Catalyst Connect Recap: Opening Keynote From David Spitz

April 28, 2016

CAT 051 (1)Last week, hundreds of retailers, branded manufacturers and e-commerce enthusiasts joined us in London for our Catalyst Connect event. Now that the dust has settled after the event, we’re bringing you some of the highlights and lessons learned from the day, starting with the opening keynote from ChannelAdvisor’s CEO, David Spitz.

After dishing out free Apple Watches to a few lucky audience members, David focused on technology’s rapid rate of change in today’s world, and that rate of change goes way beyond e-commerce.

When talking about how technological innovation will affect our day-to-day lives, David said it best: “We are still at the base of a very, very big mountain.”

It’s easy to be scared of the real and present challenges that retailers and branded manufacturers face as the rate of tech innovation accelerates. While it may all seem overwhelming, keeping a finger on the pulse of these industry shifts may help calm your nerves.

David offered some key predictions for what lies in store for the e-commerce industry, along with some practical advice for what retailers and brands should be doing to prepare themselves.

Prediction #1: Amazon will continue to eat the e-commerce world

Amazon is a monster, plain and simple. The Seattle-based, former bookseller continues to grow in size and gobble up more and more market share. But it’s not only growing, it’s doing so at a breakneck, accelerating rate.

According to Wells Fargo, Amazon captured more than 51% of all retail growth dollars in the US in Q4 of 2015. If that blows your mind, wrap your head around this: Amazon added $39 billion in online sales revenue last year.

But that’s not exactly news. Everyone knows that Amazon is massive.

Now, imagine that sheer size and double it. That’s right, Amazon is probably twice as big as you may think it is. According to David’s estimations, Amazon’s reported revenue for third-party sellers is underreported by up to 90%. That means that the retail dollars flowing through Amazon 1P and 3P are actually way higher.

With over 2 million third-party sellers on Amazon today, ignoring Amazon is analogous to isolating yourself on a desert island — why miss out on all of those sales dollars?

David’s Advice: What Should You Do?

First of all, join the party. Which products sell well on Amazon? Piggyback on Amazon’s massive reach and overlap your product selection with Amazon’s. Be different. Advertise unique, but non-strategic products on the marketplace. Ultimately, keep an ace in the hole. Hold back your strategic product selection for your online store.

Prediction #2: The shift to mobile will make retailer websites obsolete

Way back in the day, shopping malls were the hottest thing to hit the retail landscape — consumers could go to one single location to get [most] of their shopping done. Then, websites came along for what David referred to as “the Woodstock era of e-commerce” — everyone was happy, relatively equal and only one click away from their customers.

Then came the iPhone, turning the world as we know it on its head. How many people do you know that don’t own either an iPhone or an Android device? Exactly.

Here’s the kicker: According to ChannelAdvisor data, in Q4 2015, mobile clicks outpaced desktop clicks for the first time — and we don’t foresee that relationship reversing again. We’re officially living in the era of mobile.

The issue then becomes the fight for the “prime” mobile real estate: the home screen. Consumer journeys will become “hyper concentrated” on only a handful of apps (e.g., Facebook, Amazon, eBay), and retailers need to have a plan.

It’s already happening in China: Take the Chinese messaging app WeChat. WeChat allows you to communicate with people, but also bank, pay bills, buy cinema tickets… the app essentially becomes an entire mobile ecosystem. Incorporating features like a wallet, a messaging app and a marketplace all into one app as opposed to three eliminates friction and enhances the overall m-commerce experience.

David’s Advice: What Should You Do?

Embrace those channels that are complementing the consumer experience. See what they’re doing. Learn it. Learn how the customers of tomorrow will shop. It’s coming fast. Rate of change, remember?

You’ll have to be nimble to be successful.

Prediction #3: Consumers want their package YESTERDAY

Amazon changed the game with Prime in 2005. Then came Prime Now last year in the UK. Available in 7 cities and growing, Prime Now is disrupting the market at that blinding pace we keep talking about.

How does Amazon do all of this? It’s seemingly impossible. If you took all the trucks, all the planes, warehouses… they still aren’t enough to fulfil the logistics needs that the peak season demands. Fulfillment by Amazon (FBA) was just the beginning.

Amazon is smart, Amazon is ambitious, and David thinks FBA is the beginning of Amazon going after a $400 billion logistics market.

David’s Advice: What Should You Do?

Consumers expect immediacy. If you don’t have the ability to create your own fulfilment network, you need to work with a good 3PL (third-party logistics provider). Or use FBA.

Prediction #4: The awakening of branded manufacturers will change e-commerce

Branded manufacturers, you’re not being disrupted by other channels. You’re being disrupted by “digital.” You’ve seen this story play out before: Blockbuster and Netflix, taxis and Uber…

If you’re a brand, your distribution channels are shifting, but the product is still the same. You have to be willing to adapt and embrace digital disruption. Those that don’t become the Blockbusters of the world. Don’t be Netflix’s roadkill.

David’s Advice: What Should You Do?

As a brand, you need to get more involved. Round out your strategies and collaborate with your retailers. Invest in creating and monitoring high-quality product content. Selling on marketplaces as a first-party retailer may come later. But at the very least, make sure your strategies and your retailers’ strategies are aligned and complementary.

ChannelAdvisor Updates

David wrapped up his session by giving the audience a quick look into what we’ve been up to at ChannelAdvisor lately. Highlights included: 

  • Where to Buy: Our new Buy Local functionality for brands allows consumers to find your products on retailer websites nearby.   
  • Amazon Sponsored Products: We worked closely with Amazon to be the first to support Amazon Sponsored Products in the US. David announced that this support now extends to European marketplaces. 
  • Product Intelligence: Our newest features in ChannelAdvisor for Brands provides brands actionable insights about online assortment, merchandising and pricing across multiple online channels to ensure a consistent customer experience.
  • Digital Marketing Benchmarking: We launched Marketplaces Benchmarking last year, but now we offer Digital Marketing Benchmarking, which provides competitive data for Google Shopping.
  • Facebook and Google RLSA: Our full support for Facebook Dynamic Product Ads and remarketing lists for search ads (RLSA) makes ChannelAdvisor the one-stop-shop across these two major customer destinations. RLSA allows advertisers to adjust PPC bid amounts, ad copy and keywords based on the activity of past visitors to your website.

That closed off David’s session. Check back shortly for a recap of the Google, eBay and Amazon’s sessions from Catalyst Connect.