Experiential Commerce: The 'Future' of Shopping Is Now

Social commerce, interactive photos, and videos. Online shopping is getting fun. Here's how to turn customers' paths to purchase into experiential journeys.
Customer Experience

Traditional online commerce has long been characterized by transactional services; the purpose of an e-commerce site is to help customers select merchandise and make a purchase. And online retailers have been successful. Worldwide B2C e-commerce sales are forecast to reach $1.7 trillion this year and could balloon to $2.4 trillion by 2018, according to eMarketer. But as the ecommerce space becomes increasingly crowded, companies are looking for ways to differentiate their brands.

Enter experiential commerce. Online retailers like Modcloth, The Grommet, and others are outfitting their sites with product reviews, integrated social content, and rich media that are designed to engage shoppers and make their sites stickier.

"Ratings and reviews have been very effective over time [as well as] photos with dynamic color switching, zoom capabilities, alternative images, and detailed text," notes Forrester Research analyst Sucharita Mulpuru. The goal, Mulpuru adds, is to give shoppers a great experience they want to come back to."If you bomb your new shopper experience, good luck getting a customer back," she says.

Nick Marvik, founder of online shop NWT3K and a former Amazon employee, saw an opportunity to make shopping for skiing and snowboarding apparel more fun. Headquartered in Seattle, Wash., NWT3K lets customers design their own jackets and pants, choosing from various colors, zippers, pocket placements, and more. NWT3K works with two Seattle facilities to manufacture the clothing, which is then shipped to the buyer. The website also includes a gallery of skiers and snowboarders wearing the clothes and customer reviews.

Prior to opening his own business in 2012, Marvik was a marketing coordinator for Amazon's e-commerce platform, Amazon Webstore. Marvik attributes his experience at Amazon to helping him learn how to build a direct-to-consumer customized e-commerce platform.

"Coming from a company that's so data-driven, I know our company had to be data-driven, too," Marvik says. "We look at a lot of granular things like the paradox of choice. Too many options can reduce the conversion rate so we're trying to optimize our product selections."

Having a CRM tool to keep track of customer data and sales leads is essential, Marvik adds. It's critical for companies to understand where customers are in the buying life cycle. NWT3K uses Insightly's CRM platform to organize the data fields customers fill out and Marvik credits the platform for generating $200,000 in sales leads within four months.

NWT3K is also beginning to accept bulk orders, adding more pressure on the company to provide a seamless customer experience from the online order to deliveries. Additionally, NWT3K's road map includes eventually partnering with brick-and-mortar retailers to make its apparel available to more shoppers, Marvik says.

NWT3K isn't the first online company to offer customized apparel, but providing a smooth customer experience from choosing the clothing to receiving it, differentiates the company, according to Marvik. Whereas competitors take six weeks to deliver an order, the company's average turnaround time is two weeks.

"Amazon's fulfillment centers and ability to minimize turnaround time is a model for many businesses," Marvik notes. "But customized manufacturing can still be improved and online retail experiences are changing, so we're trying to be innovative in what we do."

Online retailers like Modcloth and The Grommet have also made their sites highly interactive and visual. Modcloth encourages customers to submit photos of them wearing the retailer's clothes which it displays in slideshows and next to product reviews to give other customers a better idea of how the merchandise fits. It also offers DIY articles and the ability to communicate with a sales rep through a chat function on its website and mobile app for quick questions. The Grommet's website includes a "Citizens' Gallery," that contains photos and videos of consumers talking about their favorite products.

At the same time, many retailers are still trying figure out how to leverage experiential commerce. "Storytelling can be a powerful component of a brand experience, but we've seen companies struggle to align stories with their products, especially in mobile," says Glenn Conradt, vice president of global product marketing at CoreMedia, a web content management provider. "The obstacle is often due to organizational challenges."

CoreMediasurveyed about 140 attendees at IBM's Smarter Commerce Global Summit last year about their approach to experiential commerce. While 75 percent of businesses are discussing experiential commerce strategies, only 11 percent have implemented them. More than half (55 percent) indicated that the integration of e-commerce and marketing strategies as well as the systems that support them was a challenge. And 58 percent reported providing relevant shopping experiences regardless of channel as another challenge.

Indeed, some companies, like Refinery29, struggled to turn content combined with commerce into a lasting business model. When the New York-based company launched its site in 2005, it offered blog posts about fashion trends and other editorial content that was designed to complement the clothing and accessories that it was selling.

But 10 years later, Refinery29 evolved into a media company whose main source of revenue is advertising. "Refinery29is your resource for fashion, beauty, lifestyle and health news, and expert tips," according to the company's corporate website. The company declined to comment on its roots as an e-commerce company, but Philippe von Borries, co-founder of Refinery29, told Digiday last year that "the integration of content and commerce is really, really freaking hard."

Running a successful commerce business requires coordinating numerous areas from inventory and supply to merchandising and manufacturing, in addition to sales and customer service. And while delivering engaging content that gets customers to linger on a retailer's site is helpful, companies still need to drive sales.

But what if the website has a lot of intent data and insight into customer preferences? Marketers and retailers are anticipating the day when Pinterest, the digital scrapbooking service, will become an e-commerce platform. That day is nearly here, according to Re/Code, which broke the story last week that Pinterest is developing a "Buy" button that will be launched later this year.

More than 70 million monthly users use Pinterest to discover, share, and save images of products, making it a potential gold mine of audience data for marketers and a natural e-commerce market.

But regardless of whether retailers are engaging shoppers through Pinterest or another e-commerce site, context and value are critical, Conradt maintains. As an example, Conradt points to Kraft Mayo. "No one wakes up wondering, 'what will I do with Kraft Mayo?'" Conradt notes. "But people want to be inspired and so the company developed recipes for it and it's been a success." The bottom line, he continues, is "if you can provide content that provides value and gives people more reasons to use your product or service, you've got a perfect match."