Four Takeaways From the D3 Conference in New York
By: Azad Sadr
We’re just back from the D3 conference in New York. Many thanks to Priyanka, Toby, and the entire EFT team for putting an amazing event together!
We had the terrific opportunity to host the most important piece of the conference: the rooftop party! We’re grateful that we were able to support peer connections between retailers, and we especially enjoyed having some good laughs about what is and what isn’t real US currency. 😉
As usual the sessions and panels were also top notch, with speakers from Target, Amazon, REI, and JD.com to name a few. In the coming weeks we’ll be writing a few in-depth blog posts based on some of the topics that were discussed. In the meantime, here’s an overview of important takeaways from the panels and speeches attended.
D3 Conference Insights
What follows are some of the major themes that I saw running through the discussions. If you would like more of the minute details feel free to reach out in the comments below.
Target, Michael Kors, Walgreens, Neiman Marcus, etc, All Agree: Omnichannel, Omnichannel, Omnichannel
Every retailer presented numbers and statistics to show how fast their omnichannel strategies are moving along. Some of the interesting tidbits included the fact that Target shipped more than 70% of its Black Monday volume through its stores last year and that 95% of Michael Kors customers can get natural next day ground delivery from their stores.
In all of the discussions a few trends were clear:
- Huge Focus on Omnichannel: Not surprisingly, omnichannel is top of mind for all these companies. They’re all making huge investments in logistics, technology, training, and physical warehouses and fulfillment centers in order to create a seamless customer experience involving all their channels.
- Stores Aren’t Just for Show: One of the biggest strategic assets that retailers have currently is their network of stores throughout the country. Unlike ecommerce giants like Amazon that have to build huge fulfillment centers to reach customers, brick and mortar retailers already have stores in most cities and areas of the country. This makes physical stores very convenient as centers for providing customers with various omnichannel fulfillment options. All of these major retailers are therefore investing a lot of time, energy, and capital into getting this right.
- Lots of Challenges: Despite the rosy statistics and upbeat strategy discussions, it’s clear that retailers still face a lot of challenges. Here are some of the most important ones:
- Stores don’t have enough stock room space to fill orders once volume passes a certain level. At some point, retailers will have to invest in more distribution centers to support their store networks. This is something that Michael Kors is already in the process of doing.
- For store employees, there’s a lot of tension that exists between in-store duties such as customer service and stocking, and ecommerce duties such as fulfilling orders and accepting online returns. Most retailers that spoke have yet to discover the proper strategy for optimizing their store employees’ time to deal with the new demands that omnichannel creates.
- Retailers are having a tough time finding capable employees to fill distribution and fulfillment center roles. Not only are they facing a tight job market, but there’s a high level of churn that retailers have been unable to alleviate.
A Lot of Brands Are Becoming D2C Retailers
It shouldn’t be any surprise that many of the brands discussed their plans for selling direct to end-customers. This is the natural outgrowth of ecommerce and dropshipping, which have given brands and suppliers the capabilities to not only reach customers but fulfill individual orders in their warehouses and fulfillment centers.
One of the most interesting brands that is moving in this direction is Nike. They said they’re going to be ramping up their D2C operations a lot and increasing their drop ship programs from both sides of the supply chain–meaning they will drop ship for retailers as well as have suppliers drop ship for them.
Nike also showed a pretty funny advertisement that got a lot of laughs. If you haven’t seen it yet, check it out here.
JD.com Stole the Show
By far one of the most fascinating presentations was by JD.com, which is one of the two largest online stores in China and Alibaba’s biggest competitor. To give you an idea of their scale, on last year’s Singles’ Day alone (“Singles’ Day” is a shopping day in China that has become the world’s largest shopping event) they pulled in $19.1 billion in revenue.
What makes JD.com extremely interesting, however, is that while American retailers are still experimenting with advanced retail technologies like clerk-less Amazon Go stores and cool technologies such as drone delivery, JD.com already has had such technologies built and running for years.
Here are some highlights from JD.com’s talks:
- JD.com is able to offer same/next day delivery for 90% of orders throughout China.
- They can do this because they control 100% of their supply chain from sourcing to last mile delivery.
- JD.com built and operates the world’s only fully automated warehouse. Take a look at it here, it’s pretty amazing!
- JD.com is now offering its supply chain and shipping logistics as a service for other retailers who want to operate in China.
- While JD.com doesn’t currently have any plans to move into the US market, America is definitely on their radar.
- JD.com currently operates limited drone deliveries in China. They have been able to send medicine to villages on mountaintops in the space of a few minutes compared to the several hours of treacherous climbing it used to take.
. . . and Amazon Shared an Amateur Blog Post
One of the most lackluster presentations of the event was Amazon’s. They didn’t share any new tech or insights, and spent most of the discussion either hitting their marketing-drone talking points, or regurgitating details about modern retail trends that most ecommerce bloggers wouldn’t have difficulty coming up with off the top of their heads. Missed opportunity for Amazon but not entirely surprising.
Here are some of the gems they shared with us:
- Global retail’s most important challenges:
- Increased rivalry
- Supply side challenges
- Customers only care about price
- Different countries have different rules and regulations
- Analytics are important
- Trends in ecommerce:
- AR is important
- Omnichannel is important
- Mobile devices are important
Okay, that’s about it for now. I’m looking forward to writing up some more in-depth material in the coming weeks. In the comments below, let me know if you have any questions or want more details about any of the points I made above. #d3newyork