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What Retailers Need To Know About Sales Taxes In 2020

By Peter Michalowski, PwC

Recent changes in sales tax law have made compliance more complex for online retailers. In June 2018, the Supreme Court decision in South Dakota v. Wayfair upended decades of established sales tax law by expanding the definition of nexus. Nexus is a connection to a state sufficient to trigger a merchant’s responsibility to collect sales taxes on sales made to residents of that state.

Failing to comply with sales tax obligations can be expensive for online retailers, as many states have also stepped up enforcement. Here’s what retailers need to know about sales taxes in 2020.

Before Wayfair

Nexus was once triggered by physical presence: a store, warehouse, employee, etc. in a state. The ruling struck down the physical presence requirement and upheld a South Dakota law, creating an additional category: economic nexus. Now, a state can require merchants with no physical presence to collect and remit sales taxes. Economic nexus laws apply to remote sellers who sell over a certain dollar amount or conduct more than a certain number of transactions to residents of a state.

Since June 2018, states have scrambled to pass new economic nexus laws. As of this writing, only two of the 45 states that collect sales tax, Florida and Missouri, do not yet have these laws on the books (and Kansas has asserted economic nexus administratively).

Changes To Economic Nexus Thresholds

On Oct. 1, 2019, economic nexus laws went into effect in several states. Some of these laws instituted economic nexus laws for the first time. Others adjusted the dollar or transaction thresholds that trigger economic nexus.

Initially, many states copied South Dakota’s economic nexus rule, which was codified by Wayfair. That set the threshold for economic nexus at $100,000 or 200 transactions. Some recent updates have removed the transaction threshold, as states like California and Texas set economic nexus based solely on the dollar amount of sales into the state.

These changes can reduce the burden on smaller sellers and focus economic nexus laws on sellers who exceed a threshold amount of revenue in a state. Kansas is an exception; administratively the Sunflower State requires every online seller who ships even one order to the state to collect and remit sales taxes.

More changes coming in 2020 include:

On Jan. 1, 2020, Washington State's Business & Occupation tax will match the economic nexus threshold of the previously enacted retail sales tax economic nexus law. As of March 14, 2019, the state eliminated the 200 transaction threshold but maintained the $100,000 sales threshold.

Arizona’s economic nexus law went into effect Oct. 1, 2019. It requires remote sellers with more than $200,000 in sales in the state in 2019 to register to collect and remit sales taxes. In 2020, the threshold goes down to $150,000. In 2021 and beyond, the economic nexus threshold in Arizona will be $100,000.

A bill working its way through the Florida legislature would institute economic nexus in the state as of July 1, 2020. If it passes in its current form, Florida’s economic nexus threshold will be retail sales of $100,000 or 200 transactions.

On Dec. 12, 2019, Michigan codified its economic nexus standards (effective retroactively to the administrative adoption date of Oct. 1, 2018) and established marketplace provisions effective Jan. 1, 2020.

Also on Jan. 1, 2020, Hawaii and Illinois will join the list of states that have marketplace facilitator laws.

Marketplace Facilitator Laws

Marketplace facilitator laws require online sales platforms to collect and remit sales tax on the sales made through their sites. This is good news for states’ revenues as these laws allow states to collect sales taxes on sales from merchants who wouldn’t otherwise meet the economic nexus threshold. All sellers should note that these laws generally do not relieve them of responsibility for proper tax payment, and in many cases provide liability relief to the marketplace facilitator for incorrect information provided by the seller.  

Like other economic nexus rules, most marketplace facilitator laws have a threshold dollar amount or number of transactions. Expect more changes to sales tax laws in 2020 as states continue to refine their approaches to collecting sales taxes on online transactions. Fortunately, there are a growing number of tools and apps to help merchants determine where they have sales tax nexus and ensure they’re compliant.

Peter Michalowski is the National Practice Leader of PwC’s State and Local Tax (SALT) practice and advising partner for PwC TaxVerse, an automated nexus determination software. He has over 20 years of public accounting experience with a focus on complex nexus, apportionment, tax accounting, transactional and compliance issues, as well as state tax controversy matters.

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What’s In Store At NRF2020? RTP Editors Reveal Their ‘Must-See’ Experiences

NRF2020 is less than a week away, and the Retail TouchPoints team is sending its full editorial team to cover the hottest sessions and gather insight on the top new trends and solutions for 2020. Leading retail and tech CEOs including Best Buy’s Corie Barry, Starbucks’ Kevin Johnson, Kohl’s Michelle Gass and Microsoft’s Satya Nadella lead a stellar group of executives speaking at the event, revealing their “2020 Vision” to thousands of attendees.

The Retail TouchPoints editors share what they are most looking forward to at the NRF2020 Big Show.

Adam Blair, Editor: One thing I always look forward to at the NRF Big Show is the Innovation Lab. It’s the place where I’ve met robots face to face, gotten the low-down on visual search and stepped into a bit of augmented reality. Beyond the fascinating tech showcased by the exhibitors there, the Innovation Lab also was the site of a session that first alerted me to the potential dangers of AI. I’m not talking about an Arnold Schwarzenegger-style Terminator roaring back from the future, but the present-day ethical difficulties of keeping deep-set human biases out of the algorithms that power artificial intelligence and machine learning. It’s the old Garbage In-Garbage Out from the early days of computer coding, but supercharged with the mystique of AI. Artificial intelligence is already an incredibly useful tool, but ultimately it needs to support human judgment — not supplant it.

Glenn Taylor, Senior Editor: There’s always something new to learn about at NRF, and a portion of what goes on at the event sets the tone for the rest of the year. One panel I will be attending shares prospects and perspectives on the U.S. economy in 2020, and their likely effects on retail. Considering I’ve moderated financial panels at the past two RIC events and anticipate moderating a similar panel this year, I need all the insight I can get on the financial/business outlook for the rest of the year. I’m definitely looking forward to hearing about some of the potential macro headwinds that could affect the economy (ongoing China trade issues and the recent geopolitical tensions in Iran come to mind here), as well as the smaller issues that exist within each retail sector. Either way, NRF2020 is shaping up to be an exciting event and I anticipate there will be additional surprises to keep an eye out for.  

Bryan Wassel, Associate Editor: I’m excited to cover the opening keynote at NRF, which will feature Satya Nadella, CEO of Microsoft. The company has been on the cutting edge of retail for a while now, offering everything from cloud services to “connected store” experiences, and it seems like Microsoft is involved in partnerships with just about every retailer that’s shown even the slightest interest in innovation. I get to interview a lot of retail executives, analysts and solution providers in my job, but it will be particularly interesting to get perspectives on the retail industry from someone watching the tech side from a lofty viewpoint, to learn where he thinks technology is going to head next. I can’t say I know exactly what topics he’ll bring up, but I’ll definitely keep my ears open to learn about the hottest trends of the near future.

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What To Know Before Selling Online

By Eric Prugh, PactSafe

Digital marketplaces have made it overwhelmingly simple to open up an online store and sell products online. Between Etsy, Shopify, eBay, and a host of other online marketplaces, it’s never been easier to make your products available for your customer base. These online marketplaces often manage the online legal regulations for starting an online e-Commerce store, but there are times when sellers/shop owners are the ones responsible for knowing and following the rules and regulations for selling.

Before you set up shop and make your first online sales, there are several legal mandates to consider. For example, there are rigorous restrictions for shipping certain products like nail polish, alcohol and dry ice, and if you are operating the business out of your home, you need to know the zoning laws in your state. The following list of things to consider is by no means comprehensive, but here are five legal things you should know before selling online.

1. Have an informative, concise Terms of Service

Your customers deserve transparency about the way your business operates and what rights they have as users. If signing up for your service or purchasing your product online comes with weekly emails, recurring charges or an auto-renewal, this should be outlined in your Terms of Service and presented conspicuously to your customers.

It is important that customers are given notice of and can acknowledge the Terms before signing up; otherwise, your new business runs the risk of having unenforceable Terms and increase the possibility of a class action suit. Having notifications about the contents and updates of your Terms of Service is an easy way to build trust and transparency with your customers.

2. Protect your users’ data

Just like any retailer, online retailers must have reputable payment gateways. If your online marketplace isn’t using third-party companies (PayPal, CashApp, Venmo, etc.) for payment, it is your responsibility to be compliant with local data protection standards. If you serve customers that are based in the EU, for example, you must protect users’ data in accordance with the GDPR. While the U.S does not have a nationwide privacy law, California law requires web sites that process the data of California residents to follow CalOPPA, and starting in January 2020, CCPA.

Non-compliance is an expensive lawsuit waiting to happen. Become PCI compliant, understand the steps you need to take to encrypt credit card data for your checkout flow and do away with other purchasing data.

3. Insure your product

Whether you’re selling software, a service or materials, it’s important to protect your product or service. In some cases, this might mean having delivery insurance and an exchange policy. In others, it can be as simple as providing customers with a cancellation policy upfront, or a process for service review and feedback.

Good communication is important; no one wants to be left in the dark, particularly a customer in the digital age. Nurture customer relationships like you would any other — with trust and accountability. If everyone is aware of how they are being held responsible in this two-sided relationship, there is less room for legal blunders.

4. Protect your intellectual property

Before you set up your online store or even before you begin selling, it’s crucial that you put legal standards in place about your intellectual property. This means trademarking, patenting and copyrighting your logo, your content, your brand in general. This prevents others from passing off your hard work as theirs. Even more important, putting these legal measures in place will help you double-check that no one else has already claimed your business name. Take the necessary steps to research your product or service, and make it legally official.

5. Have excellent recordkeeping in place

None of the previous four tips matter if there is no record of transactions or of which customers agreed to your Terms before completing the transaction. Easily accessible records of online interactions with customers go a long way in helping you establish expectations between yourself and customers. It is as much for your protection as it is for theirs. Exceptional digital recordkeeping is too often an afterthought and lands companies in hot water. Telling customers how you are protecting them is not enough; your company needs to record when and how customers were notified of your online terms in order for any of your legal efforts to be considered legitimate.

Doing your research and protecting your business before you even start it will help you get further faster and protect you from potential litigation. Starting an online business is easy enough; however, without the proper legal protections in place, you might start losing money before you make it.

As Co-Founder and CEO, Eric Prugh oversees product, customer success, solutions engineering and partnerships at PactSafe, a SaaS company that securely powers high-velocity acceptance for contracts. Prior to his current role, Prugh spent seven years at ExactTarget and Salesforce supporting sales exceeding $30 million in sales, worked for two years in Australia developing the APAC business which grew over 10X during his tenure, and led product and engineering for content management products for what became Salesforce Marketing Cloud.

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Why DTC Brands Are Joining The OTT Movement

By Rebecca Lerner, MadHive

Over-the-top (OTT) ad spend is on track to reach $5 billion by 2020, with the digital-esque targeting capabilities, granular campaign reporting and low-cost linear alternative attracting a wider variety of brands than traditional TV. These features are helping advertisers — big and small — ensure they are delivering the right messages to the right people while mapping tangible business outcomes and ROI to campaigns. And one vertical that is starting to invest heavily is DTC, thanks to the striking similarities to traditional digital advertising.

It’s no secret that many DTC brand’s claim to fame is forward-thinking social campaigns — just look at Dollar Shave Club’s now-famous video, “Our Blades are F***ing Great”. Most DTC brands are digitally native and social media allowed them to effectively target customers most likely to be interested in their products, while simultaneously developing a following and driving fast growth. But social only goes so far, and many DTC brands have saturated those audiences and are looking for ways to expand into additional markets.

Hundreds of DTC brands like Warby Parker, Casper and Wayfair are already spending billions of dollars on linear TV every year, but with OTT offering the same digital capabilities that sparked the first DTC surge, something tells me they will find their home on streaming TV.

Digital TV And The Future Of DTC Brands

Traditional linear TV has played an integral role in helping advertisers get in front of massive audiences, allowing brands to establish credibility in the minds of consumers. But the emergence of OTT is enabling advertisers to establish that same reach and credibility while transcending traditional audience-based TV buys.

OTT allows advertisers to purchase inventory based on granular consumer data, including things like demographics and interests, similar to traditional digital advertising. Digital TV also enables brands to specifically tailor individual ads for individual people and deliver them in an addressable fashion on a one-to-one basis, creating a better value prop for advertisers, publishers, and consumers. And for digital-savvy DTC brands, this is a huge opportunity to create new relationships with untapped audiences, while deepening relationships with existing customers by adding additional touch points.

Not to mention, linear TV can be expensive for emerging/DTC brands. And in addition to these precision targeting capabilities, OTT is also more affordable than linear, making it a natural fit for many DTC brands. Additionally, OTT still drives the same effectiveness of traditional TV, with a recent study showing that 72% of viewers recall ads, with 40% saying they paused a show to learn more about a product or service.

Measurement That Matters

OTT also provides detailed campaign measurement and reporting, including impression metrics that can be leveraged in conjunction with point-of-sale data, in order to track attribution directly back to in-store visits. This sort of closed-loop attribution isn’t possible with linear TV, but it is critical to understanding customer acquisition costs in the same way they would in an entirely digital customer journey.

For the digital-savvy marketers behind many of the forward-thinking DTC brands linear will be a great first stop, but OTT provides a similar granularity to digital, delivering the meaningful campaign metrics needed to prove success. This will allow marketers to drive informed decisions, with insights that will paint a much more valuable picture of their TV advertising campaigns, and work in conjunction with social media. Rebecca Lerner is Executive Vice President at MadHive, an end-to-end advanced advertising solution for digital video that leverages cryptography, blockchain and AI to deliver evidence-based business outcomes. MadHive’s next-generation advertising suite delivers precision targeting, audience verification, as well as the first OTT-first device graph and cross-device attribution, while addressing the biggest threats to the advertising industry — the issues of trust, transparency, fraud and brand safety.

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Where Payment Processing Systems Are Headed In 2020

By Scott Paape, Talus Pay

The U.S. market for payment systems is complex. We have over 21 million businesses, and every one of them needs some form of a payment processing solution. They rely on more than 10,000 financial institutions to make that happen. All told, it amounts to an $18 trillion economy.

So, yes. Payment processing is complex.

However, payment technology is perhaps the best it’s ever been. FinTech companies and customer expectations are shaping the future of payment processing. Here’s what you can expect in 2020.

Better Payment Security

Credit card fraud is on the decline. Just three years ago, in 2017, fraud amounted to $8.1 billion in damages. The following year, in 2018, that number dropped to $6.4 billion.

But that doesn’t mean security is no longer a concern. And technology is one way to heighten security, both for FinTech companies and consumers.

For example, biometric identity verification is becoming more commonplace. It’s predicted that by 2022, 1.37 trillion biometrically secured transactions will take place annually via mobile devices.

Said another way (and in more general terms), the kinds of authentication we consider to be reliable are changing. Passwords aren’t enough anymore. Now we’re turning to fingerprints, iris scans and even vein mapping.

Mobile Payments On The Rise

Already, 29% of American consumers would be content to pay with their smartphones all the time. 

Think about that. That’s nearly one in three people who would be happy to use an app or contactless payment method instead of cash or a credit card for all their payments. Our level of comfort with payment apps has changed considerably over the last few years.

For savvy business owners, the implication is all too clear. You need to facilitate mobile payments if you haven’t already. We’re likely not far from the day when mobile payments will be the preferred method for the majority of consumers. Once we hit that tipping point, merchants who are behind the times will pay in the form of lost business.

Don’t let that be you.

mPOS Systems Simplifying Sales

Wireless credit card machines are nothing new. They’ve been around for a while. But it’s worth remembering the level of impact they had on the industry. They were one of the technological shifts that changed the very nature of card transactions.

Said another way, the ease with which merchants can accept credit card payments is a lot of why so many people carry cards instead of cash.

Now we have completely mobile point-of-sale (mPOS) systems that aren’t tied to a brick-and-mortar location at all. The convenience and simplicity of contactless payments extend even further. 

They're flexible and modern. And they provide businesses with the ability to accept payments at any place and at any time.

Cryptocurrencies Are Becoming More Popular

Bitcoin is the most commonly known cryptocurrency, but there are currently more than 1,600 different blockchain networks in existence. It’s possible that retailers will begin accepting cryptocurrencies. If that happens, it will definitely change payment processing.

What makes cryptocurrency appealing?

Cryptocurrencies are considered one of the most secure payment methods. They're also virtually untraceable, which is why they are becoming more popular with consumers everywhere.

We don’t yet know exactly how or when cryptocurrencies will begin to change how POS systems operate, but it’s wise to start keeping an eye on them now.

Final Thoughts

Payment processing systems are advancing as quickly as any other technology.

Based on current trends, consumers are looking for convenience, simplicity and security. Any provider that offers the best combination of these three is guaranteed to lead the market in payment processing systems of the future.

Scott Paape is SVP of Sales & Operations at Talus Pay. Never losing sight of the customer has always been front and center leading back to his early days putting himself through college as a charter boat captain on Lake Michigan. The fish may not always bite but his clients were guaranteed a trip full of memories! With a corporate career that began as a third shift supervisor in manufacturing for Frito Lay all the way to broad “Total Company” HQ roles, Paape has a great appreciation for what it takes to Influence others and keep a company healthy.

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6 Success Factors For Marketing Measurement

By Nick Mangiapane, Commerce Signals

The stakes are high for marketers in proving their ROI. More data, approaches and vendors exist than ever, but it’s difficult for even people working full time in marketing tech to keep up with the changing landscape. Furthermore, many of these companies use the same words to describe themselves making the marketer’s job to parse the differences even more challenging. Alas, there is no one magic word or endorsement that connotes “This model is the perfect fit for my company and they can actually deliver on their promises.”

The best model fit for your company will depend on your business type (B2B vs. B2C), the types of media you buy, the owned marketing you employ, the reach of your plans, your market penetration and customer visit frequency. For example, if you run a small chain of furniture stores and employ mostly email marketing to customers that on average shop in your store every three years, that will lead you to focus on companies with great email measurement. Alternatively, a large convenience store chain buying outdoor media will have different measurement needs.

Regardless of your marketing budget and goals, when considering ROI measurement options, drill deep on these six success factors:.

1. Accuracy

Don’t take this for granted. There are several factors to consider here:

    a. Is the raw data an accurate reflection of your sales impact?

    b. Is the raw data free from errors, bots and fraud?

    c. Can the approach measure your incremental impact? 

    d. Can the approach separate noise in the data from true impact (statistical      significance)?

    e. What is the implicit or explicit comparison being made to judge whether marketing drove a positive impact? Does that make sense for your customer base? Is it an apples-to-apples comparison?

    f. Does the approach measure the short-term impact of marketing or the long term, and does that match your campaign objectives?

    g. Does it account for all your sales channels (online, offline, in-app, pickup or      delivery)?

2. Scale

    a. Is the raw data source big enough to derive meaningful sample sizes for your total campaign and the drill-downs that you require?

    b. What percentage of the raw data “panel” is trackable continuously?

    c. Is the raw data representative of your total business?

    d. For people-based models, what match rates does the vendor typically deliver? This will impact the sample size of your measurement studies.

3. Speed

Time is money. The sooner you know what’s working, the sooner you can impact your business results.

    a. How close to real time can you get results?

    b. Can you measure results while campaigns are in flight?

    c. How are results delivered (PPT, online, API)?

    d. How quickly can follow-up questions be answered?

4. Actionable 

    a. Are results granular enough that you can impact your results?

    b. Can you see results by audience, by creative, by ad exchange?

    c. Are results timely enough to impact the current campaign? The next campaign?

5. Privacy

    a. Do you or your partners have the right to collect the data?

    b. To use the data?

    c. To share the data?

6. Defensible

    a. Does the approach measure sales impact or a proxy for it?

    b. Is the methodology easy to explain to other execs?

    c. How will the results reflect on your ability to defend your decisions and budget?

    d. How does the estimated financial impact of the solution compare to cost?

I’d argue that most marketers try to answer some subset of these questions from the top down. While not illogical, beginning with the end in mind can help you narrow in from the 112 marketing analytics companies listed in Scott Brinker’s 2019 Marketing Technology Landscape, to some manageable subset for consideration and research. After all, if you can’t get the CEO and CFO of your company to trust your ROI measurement — and really believe it in their gut — then it’s probably not the right approach for you.

Nick Mangiapane is Chief Marketing Officer of Commerce Signals, a data insights platform that helps marketers make better decisions in near-real time. Mangiapane is a pragmatic consumer marketer with leadership experience from Procter & Gamble, Newell Rubbermaid, ​and Ingersoll Rand in addition to Commerce Signals. Mangiapane is an alum of Boston College and Cornell's business school.

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Three Reasons To Take Your Contact Center Into The Cloud

By Anand Janefalkar, UJET

In order to stay ahead in today’s highly competitive environment, the realization is that businesses must prioritize digital transformation or be passed by. For retailers, this has meant investing in cloud-based technologies and finding new ways to connect with their customers and expand their digital footprint. While there has been significant growth across e-Commerce, mobile apps, alternative payments options and much more, one area that is currently ripe for digital transformation is customer support.

Today, according to Salesforce’s 2019 State of Service report, 80% of customers now consider their experience with a company to be as important as its products. Moving to a cloud-native contact center, or a Contact-Center-as-a-Service (CCaaS) platform, can provide retailers with the tools they need to turn customer support from a cost center into a revenue driver.

Here are three reasons why the time is now for retailers to move their customer support to the cloud:

Streamline Operations

Cloud-based contact centers not only help retailers better connect with their customers and deliver a better experience, they also give support leaders the ability to tap into a larger contact center ecosystem that can help them to streamline their operations and run a more efficient and effective support center. And unlike on-premise large infrastructure systems, CCaaS solutions can operate without the need for large continual investments.

Workforce Management (WFM) and Quality Management (QM) integrations help support leaders get a better understanding of peak hours and seasons, highly used support channels, as well as the ability to better monitor and track agent efficiency and productivity so they can strategically and effectively staff and hire. It gives retailers the ability to make operational adjustments in real time, ensuring that customers are not being left on hold but instead receiving the support they need.

Integrations into Customer Relationship Management (CRM) tools like Salesforce, Zendesk, Microsoft Dynamics and more allow support agents to securely access relevant customer data in real time. This data helps agents gather more context as to who the customer is and why they might be calling in, allowing them to provide a more personalized experience where they can not only resolve issues faster, but provide suggestions, tips, and even identify upsell opportunities.

Expand Support Channels

Customers today communicate with each other both visually and contextually and across multiple channels. Conversations today may start with a phone call but quickly expand into SMS, chat, video and more. A key aspect of the retail and e-Commerce experience is to allow customers to communicate with the brands they love in the same way that they would communicate with each other.

The reality is, the more accessible customer support can be, the better the customer experience will be. The growing expectation of being able to reach people from anywhere and at any time means support teams must understand where their customers are when they have questions — and not only make these channels easily accessible, but allow customers to seamlessly flow between them. Whether customers are on the web, on their mobile device or even inside your mobile app, the experience should be consistent.

Connect Actionable Data

Arguably no one interacts with customers on a daily basis more than customer support, meaning they have a wealth of customer insights, feedback and knowledge at their fingertips. Cloud-based CCaaS support platforms allow companies to not only leverage this knowledge and the voice of the customer within customer support, but across the entire enterprise.

Extending voice of the customer data to teams outside of customer support can help numerous other arms of an organization. For example, marketing teams can get a more developed 360-degree view of their customers, allowing for more strategic messaging, content development and ad spend. Product teams can benefit from further insight into product usage, malfunctions and general feedback in order to help prioritize updates and rollouts of different features, functionalities and product lines.

Cloud-based software has emerged as the preferred way to not only empower teams and inspire collaboration, but do so in an efficient and cost-effective way. Retailers moving to a CCaaS support platform are able to connect into a much larger digital ecosystem and take advantage of customized features and applications that can not only digitally transform their operations, but provide the modern, personalized and one-of-a-kind digital customer experience needed to surpass competitors and thrive in today’s market.

As Founder and CEO of UJET, Inc., Anand Janefalkar has 15 years of experience in the technology industry and has served as a technical advisor for various startups in the Bay Area. Before founding UJET, he served as Senior Engineering Manager at Jawbone, and also previously contributed to multiple high profile projects at Motorola.

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How Grocers Are Using Social To Elevate Digital Circular Experiences

By Adam McGilvray, StitcherAds

Question: Who goes to the newspaper to check for movie times, or waits for a Christmas catalog in the mail to make their wish list? Sad as it may be to some, these institutions have moved on.

The real question is, why do grocers — our most established and entrenched retailers — continue to put their most important advertising on paper?

Almost all grocers think they have a digital circular, but I like to refer to them as “digitized circulars” because they look just like their print counterparts. You can even simulate flipping their pages through your web browser, just in case you miss that experience. While they are technically “digital,” these too have the same deficiencies as print. They are still designed to cater to everyone within a targeted zip code or city. It’s a mass marketing tactic in a world where consumers are craving personalization.

Innovative grocery teams have started adapting their print circulars into personalized, shoppable ads on Facebook, Instagram and other platforms.

Digital circulars on social platforms have enabled grocers to evolve their creative. As a result, they are saving on rising print costs, being more eco-friendly, driving personalization and connecting with new generations of customers. (It’s worth mentioning that Millennials are now outspending other generations in food purchases.)

So, how are they doing it? Here’s the rundown.

1. Using new and existing assets to elevate creative.

Print circulars only contain so much space — meaning there’s limited room on the coveted front and back pages. Using those pages to attract a wide range of customers is a crucial decision grocer teams face weekly.

The equivalent for digital circulars is the visual you present in the social feed. Like the print cover, this is the crucial piece of creative. If you don’t attract shoppers’ attention here, they won’t tap to see your offers.

With print, there’s obviously no opportunity to include animation or video, unless you count when the pages go flying across your floor when you pick up the paper from the wrong end. This is a big problem because consumers say video is the most memorable form of content. When trying to introduce shoppers to new brands and products, static images are hardly ideal.

With digital circulars, grocery marketers can use their existing assets — combining the print and video marketing they are already producing. We’re seeing grocery retailers effectively bring their brand and value directly to customers’ Facebook and Instagram feeds by featuring social-savvy engaging video posts. One grocer the StitcherAds team worked with used this space to draw attention to its loyalty program. Utilizing the style guidelines of their loyalty program, they enriched the look of their member card with light animation for a thumb-stopping effect.

2. Creating tailored-to-user digital circulars.

An IDC and Precima study released this year discovered that 52% of food shoppers want to receive personalized promotions via digital channels.

This tailored-to-user approach would be incredibly complex and costly to execute via print. Some might have the misconception that it’s challenging to achieve on social, too. But, the TL;DR here is that personalizing content to a wider audience doesn’t mean doing more work.

Digital circulars on Facebook and Instagram automate the process and make it cost-effective to produce at scale. Grocers that work with StitcherAds are doing it by leveraging first- and third-party data as well as Facebook’s behavioral insights. Instead of targeting every consumer in a specific region with one flier, some grocers are creating personalized circulars based on gender, location, age, purchase history and other factors.

For example, a 20-year-old who lives in a dorm room and frequently stops at her local supermarket for snacks, school supplies and mascara will see a digital circular with those items at the forefront. With her thumb, she can navigate her feed quicker than I can blink. She won’t spend time sifting through products she has no use for, like facial shaving cream or baby food.

3. Delivering information in real time.

The last thing a shopper wants is to get excited about a great deal that’s been presented to them, only to arrive at a physical store to discover the product is no longer available at that location. In fact, in the age of Amazon it’s almost unfathomable to most of us.

By incorporating product feeds and local inventory information, grocery retailers have the ability to promote localized offers in real time. And they can do this at scale, across thousands of stores.

Creatively, this enables marketers to run last-minute deals using real-time third-party data such as sporting events or weather. For example, if a heatwave hits the Midwest in late fall, retailers can create visuals and messaging to drive people in-store for ice, fans and cool beverages. Take that climate change.

4. Measuring to build stronger campaigns.

Grocers are finding that digital circulars on Facebook and Instagram have another major advantage over print: This format can be measured more accurately and with more detail. By integrating measurement tools like Facebook’s Store Visits Reporting and Offline Conversions, or working with a third-party measurement partner like Applied Predictive Technologies, marketers can attribute in-store sales to online efforts. Omni-ROAS is a metric you should be getting familiar with. This can even be done down to the product level, which gives marketers the ability to unearth best practices for creative and build even stronger campaigns.

The End Is Near

Sadly, with mounting pressure from e-Commerce competitors, many grocers are afraid to innovate — fearing that stagnant or declining sales will accelerate if they do. Sure, any paradigm shift is scary (that’s why there is spelling bee-worthy term for it), but the truth is they can’t afford not to. Those who are first to adapt will reap the benefits of reaching new customers, reconnecting with lost customers and building loyalty.

The end of print (circulars) is just the beginning.

Adam McGilvray is the VP, Creative Services and Technology at StitcherAds. He has over a decade of experience leading creative teams producing world-class online, video and social advertising experiences. A strong promoter of digital over print, he fondly remembers the magic of the arrival of behemoth Sears Christmas catalogue and his first Commodore 64 computer as a child. While this may date him, his childlike enthusiasm for their modern descendants remains as strong as ever. No books were harmed in the writing of this article.

[retailtouchpoints]

How APAC Retailers Can Elevate The Customer Experience

By Agnes Law, Schawk!

Brands are facing more complexity than ever with the growing needs of customers and the multiplying number of sales channels. In APAC, e-Commerce sales have tripled from $600 Billion USD in 2014 to $1.8 trillion in 2018. Clearly, online channels are no longer just a nice-to-have — they’re a necessity in our always-on world.

Each consumer has a unique preference. The shift from one-size-fits-all to personalized products creates demand for development of new brands, expanded product portfolios and nuanced marketing activities. As a result, consumers are expecting customized products marketed with relevance via their preferred medium.

Below, we’ve outlined four steps brands can take in order to deliver the best shopping experience for the APAC market.

Track The Customer Journey

Understanding customer purchase behaviour and creating customer journey maps are vital to track the activities involved in finalizing a product. But, in an ideal world, brands can’t create thousands of shopper journey maps for each customer or invest in disjointed marketing programs across various sales channels.

This is a time when brands turn to develop customer-centric, platform-neutral content to maximize reuse and operational efficiencies across every stage of the content lifecycle.

Create Omnichannel Experiences

The rising trend of using omnichannel experience extends sales channels, and an array of media options for marketing activities to be rolled out. Developing influential touch points requires a strategic and integrated approach because marketing messages and engagement efforts need to be a cross-functional effort.

For example, in Hong Kong, HKTVMall, a company that once had plans to become a TV station now offers a “shoppertainment” online platform. As HKTV’s online sales increased five-fold during the first half of the year, the company launched its brick-and-mortar store to amplify its reach to its consumers further.

HKTV installed 50 tablets at its offline retail store to encourage customers to continue their omnichannel shopping behaviour. It also was a means to promote inclusivity for those who may not have access to the online shopping experience.

Optimize E-Commerce Content

Online retail touch points include the creation of digital assets to promote e-Commerce sales.  While offline touch points heavily rely upon brand experience to provide a wholesome retail experience for consumers. Consistency of brand assets and marketing information across both platforms instills confidence over the brand and product.

Developing accurate and informative online content is essential to convert shopping into commercial sales. Digital assets created for targeted repetitive exposure amplifies personalized shopping experiences and encourages customers towards the brick-and-mortar store to enjoy the hands-on experience.

Connect With Packaging

Enhancing offline retail store experiences elevates product desire and connects the brand story with customers.  It includes engaging customers through influencer campaigns, building a community or members-only networking events. Such activities create a sense of exclusivity, brand relevance and affirmation that the brands are genuinely hearing their customers feedback.

Complementing the retail experience is the packaging, the key communication tool, that reaches the customers. Younger generations are expecting a much different relationship with brands — a more connected one. If the product sits on a shelf in-store or online, the content should be connected to the packaging, and the packaging to the content.

Developing meaningful content to excite customers at retail stores is paramount to brands as much as creating a space for customers to congregate and share their views with the brands.

Brands need to continue to strive in elevating the retail experience, understand their customer’s needs, geographical preferences and create compelling content to stand out amongst the sea of other retailers and marketplaces.

With over six years of experience in packaging and design industry, Agnes Law plays a key account management role in Schawk!. Law has managed relationships with global retailers and brand owners, such as Groupe SEB, Dairy Farm, Carrefour and Beka, covering a variety of disciplines and media from customer engagement, brand activation to branded environments.

[retailtouchpoints]

How Retailers Can Use Snapchat To Boost Sales

By Hannah Hambleton, Beambox

Snapchat is a powerful tool for any retailer. In this article, we’ll discuss why, highlighting some great ways to use Snapchat in your retail marketing. The result? Better brand awareness, customer loyalty and ultimately, sales.

Why Should Retailers Look To Use Snapchat In Their Marketing?

The Smartphone app Snapchat allows users to share videos and photos (‘Snaps’) that are automatically erased after a few seconds. Snapchat is a perfect marketing stream for retailers. As well as providing the chance to engage with customers directly, it enables retailers to develop a stand-out retail brand personality. Retail customers want to engage with your brand story, not just your products, and Snapchat gives you the tools to create genuine engagement with strong marketing power.

It’s Quick And Easy For Retailers To Set Up Snapchat

Snapchat is really easy to set up for any retailer, from a big brand to a small local store. All that’s needed is to download the app and set your retailer name as your Snapchat account name. Then, you need to find your Snapchat ‘friends’ — these are the customers and contacts you’ll market to. To do this, your customers will need to add you using your shareable Snapchat QR code. Share this every single place you can think of — your POS till system, on specific Snapchat ads in your store, on receipts and any packaging. Make sure you cross-promote with other social platforms too, thus increasing brand awareness at every opportunity.

4 Ways To Use Snapchat To Market Your Retail Brand

Here are some great ways to use Snapchat for your retail marketing. It’s important to note that each one has engagement with customers at its core, vital for creating genuine interaction and developing profitable loyalty.

1. Use Snapchat to show off your retail products

Whether you sell books, clothes or high-end goods, make sure you use Snapchat to highlight them with your customers. Get excited about product features, demonstrate how they can be used and even tease clips of new stock additions coming soon. Creating genuine excitement around what you sell will hook your audience, making them buy into your story and want your products. You can add links to your web site to your snaps as well, driving people online or to your brick-and -mortar location.

2. Use Snapchat as a digital retail loyalty card for your retail store

Loyalty cards work really well for retailers as an engagement tool, and Snapchat can be used to create an up-to-date digital version for creating lasting loyalty in your customer base. Use Snapchat to give special offers to your Snapchat audience, create some VIP shopper perks and even offer discount codes or a free item over a certain spend especially for your Snapchat followers. You also can use Snapchat to share limited, 24-hour-only special deals, adding some scarcity power to your marketing. Your customers will love feeling valued, while you’ll love the benefits to your bottom line from repeat customers.

3. Encourage user-generated Snapchat content to boost your retail brand

Demonstrating your brand values and story is essential for brand loyalty, and Snapchat is an important tool for this. As it’s all about sharing, interacting and creating user content, ask your audience to share their experience of your products, stores or online shopping. Sharing selfie snaps with products, tagging your store in a visit or creating video clips of shopping with friends all will supercharge your brand’s visibility. But it will also contribute to that all-important social proof. You can get your customers to submit Snaps to your public ‘Our Story’ to share their images, creating further engagement.

4. Help new retail customers find you with a Geofilter

Geofilters are similar to a normal Snapchat filter, but they can only be used when Snapchat users are in a specific location such as your retail store. Creating a geofilter for a retail store is a cost effective-way for brick-and-mortar retailers to boost and target customers based on their smartphone location. Your customers will then be able to use that filter every time they visit you, adding to that all-important customer engagement again.

Retailers Must Embrace The Marketing Power Of Snapchat

Snapchat is a powerful social marketing platform that helps drive brand visibility, brand loyalty and engagement with customers. Take the time to use Snapchat to create engaging, shareable and dynamic content, and your retail brand will be rewarded with loyal and profitable customers — it’s as simple as that.

Hannah Hambleton is the Content Manager for Beambox.com. She writes about technology, marketing and social media trends for small businesses and retailers, giving them the tools to drive growth with engaged and loyal customers. Beambox is a guest WiFi provider, combining quality WiFi with marketing insight.

[retailtouchpoints]

How Suppliers Can Use AI To Immunize Against The Retail Apocalypse

By Pijush Gupta, HighRadius

More than 3,800 stores are expected to shutter their brick-and-mortar retail operations this year, most notably and recently the bankruptcies of Toys ‘R’ Us and Sears Holdings. But it’s not only stockholders and employees that are feeling the fallout. It’s also the suppliers — big and small — that rely on these retailers as a valuable sales channel.

What happens to suppliers when it’s time to collect past-due receivables from swiftly closing operations? The answer isn’t pretty, depending largely on how well suppliers have immunized their business. The distinction often lies within a supplier’s order to cash process and whether the supplier is actively deploying the right AI technology.

When done properly, order to cash and, more specifically, accounts receivable (AR) is integral to the success of a business, in that it enables cash forecasting and allows companies to optimize their working capital. There are three key areas where utilizing an order to cash solution can provide a competitive advantage for suppliers amid store closures:

1. Improve Credit Risk Management

When large companies like Toys ‘R’ Us and Sears head for bankruptcy, suppliers know. In these instances, equity analysts accurately predicted the closures several quarters before they actually happened. Combined with mandatory disclosure protocols for public companies, information about the impending bankruptcies were all over the news. Suppliers had time to prepare.

But this isn’t always the case. Because big buyers are just that — big — suppliers often mistakenly place the majority of their focus on their biggest partners, forgetting that in aggregate, smaller retail partners can be just as risky. When these smaller, private retail operations are struggling, oftentimes suppliers are left in the dark. These operations don’t have to follow the same public disclosure steps as their larger, publicly held peers, leaving suppliers unaware of potentially impending bankruptcies and closures. Without advance warning, suppliers are left to make assumptions about a private operation’s struggles, which can make it difficult to accurately judge credit risk. That’s where technology steps in.

With an AI-driven credit risk mitigation plan, all micro- and macroeconomic conditions, market sentiments and social media noise can be considered in order to arrive at a predictive and prescriptive plan. An AI-enabled order to cash solution works through all available data, both internal and external, to consolidate opinions on creditworthiness. Suppliers are then able to adjust risk based on the projected health of their partners — both large and small.

As the retail sector continues to witness a mass exodus where entire malls are failing, it’s becoming more important to carefully consider risk levels for those smaller partners. By automating ongoing credit assessments and scrutiny with an appropriate AI-based order to cash platform, it’s easier for suppliers to maintain a healthy awareness of risk exposure and adjust as necessary.

2. Better Predict Buyer Behavior

In practice, retail suppliers with the best processes get paid more often by making it quick and easy for their buyers. The best suppliers understand their customers, allowing them to optimize their interactions and even predict customer behavior.

AI is already being used by suppliers to predict customers’ payment dates and auto-prioritize their collectors’ activities accordingly. In the retail sector, similar to other industries, the ability to evaluate payment patterns and examine historical behavioral data to figure out the most effective methods and times to follow up with customers can keep suppliers more in tune with their buyer’s behavior.

AI can predict a late payment for a given customer before that customer ever goes delinquent. This enables the collector to send a proactive reminder to the customer with a link to a self-service payment portal — allowing the supplier and the buyer to avoid delinquency altogether.

AI can also track trends in payments, noting an unusual uptick in late payments that could foreshadow a buyer going out of business. At the end of the day, an AI-backed system can enable a frictionless and collaborative relationship.

3. Increase Recovery Rates

Invalid deductions are like highly valuable needles in a haystack. AI enables you to find those needles without sifting through the hay. With AI software, you can predict deduction validity or invalidity with 90%+ accuracy, and programmatically auto-clear valid deductions and trigger research workflows and customer correspondence for invalid deductions. This greatly accelerates resolution time and results in fewer write-offs and increased recovery rates for suppliers.

The Devil Is In The Details

With the effects of the “retail apocalypse” pervasive among smaller companies, micro-level troubles can add up to a macro-level problem. The best way to inoculate yourself as a supplier is to use AI to harness the incredible power of information. If a company is in trouble, you need to look at every index and every indicator to understand where to add additional layers of scrutiny.

The devil is in the details, but the use of an order to cash platform can allow you to properly track and analyze those details, giving you the ability to manage risk and ultimately helping you get better results.

Pijush Gupta is an AVP, Product Marketing at HighRadius. As part of HighRadius’ Marketing team, he is responsible for innovative and targeted content strategy to drive messaging for core products and new product initiatives. Previously, Gupta also provided strategic direction to evolve, grow and market SaaS software products in the Accounts Receivables and Revenue Management space.

[retailtouchpoints]

Leverage CRM Data To Boost Traffic And In-Store Revenue

By David le Douarin, Advalo

The rise of marketing overpressure practices has proven destructive for both profit margin and brand image and negatively affects the relationship of trust between retailers and customers. It thus has given rise to some consumer dislike for emails and, inevitably has led email click-through and open rates and customer contact ability to plummet.

A few years ago, 30% to 40% of emails sent by retailers to targeted individuals were opened. Today for the most successful retailers, opening rates hardly reach 15% or 20%. These findings reveal the urgency for retailers to limit mass marketing which is a pollutant and intrusive, and is not adapted to the real needs of consumers. Brands must change their CRM marketing efforts and the way they speak to each consumer. The greatest challenge lies in understanding — when they should, what they should and how they should talk to each customer.

Bring Performance Back With Adapted CRM Marketing Efforts

If one studies retailers who succeed in properly taking advantage of their CRM data and thus increase traffic and turnover in their stores, we see that they have worked on three axes: the volume of contactable customers, the responsiveness of these customers and optimization of conversion rate, whether online or in-store. We can then define CRM impact as the sum of these three variables: Volume Of Contactable Customers + Reactivation Of Contacted Customers + Activated Customers Conversion = CRM impact

These brands have successfully provided concrete and operational answers to these 3 challenges: 

1. Provide an answer to the drop in contact ability

By being able to establish a link between a unique CRM identifier and browsing cookies, brand marketing teams are able to find their customers on digital channels in order to open new points of contact with them. They can talk to them wherever they are and where their buying decision is being made. Marketers will be able to circumvent the barrier of email opt-in and low contact ability on social networks or search engines and push timely individualized messages to each customer on Facebook, Instagram or Google. Brands can thus contact an average of 4X more individuals than they would have with a simple email campaign, increasing their ability to speak and message reach.

2. Provide a response to the decline in responsiveness

One way marketers should respond to the decline in email campaign responsiveness is to identify the various pretexts for the desired message they want to convey and whom they want to convey it to. These pretexts can be of a different nature and have only one purpose: encourage the individual to click and go to the web site to consider and prepare their purchase. Indeed, we can take advantage of "hot data" related to real-time consumer navigation: through offline and online data reconciliation, we know who the user is, who is browsing the site, their purchase

history, what they are searching for in the exact moment and so a pertinent message with the relevant product recommendations are sent.

On the other hand, we also can take advantage of "cold data" related to the customer's lifecycle and the history of their relationship with the brand. For example, a new customer, who has just bought a product for the first time, offers many speaking and exchange opportunities. I can speak about the brand’s history, or give them advice on the use or maintenance of the product they have just bought.

Based on a detailed analysis of its CRM database, the marketer will be able to identify several audiences (very good customers, occasional customers, churners, etc.), to which they will address in a differentiated way, an individualized message, aligned with the profile of each consumer. Finally, we can also identify exogenous pretexts, related to the consumers' context and environment. The weather is the simplest example: if I know it will be 40°C in Nice, France next weekend, it's time to implement the tank top collection to customers living in the Nice region.

Whether it's the weather or various events in the vicinity, marketing actions must be registered as soon as possible, in the current context of the consumer that we want to activate in order to introduce a relevant discourse that takes into account the offer proposed to them.

3. An answer to lower conversion rate

The last link in CRM impact, conversion is undoubtedly the most crucial since it carries the final value. Here again, individualized marketing and personalization allow marketers to optimize the conversion rate of their campaigns by offering each of their customers the most relevant offers and products closest to the needs they express — complementary products or similar. Product customization takes advantage of all the data available to retailers, who can, through artificial intelligence and models, predict the past or current behavior of the customer, what they are precisely interested in today and what could interest them tomorrow.

In conclusion, in order to understand the impact of CRM actions, it is obvious that it is necessary first to better understand the new purchasing paths of customers, have a perfect knowledge of customers through RFM (recency, frequency and monetary) segmentation, assessment matrices, and ROPO (research online, purchase offline) for example.

These CRM analyses will enrich the relationship with the consumer: we are entering the age of individualized marketing which is taking its full meaning in the context of CRM data, pretexts for desired messages, context and environment. 

David Le Douarin is the Co-Founder of predictive marketing platform Advalo. Advalo’s predictive Marketing Platform leverages artificial intelligence to detect intent-rich moments throughout the consumer journey. Advalo enables marketers to develop an individualized relationship with each customer, targeting key moments.

[retailtouchpoints]

Costco’s Minimal Communications Following Thanksgiving Site Outage: A Mistake Or A Strategy?

Costco’s e-Commerce site went down for more than 16 hours on Thanksgiving Day, impacting an estimated 2.65 million customers who were trying to access the web site and creating sales losses that neared $11 million. (Nordstrom Rack and H&M also experienced technical difficulties, but neither was of the duration of Costco’s.) Costco acknowledged on its home page that its site was “currently experiencing longer than normal response times" during the day and even extended its Thanksgiving Day-only promotions into Black Friday. But besides apologizing “for any inconvenience” on its home page, the company operated in a business-as-usual mode, with no subsequent acknowledgement of the outages even as more coverage of the site issues occurred.

The RTP editors discuss whether Costco's response to the site outages was satisfactory, or if the retailer should have made more effort through other channels to address and clarify the issues at hand.

Adam Blair, Editor: Any retailer can suffer a site outage or even just a slowdown, and it’s never a good thing. But it’s much worse when the glitch occurs during the busiest shopping days, when sales volumes — and consumer/media scrutiny — are at their peak. Given this reality, it’s remarkable that a savvy retailer like Costco didn’t have a comprehensive communications response plan all ready to go, one that: 1. Acknowledges the problem and apologizes for the inconvenience; 2. Reassures consumers that it's being worked on; and 3. Includes triggers for make-goods based on the length of the downtime. It’s possible Costco’s radio silence in this case came from simply wanting to put the episode behind it, in hopes that it would fade from people’s consciousness. However, I think it’s more likely that Costco didn’t have a plan — or that the plan they had wasn’t effectively executed. If that’s the case, it’s not just a PR and lost sales issue; it’s an operational and corporate governance issue. Now is the time for every retailer to review not just what is supposed to be communicated when disaster strikes, but exactly how that message will get out to the public.

Glenn Taylor, Senior Editor: When I saw the news of the Costco outages, it brought my mind back to the Macy’s data breach from earlier in November. Although this scenario is a far more serious issue than Costco’s from a sheer customer trust standpoint, Macy’s went out of its way to send out a comprehensive letter to shoppers, revealing important info such as the results from the investigation; the day the retailer was alerted of the incident; what kind of information was involved in the breach; the steps Macy’s took to report this issue; and what shoppers should do in the wake of the breach. Costco’s issue wasn’t about personal information, so the retailer may not have felt as compelled to give shoppers every answer after the event had passed, but the angry social media posts in its wake suggest that quite a few shoppers wanted some kind of response. At the very least, the company could have given a Cyber Monday status update, designed to give consumers confidence that they could shop on the site hassle-free throughout the day.

Bryan Wassel, Associate Editor: I honestly think Costco handled the outages well, given the situation. Releasing an apology, whether during Black Friday or in the aftermath, would just attract more scrutiny and grab headlines that would prevent people from even bothering to visit the site. The response may not have seemed like much, but at least it didn’t further fuel the anger over the downtime: it’s easier to make a viral social media post or a quick-and-easy news story if you have some sort of quote as a jumping off point. Angry status updates mocking what would inevitably be seen as an underwhelming response to the issue on Costco’s part would have gotten much more attention than claims that random users had a hard time. It may be that a proper PR plan would have been able to defuse these challenges, but at a super-busy time like Black Friday, no news may be the best news.

[retailtouchpoints]

Open Workforce Models Drive Retail Innovation

By Michael P. Morris, Topcoder

Tech skills are critical to essential retail business functions, such as warehouse management and supply chain optimization. The role of software developer is now the third most common job in retail, as well as one of the fastest growing. With the traditional brick-and-mortar model continually challenged, technology isn’t just essential to growth, it’s essential to survival.

Some retail execs fear a projected shortage in tech talent will make it difficult to solve business issues and innovate fast enough to lead in a market that continues to shift online. While the move to web shopping continues to be a reality, the apparent skills gap and talent shortage issues are not.

In the last two decades, digital connectivity and platforms designed to streamline access to talent have made it possible to outsource even the most complex IT/data challenges. Retailers can augment internal staff and free them to do other activities, as well as often get better technology solutions faster, by embracing a mobile, multitasking, gig-economy workforce.

No War On Retail Tech Talent, More Of A ‘Persistent Blind Spot’ In Workforce Acquisition

Freelancers were once considered a secondary choice to full-time employees. Now, many of the world’s best developers and data professionals are choosing the gig economy over traditional employment. The open workforce model is driving digital retail innovation and skilled technologists have never been more accessible to help.

To tackle challenges in areas like user experience, data, web site engineering or cybersecurity, some retailers have begun utilizing innovative staffing approaches like crowdsourcing. This is where global tech/IT professionals with skills in high demand by retail (such as JAVA, SQL and HTML) collaborate and compete on projects, and companies pay only for the solutions they want.

Retailers Starting To Level Up The Online Retail Experience

Retailers are seeing opportunity in blending in-store experiences with digital engagement using AR, AI and algorithms. Topcoder has worked successfully with retailers like Macy’s and CPG brands like Coca-Cola, Land O'Lakes and Kellogg’s, to help them tap into the gig economy with measurable ROI.

For example, Macy’s realized that a collaborative on-demand talent marketplace was a bridge to reach the talent it needed to revamp its most important digital asset: macys.com. Macys.com was strong from a transactional perspective, but chose to leverage an open workforce model to help it re-envision consumer experiences with a focus on delivering its brand promise: to be the fashion authority.  

In just under three weeks from initial idea to producing results, Macy’s had 41 technologists across seven countries working on its project, with 18 original design concepts and more than 180 unique screens presented back to the Macy’s team for consideration. High-quality design, UI/UX exploration and optionality was delivered to Macy’s in record time by infusing competition and incremental challenges into the design process.

Open Workforce Model Gives Fresh Perspective To CPG Web Site Improvements, Retailer Loyalty Mobile App Design Concepts

Another example of a major CPG company successfully leveraging an open workforce model is Land O’Lakes, one of the largest producers of butter and cheese in the United States. Under its umbrella, the company includes brands that offer animal feed and seed/crop protection such as Purina, Calva, Nutra Blend and PMI Nutrition.

Land O’Lakes began working with web site designers and technologists from the gig economy through a leading on-demand talent marketplace provider. 10 significant projects were completed in just under a year at a fraction of the cost of hiring an agency. The on-demand workforce met Land O’Lakes’ project requirements and provided affordable ideas with high quality outputs that were customized to individual brand needs.

“Crowdsourcing with an open workforce meant the brands had more flexibility,” said Allen Niere, Digital Development Manager for Land O’Lakes. “The variety of approaches is something you don’t get with an agency,” he said. “With an agency or a single designer, you get one person’s solution and their flair applied to the design. If they move things around to update it, it tends to look the same.”

The ‘War On Talent’ May Eventually Knock On Corporations’ Doors, But It Hasn’t Yet

As the retail industry continues to shift and e-Commerce grows in usage, there is a strong opportunity to revolutionize business through technology. On-demand, open workforce models can empower retailers and CPG companies to be innovative in development and achieve digital transformation objectives to enhance functionality, engagement and user experience. Tech talent worldwide is simply waiting for retailers to just reach out.

Michael P. Morris is the CEO of Topcoder (a global community of 1.5M+ design, development and data science experts disrupting enterprise software innovation through competition) and Global Head of Crowdsourcing for IT-services leader Wipro. Second only to his commitment to family — and perhaps waterskiing — Morris has served in leadership roles at Topcoder since 2002. A gig economy expert, he speaks worldwide about cultivating a passionate workforce to drive the transformative nature of digital asset development across every industry imaginable. Previously a GM/SVP at Appirio, Morris led its crowdsource offering (Cloudspokes) through the acquisition of Topcoder, and then managed customer, sales and services teams to solidify the Topcoder brand as the largest crowdsourcing provider in the world. He was an integral part of Topcoder becoming a Wipro company through the acquisition of Appirio in 2016.

[retailtouchpoints]

What To Do About Holiday Outages

By Mahesh Ramachandran, OpsRamp

It’s that time of year again. Forget turkey, cranberries and pesky in-laws: it’s time to get your shopping on. For IT organizations at retailers and e-Commerce companies, it’s an exciting time and also one where every detail matters.

So far, predictions are robust for sales, with eMarketer forecasting that this will be the first-ever trillion-dollar holiday season in the United States. The analyst firm predicts that Cyber Monday will once again kill Black Friday sales, and that e-Commerce will represent 13.4% of all holiday retail sales this year. U.S. digital revenue will grow 13% year over year (YoY) this holiday season, according to Salesforce Commerce Cloud data.

New Variables And Risks

The stakes are, as ever, high in the cutthroat global e-Commerce market. This year is particularly unusual here in the States because there are six fewer days between Thanksgiving and Christmas than in 2018. That means more people crowding your web site and other shopping channels on an average day to get orders in before the mid-December shipping deadline.

Speaking of channels — another trend, according to Salesforce, is that we will see more shopping move to the edge, as younger shoppers flock to social media and messaging applications to make their purchases. Retailers selling on these channels will need to consider the potential impact of edge sales on IT stability.

We’ve all heard it before: one hour of downtime can result in catastrophic revenue losses during a critical sales period. Although the comparison may not be useful for the average business, Amazon’s one hour of downtime on Prime Day 2018 may have cost the Internet giant an estimated $100 million in lost sales.

How To Sharpen IT Ops Strategies This Holiday Season

When it comes to helping companies ensure a successful online holiday season, IT operations plays a central role in preventing outages and keeping web sites and apps running optimally for impatient and distracted consumers. The strategy I recommend revolves around three core tenets of modern IT Ops: deep visibility, capacity planning and proactive incident response.

1. Visibility: The ability to see real-time status and metrics on infrastructure across the business is critical, so that your organization can understand vulnerabilities and bottlenecks. Armed with the best data you can possibly get on your environment, now you can easily assess the business impact of IT hotspots and capacity constraints to understand where the business might get into trouble during high demand. First understand what the steady-state looks like regarding interconnections, metrics and utilization. A map of this steady-state might highlight a point of danger, such as too many connections going through a single node. If that node goes down, the whole web site could also be out of commission. Take time to analyze the most likely scenarios that will happen during unpredictable surges in customer activity.

2. Capacity planning: Once you’ve done a mapping exercise, you can take preventive measures to lower risks during seasonal spikes, such as by adding in more routes or redundancy into the network. The point is to eliminate single points of failure. Balancing cloud versus on-premise capacity is another smart tactic from both the performance and cost perspective. Many organizations will rely upon internal IT resources for static, predictable demand and scale up cloud resources for the unpredictable surges in traffic.

3. Proactive incident response: The ability to proactively identify failure points in the IT environment is one of the hardest things for companies to do, yet it’s the only way to preempt systemic, business-impacting outages . AI technologies are now helping IT operations manage and control alert chaos and make correlations faster to get an accurate root cause analysis. It’s also valuable to understand what caused previous significant incidents and outages: modern ITOM systems enable rapid historical analysis. Since you can’t prevent all issues, having a process in place to quickly mitigate and respond, including how to best communicate with customers, is vital. Simulating incident response to a major issue is always a capital idea.    

As a final note, make sure that backup sites are equally vetted and ready to go in case of an emergency. Too often, companies set and forget disaster recovery environments; ensure that you have enough capacity to handle a failover and that all of your DR systems have been updated and tested. With proper planning, a holiday outage will likely never happen to your business. But if it does, be ready so that the impact on customers is minimal.

Mahesh Ramachandran is vice president of product management at OpsRamp. He has 18 years' experience spanning roles in product management and R&D in IT operations management, cloud computing, server virtualization, log/event management, operating systems, compilers and programming language runtimes.

[retailtouchpoints]

Holiday Shoppers Adjust To An Evolving Online Shopping Experience

By Brian Byer, Blue Fountain Media

It’s no question that consumers have embraced online holiday shopping. This year, for the first time, they’re expected to do more shopping online than at the mall and other brick-and-mortar retailers. Our own recent survey on holiday shopping confirms this, with almost 30% of respondents claiming they’d do all their gift shopping online this season, not setting a foot inside traditional retail outlets.

What our survey also showed, however, is that the online holiday shopping experience is evolving, with retailers, advertisers and even the government greeting this year’s wave of buyers with a host of innovations, not all of which will be readily accepted. There’s a lot to grapple with, but here’s what we found out about some of the most important changes.

Some good news first. Shoppers seem to have grown accustomed to, and even value, the ads popping up in their social media feeds — most of which are based on information garnered from their web searches and other online activities. While these ads were once considered creepy and invasive, 60% of our survey respondents report they regularly click through on these ads, especially if it’s a pitch for a product or service they’re curious about.

Similarly, innovations like voice assistant shopping, through interfaces like Siri, Alexa and Google Home, also are gaining increasing acceptance. While not everyone is running to make use of these aids, a slow but steady stream is adopting them, with our survey suggesting some 55% would be taking advantage of new features, like augmented reality sizing tools and customer service chatbots, this holiday season.

Also new on the online shopping scene is a growing consumer awareness of sustainability. Only 14% of those polled indicated sustainability would not be part of their seasonal strategy. However, an overwhelming majority were going to combine shipments at Amazon, plan retail trips with fuel economy in mind, and recycle or just not use wrapping paper in their attempts to reduce the holiday’s overall carbon footprint.

If there is a Scrooge character this year, it’s the recent implementation by many states to collect sales tax on all online retail sales, even those being fulfilled in other states. Reacting to the sales tax revenue loss from brick-and-mortar retailers, states have turned to online sales to make up for the shortfall. 75% of those polled were aware of the ubiquitous sales tax, with 35% saying it’s made shopping online less advantageous than it used to be, but some 20% are resigned to its inevitability given the shifting retail market from Main Street to online.

Security remains an issue, with almost half feeling their personal information is shared with far more entities than they can imagine, and with a whopping 70% claiming that they’d be uncomfortable if they knew for sure their info was being shared with five or more other companies.

Retailers that are busy trying to improve the customer experience may find that innovation is slow to catch on with consumers, but we believe that this year, over most others in recent memory, the public will understand the online shopping market is growing and changing, for the better in most cases, and that they ultimately will determine which features stick and which will fall to the wayside.

Brian Byer is Vice President and General Manager of Blue Fountain Media, a Pactera Company, which is a full-service digital marketing agency. He has over 20-years’ experience helping businesses navigate major technology trends to create a competitive advantage and ultimately transform their organizations.

[retailtouchpoints]

A Wrap-Up Of Singles Day 2019

By Franklin Chu, Azoya USA

Today's e-Commerce market is oversaturated and many players are losing steam and losing money. Yet Chinese e-Commerce giant Alibaba recorded a whopping $38.4 billion in GMV this year, a 26% jump from last year's Singles Day. 

While growth is slowing, it remains strong and impressive for a company as large as Alibaba. In this brief wrap-up we dive deeper into how cross-border e-Commerce performed this year.

Alibaba Growth Powered By Lower-Tier Cities, Livestreaming And New Brands

Alibaba’s strengths include incredible foresight and long-term vision. Early on, management knew the market would get more competitive, so they laid the groundwork for new strategies long before they were needed. 

Their plan included focusing on lower-tier cities, integrating online-offline retail and building an ecosystem of livestreaming influencers on Taobao. 

Lower-tier cities: 102 million new users participated in Singles Day this year, mostly from lower-tier cities. Alibaba claims more than 70% of new users in fiscal 2019 came from lower-tier cities.

New product launches: Over 1 million new products launched for Singles Day. Launching limited-edition products like MAC lipstick help Alibaba to stand out from competitors with exclusive products.

Livestreaming: Chinese e-Commerce web site Taobao raked in $1.4 billion worth of sales within the first eight hours and 55 minutes of Singles Day. Over 100,000 brands used livestreaming to promote their products during the day, including U.S. and foreign brands MAC, Levi's, Ralph Lauren, Sisley and Burberry. 

While Taobao’s livestreaming feature has been around for years, in 2019 it became a major focus due to intense competition as brands seek to capture customers' attention. 

Livestreaming effectively activates potential customers who have browsed your products for a long time without making a purchase. It is most useful for marketing visual products like apparel and cosmetics. 

Who Were The Top Sellers?

This year, 299 brands each brought in more than $15 million in revenues on Singles Day, up from 237 in 2018. 

Top brands included Estée Lauder, Apple, Li Ning (sportswear), Bosideng (apparel), Perfect Diary (cosmetics) and HomeFacialPro (skincare).

Brands earning over $15.1 billion in GMV across multiple platforms (not just Tmall) include: Uniqlo, Semir (apparel), Gree (air conditioners), Anta (sportswear), Linshimuye (furniture), Estee Lauder, Xiaomi (smartphones), Haier (white goods appliances) and Midea (white goods appliances). 

These results mean: 

1. More sales are concentrated among a few big brands. The amount of capital required to compete effectively during such holidays has increased. 

2. Chinese brands are becoming more popular, as foreign brands previously dominated this list.

How Cross-Border E-Commerce Fared On Singles Day 2019

In total, 22,000 cross-border e-Commerce brands from 78 countries participated in Tmall Global's Singles Day promotions, selling more than 620,000 imported products, most of which are unavailable in China for various reasons. 

Over 120,000 new products were launched just for Singles Day, indicating the retail extravaganza effectively builds brand awareness. 

To further entice customers, 2,500 of these brands covered the costs of import duties and shipping; Alibaba also provided interest-free installment loans for 24 months. 

The hottest categories according to Tmall were beauty tech gadgets, imported cultural products, sleeping pills/aids, pet food, products for the elderly and male skincare products. 

Japanese beauty tech brand Ya-Man sold 6,000 products within just 30 seconds. Notably, each of these products costs more than $1,500.

Which trends did Azoya see this year? Top trending categories included beauty, skincare and health products. 

Specifically, we saw increased demand for facial masks, tooth whitening products, perfume, eye shadow, skin moisturizer, anti-wrinkle cream, laxatives and ginkgo leaf extract. Many of these products include ingredients that cannot be found or manufactured in China, or cannot be imported due to animal testing laws cosmetics brands have to abide by. 

Key Takeaways

1. Despite its size, Alibaba maintained strong growth this year by focusing on lower-tier cities, helping brands launch new products and using livestreaming influencers to activate sales. 

2. More brands surpassed the $15 billion GMV mark, indicating more sales are concentrated within the larger brands; however Chinese brands are gaining in popularity.

3. Cross-border e-Commerce continued to perform well. Popular subcategories included beauty tech gadgets, pet food, sleeping aids, tooth whitening products and other products with ingredients that are difficult to find in China.

Franklin Chu is Managing Director U.S. for Azoya USA, a provider of turnkey cross-border e-Commerce solutions to assist retailers looking to expand into China through a cost-effective and lower risk method. To date, more than 35 retailers in 11 countries are partnering with Azoya to expand into China with ease, including French fashion retailer, La Redoute, Australia’s largest pharmacy group, Sigma, Europe’s largest online beauty retailer, Feelunique, and United States premier retailer of juvenile products, Babyhaven.