Personalised customer experiences are so last year, according to Shimona Mehta, MD of Shopify in EMEA. She explains why the retail sector must focus on building ‘brand communities’ instead
Spring, the period of fresh starts, is a fitting time to ask Shopify’s Shimona Mehta how retailers can give themselves the best chance to flourish amid upheaval. She’s well placed to offer advice, especially as the ecommerce platform, of which she became managing director for EMEA in November 2020, is itself blossoming.
The technology provided by this Ottawa-based multinational powers “millions of businesses in 175 countries”, she says. According to recent research by W3Techs, 440,000 of the world’s 10 million highest-ranking websites use the Shopify content management system, placing it second behind only WordPress in the popularity league. Retailers and direct-to-consumer brands would therefore be well advised to take careful note of any insights arising from Shopify’s vast bank of data.
Mehta predicts that non-fungible tokens (NFTs), augmented reality (AR) shopping experiences and social commerce – buying and selling directly across social networks – will play significant roles over the coming years for online merchants. Retailers must accelerate their digital transformations to take full advantage of these trends, she stresses.
Data to support her forecasts can be found in The Future of Commerce in 2022, a research report that Shopify published in January. This reveals one particularly seismic finding. Personalising the customer experience has been the holy grail for many marketers, yet 80% are likely to stop doing this by as soon as 2025.
The main reasons for the decline of personalisation are that tightening regulations are making data-tracking harder; innovating with first-party data is unlikely to produce many lasting customer relationships; and the most prominent web browsers are phasing out support for third-party cookies.
“The biggest challenge for retailers and brands is building long-term relationships with their customers when it’s possible to shop across several channels from a multitude of brands,” Mehta says. “New internet privacy regulations and the changes affecting third-party cookies are pushing up the costs of customer acquisition. This represents a sea change in how brands have been thinking about connecting with consumers.”
Mehta, who joined Shopify in January 2017 as head of sales enablement in her native Canada, argues that improving customer retention using “brand communities” will become key. This is where retailers – and business leaders operating in other industries – should focus their digital transformation efforts. In much the same way that a clunky etail experience will lead consumers to abandon their shopping carts, any organisation will lose potential customers if it offers them an unsatisfactory digital journey.
“There have never been as many opportunities in this space, but there has also never been as much competition. Creating a seamless customer experience is key for organisations wishing to emerge from the crowd,” she says. “The most successful brands are transparent, authentic and readily available to their customers, wherever they are. Trust is the main currency of the future of commerce. Retailers that stand out online and retain customers build bidirectional, meaningful relationships with them.”
But establishing and maintaining that sort of relationship is neither simple nor cheap. At the heart of the process, though, is a digital transformation featuring the adoption of tools with the capacity to empower merchants and make consumers feel comfortable using any channel they choose.
Mehta, who moved to London, England (rather than Ontario), when she became head of Shopify Plus for EMEA in March 2019, stresses the importance of investing in digital transformation to ensure that online and offline customer experiences aren’t disjointed. Powerful tech including artificial intelligence and big data analytics can predict likely spikes in demand, enabling greater efficiency in supply chain management. All data points should inform strategy.
“There are more contact channels than ever, be they websites, mobile apps, social platforms or the point of sale in a physical store,” she says. “An omnichannel approach is about aggregating these varied touchpoints. Operating an omnichannel business requires a lot of long-term planning and future-proofing strategies to absorb new technologies and avoid offering disjointed customer experiences.”
It all comes back to engaging with consumers and learning from them to better serve customers and enrich the brand community, says Mehta, who adds: “The emergence of social commerce represents a particular opportunity for businesses to regain control of their brands in digital channels.”
She cites Lounge Underwear’s “hybrid approach” to influencer marketing as an example. “To spread awareness, the brand has used both big names and micro-influencers. It believes that the latter have a better conversion rate, as consumers find them more authentic and relatable.”
Shoppers are increasingly using social channels to discover brands, connect with them and make purchasing decisions, Mehta reports.
“More of our merchants are unlocking the power of social commerce through our integrations with TikTok, Facebook, Pinterest and Instagram. This is not about advertising or performance marketing – consumers are engaging with brands and increasingly completing checkouts directly via social channels.”
Linked to this, livestream selling – interactive videos through which viewers can buy the goods being demonstrated – has exploded in popularity. Shopify merchant data covering August, September and October 2021 indicates that the number of downloads of livestream selling apps was 40% up on the total for the preceding three months.
Also on the up are AR-enabled mobile apps. Clothing brand Allbirds, for instance, has found success by using Shopify’s custom storefront tool to create a more immersive shopping experience through a virtual try-on feature.
“AR can make a big difference for customer experience, although it isn’t for every brand,” Mehta says. “If merchants want to experiment with it, we offer a plug-in that enables them to test things cost-effectively. If they don’t work, they haven’t wasted a ton of investment.”
When retailers – and businesses in other industries – embarked on their digital transformations, they would not have considered NFTs. And here is where the benefit of partnering to boost digital capabilities can prove truly useful, according to Mehta.
“NFTs are certainly an interesting way for firms to stand out and build relationships with consumers,” she says. “As more merchants build fun, engaging experiences for their communities, I believe that interest and excitement from their fans will continue to grow.”
Overhyped or not, it could be a gamble worth taking, given that brands as varied as the Chicago Bulls, Martha Stewart and Superplastic have completed successful NFT ‘drops’ through Shopify. After all, it’s a winner if it builds that all-important brand community and improves the customer experience.
Mehta concludes by offering advice on how retailers can thrive by accelerating their transformation. “My main tip is to start now; don’t wait for the ideal moment. Brands without a strong multichannel presence will miss out on a huge opportunity,” she says. “For retailers at the start of this journey, focus on building for the long term. Choose tools that enable you to develop your own ecosystem for commerce – and meet your customers where they are.”