

advertiser revenueadvertisers on global network

new affiliates joining every day

markets globally

Find out what makes the Awin Group the leading global affiliate marketing network.

IRCE June 5-8 | Booth #1600

https://www.awin.com/us

SPONSORED ARTICLE

Effectively using customer data allows retailers to provide personalized shopping experiences

GREG ZAKOWICZSenior commerce marketing analyst at

Oracle Bronto, a provider of e-commerce

marketing technology

intuitive product recommendations

and automated lifecycle messages

like abandoned cart emails,” he adds.

“Anything that helps the customer

inform decisions and streamline the

experience is what will matter the

most for retailers.”

For example, luxury home

furnishings retailer OKA turned

to Bronto to better engage its

customers.

Using Bronto’s technology,

OKA combined in-store and online

purchase information to pair browse

and cart recovery emails with

recommendations, and increased

the use of mobile-optimized

content. This enabled OKA to offer

its customers a more personalized

experience, improve the

performance of shopping recovery

campaigns and recommend relevant

items. And the technology has

proven very successful for OKA. Its

revenue from automated email is up

200% year over year, its conversion

rate for cart recovery is 218% higher

and its recommendations click-

through rate increased by 9%.

“We wanted to deliver a tailored

shopping experience to customers to

ensure we are displaying what they

want to see rather than what we want

to show them,” says Andrew Lothian,

OKA’s email marketing executive.

“My main goal is to deliver a better

customer experience by leveraging

customer information to show them

what they want to see and help them

toward their next ideal purchase.”

With the right technology partner

and tools, Zakowicz says this level of

success is within reach for any retailer.

“Be a concierge to your customers,”

he says. “Listen to them digitally to

churn out the results that allow you to

provide a smooth, convenient and less

time-consuming shopping experience

that makes their lives easier.”

Nearly every retailer

collects some amount of

customer data. Whether it’s

browsing behaviors, email

engagement or purchase history,

customer data can offer important

insights that may dramatically

improve profitability—and give it a leg

up against the competition.

But harnessing that data and

actually using the insights it provides

are two different things, says

Greg Zakowicz, senior commerce

marketing analyst at Oracle Bronto, a

provider of e-commerce marketing

technology. Retailers are confident in

their ability to collect customer data,

but they lack confidence in how to

execute on it, according to “Inside

the Minds of E-commerce Execs,”

a recent Bronto survey of U.S. retail

executives. But the company’s recent

survey of consumers confirmed

that many online shoppers expect

retailers to collect their data and

use it to personalize their shopping

experiences.

“Failing to execute on the data

retailers collect can be detrimental

to the success of their businesses,”

Zakowicz says. “Customers expect

retailers to cater to them—to offer

them personalized recommendations,

promotions and discounts.”

Retailers that don’t put their

customer data into action usually

want to, but often lack the necessary

resources, Zakowicz says. For instance,

only 65% of U.S. retailers surveyed

were satisfied with their ability to use

the data to understand consumer

preferences, and 60% were satisfied

with their ability to use data to

personalize the consumer’s experience.

“That means 40% are uncomfortable

using the data to customize the

experience—and that points to staffing

issues,” he says. “There’s this dichotomy

where consumers expect retailers to

offer more personalized and relevant

experiences, but many retailers don’t

have the ability to make the most of

their data.”

RETAILERS SHOULD LOOK for a

technology partner, such as Bronto,

that can help them automate the

process of collecting and executing

on customer data to offer that per-

sonalized experience, Zakowicz says.

“Retailers should implement tech-

nology that offers features such as

In the US, an astounding 160 million adults

have made at least one purchase using a mobile phone. That’s enough to fill all the Major League

Baseball stadiums 20 times over.

Buying behavior is changing. Learn what shoppers want and how

to deliver. Download our white paper bronto.com/mobile-trends

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SPONSORED ARTICLE

Gain a competitive advantage by turning customer data into intelligence

MICHAEL SCHOENGeneral manager and vice president of

marketing solutions, Neustar

deliver and maintain a relevant omni-

channel connection.”

For instance, without that com-

prehensive customer journey view,

Schoen says retailers may end up

wasting time and money delivering

the right message to the wrong chan-

nel. “The results are an inconsistent,

frustrating customer experience,” he

says.

As more dollars shift to mar-

ketplaces, there is now a blind spot

for retailers who may sell through

these aggregators, Schoen says. “It’s

difficult to connect the transaction

back to the customer when online

marketplaces share limited data with

retailers,” he says. “Many e-com-

merce-forward retailers, where most

of the transactions occur online,

often lack robust or complete cus-

tomer data within their customer

relationship management software.”

The first step in building a data

strategy that produces results is

implementing an identity manage-

ment platform that gives the retailer

a holistic and single customer view.

“By tying all of these fractional pieces

back to a persistent customer ID,

retailers can match, augment and

append more diverse data types—

giving them a enriched view across

channels, business units and internal

data warehouses.”

Retailers should find a tech-

nology provider, such as Neustar,

that can help them accomplish this

goal, Schoen says. “Today’s greatest

businesses are built on a foundation

of customer data, but collecting and

maintaining an accurate view of the

customer is harder than ever,” he

says. “By working with a partner that

can help connect offline identity data

to digital engagement and marketing

strategies, marketers gain a com-

petitive advantage using what they

already know is working to influence

their cross-channel marketing initia-

tives, helping the best become even

better.” l

In retail, the competitive

landscape is no longer two

dimensional: online vs. offline. In

order to be successful, com-

panies have to be prepared to meet

their customers where they are:

online or offline. Companies such

as Amazon.com Inc. and Walmart

Inc. have already moved aggressively

toward building omnichannel retail

networks.

“However, just moving to an

omnichannel distribution strategy is

not enough,” says Michael Schoen,

vice president of marketing services

at Neustar, a customer intelligence

and identity management provider.

“Consumers’ expectations and

buying behaviors are changing and,

more than ever, today’s shoppers

demand a convenient, personal-

ized shopping experience.” And if

they don’t find it with one retailer,

Schoen says they will quickly move

on to the next—forcing many retail-

ers to shift their marketing and data

strategies toward an omnichannel

approach.

Part of that shift, Schoen says, is

using what they already know about

their existing core customers to

influence their marketing decisions.

Retailers looking to successfully

leverage their own proprietary

customer records require a compre-

hensive data strategy that combines

deterministic first-party data with

probabilistic consumer data. By con-

necting offline customer relationship

management data to digital attributes

and behaviors, retailers can build

predictive targeting segments that

provide relevant communications to

existing customers and anonymous

prospects.

But it’s not easy. “In practice,

data proliferation and fragmentation

make it very difficult for companies

to leverage customer data at scale,”

Schoen says.

RETAILERS CONFRONT MULTIPLE challenges when implementing a

digital marketing strategy. “Gaps in

consumer identity and online con-

sumption make segmentation, target-

ing and marketing ROI more difficult

to measure and optimize,” he says.

Schoen says as consumers move

along their purchase journey, they

often jump between the digital and

physical worlds. “For a single view

of that customer, retailers need to

connect activities tied to their offline

identity like name and address to

those associated with their digital

breadcrumbs, such as cookies and IP

addresses. Then they can truly build,

https://www.marketing.neustar/customer-intelligence

BY SCOTT GALIT

HOW RETAILERS CAN BENEFIT FROM THE GIG ECONOMY JUST AS UBER MAKES IT EASY TO GET A RIDE, THERE ARE MYRIAD SERVICES THAT ENABLE A SMALL BUSINESS TO PROJECT A PROFESSIONAL IMAGE ONLINE AND GROW SALES.

Scott Galit is CEO of Payoneer, a provider of international payment technology and services.

IN TODAY’S DIGITAL, BORDERLESS ECONOMY, it’s easier than ever for a business of any size to grow globally.

By simply listing its products or services on an online marketplace like Amazon, a merchant can find customers around the world and reach new heights of success.

But while the opportunities have grown, so have the challenges. The prospect of a larger customer base, longer selling sea-sons and more diverse customers means that small and midsized retailers have to realize that they can’t do everything themselves. Thankfully, the digital econ-omy offers solutions to these challenges. Relying on an on-demand workforce can be an excellent way to find high-skilled resources who can meet a host of unique business needs and gain an advantage over sluggish competitors.

Here are five ways that your business can benefit from the global on-demand economy today.

1. HIRE A FREELANCERContent creation is crucial to businesses of all sizes. U.S. adults alone now consume over 10 hours of media every day and the digitization of everything is only going to increase this insatiable thirst for informa-tion. The best way for any business to make its voice heard is to provide valuable content that educates the reader and establishes your brand as an authority in your niche.

Meaningful content builds relationships with both existing and potential new customers. However, one of the biggest problems with in-house-produced content is that it is often tagged onto someone’s

role as an afterthought. These tasks are frequently relegated to the bottom of to-do lists when something deemed more important comes along.

Sites such as Envato, Fiverr, Freelancer.com and Upwork offer various methods merchants can use to outsource content to a team of highly skilled professionals. By utilizing resources only when they are required, small and midsized retailers can get premium work at a reasonable price. Why get bogged down with creating blog posts when a professional writer can produce it for a fraction of the cost?

2. CHOOSE A DESIGNERMany entrepreneurs pride themselves on their newfound skills in applications such as Photoshop and argue that it’s enough to finish the task at hand. But sometimes you need something a little more specialized. Finding a designer who can complete professional work that looks slick and aesthetically pleasing but is also afford-able can be incredibly challenging.

The inconvenient truth for many small and midsized merchants is that their limited budgets do not stretch to the prices charged by trendy design agencies. However, the rise of crowd-sourced design platforms like 99Designs is dramatically lowering costs without sacrificing the quality of the work delivered.

Branding is one of the most crucial aspects of distinguishing your business from its competition—whether it’s a new logo, an infographic, or even an email design template. If you are looking for a

49 » VIEWS

create online partnerships. Retailers can boost their customer base by working with affiliates that refer global shoppers to their product or service for an agreed fee.

If aligned with the right partner, this can be an excellent path to driving traffic to your online business and spurring growth.

5. UTILIZE A STOCK-MEDIA COMPANYWhen it comes to site design, high-quality imagery is crucial in capturing the attention of customers, as you will never get a second chance to make a first impres-sion on a potential client. The use of professional and creative media is vital to encourage readers to engage with your landing page, website and other marketing channels, and to earn the trust of your audience.

However, obtaining images or video content for your site is notoriously difficult. Helping yourself to content from Google images is more likely to bring an unwanted copyright lawsuit your way than it is to attract new clients. Platforms such as Getty or Shutterstock offer an incredible selection of photography and digital images to meet all your creative needs.

GLOBAL GROWTH, WITHIN REACHEntrepreneurs have torn down traditional geographical barriers that once limited choices to their local region. Now, you have access to a pool of almost unlimited resources that offers top global talent at an affordable price.

Startups are no longer building up to reaching an international audience; they are serving them from day one. Understanding that you do not need to do everything yourself and leaning on creatives or virtual assistants from the online community should be a top priority. This newfound level of skills, speed and agility could be the secret to securing a significant advantage over your competitor. So, what are you waiting for? l

way to lower costs while investing in your company, it is a good idea to crowdsource your new branding.

3. HIRE A TRANSLATORWhen launching a business in the global market-place, many make the mistake of alienating their audience by not properly localizing their products or services. Failing to adapt your messaging, branding or website to appeal to multiple cultures and local consumers will restrict your opportunities for growth. Ultimately, the modern consumer wants you to show you care about them and are not focused on a singular demographic.

It’s time for your business to broaden its horizons and understand the importance of localizing your product. Localization helps you demonstrate that you care about all of your clients. Translating your material and showing a level of respect toward various cultures and traditions in the international community will go a long way.

There are several solutions such as Gengo, OneHour Translation, and TextMaster that allow small and midsized merchants to localize their business and help translate materials, packaging and advertising to reach global customers. These sites make adapting your offering to a global audience fast and cost-efficient.

4. EMBRACE AFFILIATE MARKETINGAffiliate marketing is often referred to as a hybrid advertising and referral channel that enables third parties to promote another company’s product or service and receive a commission for any sales generated. For small and midsized retailers, this presents an easy opportunity to increase brand awareness and sales.

There are several well-known ad networks such as CJ by Conversant, ShareASale and TradeDoubler that provide a platform for affiliates and advertisers to


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FACEBOOK INC. HAS BEEN UNDER intense scrutiny since March, when the New York Times, The Observer of London and The Guardian detailed how data firm Cambridge Analytica improperly used Facebook data to create voter profiles. For instance, Sen. John Cornyn asked Facebook CEO Mark Zuckerberg in an April congressional hearing whether the social network’s business model conflicts with protecting privacy and whether new laws are needed. Consumers also appear to be concerned; 35% of consumers are using the social network less often than they used to, according to an Internet Retailer consumer survey conducted in April, and nearly 25% said they are less likely to click on ads when they are on Facebook or Instagram. We want to know whether these developments will alter the way retailers market on Facebook.

WILL RETAILERS CHANGE THEIR FACEBOOK MARKETING STRATEGIES?

“TechStyle’s goal is to use Facebook to offer people the

fashion they love at an amazing value. So long as the platform continues to

make sense for our e-commerce businesses and allows us to enhance peoples’ lives in an ethical way, we will continue to advertise with

Facebook.”

LAURA JOUKOVSKIsenior vice president of media at

TechStyle Fashion Group, the parent company of fashion brand JustFab, athleisure brand Fabletics,

shoe brand ShoeDazzle and children’s apparel brand FabKids

“Facebook, like so many of its peers and predecessors,

experienced problems with protecting user privacy. This is not an unknown issue

in retail environments, on- or offline. User data and credit card information are just two of many

types of sensitive user data that have been breached in retail environments. Protecting sensitive information from breaches, leaks, hacks and other means of egress

is paramount, always, in any business environment. I can’t see Facebook’s recent woes changing retail marketing strategies in the short term, but they serve as a sober

reminder that user data must be guarded and protected at all costs.”

REBECCA LIEBanalyst and founding partner at research

and advisory firm Kaleido Insights

“You can’t have your head in the sand. Ultimately, most/

all brands operate within the letter of the law. But the Facebook drama should be a reminder that in a rapidly evolving

landscape like we face today that might be not be good enough.”

CHARLIE COLEglobal chief e-commerce officer at luggage manufacturer Samsonite

International S.A.

“Between the change in the [news feed] algorithm and

the overall shift in public opinion among users regarding the platform,

we are continuing to see a dramatic drop in user engagement. As a result, we are

re-evaluating the strategies for our pages in a whole different way.”

PETER GOLDchief digital marketing officer at

Market America, parent of general merchandise merchant

Shop.com


MAY 2018 | DIGITALCOMMERCE360.COM/IR THE HOTTEST E ...advertising.digitalcommerce360.com.s3.amazonaws.com/2019-IR/lin… · COVER STORY 3 » CONTENTS features SPONSORED TECHNOLOGY

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