Our Top Takeaways & Learnings from Virtual Commerce 3.0
On Wednesday, July 29th, BVA hosted our third edition of Virtual Commerce, a virtual conference to keep the industry connected through a time when business is anything but usual.
We created this third event to focus on some of the challenges facing direct-to-consumer (DTC) brands right now, most notably, the Black Lives Matter Movement, digital transformation, and the shifts in consumer behavior resulting from economic turmoil in the midst of the COVID-19 crisis.
Before delving into the content, we’d like to say a special thank you to our sponsors who made this event possible: Contentful, Dynamic Yield, Gorgias, Klaviyo, Klevu, Nosto, Radial, Ordergroove, Workarea, Yotpo, Yottaa, and Shopify Plus. Be sure to check out their technology solutions if you’re in the market to improve your online storefront.
Another big thank you to our speakers and moderators who also made this possible and shared some amazing insights throughout the event!
Keep reading to hear our key takeaways and see the session recordings! Here’s the run of the show:
- Keynote Address: State of the Current Crisis by McKinsey & Company
- Panel 1: Navigating Commerce Without a Compass
- Panel 2: Marketing to a Moving Target
- Panel 3: Diversifying the Commerce Industry
- Panel 4: Verticals Ripe for Disruption
- Panel 5: A Fast and Forced Digital Transformation
This session was moderated by BVA’s CEO Michael Cassidy, and featured Steve Nobel, Kurt Chauviere, and Diana Ellsworth from McKinsey & Co. We received an overview of the current world economy in light of COVID-19, changes in consumer sentiment, and a look at how diversity and inclusion affect business.
The big takeaway about the U.S. economy was that we are facing a relatively slower economic rebound compared to some of the world’s other large economies. McKinsey & Co. is now anticipating a gradual recovery of 2-3 years before returning to pre-COVID-19 levels.
In comparison, China’s economy is expected to make an almost full recovery by the end of the year. Their quick action to contain the virus has ultimately benefited the economy, and they’re already returning to normal work and consumer life as citizens feel more confident about their safety.
When it comes to U.S. consumer optimism levels, not much has changed since April, but all seems to be moving in a generally positive direction. However this positivity is definitely gradual, as people are wary of what lies ahead.
We are seeing that consumer mindset changes are mirroring that of previous recessions. Most shoppers are mindful of saving money and looking for less expensive products, in addition to wanting tangible safety and security measures when it comes to shopping (in store, especially).
Customers are generally looking for more indicators of safety before completely resuming normal shopping and consumption behaviors. For many, re-opening of storefronts in some areas has not caused them to revert back to their normal shopping habits, and they seek to hear more good news about the virus levels before venturing too far into public.
Finally, McKinsey & Co. shared some of their findings in regards to diversity and inclusion practices and how consumers currently view these qualities in brands, as well as how it affects business.
The two key takeaways...
Diversity is paramount in the eyes of consumers:
The next generation of consumers (Gen Z) cares greatly about diversity and inclusion, and will not only consciously choose to boycott brands that don’t value these concepts, but also share their feelings about it far and wide on social media. Gen Zer’s frequently vocalize their love for specific brands on their online platforms, and in turn they also very publicly share their distaste for companies that do not support their social values (or only pretend to).
Ethnically and gender diverse companies outperform less diverse companies:
McKinsey and Company has found that gender and ethnically diverse companies are respectively 24% and 33% more likely to outperform less diverse companies. Diversity on many levels seems to improve decision-making abilities, financial performance, while allowing companies to fulfill broader needs with their offerings. Finally, research also shows that companies should have diverse executive teams and board of directors. Companies with a diverse top quartile will financially outperform less diverse companies, as shown in the illustration below. This shows that diversity isn’t only a matter of moral obligation, it is also the right thing to do for business.
You can find the recorded session here.
This panel started with our speakers discussing how COVID-19 and recent events have forced (or not forced) their plans to pivot. The answers, surprisingly, varied across our three panelists. Overall, however, the three brands definitely had to increase their digital presence and cater to a more virtual consumer base.
Luxie's Charles Cantrell did note that he felt their brand had been prepared for a downturn in their planning, and that they had already anticipated demand going through a down cycle. Ultimately, this allowed them to be well-positioned for the hardship of an economic recession, and their brand is currently performing quite well, serving as a reminder to always be prepared for alternate scenarios.
Jamie Schisler with Upwest said that their brand’s biggest shift to accelerate their digital transformation was to pivot their strategy from awareness to conversion-focused. This came by way of finding methods that moved traffic through the purchase funnel more quickly on their online storefront. They made enhancements to their product description pages (PDPs) and found ways to better serve their customers from a digital perspective.
One of Upwest's product description pages
Jon Levine from Hedley & Bennett had the unique experience of shifting their business from B2B towards direct-to-consumer (DTC) as the world of commerce moved online. Their brand previously sold primarily wholesale, serving businesses like hotels and restaurants. Now, they found a way to offer their products to the average consumer on their online store, and pivoted to start producing face masks, something that was new to their brand but within the capability of their manufacturing factories.
When asked about how the holiday shopping season may be affected by the pandemic and the rapid digital transformation, our panelists noted that fulfilment would be the biggest adjustment. Brands will have to anticipate the need for shipping more products as people shop online more than previous years, and also prepare to encounter delays and other delivery challenges that may require heightened levels of customer support.
You can find the recorded session here.
Discussing marketing during the chaos of the current world state, our panelists all noted a big trend of seeing an increase in ROAS (Return on Ad Spend) right now. They agreed that now has been a good time for performance marketing as people spend more time online and consuming digital content.
Chris Garcin with Pit Viper noted that their brand, in previous years, had made the mistake of putting all of their eggs in one basket by only running paid social advertising on Instagram and Facebook. As the pandemic has grown into full-force, they have begun running paid media on SnapChat as well, and instantly saw high ROAS.
Steve Staffan with Brummell shared that their brand was focusing on retaining customers rather than acquiring new ones. This included marketing campaigns that were targeted at consumers who had previously bought from them and giving them special offers to reward loyalty.
Industry West shared that their unique way of connecting with either loyal or low-funnel customers was by setting up a platform to schedule appointments at their brick-and-mortar furniture store in SoHo, Manhattan (when it was able to re-open). Letting their fans know that they were implementing this extra safety measure to allow for social distancing not only encouraged people to come shop with them, but also allowed for a more nurturing and personalized buying experience.
Another tip that came from our speakers was to embrace the customer service roles within your brand’s company. Chris Garcin noted, despite being one of the Founders of his quickly growing brand, that he recently spent a day as a customer service representative in order to gain more exposure to the kinds of support consumers need during these times. He has, in turn, been able to create better educational marketing experiences that consumers will find helpful right now.
You can find the recorded session here.
This panel discussed why the lack of diversity in the commerce industry is a problem and how companies can actively work to become more inclusive. One of the key topics that arose was diversity in leadership allowing brands to reach a wider audience. By including many different perspectives in decision making, brands are able to anticipate what offerings may attract a larger audience and how to adapt to broader needs.
Brands that have diverse voices present in leadership are better able to communicate with a world of consumers, and market to different groups of people. As noted in our intro session by McKinsey & Co., companies with a more diverse set of employees outperform those that are less diverse.
Our panelists discussed their own personal experiences in the professional world, and why they think that a lack of diversity has become an issue specifically in the world of commerce.
According to them, it has appeared to most frequently be the result of blind spots that many business leaders have when it comes to inclusion. Many companies are not born out of a diverse environment, and therefore don’t realize that there is any kind of problem. It's out of sight, out of mind.
Unfortunately, systematic racism in hiring practices (meaning the system by which new talent is sourced) is very prevalent in the commerce space. This is not built intentionally to be racist, but rather the processes in place don’t leave room for diverse hiring practices. Companies often don’t tend to look in the places that will help them source more diverse employees. It’s not always malicious, but it definitely happens.
Our panelists then addressed the question of how businesses can alleviate the lack of diversity occurring within this space. Chauncey Twine with Briogeo said his biggest pieces of advice was to set KPI’s and goals around diversity in hiring practices. He noted that it’s impossible to improve something without actively measuring to look for improvements.
When it comes to actively sourcing new talent from more diverse groups, Amanda Johnson with Mented recommended simply shifting talent acquisition efforts to target different people. This is an easy tweak in some ways-- for example, companies should advertise new roles to historically black colleges and universities rather than predominately white institutions. Amanda also noted that one way she’s actively hired more diversity is by reaching out to friends that have a different background than her, and asking if they can recommend anyone for an open position.
On another note, Ronny Sage with ShoppingGives shared that it’s also important for individuals to be aware of their own biases, and for leadership to bring up the tough questions that lead to self-awareness when it comes to these matters. It takes the first step of just asking some of the tough questions (the hardest part) to get the ball rolling within your team.
This panel was moderated by Jordan Knapp from Shopify Plus, featuring speakers Jamie Schwartz from Cavu Ventures, Tessa Battistin from Rosecliff Ventures, and Ashley Brasier from Lightspeed Venture Partners.
You can find the recorded session here.
This panel, shared by speakers from Venture Capital firms, discussed verticals within the commerce industry and DTC space that are looking promising in light of the rapid digital transformation.
One of the hot topics among our panelists was Telehealth and the wellness industry. As they pointed out, many consumers are willing to invest in their health right now, and others with chronic illnesses and conditions are looking for ways to receive care virtually (i.e. virtual doctor visits).
With many people looking to stay healthy during these difficult times, a lot of brands are emerging to address this need by providing products and services that optimize their health routine. This includes everything ranging from vitamins and supplements to platforms that aid in Telehealth care.
Another category that is ripe for disruption is online grocery and food delivery. This may be a more obvious one-- but it’s true that in conjunction with looking to improve their health and stay safe, people are looking to buy their food safely and seeking healthier options.
One way that brands can disrupt the food and beverage space right now is through niche products like unique healthy snacks and other foods that may provide another way for consumers to optimize their nutrition and health routine.
When our Venture Capital speakers were asked if they’re still seeing a lot of activity in their pipelines with the economic recession, the answer was yes. In fact, Jamie Schwartz with Cavu Ventures said that it had been easier and more seamless to close new deals as a result of working remotely and being able to video call rather than traveling for in-person meetings.
It seems that Venture Capital firms still have their eyes open to at least a few verticals, and that now might be a better time than ever for brands to disrupt these categories.
This panel was moderated by Rupert Bonham-Carter from Shopify, featuring speakers Jenny Dwork from Aerosoles, Terra Teat from JLab Audio, Travis May from Lenny & Larry’s, and AJ Bhatia from Dressbarn.
You can find the recorded session here.
Our panelists discussed the massive shift from retail to online that has occurred since March this year. All of their brands have experienced a digital transformation requiring them to adapt their offering from in-store purchase to online shopping.
For a couple of our panelists, they noted a big shift to online marketplace (a.k.a. Amazon), and seeing bigger spikes in demand there. For electronic and food products, it may be a good time to ensure your Amazon presence is optimized as consumers are increasingly going to the marketplace not only to purchase specific items, but also to research new brands and products that have piqued their interest.
Another important topic of discussion for our panelists was understanding how to bring customers over from brick-and-mortar or retail shopping to the online experience. Our panelists have experience primarily selling in-store, and being recognized in larger retailers, but at the beginning of their digital transformations buyers probably weren’t going to look for them online.
It was important for these brands to figure out which parts of their consumer base would be the best fit to target online. Understanding who their online audience would be was important in guiding their strategy to becoming more digitized.
A big thank you to all of our amazing attendees who actively participated and brought questions to this Virtual Commerce 3.0 conference! If you have any questions about Virtual Commerce, or are interested in applying some of the strategies our panelists discussed to your own brand, please feel free to reach out to us here!
BVA is a commerce agency that incubates and grows the direct-to-consumer (DTC) brands that people love. With the largest and most versatile client roster in the industry, we’ve launched more brands on Shopify Plus than any other agency and currently manage a client portfolio that generates nearly one billion dollars annually in gross merchandise volume (GMV).