The world’s largest retail trade association, NRF, once again hosted its biggest conference of the year in New York City to discuss the challenges and opportunities the industry will face this year. NRF’s theme was “2020 Vision,” for obvious reasons. According to NRF’s own estimates, more than 40,000 conference-goers from 100 countries representing 16,000 global retailers converged on the Javits Center to “talk shop.” What were the hot topics this year, and how will they inform retail strategies for the rest of 2020 and beyond?
Here are a few observations and takeaways from Flow’s team of cross border e-commerce experts.
- Retailers are feeling optimistic. Despite the real-time news that Macy’s is undergoing a massive restructuring that includes closing more than two dozen brick-and-mortar stores, the overall atmosphere at NRF was upbeat and focused on the future. This renewed vigor is in contrast to previous years in which panelists seemed to be doing much more hand-wringing about personalization and customer loyalty.
- Convenience is king for consumers. In his opening remarks, NRF Board Chairman Chris Baldwin urged the audience to take a moment and reflect on the resources and all the hard work that the industry has poured into improving the customer experience. From his point of view, these investments seem to be working. He referenced data points from NRF’s latest Consumer View research report, pointing out that “83 percent of customers say convenience is more important than it was five years ago, and 60 percent say retail’s investments have improved their shopping experience.” Now, let’s focus on improving the experience for that 40 percent.
- 2020’s big challenge will be creating communities. The new buzzword in 2020 for online retailers: “Communities.” There were questions, answers and suggestions around building digital communities, and why they matter. How can e-commerce retailers create stickiness with customers, as competition from all sides continues to ramp up? Many retailers are hopeful that online communities could be the answer. As Facebook Groups enjoyed unprecedented popularity in 2019, e-commerce innovators starting thinking of ways to leverage the best parts of curated digital communities to build meaningful relationships with customers. This was discussed by multiple panelists and speakers, including one panel entitled “It Takes a Community to Build a Brand,” which featured speakers from Bombas, Birchbox, and Cotopaxi.
- Loyalty marketing is in need of a makeover. Retailers have figured out that their loyalty programs need to be less focused on points and more on people and experiences. Digital heads of Target and Reebok took to the NRF stage to share stories of the overhauls of their brands’ loyalty programs. In Reebok’s case, the recent launch of its new Unlocked loyalty program allows members to earn points each time they interact with the brand, not just when purchases are made. Rather than just redeeming these points when making a purchase, customers can receive experiential rewards. Reebok says the goal is “creating an ongoing connection between the brand and its most loyal customers, as well as the community at large.” There’s that “community” buzzword again.
Some of these trends may be more difficult for cross border e-commerce merchants to scale internationally, such as building specialized online communities. But others, such as improving convenience factors for your customers, should already be a top priority.
A major part of creating a convenient experience for cross border shoppers is transparency. Our own research shows that 21% of international consumers who have never made a cross border purchase cite “lack of trust” as a factor. To succeed with global customers, cross-border retailers must overcome that sense of distrust and make it just as convenient for consumers to shop with you as it is for them to shop locally. That includes being upfront about pricing and currency, shipping and delivery, taxes and duties, and returns. It’s not convenient for your global customers to be surprised by a cost they hadn’t planned for, or to learn that it’s going to take much longer to receive their order than expected.
It will be interesting to see how these trends play out over the rest of 2020. Will retailers still be as optimistic as the year progresses? Will online communities drive more e-commerce sales? What will the loyalty program of the future look like? If you love making predictions and thinking about the future of retail, check out our own 2020 predictions. Then, when your brand is ready to make the leap into cross-border e-commerce, get in touch to find out more about how Flow can help.