Tech Bytes: Three Lessons from the Plug and Play Retail CMO Summit
Chain Store Age’s exclusive media partnership with Silicon Valley accelerator Plug and Play Tech Center offers many benefits. Among them is the chance to escape to the warmth and sunshine of northern California from one of the snowiest winters in the history of New England.
Another benefit of our relationship with Plug and Play is that I get to attend events like last week’s Retail CMO Summit, where top marketing executives from major retailers were able network, listen to expert speakers, see pitch presentation from marketing technology start-ups, and even tour the offices of LinkedIn and eBay. While there was far too much information given to cram into a single column, I’d like to share three lessons participants took from the event.
Lesson #1: Store = Innovation
“The store is innovation for e-commerce,” J. Sklyer Fernandes, managing director of retail IT venture capital investor (and Plug and Play partner) Simon Venture Group, told attendees. Fernandes went on to explain how formerly pure-play e-commerce retailers like Bonobos and Warby Parker have experienced success and gained new revenues streams from entering the brick-and-mortar channel.
And of course Amazon is piloting pop-ups as well as a staffed pick-up/drop-off store on the Purdue University campus. Fernandes said Amazon will also open stores to sell its own branded hardware items, like Kindle readers, in the next few years. He also said that decelerating growth of e-commerce and mobile commerce, as well as other factors, will ensure the continued primacy of the store.
“E-commerce is inefficient compared to traditional email,” said Fernandes. “You have a 3% conversion rate for e-commerce, compared to a 30% conversion rate for the store. The store also has a lower return rate and better customer experience.”
Lesson # 2 : Marketing and IT – A Beautiful Friendship
Marketing and IT were once siloed parts of the enterprise with little to no interaction. But for most retailers, marketing and IT now work hand-in-hand, and in some cases may even serve as a blended department. Needless to say, these two vastly different cultures do not always immediately co-exist in harmony, but expert panelists explained how marketing and IT can join forces for the benefit of everyone.
“It takes time to understand what the other side is doing,” advised Francesca Schuler, former chief marketing officer of BevMo. “IT is a strategic partner, not a service organization. We educated IT on customer experience and now they will bring us ideas.”
“We segmented coding from mission-critical IT functions and co-locate light coding in the marketing department,” said Chris Curtin, chief brand and innovation marketing officer for Visa. “We have a bias toward agile development.”
“We engage IT for due diligence,” said Mikael Thygesen, CMO of Simon Property Group. “Marketing is autonomous. We engage IS more for core competencies.”
Lesson #3: If You Start Me Up, Do Your Homework
Panelists also agreed that start-ups seeking to introduce themselves to retail marketers need to do their homework first and make their pitches targeted and relevant.
“I get pitched by start-ups every day,” said Schuler. “It’s about conversation and context. Start-ups should know the brand, their customers and the problems they are trying to solve. They should ask the retailer what they need and personalize the pitch to make it a dialogue.”
“Start-ups should have retail end-users who can vouch for them,” said Curtin. “They should be able to define what they can and can’t do. Know the business and the category.”