Welcome to Season 4 Episode 2 of The Retail Razor Show and our latest exploration into the dynamic world of retail and commerce technology! Ever wonder how retail giants manage to create seamless shopping experiences across digital and physical spaces? It's not just about blending online and offline—it's a strategic dance of data, technology, and human engagement.
You might be thinking, “that’s an omnichannel experience!” - but we beg to differ! Retailers must go beyond omnichannel and uncover the art of unified commerce.
For this episode, Ricardo Belmar and Casey Golden had the pleasure of discussing this transformative concept of unified commerce with none other than Giri Agarwal, Chief Strategy Officer at Incisiv.
Unified commerce is more than just a buzzword; it's the heartbeat of modern retail. Giri Agarwal enlightened us on the necessity for retailers to create a cohesive shopping experience that bridges the gap between physical stores and digital platforms. The goal? To craft a singular, seamless retail journey for every customer. Imagine a world where your shopping experience is so smooth, it feels like magic – that's what we're talking about! Once we defined unified commerce, Giri shed light on why this is so essential for retailers to thrive.
Overcoming the Hurdles
Transitioning to a unified commerce system is no small feat. Retailers often grapple with outdated store technology and complex commerce stacks. Giri described these challenges, emphasizing the need for a cultural shift and strategic leadership to navigate this evolution successfully. While not exactly a “secret sauce” there is definitely a success formula and Giri shared some of Incisiv’s research int his area.
A unified approach hinges on customer data. Understanding the context of digital interactions is crucial for delivering personalized experiences. Giri also delved into the transformative potential of AI in retail, from enhancing customer service to optimizing inventory management. We discussed the necessary building blocks that make AI deployments possible, without which, you just have a technology searching for a problem to solve!
Success Stories and Methodologies
We didn't just talk theory; we explored real-world examples of retailers who are leading the charge in unified commerce. Incisiv's research approach involved a meticulous evaluation of around 290 customer experience attributes, ensuring that retailers can deliver both relevance and personalization.
Giri's insights extended beyond the present, offering a roadmap for the future. He highlighted the importance of platform modernization, customer data integration, and the financial implications of adopting a unified commerce strategy. It’s a cultural shift for the organization and requires a leadership focus to succeed!
Embracing the Digital-Physical Collision
The conversation took an exciting turn as we discussed immersive technologies in the merging of the digital and physical realms. Retailers must be ready to embrace this shift to stay ahead.
Lastly, we touched on the critical role of sustainability in retail. Unified commerce isn't just about customer convenience; it's about creating sustainable outcomes that benefit businesses and the planet alike.
The Future of Commerce is… Unified Commerce!
Our amazing discussion with Giri Agarwal was a deep dive into the essence of unified commerce and its pivotal role in shaping the future of retail. For retailers looking to thrive in this new landscape, the message is clear: adapt to a unified approach or risk being left behind.
So, are you ready to get a front-row seat to the future of retail? Tune in to this latest episode and join the conversation. You'll walk away with a treasure trove of insights that could transform the way you think about retail!
Until next time, keep cutting through the clutter and stay sharp!
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S4E2 The Future of Commerce is Unified Commerce
[00:00:00] Show Start
[00:00:00]
[00:00:20] Show Intro
[00:00:20] Ricardo Belmar: Hello and welcome to season four, episode two of the Retail Razor Show. I'm your host, Ricardo Belmar.
[00:00:26] Casey Golden: And I'mm your cohost, Casey Golden, welcome to retail's favorite podcast, where we cut through the clutter to give you sharp insights on the retail industry and commerce technology. It's the show for product junkies, supply chain technologists, and everyone else in retail and retail tech alike.
[00:00:42] Ricardo Belmar: So Casey, we are off to a fantastic start to season four coming off of our 2024 predictions episode last time with special guest, Ben Miller from Shoptalk, I feel I can safely say with confidence that we are totally keeping the momentum going with this episode's topic.
[00:00:59] Casey Golden: [00:01:00] Absolutely. This is yet another episode topic that's near and dear to my heart. And frankly, we haven't truly focused on it since... what? Season two, when we had Brian Dove from Commerce Hub with us talking about the future of commerce and, course, Commerce Hub since merged with Channel Advisor, and they go by Rhythm now.
[00:01:21] Ricardo Belmar: That's true. True. And even that episode only touched on today's topic. It wasn't quite the focus of the episode.
[00:01:28] Casey Golden: let's not keep the topic, a secret any longer,
[00:01:31] Ricardo Belmar: And if listeners were about to guess that we're going to talk about Omnichannel, they would be wrong!
[00:01:37] Casey Golden: Very wrong. And honestly, if you guess that you haven't been listening to us rant about omni channel with so many guests before.
[00:01:46] Ricardo Belmar: That's right. And especially considering one of our predictions last episode was that we're finally calling the death of Omnichannel and moving on to Unified Commerce. So guess what? Our topic today is Unified Commerce... listeners may be [00:02:00] wondering how this fits into our season four theme of unlocking retail with the integration of AI, humans, and media.
[00:02:06] Casey Golden: I'd say that that will be crystal clear by the time we get to the end of this episode.
[00:02:11] Ricardo Belmar: Absolutely. So with that said, let's cut right to it. Then today we've invited a very special guest, Giri Agarwal, the Chief Strategy Officer at Incisiv, a leading insights firm for consumer industries.
[00:02:22] Casey Golden: Let's listen now to our conversation with Giri and how unified commerce isthe future of commerce.
[00:02:30]
[00:02:35] Unified Commerce with Giri Agarwal from Incisiv
[00:02:35] Ricardo Belmar: Retailers are leveraging advanced technologies like real time inventory visibility, and AI driven personalization to enhance customer experiences and drive revenue growth. But the conversations about Omnichannel are finally coming to an end as technology is making unified commerce, the real reality of retailing today.
[00:02:54] Casey Golden: Unified Commerce is about 70 percent of the reason I get out of bed and come to [00:03:00] work. and unlike Omnichannel, we all know what Unified Commerce is, not just technology, but also a leadership role. Which brings us to why we're all tuning in for this episode.
[00:03:11] Ricardo Belmar: Today, we have a very special guest joining us to discuss how retail is shifting to a more unified approach to commerce, and why the future starts here.
[00:03:20] So welcome Giri Agarwal, Chief Strategy Officer at Incisiv. Giri it's fantastic to have you here with us today.
[00:03:27] Giri Agarwal : Hey, Ricardo. Thank you. Hi, Casey. Morning. yeah, my '24 moment's arrived. I don't think it gets better. And it's only February, so it's lovely to be on.
[00:03:37] Casey Golden: Absolutely. And if there's a line in the sand, I'm on your side and there are no silos. The path to purchase is not linear and I also believe it's a series of consumer touch points that trigger an array of user journeys for both internal brand ops and consumer touch points.
[00:03:55] Giri Agarwal : I couldn't agree more. I think the path to purchase is long dead. We're sort of in a, [00:04:00] you know, in an engagement continuum. This is one of those dystopian movies with a circle. But hopefully by the end of this, we'll solve the dystopia and people can look at this more positively
[00:04:08] Ricardo Belmar: And jump out of the circle. So Giri, before we jump in any further, you and I have known each other for many years now, and it's a super thrill to have you on the show finally. Now, but why don't you start by giving our listeners a little bit about your background and tell everyone what Incisiv does.
[00:04:25] Giri Agarwal : Yeah. So, I think the best intros come from how we've gotten to know each other, which is actually through evenings spent at BXL Zoot, which is my favorite New York City bar, 22nd Street, between 5th and 6th, for anyone that doesn't take anything else away from today,
[00:04:39] Ricardo Belmar: Make sure you take a note of that.
[00:04:40] Giri Agarwal : go, go to BXL Zoot and for others that, we haven't had an opportunity to meet before, I'm Giri Agarwal, co-founder and chief strategy officer, Incisiv. Incisiv is an independent industry insights firm. We focus really on consumer industries and focus specifically on commerce, supply chain and emerging technologies. So yeah, I've been privileged to really be participating in a [00:05:00] lot of the strategic programs that we run and, unified commerce, just both as an overall area is one that we've focused on quite significantly.
[00:05:07] And, happy to bring some of those insights into our chat today.
[00:05:10] Defining Unified Commece
[00:05:10] Casey Golden: Just to kick off can you explain the concept of unified commerce and why it's become increasingly important in today's retail landscape?
[00:05:19] Giri Agarwal : Yeah, I mean, I'll just focus on two things just to get us started and say, first and foremost, consumers are great at mashing their physical and their digital realities together. But for a second, in fact, let's just not even use the word consumers and really begin to think about how all of us just behave in today's day and age as just human beings, as people living on this earth at this current moment.
[00:05:40] I mean, we are so comfortable mashing our physical and digital realities together, whether that's, you're plugging into your Spotify playlist on your Uber ride over whether you're, listening to that podcast on the subway ride in whether it is just the sort of immersion that has become just second nature to all of us. And, a lot of [00:06:00] companies get that and are as good at it as we are, as human beings, as shoppers. But most of the retail industry wasn't really designed for this level of unification, this mashing together of their physical and digital reality. They're just not good at it. Their organizational culture, their customer experience, their processes, their people incentive, their technology systems aren't built for today's reality.
[00:06:22] So over the past 20 years, I think we've basically thrown duct tape and glue to patch together systems that weren't designed to do what we're making them do. And that's great. I think it fit, kudos to to, to retailers where it's extremely difficult and hard to do that, especially through the past, COVID years where again, some of this stuff really became essential, existential to us as human beings.
[00:06:41] And I don't want to just throw bricks at something that's really been a way of survival for many of us. But I think it's time to really fundamentally rethink what the approach needs to be, and that is what to me Unified Commerce represents. It's a fundamental reset of thinking about how we should design and define a [00:07:00] single retail experience.
[00:07:01] So that's the first thing I'd say. And for those that may roll their eyes at it and say that's a little too fruity philosophical for, for their taste. Here's some hard facts. And the hard fact is that retailers have reached the end of the traffic acquisition based growth runway. If you look at a simplified growth equation, it's really traffic times conversion times average order value times purchase frequency. Those are your four key levers of growth. And traffic today is dead on arrival. So what you've got remaining is the opportunity to impact conversion, impact purchase frequency, impact average order value.
[00:07:37] And that is the domain of delivering a great customer experience, a unified customer experience, and really getting more shoppers to say "yes" more often and build a deeper relationship with you. That's why unified commerce matters. That's what unified commerce to me is all about.
[00:07:54] Ricardo Belmar: I love that explanation, particularly because it speaks to the fact that when, I [00:08:00] mean, I completely agree with you that it's traffic is, there's no more runway left on that because it really isn't about volume of feet coming through your doors anymore, right? Because what matters now is the quality of those visits and what those visits amount to.
[00:08:14] And then even more so the fact that that visit isn't the only method you have, to convert that customer. And, to your first point, that customer doesn't necessarily always want to convert that way either. They want to convert any way they want, wherever they are, no matter what they're doing, and a retailer has to be prepared and enabled for that.
[00:08:32] Giri Agarwal : No, a hundred percent. I think the idea of understanding the intent and the engagement with the shopper, that is fundamental. So forget the big words around unifying or whatever else, but truly it begins with the shopper and begins with understanding what it is that they want, when and where they want to engage with you and being able to serve that not in the same way across all channels, which I think was what Omnichannel all became about.
[00:08:55] Let me do everything everywhere. No, just smartly being able to utilize the natural strengths [00:09:00] of an engagement mode versus another. And then being able to really thread them together seamlessly for them so that the burden is taken away from the shopper.
[00:09:07] Casey Golden: You're going to be like my new best friend. I had no idea, Giri.
[00:09:14] Giri Agarwal : We just need to now move this to a live session next time that BXL and that,
[00:09:19] Ricardo Belmar: At BXL. Yeah, that'll, that'll be the followup,
[00:09:22] Casey Golden: perfect. I'm in.
[00:09:24] Challenges and Strategies for Unified Commerce
[00:09:24] Casey Golden: How can businesses effectively transition towards a more mature unified system? what are some of the key challenges that they're going to encounter on the way? It's not going to be painless.
[00:09:35] Giri Agarwal : no, no, no, not at all. And I think, the answer is obviously going to be depending on a retailer's current maturity. So I'd say the challenges, they face may vary widely, but the most basic one, I think most retailers grapple with is just how much of the store experience. is driven and dependent on legacy store tech that is hardwired into their operations, right?
[00:09:56] It's in those point of sale systems, it's in [00:10:00] hardware, it's in camera systems. It's just, it's embedded into their physical infrastructure. And it's extremely difficult to extract this in store functionality and digitize it. So you have the same amount of freedom and flexibility and speed.
[00:10:14] In spinning up, say, a new point of sale interface, right? I want to quickly turn my store and pop up a express store interface. It should be as easy for me to do that as it is to pop up a digital storefront. So, extracting that sort of hardwired retail gooeyness. from stores, I think is a big step.
[00:10:33] Second, I think we've got a lot of duplicity and redundancy, duplicity, is that a word? Duplication, duplicity, whatever, pick one. And redundancy in our core systems that make up a retailer's commerce stack today, right? So you've got order management now that has some light. Point of sale capabilities.
[00:10:52] You've got point of sale that can do in store fulfillment. You've got e-commerce platform that could probably serve some of your in store needs. We know a [00:11:00] lot of retailers that are using e-com in their store. So you've got this sort of complex mesh of systems that are talking to each other, the best they can, but there's a lot of redundancy.
[00:11:10] There's a lot of duplication, which adds complexity. Complexity begets an opportunity to fail and remove in the opposite of simplicity, which is what we're looking for. And the third thing I'd say is this is where I think I caution both some of our technology partners as well as retailers, which is I don't think there's any single sort of technology silver spoon.
[00:11:30] It isn't a, "monolithic bad", and, "microservice is good". It's really ultimately the question is "what is the right technology approach for me?" The most pertinent thing to determine for a retailer is who they want to be, what sort of approach fits them. Do they want to go quick in many markets and have a stable platform that can allow them to just quickly go ahead and experiment quickly, maybe go with a quarter backing sort of a technology platform and then build around it.
[00:11:59] Or do they want [00:12:00] to be a technology giant with a team that can battle the likes of Meta, and Apple, and Google for the talent that they can acquire. Then, sure, go ahead with a microservices based, atomic, composable commerce approach and go nuts. But, believing that any one approach is either too good or too bad I think is just a fool's errand.
[00:12:20] Ricardo Belmar: Are there amongst those challenges, is there something that equivalent to a digital reset that some retailers need to think about and how they take this approach, and how they're looking at doing this integration, to bring those capabilities in store as much as taking those in store capabilities into other channels.
[00:12:38] Giri Agarwal : Yeah, I think we have to almost rethink the overall commerce stack. And, one of the things, one of the challenges, would be around really three sources of the atomic level of data that really moves retail, right? Which is really going to be around your customer. We've spent a lot of time, Omnichannel, long.
[00:12:59] Long may the [00:13:00] term live. I really don't care. As much as recognizing the fact that the last 20 years have not been about the customer. They've been about inventory. They've been about items. That's what Omnichannel has in overall philosophy represented to me, which was being able to see where I have inventory available and be able to serve it up to wherever the shopper is, make it easy for them to do that.
[00:13:19] But you also got to marry customer data, inventory data, and now with context data, which is the idea that just because I have that, sectional couch as Ashley Furniture available on a Friday at 8 pm in my New York store doesn't mean that I actually serve that up to an online shopper Because I've got to recognize the labor I have in the store at that time. The fact that i'm going to pay them over time.
[00:13:43] I may not even be able to serve that up and bring that out curbside. Should I do that? Does it make sense for the shopper? Does it make sense for me? I think the combination of those two things is really the foundational building block of success. And the challenges retailers are going to go through from a [00:14:00] digital reset perspective to me are you've spent a lot of time on the inventory systems.
[00:14:04] You just haven't on the customer side and you haven't on the business logic of codifying what a good experience means to your shopper and what is good business for you.
[00:14:17] Casey Golden: I think that's a great point. One of my biggest proponents of a unified commerce approach is the fact that you gain, you have the ability to gain context. Rather than having five silos talking to each other. You can actually just see how the conversation is going. You can see front to back. You can add the context.
[00:14:38] And it's a lot easier to come to those solutions of the business logic of, well, just because I can, does the customer want it? Is it extra? Is it good? Or am I just adding a layer of complexity that actually doesn't help the customer experience? but I think it's hard to do that without having that streaming and streamlined visibility [00:15:00] across multiples.
[00:15:00] That's how we get to seamless. The context has been missing through digital. I just feel like it's, we've never had context on the digital side. All the context arrives in stores because there was a conversation and you understood why somebody was here. Online, you have no idea why somebody's there. And they might be walking through the park right now talking to a friend, looking at something that has nothing to do with you.
[00:15:23] Giri Agarwal. : Right.
[00:15:25] Casey Golden: The context is different. They didn't necessarily stop what they were doing for you. Whereas traditionally we knew people stopped what they were doing to come walk into a store and spend time with us. We knew how important we were.
[00:15:37] Giri Agarwal : Absolutely. And that's where the, again, that sort of multidimensional, non linear, complex engagement, right? People want to start and stop when they want right? People want the ability to have discrete engagement right? I could be engaging with you, but I don't want to be interrupted in another task that I'm forming.
[00:15:57] I could be as immersed. I could be in your [00:16:00] store. Plugged in, listening to my podcast, going through that process. And the only time I actually notice you is at that point of friction where you interrupt my seamless movement through life.
[00:16:13] People have to also recognize that I am not going through a shopping journey as a shopper.
[00:16:18] I'm going through life.
[00:16:19] I'm going through a wide variety of things in that current moment.
[00:16:22] I'm texting my family. I'm probably, checking in my email or WhatsApp there.
[00:16:27] I'm planning for dinner. And really thinking about what your place in their world and almost getting out of the way so that they can go through with it.
[00:16:38] I think is a fundamental part of it. Seeing that retail is what I think about.
[00:16:42] Casey Golden: Yeah,
[00:16:42] Ricardo Belmar: Yeah.
[00:16:43] The Role of AI in Unified Commerce
[00:16:43] Ricardo Belmar: 100%. So here's a question for you, Giri. On that note, how do you see or maybe I shouldn't, it's not a how question. Maybe it's a can question as retailers are, immersed in all things AI this year. How is AI going to help them with that? Or is it?
[00:16:58] Giri Agarwal : Yeah, [00:17:00] I'd be careful about my response to them. There are so many creators, smarter, bigger, wiser voices around AI. It's a broad question. My head really goes towards, again, the idea of how are you going to get to effectively utilizing artificial intelligence unless two states are progressing, right? Number one is the existence of accurate, unified customer data that you can actually trust upon which you might be making some AI based observations, right? So again, that foundational customer data platform to me is key. And the second is going to be that ability to orchestrate action based on AI across the touch points that you control your store, your mobile app, your web, your call center, and your social media and those that you don't.
[00:17:53] Marketplaces, physical devices of your shoppers, third party systems, et cetera, et cetera. So I [00:18:00] think AI has a significant role to play. However, folks that are able to extract greater value from it will probably have those simpler building blocks first in place. So without that, I don't think AI is a solution for anything.
[00:18:11] It's something looking for a problem to solve for. But yeah, we're looking, but as we went through, we went through one of the most ambitious. sort of research exercises we've undertaken. This is in partnership with three of our friends at Manhattan, Zebra and Google. And when I say why it's ambitious is because when we looked at and identified that Unified Commerce is going to be a space that we should focus on because of the importance that we've discussed so far.
[00:18:32] What we found was a lot of people were looking at Unified Commerce or looking at a customer experience and saying, Okay. If you do these 16 out of 20 things, you're great. Where it says, Hey, back to our con, does it matter? What matters in luxury is very different from what matters in home furnishing is very different from what matters in footwear versus fast fashion.
[00:18:50] So that nuance of what matters to a particular industry segment, a particular business, and then the actual going through of the experience, not [00:19:00] just observing if you offer this, but how do you actually execute it. If I walk into that store and I try a few things in a luxury store and your associate actually helps me they know me by name.
[00:19:12] I have a transaction that you have on file. Why is it not a standard practice that the next time I log onto your website that your search filters auto default to my size profile? Are you appending any information from that store visit right into my online experience? How is it that I can have eight items in my wishlist or online cart and two weeks later I visit you and you have no freaking clue who I am.
[00:19:37] right.
[00:19:38] So those are the sorts of things I think that hopefully AI can help smoothen, but you've got to have the building blocks in place.
[00:19:45] Ricardo Belmar: Yeah, it's all those kind of individually these are all little things, but they all add up to a massive amount of positive customer experience, for the shopper. I think that's maybe you're spot on. That's the right way to look at it.
[00:19:57] So can you share some examples [00:20:00] based on the research you guys have done and the benchmarking, what were some examples of retailers that are successfully adopting this unified commerce approach?
[00:20:08] And do you have a sense of, how that. impacted their customer experience. And maybe the question there is, how do you actually assess that? How do you, are there, what are the metrics you'd look for? How are you assessing that quality, if you will of success in implementing unified commerce?
[00:20:24] Giri Agarwal : Yeah, absolutely. So the methodology we adopted really looked at about 290 customer experience attributes, right? So it looked at not only whether you do something, but how you do it. For example. I may look at, the fact that an attribute is, hey, you do product recommendations on your product detail page on your e commerce site.
[00:20:43] Sure. But are those recommendations relevant? Are they personalized based on my prior history with you? We went through some examples just recently right now about let's say the store example. But even could be browsing history based. So how well do you do them? The other might be, previously we may have looked at [00:21:00] an attribute that says, hey, inventory visibility is important.
[00:21:02] What we're finding, to your other question about what leaders are beginning to do better than others, what's beginning to shape unified commerce leadership. It's not a race to the bottom by chasing parity. So it's not that, hey, we're going to go and everybody should do curbside pickup and two day delivery and next day delivery and, order this way or that way.
[00:21:22] It's really more that focus on identifying which, in which segment, what matters most, being clear on that. And actually offering a much richer experience around that. For example, back to the inventory visibility issue, it's not that you can see my store inventory. I think everybody can do that now in today's day and age.
[00:21:40] But it is what can I do with the inventory intelligence to improve your experience? Can I look at only stores that have that one item that I need by tomorrow? Can you assort your e commerce search listing based on my intent, either by store, either by fulfillment type, what have you. Can you tell me what metrics are going, X number of people bought [00:22:00] this in the last two hours, only six remaining.
[00:22:03] When is it going to be back in stock? If it's out of stock, can you give me other options to fulfill substitutions? So it's, it's a whole flywheel of richer experiences. that companies that are committing to this approach are getting better at. So I think that that's what's emerging for us, which is depth of experience is much greater than simple unification.
[00:22:23] To your other question about what are we seeing or how are we seeing some sort of measurements of success. As I had said, obviously there is a direct correlation between the three metrics I had talked about previously. So there is a direct correlation between greater unified commerce maturity with average order value and with convergence specifically, there is a slightly looser correlation with customer satisfaction, which can be a proxy for purchase frequency or royalty.
[00:22:48] But the biggest thing we found was in our study, we found 15 unified commerce leaders out of 124 assessed in the U S. And their average three year growth rate, revenue growth [00:23:00] ratewas three to six times their peers.
[00:23:03] So let that sink in. Unified commerce is highly, highly correlated with driving revenue growth, right?
[00:23:10] The State of Unified Commerce in 2024
[00:23:10] Ricardo Belmar: How do you see the industry as a whole kind of coming into 2024 with this approach?
[00:23:17] Giri Agarwal : In, in terms of where it is on a maturity or where they invest,
[00:23:20] Ricardo Belmar: Yeah. Yeah. If we think of it in terms of a maturity, as you mentioned, you identify and there, there are 15 strong leaders in those metrics that you outline out of all the ones that you looked at. If you were to say as a whole is that maturity level for the industry, if you were going to say it's on a scale of one to 10, are we still in the early stages?
[00:23:38] It has a four or five or are these leaders advanced enough to the kind of pulling the industry along? And if I'm a shopper, it feels like it's a seven or an eight.
[00:23:47] Giri Agarwal : Great question. I'd say we're still at a five on an overall scale. And the basic thing that's holding us back is ultimately there is no unified commerce without a unified [00:24:00] cart, and we are nowhere close to the idea of a unified cart. Out of the 124 assessed, a grand total of zero have achieved a unified cart.
[00:24:14] I actually don't even think the industry is thinking or is ready to go down that route because It is a total fundamental reset of reimagining your commerce stack and maybe having one quarterbacking system, right? Choose one that you major on and then you build the best of breed potentially around it or whatever you want to do.
[00:24:31] But a single cart. It's difficult, right? So I think unified commerce in that sense, if we look at it theoretically, gladly will forever remain further away. And that is the point. I think the point should be that we on an ongoing basis, constantly reset what a 10 is and hopefully find all of ourselves at a five or a six so that there is enough upside for people to continue to chase.
[00:24:53] Now, there are things in places that people are doing better than in other areas. So we decompose the journey. [00:25:00] Or this assessment into four journey hops, all interconnected and all nonlinear. But, we needed to give them some amount of shape. So we've looked at maturity in what we call search and discovery, cart and checkout, promising and fulfillment and customer service. So out of these four areas the one that we think the battlegrounds shifting to, and which is the least mature of the four is promising and fulfillment because in a certain way, what's occurred now because of, post-COVID is unless you can actually very quickly create confidence in me that you have it, you can get it to me. And by when can you get it to me, right? That sort of accurate delivery date promising piece of it. I'm not even interested in anything else. So it's becoming the new entry point for a lot of shopping journeys, because they have more intention. So that's the least mature out of all four. But I'd say the unified cart, which belongs in the cart and checkout piece [00:26:00] is a fundamental piece that everybody's just missing.
[00:26:03] Ricardo Belmar: Interesting. Yeah, yeah. And I guess a lot of that, to your point, from a consumer perspective, it's become all about instant gratification and convenience, and as you said, if you can't deliver that, then as the consumer, you immediately lose interest, and you want to move on to the next retailer that can deliver on that.
[00:26:19] Generational Differences and Consumer Behavior
[00:26:19] Ricardo Belmar: I'm curious, as you've been looking at this, or do you see generational differences on the consumer side of this or is one demographic group deeper into this sense of the instant gratification, convenience and others from what you're seeing?
[00:26:33] Giri Agarwal : I think it's more to do with a technological adoption. Folks that are more digitally savvy, tend to gravitate towards and know how to navigate and very quickly get to the answer that they want to get to. So especially in a need state where I know what I want of course, it will skew in the younger generation.
[00:26:50] So your Gen Z, millennial Zennials. Probably a little more, that's now becoming just basic habit of going and looking for, Hey, this is how you shop. You look to see if they've [00:27:00] got it in the store that's closest to you, or the fact that it might actually be quicker for you to go pick it up versus have it delivered.
[00:27:07] You may have greater options to return it if you bought it and so on, et cetera. So I think it's compressing. But what's more important right now, what's occurring is I think the relationship retailers need to have to your earlier part of the question in the age of convenience, which is competing on convenience alone is a slippery slope to the bottom.
[00:27:27] So you've got to figure out what are the table stakes for your business and then use a unified commerce +strategy to execute them better than anybody else or as, as well as you can. Unified commerce isn't about offering those table stakes. It is about orchestrating those table stake convenient experiences. in a operationally profitable, meaningful manner, both for the shopper and for yourself.
[00:27:52] Second, I think you've got to use unified commerce to redefine convenience,. I think there's this trap that we all fall into and think of convenience really [00:28:00] only as, easy and free returns, free shipping on all orders, next day delivery, blah, blah, blah.
[00:28:06] But if you think, really think about maybe somebody like an Apple the fact that I know I, I could lose a single AirPod and there's a way I can solve that problem today. Just, I, I can buy a single AirPod. That to me is convenience. Right within the construct of what they offer. So retailers, I think, ought to really think about what does convenience mean for their shopper and go beyond, don't just compete with the Joneses.
[00:28:30] So the, the third piece of it really is going to be around, you've got to give the shopper reasons to want to shop with you, despite you're not doing certain things that your peers do.
[00:28:42] That is the definition of loyalty. That is the definition of a strong brand. Which is a irrational love. I will go with you despite, not because of. Uniqlo as an example has one of the most stringent, return policies. You buy something from the store on [00:29:00] 34th street. You can only return it in the store on 34th street.
[00:29:03] You can't take online returns. Online purchases store that they've made that conscious choice, but, they deliver amazing experience elsewhere. So those are just I just go back and say, got to really fight the convenience piece of it, because if that's what your strategy is, I don't think you're long for this world.
[00:29:24] Casey Golden: No, I mean, I always say that Amazon scaled the active trade. And like bartering price to price, right? I'll give you this for that. And I believe Selfridge's created shopping where I'm going to go for no reason. I'm going to spend half a day there. I'm going to look at things. I'm going to leave and I'm going to tell everybody I had a great time.
[00:29:43] I had so much fun, right? No transaction happened, but if those experiences are wonderful, transactions are inevitable. And I keep seeing everyone chasing that convenience. And I'm like, you guys are deleting shopping. We like shopping. Shopping's fun. [00:30:00] Shopping's supposed to be an enjoyable moment. And it keeps getting deleted in these digital journeys.
[00:30:07] And everybody's trying to get you to the cart really quick. And I'm like, it's not always the point. If I'm buying a charger for my phone out of state or out of country, Yeah, that's the point. But for most other things that I engage with, you could deliver it to me in six months. I really don't care. It's just the fact that I wanted this thing. I got this thing. I had a great experience getting this thing.
[00:30:35] And I love this brand despite everything. And I'll be with you for another 30 years. And I think that that's not necessarily a lot of a retailer's DNA. Coming from luxury that is the DNA is just like I'll wait two years for this. Love you.
[00:30:52] Ricardo Belmar: It's building that lifetime value. Building that long lifetime, emotional connection with your shopper and with your consumer,
[00:30:59] Casey Golden: yeah. [00:31:00] And so I think that there is this distinction of seamless to deletion. And deleting that shopping experience isn't always, the best thing.
[00:31:10] Key Differentiators for Unified Commerce
[00:31:10] Casey Golden: What would you say are key points of differentiation for a great unified commerce experience in general? When a brand's thinking right now, like one of our listeners is saying, we have a great unified or seamless shopping experience.
[00:31:26] What would be some areas that you can call out? That make you think, you know what? Maybe I don't.
[00:31:32] Giri Agarwal : Great question. So again, your question by making it slightly general, I may be focused on a few things. Number one is just customer identification. How are you orchestrating a way in which your variety of customer touch points, you can very quickly get to a opted in, non creepy customer identification, so that you can then have a conversation with that shopper.
[00:31:53] I'll give you a great example. We had visited the Birchbox store when it first launched , in New York, and Birchbox is still a thing. And [00:32:00] everybody's walking into the store, and this is a subscription based service, and we've got a bunch of retailers, we have 20 people in there, and we were so excited.
[00:32:06] And the only question everybody was asking Birchbox was, hey, where is the camera? Like, how do you guys know? Like, is it app based? You know, when I walk in the store, do you know our subscribers in the store? Because, your store associate app has a notification that they've just walked in. Or they're gonna come in, where is it, are there beacons, are there cameras?
[00:32:21] How do you know? And the store manager said, you know what, you walk into the store based on what you, where you head to, what you pick up, how you're interfacing and interacting with me. I know, I know my subscribers. That's what we're trained on. ?When you walk in here and you go to the special edit, of the thing that only launched for our subscribers.
[00:32:43] I know you're a subscriber. I don't need some this is the dystopian conversation we're having early, that sometimes the solutions are simpler in your face. So that's big one for me is quick identification of a customer across channels and the second is again related is [00:33:00] arming and empowering your people.
[00:33:01] Great experiences are delivered by great people. it were delivered by great tech alone, I think, Sears would be the greatest retailer in the world. So, and if you look at, again, you look at, Costco, you look at Apple, you look at, a wide variety of retailers that, again, I'm going beyond the limit of who and what we benchmark.
[00:33:20] But again, we've also observed through our benchmark, the leaders have great augmentation of their frontline workforce. This is clienteling, assistive selling, making sure that they can identify, they can help a shopper with exception handling, that they can look into order histories, that they can access their endless aisle and be able to split orders.
[00:33:40] I want this shipped. I want this gift wrapped. I want all on a single sort of transaction. I want to add something while I'm picking something up. empower your people to solve problems for you. I think that'll be a huge piece. So those two stand out for me as things that leaders are doing really well, or what defines unified commerce leadership that is also tough to do.
[00:33:59] And [00:34:00] the third, I think I'll just throw in there, which is just totally rethinking your store experience. So back to the point you were making around, deleting shopping. I think stores are one of, for a omni channel retailer, which in this case I'm using the idea that you operate both stores and e-com. The store, the physical asset is one of your biggest assets from a media perspective.
[00:34:22] Imagine the amount of money you have paid to have that customer like Julia Roberts standing in front of a store associate and I'm just I'm just a shopper asking to be romanced how much money you've paid to acquire that impression when they're maybe coming into the store to return an item and all you're doing Is making it easy for them to just simply return it and making it difficult for them to buy more stuff or engage with you You know, imagine, I mean, I don't know, maybe Kanye can get away with, paying 36 million or whatever and putting up a self shot video, but most retailers, they paid top dollar for that top [00:35:00] ranking search keyword and pointed that to a 404 page not found, I think that person's getting fired, but across the board in retail, we don't think of our stores as media, as customer engagement we have paid for. Now they're here. Okay. What do we do with it? So those are three things that I'd say leaders do well.
[00:35:18] Casey Golden: I think that's a great takeaway.
[00:35:20] Financial Implications and Future Outlook
[00:35:20] Casey Golden: So how much is all of this going to cost them? Right?
[00:35:24] We kind of go into the financials of what are some of the financial implications of making the shift to , taking a unified approach to, to commerce. How do businesses measure that return on investment? Is it a direct ROI for like revenue?
[00:35:43] And do you see it taking, it's not just a project that's going to cost X dollars. It's, you're going to shift your budgets this direction for the life of your company now.
[00:35:56] Giri Agarwal : Yeah, it's a tough one and maybe we can think about it in a [00:36:00] few different ways. Number one is you're already spending money on trying to achieve unification. I think unified commerce again must represent more than just a technology approach. It must represent a cultural change, which actually costs a Way lesser, but it's much harder than throwing dollars at a piece of software or enterprise app or hardware, whatever.
[00:36:20] I think it's going to cost them their leadership attention. It's going to cost them a few bumps in the road in terms of the way in which people, teams are organized. So that's first and foremost there. Now, depending on the technology approach they take, The initial financial implications, can range from actually being a net positive, right?
[00:36:39] Because you're going to rationalize some tech. Or it could be, hey, you're going to require some capital outlays because you're going to get a new platform. And you're going to make it the quarterback and build around it. Either way, I think you are spending already. Now you've got to make a roadmap off over the next five years.
[00:36:55] Which direction do I want to choose? Because again, it's more a approach [00:37:00]conversation than a. investment conversation as such, you are going to continue to invest. Maybe you're going to invest more in integrating systems than you are in going to fundamentally replace them or build new systems. The big investments I'd say, if they haven't already made are going to be the platform modernization across your key stacks of e-com, store, order management.
[00:37:20] Those are three key big ones. And then underlying that it's going to be that something that threads that customer data together, right? So that customer data platform, if you haven't done these, I think, these are going to be . These are going to be fundamental. They're going to cost some money.
[00:37:32] And you can look at, in terms of what it means, I'd say, look at someone like a Tapestry, quite, quite complex in terms of the fact that it's multi brand luxury retail multi region international, but they started many moons ago with the overall sort of, ERP type transformation.
[00:37:50] Then they've gone on to, having their unified customer engagement platform, they're building on that, right? So now that now they're finding that you can actually sweat that asset. [00:38:00] So what it does to me is not necessarily put you behind. It actually gives you the ability to green light that next thing quicker and quicker and quicker and gives you the ability to go at the speed of your consumer, go at the speed that your business needs and deserves now.
[00:38:15] And that's what it's about, which is the ability to pivot quickly, the ability to experiment rapidly, iterate. at a moment's notice and get you in a position to do that. If you're not on this path, I think you will still do it. You will just do it slower. You will fail, fail slower. And that's it.
[00:38:31] That's what people need to watch out for that. You're going to go through a six, nine month program and fail rather than a one, two, three week experiment and fail and learn And then go again and fail and learn and then go again and get it right and move on.
[00:38:46] Risks of NOT Embracing Unified Commerce
[00:38:46] Ricardo Belmar: So looking at it that way, we've touched on the what, the how, and the ROI on, on unified. Maybe let's look at it another way. It's 2024, right? So why now,? Why is this the [00:39:00] moment? That we're saying retailers really, if they're not already doing this, to your point, if they're doing it too slowly, what's the consequence?
[00:39:06] Why now? What are the risks of not doing it?
[00:39:09] Giri Agarwal : So let's start with maybe the idea that three, three fundamental things are happening in our world right now. So it's an emergence moment has arrived. So if we think unified commerce and people don't roll their eyes, Mark Zuckerberg just did a very authentic review of the Apple Vision Pro that was shot on a Quest device.
[00:39:29] And he's. One of the, one of the biggest tech entrepreneurs of our generation is fully all in on virtual commerce. So he's, that ship is sailing that way with Meta and Apple and the big tech giants behind it. So immersion and the collision of our physical and digital worlds is a reality.
[00:39:50] And it is only going to get more and more crazier. So embracing the fact that the physical and digital need to unify. I think we should just. agree [00:40:00] that that ship is sailing, you should get that the, we're in a slightly wonky economic reality, what tends to occur is that you don't shape engagement strategies because of a certain economic reality.
[00:40:12] Actually, you act from a position of strength. So you need to be ahead of when the next wave of either spending uptrend occurs that you are the brand that people choose because they love you. Or when wallets are tight, that they are the ones that they spend their limited dollars with. And that's going to again be incumbent on whether you've got a great brand ethos, but also have you respected the time they have spent with you by making it easy for them to engage with you, making it delightful for them to engage with you.
[00:40:39] That's a unified commerce strategy. Play house, play wheel as well. The third I'd put out there is sustainability is going to be the only viable business model going forward. And therefore not omni channel, not let me give you 20 different ways to get the same item in eight different boxes, seven days a week, [00:41:00] versus let me actually combine the context of my shopper, combine the context of.
[00:41:05] My inventory, combine the context of what makes sense for my business, what makes sense for the world, and give you a variety of options that maximize for those outcomes, right? Including, let me tell you sustainable stories. Let me be an Allbirds that can actually design a store that is now about sustainable storytelling.
[00:41:23] And let me unify all of my experiences so that when you go to my website, when you go to my app, when you look at my product, right? It has one ethos that is what unified commerce is about. So I think that's to me sort of why, and then what you're going to forego, I, simply you're going to forego the opportunity to maximize conversion, you're going to forego the opportunity to have a shot at improving your average order value, those three sort of things that we talked about and, and believe that you can drive growth without an active ally, which is an excellent unified customer experience.
[00:41:56] Ricardo Belmar: Yeah. I completely agree. This has just been a fascinating, [00:42:00] deep discussion on just everything unified commerce that is, I know very near and dear to Casey's heart for sure. But before we wrap up, Giri, any final thoughts or advice for retailers? Particularly for example, we didn't, the one thing I can think of, we didn't touch on, variations by segment or product category that are resources in writing any final thoughts there on a unified commerce approach.
[00:42:24] Giri Agarwal : And so great observation there, right? It was again, back to. Do these 20 things your grade is not like that. There are significant nuances by industry segment. Customer reviews as an example, right? Don't matter largely. They may matter quite significantly in consumer
[00:42:39] Casey Golden: They're not even listed. Like, it's not even, it's not even an option.
[00:42:44] Giri Agarwal : So, but, but there are so many studies out there. If you engage the third party to go and assess your customer experience today, if you're a retailer, there are very few approaches that take that nuance into account. So making sure that when you're going out there and [00:43:00] having yourself assessed, do it against number one, certainly do it in your industry segment.
[00:43:04] The other thing I'd say is while that is true, do it against cross category experience leaders. What I mean by that is if you're going to benchmark your checkout experience, And if you are Target, let's pick, don't benchmark it against Walmart benchmark it against Uber. That is the benchmark of a checkout experience, right?
[00:43:25] Personalization benchmarking against Netflix and how they can build revenue streams around it. So I think this sort of idea of just resetting what specific experiences can mean to people, if you get them right, they can spawn multi billion dollar businesses by solving for, what is in your retail value chain, a simple sort of step.
[00:43:45] So might as well at least elevate the way in which you think about it. So elevate your benchmark, find the nuance of what your shopper needs and go and commit to a few things that you think are going to move the needle for you. And commit to them and make that experience really [00:44:00] best in class amongst, your peer group.
[00:44:01] Casey Golden: Wise words.
[00:44:03] Giri Agarwal. : never been accused of No that,
[00:44:08] Casey Golden: Giri, thank you for joining us today and sharing your insights with all of our listeners. I'm betting on unified commerce this year as one of our top trends and most important aspects. We'll see how I do at the end of the year and see how how much momentum we get. But thank you so much for joining us.
[00:44:26] Ricardo Belmar: Thank you, Giri.
[00:44:26] Giri Agarwal : Oh, absolutelyy phenomenal. Lovely to have been on and I appreciate you allowing me to go on my soapbox there for what seemed like an eternity for you I'm sure. It went by quickly for me
[00:44:36] Casey Golden: Oh no. Absolute pleasure.
[00:44:41] And I'd say this episode is a wrap, Ricardo.
[00:44:51] Show Close
[00:44:51] Casey Golden: if you enjoyed our show, please consider giving us a five star rating and review on Apple podcasts or Goodpods. Remember to smash that subscribe [00:45:00] button in your favorite podcast player and tune in on YouTube so you don't miss a minute. A big thank you to our Goodpods listeners for helping us stay in the top three spots of the charts.
[00:45:09] I'm your co host, Casey Golden.
[00:45:11] Ricardo Belmar: Please connect with us and share your feedback on Twitter at Casey C Golden, Ricardo underscore Belmar and at RetailRazor, or find us on LinkedIn, Threads, and Instagram. And if you want all the highlights from each episode shipped straight to your inbox, subscribe to our Substack newsletter for full episode transcripts and bonus content.
[00:45:29] I'm your host, Ricardo Belmar.
[00:45:31] Casey Golden: Thanks for joining us.
[00:45:32] Ricardo Belmar: Until next time, keep cutting through the clutter and stay sharp.
[00:45:35] This is the Retail Razor Show.
