Innovation in ecommerce and retail for an unpredictable future

In 2011, The New York Times had to make a decision. Print circulation was in decline and revenue projections from advertising in the paper were looking gloomy. It instituted a metered paywall. While a novel idea back then, they were not the first publication to do so.

The move was deemed a modest success, but it took a year and a half to sign up  566,000 digital subscribers after the paywall first launched. This year, The New York Times signed up 587,000 net new digital subscribers in Q1 2020, a new record. The publication now has over six million subscribers.

Gaining and retaining new customers is at the core of every single business - whether you provide content, services or sell physical products. But competition for those customers is fierce. And everyone loves a bargain, especially during these challenging financial times.

Companies know that they must build a financial cushion for themselves by doing this differently.

As a result, a lot of emphases is placed on innovating.

But innovation is poorly defined, with entrepreneurs and business thinking it means inventing a new product when it is far simpler than that.

The NYT's pivot to digital certainly was not a rare discovery or even a groundbreaking one. Some might even have considered it a risk. But sometimes just taking a risk itself is innovative. (Other examples of such innovation include Google's allowance for employees to work on side projects, which gave birth to Gmail and Google News. McDonald's also encouraged franchisees to sell their own products - and that's why the Egg McMuffin now exists. Bless!)

In April, 24% of online customers who shopped at Walmart were doing so first time. 

In the context of consumer spend dropping by almost 40% compared to the year before - these are the gains that can make a fundamental difference. But the nature of ecommerce means that customers increasingly price checking and comparing offers. If a product is out of stock, customers will go elsewhere. Before the pandemic even hit, Walmart had invested heavily in ecommerce, adding a click and collect service to its offering. That might not be earth-shattering, but it is a pivot to the usual approach, and it is a value add for customers who might otherwise have moved elsewhere.

The customer profile of Walmart’s online shoppers over the last few months becomes even more interesting the more you read. Data gathered by 1010data reveals the following:

  • 24% of new customers were new to Walmart overall
  • 17% of new customers were new to purchasing at big-box retailers online
  • 15% of new customers were Amazon loyalists who had never shopped Walmart.com. This group spends over $1,200 per year at Amazon
  • 82% of new Walmart.com buyers shopped between Amazon and Target but not at Walmart. This group represents heavy eCommerce buyers spending $2,000 per year at Amazon

Walmart was not the only retailer to see a spike.

Kiehl’s direct-to-consumer site added four times more online customers than they averaged each month in the prior year. They had as many new customers in April as in the entire holiday quarter of 2019. The brand actively pursued a market share through their ecommerce during the pandemic instead of relying on the (closed) department stores who sell their products at the beauty counters.

Nobody knows what is going to happen in the next six months – or even in the next six weeks. But we know that the pandemic has fundamentally altered consumer behaviour in ways we are only beginning to understand. This uncertainty has left many entrepreneurs, businesses… well... really, everyone a bit jittery about making decisions. Especially when those decisions are prefixed with (not at all) scary words like “innovate”.

After all, how is possible to prepare for something you cannot predict?

The answer is simple:  innovate. But innovate within your means. Despite being unable to predict whether toilet paper and hand sanitizer will still be the most in demand products in six months, we can predict some of the fundamentals that customers will look for when choosing an ecommerce retailer. An easy mobile experience when shopping online is one example. Considering that a large part of a new customer base might be older and not as technologically adept is another.

The decision to innovate your ecommerce or retail offering does not have to be a brand new discovery, but it can be something new to your offering  - however small that might be.

Doblin, an innovation-focused firm now owned by Deloitte, spent years researching over 2000 businesses and discovered that innovation in business can be broken down into ten major categories.

 The ten silos of innovation 

1.

Profit Model

How you make money

2.

Network

Connections with others to create value

3.

Structure

Alignment of your talent and assets

4.

Process

Signature of superior methods for doing your work

5.

Product Performance

Distinguishing features and functionality

6.

Product System

Complementary products and services

7.

Service

Support and enhancements that surround your offerings

8.

Channel

How your offerings are delivered to customers and users

9.

Brand

Representation of your offerings and business

10.

Customer Engagement

Distinctive interactions you foster

 

When looking at it like that – doesn’t innovation look a little less scary and a lot more exciting? 

Ready to take the next steps? Peeps, we gotcha - get in touch here.

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