One Click Retail’s Nathan Rigby encourages investments in talent, logistics
The rumored death of retail at the hands of e-commerce has been greatly exaggerated. The need for retailers to develop strategies that allow them to compete with Amazon is not. At the recent Digital Disruption Innovation Summit, organized by Walgreens, Drug Store News and Mack Elevation, Nathan Rigby, vice president of sales and marketing at One Click Retail, which delivers actionable e-commerce insights, highlighted the areas where Amazon stands out and how such retailers as Walgreens can take lessons from the e-tail giant to succeed online.
Rigby noted that Amazon’s growth outstripped the growth of e-commerce overall in 2017 — growing at 26% in North America as the broader e-commerce market grew 14%, with similar growth in overseas markets. Additionally in 2017, Amazon saw 41% year-over-year growth in both consumables and beauty, as well as 44% year-over-year growth in health and personal care.
The source of the growth, he said, is where Amazon and other digital-native companies invest money and resources in comparison with legacy companies.
“Incumbents have every reason to win and to have first-mover advantage in the e-commerce space — and there are many partners in this room that are doing that very thing and doing it remarkably well,” Rigby said. “Yet, many of the incumbent brands are equally not investing the same amount of time and attention and money that these digitally native brands are able to invest.”
Rigby said that Amazon drives its growth through smartly using data around search to influence price, promotions and product placement. In particular, when it comes to search, Rigby said that 80% of purchases begin with search, and companies’ investments should aim to invest a commensurate amount of resources in search.
“[Amazon CEO Jeff Bezos] has explicitly taken the human out of the process, and he’s inserted an algorithm,” he said. “You can’t shake hands with an algorithm, but you can influence it through data, and data is really the differentiator now of how Amazon has built their platform.”
However, Amazon isn’t the only company that can use data to capture sales and entice consumers. Companies that can figure out how to position themselves — and their data — as a partner will be the ones that stand out.
“As a brand, you have to say ‘OK, how do we understand data in a way that allows us a first-mover advantage versus our competitors?’” he said. “Is there a way that you can use data to transform that conversation in a partnership type of scenario so it truly allows you to succeed?”
Rigby noted that to properly harness data, companies will need to properly invest in talent that will be able to thrive in a constantly changing retail environment. This often means stepping outside of more traditional candidate pools to find “hackers, hipsters and hustlers.”
“It truly requires a different mindset — a curiosity with data and an empowerment around it to truly start to do A-B testing that might not be really traditionally acceptable within your brand organization’s process,” Rigby said. “But with the speed of e-commerce, it’s required. You have to find people who are naturally curious, who are willing to take risks, who have a passion for data around trends and insights.”
Besides investing in talent, companies also must focus on innovation over the long-term. At Amazon, Rigby said that the expectation around innovation is that their biggest initiatives exist on a seven-year time frame. But outside of long-term innovation, a key way for retailers to build up e-commerce operations is to focus on logistics around search, using data to deploy vendor coupons to the right shoppers and making sure products are in stock to position themselves as a true partner.
“The backbone of retail is logistics, and if you can understand how your logistics deliver more incremental value better than your competitors then you’ve got a competitive advantage,” Rigby said. “It’s pretty simple, yet, all too often, it quickly gets out of control because people are looking at the very basics of performance, of sales velocity, of promotional impact.”
Rigby noted that Amazon’s growth outstripped the growth of e-commerce overall in 2017 — growing at 26% in North America as the broader e-commerce market grew 14%, with similar growth in overseas markets. Additionally in 2017, Amazon saw 41% year-over-year growth in both consumables and beauty, as well as 44% year-over-year growth in health and personal care.
The source of the growth, he said, is where Amazon and other digital-native companies invest money and resources in comparison with legacy companies.
“Incumbents have every reason to win and to have first-mover advantage in the e-commerce space — and there are many partners in this room that are doing that very thing and doing it remarkably well,” Rigby said. “Yet, many of the incumbent brands are equally not investing the same amount of time and attention and money that these digitally native brands are able to invest.”
Rigby said that Amazon drives its growth through smartly using data around search to influence price, promotions and product placement. In particular, when it comes to search, Rigby said that 80% of purchases begin with search, and companies’ investments should aim to invest a commensurate amount of resources in search.
“[Amazon CEO Jeff Bezos] has explicitly taken the human out of the process, and he’s inserted an algorithm,” he said. “You can’t shake hands with an algorithm, but you can influence it through data, and data is really the differentiator now of how Amazon has built their platform.”
However, Amazon isn’t the only company that can use data to capture sales and entice consumers. Companies that can figure out how to position themselves — and their data — as a partner will be the ones that stand out.
“As a brand, you have to say ‘OK, how do we understand data in a way that allows us a first-mover advantage versus our competitors?’” he said. “Is there a way that you can use data to transform that conversation in a partnership type of scenario so it truly allows you to succeed?”
Rigby noted that to properly harness data, companies will need to properly invest in talent that will be able to thrive in a constantly changing retail environment. This often means stepping outside of more traditional candidate pools to find “hackers, hipsters and hustlers.”
“It truly requires a different mindset — a curiosity with data and an empowerment around it to truly start to do A-B testing that might not be really traditionally acceptable within your brand organization’s process,” Rigby said. “But with the speed of e-commerce, it’s required. You have to find people who are naturally curious, who are willing to take risks, who have a passion for data around trends and insights.”
Besides investing in talent, companies also must focus on innovation over the long-term. At Amazon, Rigby said that the expectation around innovation is that their biggest initiatives exist on a seven-year time frame. But outside of long-term innovation, a key way for retailers to build up e-commerce operations is to focus on logistics around search, using data to deploy vendor coupons to the right shoppers and making sure products are in stock to position themselves as a true partner.
“The backbone of retail is logistics, and if you can understand how your logistics deliver more incremental value better than your competitors then you’ve got a competitive advantage,” Rigby said. “It’s pretty simple, yet, all too often, it quickly gets out of control because people are looking at the very basics of performance, of sales velocity, of promotional impact.”