Using digital to make your brand the easy choice2020|51:34
Consumers are constantly weighing up the trade-off between effort and experience in their purchasing decisions. In this presentation expat Kiwi David Bell, co-founder and president of the New York-based consumer and retail venture studio Idea Farm Ventures, talks about digital’s role in creating ‘commercial gravity’. Digital is a tool that brands can use to eliminate friction, improve customer experience and increase commercial attractiveness based on price, value and service. Bell, who has been credited with “kick starting the direct brand economy”, was an early investor in several iconic new economy brands including Diapers.com (acquired by Amazon for $545m), Jet.com (acquired by Walmart for $3.3b), men’s clothing site Bonobos (acquired by Walmart for $310m), and prescription eyewear brand Warby Parker. Warby Parker is an example of how digital and offline brand experiences can feed off each other and cater to different consumer needs. Bell says when the online retailer Warby Parker introduced showrooms, it led to a 7.4% increase in overall sales and a 2.9% increase in online sales due to the increased brand awareness. One of the most interesting spinoffs, though, was that while sales dropped by 4.5% from Warby Parker’s ‘Home Try-On’ scheme – which saw potential customers receive a sampling pack of five frames to try on at home – the conversion rate improved with more of the packs resulting in a sale. “What’s actually going on here is when you give customers more options, they are able to self-select the option that better suits them ... and that’s more likely to lead to a sale. Some of those people that were receiving the sample packs were people that wanted to try on lots of pairs in a store, other people are happy to jump on the website, upload their photo and see how different frames look that way.” To find the gaps that digital can address, Bell says companies should be asking themselves “what is wrong with the status quo?” and “what are the pain points that digital could reduce or eliminate?”. “Diapers.com came from a conversation about how frustrating it was to run out of diapers (nappies) and it turned into a brand that ‘delivers everything but the baby’.” Bonobos was an online clothes retailer founded to target men who needed to purchase clothes but did not want the typical shopping experience of searching through stores. “Digital removed the friction points for their target market and was able to deliver on price and value.” Now Bell says shopping and sales behaviours in the apparel industry – and the customer journey that goes alongside them – are being reinvented again with the arrival of brands like Get Choosy, which is using algorithms and feedback from social media channels to determine the styles it stocks.