"Everywhere Commerce" is currently seen as the next step after multi-channel commerce. It means no more distinction in e-commerce, m-commerce, call center commerce or traditional brick-and-mortar retail. And that makes sense, after all, because the customer also does not distinguish between channels, but always perceives the retailer. The German technology company commercetools has developed a solution that enables companies to centrally manage all existing and future touchpoints with customers and their product data - right up to augmented-reality glasses. FashionUnited DE spoke with Dirk Hörig, CEO and co-founder of commercetools GmbH about his vision of the retail of the future and how the fashion industry has already recognized the potential of innovative technical ideas.
FashionUnited: Hoerig, exactly how do you define "Everywhere Commerce"?
Hoerig: The retail business has undergone fundamental changes in recent years. The purchase decision-making process and the customer journey are much more complex today than ever before. Recent studies have shown that consumers now encounter an average of 2.8 different touchpoints or devices on their way to making a purchase decision. And today customers expect their retailers to provide them with the best possible service at all points along their customer journey – regardless of which channel they use to make contact, when they start the interaction, and which device they use. But above all, "everywhere" does not mean that everything is the same everywhere. Maybe Amazon can do that, but the goal of most retailers should be to give customers a personalized experience everywhere, with the right product in the right context. And it can appear differently on the mobile phone while on the go than it does on the couch in the evening, even if the offer comes from the same retailer. The problem, however, is that until now there were hardly any solutions on the market with which retailers could deliver, manage, and control the customer experience with data along all touchpoints. Products need to be easy for the retailer to push into the channels and sell, and campaigns have to be centrally managed from one platform.
Can you give us an example of this kind of selling process?
At the core of "Everywhere Commerce" is the customer experience, meaning the customer's shopping experience. It includes experiences from a variety of areas such as the website, mobile app, content, images, layout, and functionalities, interactions with customer service, sales staff, and even the price. An example of how the future could look: Maria enjoys shopping for new fashions. She follows her preferred fashion labels through various avenues, regularly gets newsletters with offers and new releases that are more or less tailored to suit her. In addition, she follows some brands on Facebook, Instagram, and Pinterest. Just yesterday she saw a fabulous dress in a newsletter and put it in her shopping cart in the online store. While scrolling through her Facebook timeline of the same brand she discovers a jacket that would be a great match for the dress – and even 15 percent off for all Facebook followers! She clicks on the "Add to cart" button on Facebook and the jacket is automatically added to the shopping cart for the online store – along with her dress. Then she remembers a "pin" with special sunglasses that she saved last week in Pinterest. With just a click, she checks out the glasses on Pinterest and pays conveniently with the credit card information saved in her profile. Because she is waiting desperately for her order to arrive, the next day she uses Twilio to activate her retailer's intelligent voice messaging service and it announces the exact order status on her smartphone: Both packages are en route to her home. That is Everywhere Commerce! An absolute requirement for such a scenario is a "central shopping cart" that can be accessed individually from any channel. For example, the checkout process can be completed from the smartphone (by means of an app), the shopping cart loaded with products from an entirely different context, such as a virtual fitting room, a smart watch, or the like.
An entirely new sales channel is now offered with the first shopping apps used with data glasses, like the Microsoft HoloLens. How should we imagine that? Would it also be interesting for fashion?
In the fashion environment, there are many possible use scenarios – for example, think about an "extended shopping center". With the HoloLens, products that are not in stock or in the store can be presented in an extremely realistic manner. It is only a small step then to a virtual try-on session. The HoloLens can make a complete 3D scan of your body, save it along with your profile, and you can try on clothes virtually in the store and even buy them right on the spot – commerce everywhere! And retail outlets also benefit from the enhanced experience factor while shopping, and obtain entirely new opportunities to make shopping in the store a true experience. The technology from commercetools can integrate the HoloLens – just like all other channels as well – directly into the purchase decision process, and even make it possible to place orders directly from the glasses. For the retailer, it is then a walk in the park to put campaigns in place across all channels because all products come from one platform, are synchronized with the networks in real time, and are thus available immediately from everywhere.
What role do brick-and-mortar retailers play in your scenario?
Brick-and-mortar retailers are currently faced with what is probably their biggest challenge in recent decades. Everything is undergoing radical change and there is no way to tell where this journey will lead. The worst thing that brick-and-mortar retailers can do now is to take a seat in the spectator stands. However, merely acting for the sake of doing something is not the right method. What is clear, is that the retail store as we know it today has outlived its purpose. In the future, it will no longer be enough to display products on shelves and offer on-site availability. It's about product and shopping experiences. What works and what doesn't for which industry should be evaluated individually. Creativity is called for here, because a one-size-fits-all approach will no longer exist in the future. It is that much more important for retailers to invest in their brand, to be unique, and work with customers to test new methods.
Your approach is (still) very advanced for many retailers. Are there companies in the fashion industry that have already implemented your approach?
The fashion industry is one of the first to recognize that in the future it will be important to create new fun-filled customer experiences and integrate these into the customer journey. Therefore, in the fashion industry there are already the first augmented reality (AR) and virtual reality (VR) applications – even if these are still in an experimental stage. Examples of this include the VR app from GAP, that can visualize the clothes in 3D on one of the models adapted to individual body measurements. Yoox recently started to market accessories such as purses, sunglasses, and jewelry as AR via live shoot in an app. Other examples are the Moosjaw X-ray app or the Converse sample app with which shoes can be shown on your own leg with just a swipe. There are also some initial approaches for using the HoloLens for the fashion industry: The designer Martine Jarlgaard presented her new collection for the London Fashion Week exclusively through the HoloLens.
What challenges do retailers have to overcome if they would like to offer their customers Everywhere Commerce?
We want to inspire retailers with "Everywhere Commerce" to think far beyond an online store. The challenge initially consists of understanding that every new communications and sales channel can be a differentiating feature and offer a clear competitive advantage. In order to overcome this, the retailer has to understand that a successful future can only come about with innovations and the use of technology. This requires rethinking in different directions: In the organizational structure, IT, and marketing. An additional challenge consists of understanding that most of the commerce solutions available on the market were never built for quickly adding new channels – there were built to bring a product catalog into an online store. However, cutting-edge, fast-acting companies require resilient software solutions that can only come from the cloud and thus are flexible enough to allow for connecting channels and devices in the future that do not even exist today.
In your opinion, are there perhaps target groups for which Everywhere Commerce is not relevant?
Certainly. There will still be retailers that try to survive with an online store and possibly a marketplace connection. In the area of price leadership in particular, this is a valid strategy, but time will tell how successful it will be in the long run. One thing must be clear: To survive competitive pricing, there are only two options – either find a niche or apply economies of scale. Thus, for the rank and file of retailers who seek to offer their customers a unique purchase experience, the only option we see is differentiation from the low-priced segment. In addition, new technological developments cannot be stopped. New channels like mobile, chat, or social have evolved and will continue to do so – the winners will be those who can skillfully integrate the new channels into their offering and into the purchasing process. You are probably familiar with the saying, "When the winds of change are blowing, some build a wall and others windmills." We offer those who want to build the windmills the ideal platform for integrating new channels into their processes quickly and efficiently.
They want to enable consumers to do their shopping across all available channels on the market. Which of these, in your opinion, is especially appropriate for selling fashion?
As is so often the case, of course, that depends on the product :-) In our opinion, channels with good visualization options such as magic mirrors, virtual fitting rooms, and augmented reality (AR) are very well-suited for highly emotional products – meaning always in situations where engaging the senses should be paramount. This can also be the case in the sports and leisure industry. Social media networks are another important channel, especially for brand providers. Imagine a brand with a large number of followers on Facebook. With an influencer campaign, a certain product is promoted on the company's Facebook page – for example, a celebrity wears a certain brand of sunglasses. With our solution, brands can sell these products directly on Facebook without extra expense.
Commercetools also has a subsidiary in the USA. If you compare German retailers with American retailers, what differences do you see?
First of all, the market in the US is significantly larger without a need for the retailers to immediately go international. The result is that even in niche markets a large number of retailers are making several hundred million US dollars in annual online sales, while comparable sales here just make it to the 1-2 digit range. In addition, retailers in the US invest more and earlier in innovative concepts and act a bit more courageously. That doesn't mean that there are no such companies in Germany, but here they tend to be isolated cases. Very specifically, in the US we see a great deal of interest in the subject of social media commerce. In the area of the personalized customer contact, the Americans are further ahead, in other words, when it involves providing the customer with the desired product at the right time, the right place, and at the best price.
Let's take a small established fashion retailer, maybe with 2-3 branches, who has regular customers and also sells through Amazon. To what extent can your technology offer an advantage to this retailer?
First of all, the retailer has to look at where he wants to go in the long term. What kind of pressure are chain store operations under, and is it time to reconsider the entire business model? In the intermediate terms, is the branch outlet still responsible for the breadth and depth of the product mix, or are new concepts needed in a digitally networked world? How customer-centric can and must the business be positioned? In the process, the technology can be a driver for also gaining new customers. A virtual fitting room in stores, for example, can result in a much larger product mix and thereby to additional sales.
Can small retailers afford Everywhere Commerce?
Probably not. In the process, the costs only play a role in the second step. It would probably be far more difficult to expand the knowhow internally, so as to be capable of managing the digital value creation chain in the interest of the customer. Without sufficient resources, the expenditures for this would like be too great. It could conceivably still work in a niche business, but in larger markets a small retailer would always lag behind the opportunities open to the competition.