11 things you could apply from the European Digital Conference powered by VTEX
Though I have a solid business background proven by facts, I have also published two books which go beyond the business arena, therefore my tempation would be for you to read my business notes with your heart emotions, not just your mind algorithms.
However, the title I chose is connected with SEO laws, otherwise I would never-ever pick such a boring intro for such interesting facts.
Now that I bypassed the algorithms, let me tell you about the 11 things that would make you think and feel how the ecommerce looks like in May 2022, after 2 pandemic years and 3 months of war next to our door (to be clear - Russian invasion of Ukraine).
I was invited to attend the European Digital Conference powered by VTEX on May 5 at Crowne Plaza Hotel - this is a place I very much like because it is connected to personal and professional events from my past (not a wedding) and is at a walking distance from my place.
The European Digital Commerce powered by VTEX event has become a milestone for the entire retail industry in the region, bringing together hundreds of specialists, dozens of speakers, and hours of premium content.
Fashion, electroIT, DIY, FMCG & Grocery were just some of the trade segments that were covered on May 5th. In addition, the event brought together SEO specialists, PPC, and experts in ecommerce platforms. And the occasion to meet many professional friends that I have not seen in the past 2 years due to restrictions for in person events.
I warn you: I was tempted by chit-chatting with these people so my focus after lunch was diminished and it does not have anything to do with neither the content nor the speakers. Bear with me, I am a talkative girl, but I am also an old school kind of conference participant who takes notes in a notebook with a pen. Nothing digital.
I warn you part two: I was 15 minutes late even if I mentioned already that I was at a walking distance.
Lesson #1: Luckily, Romanians are still eating 3 times per day
The first pannel was “Leading Businesses to the Next Level” and it consisted of:
- Cristi Movilă, Eastern Europe General Manager & EMEA SVP VTEX
- Teodor Șerban, Efficiency & Projects Director Auchan Retail Romania
- Dan Ostahie, CEO Altex
- Robert Berza, General Manager Fashion Days
- Victor Răcariu, Regional General Manager Glovo
a. Changes in consumer behaviour and business adaptations after the past 2 years:
- luckily, Romanians are still eating 3 times per day:)
- we merged with Foodpanda, therefore we did not feel the external environment (inflation, war)
- average order has increased due to inflation
- customers switched from a la carte restaurants to cheaper food options (fast food, supermarket)
- good weather is affecting us (25+ degrees mean people are all out)
- delivery segment would have not evolved as it did because of the pandemic in terms of acquisition, fast increase, service testing
- no Covid restrictions for us mean staying customers, but with a decreasing recurrence as well as lower acquisiton of new customers
- increased prices for transports from China
- during the pandemic we bought higher stocks, therefore we were able to control the price increases caused by transporation increased costs
- it is mandatory to understand customer needs during these times - the demand for entry produced has fallen, showing that our customers are more informed
- increase in the food segment is obvious (for the other categories we see a roller coaster)
- smaller investments and higher spending to bring the product to the customer
- investment in technology in partnership with retailers
Lesson #2: Buy Now, Pay Later will help multiple KPIs like average order or abandon cart but also your anxiety of choosing righlty
- the stock control is very important - investment in price and marketing in order to get rid of it (therefore, more focus on your core business who keeps your customers and no investment in projects with low top of mind - cautious approach)
- easybox - 70% of Bucharest orders (delivery time 24 h)
- new service - BNPL (buy now/pay later) will soon go under Genius umbrella
- there are no spectacular changes in the portfolio
Lesson #3: Digitalisation is either for omnichannel experience (marketing included) or for creating a marketplace of your own, so zero chances for us customers to resist buying
- marketplace - you bring content all the time (business from street to district to city level, meaning what you can find in the app in Bucharest in area X is different from what you can find in the app in Bucharest in area Y)
- a new stage - we clean our database (bad rating, other KPIs), therefore we reduce our portfolio
- 2% is represented by FMCG, the rest is food and only a very small % is retail, but our future objective is the increase of retail
- for us digitalisation means omnichannel (our app should help the customer have the same experience in the shop with the one from online)
- electronic tags - real time price changing based on market fluctuations
- expansion in the small cities
- we work for our own marketplace because this is the reality of all big retailers
- digitalisation on marketing level as well
- next phase - liveshopping
- Nike shop from 5th avenue NY during Next Retail Federation event - the omnichannel experience was impressive (the app transforms itself automatically in self checkout in the shop, you can ask in the app for products to be taken to the shop changing rooms, also virtual trial, etc)
- even more important, the loyalty card can be used both for the offline and online shopping
c. Cart abandonment rate
- new dressing room (5-6 products, try them all and we take money only for what you keep)
- abandoned cart is happening only when the customer is not much convinced by the products or he/she doubts the total amount to be spent
- we target the American behaviour: you can wear an item, send it back afterwards as a second hand item (9-10% from the ecommerce goes through BNPL - buy now, pay later, it is a financing of orders)
- we have 35% conversion rate, which is a high reference for an commerce
- no cart abandonment
- for us it is very relevant to get there, to have a cart, we do not have any problem with the abandonment
- part of our company’s culture (we loose our goal if we do not do upselling)
- when we have an abandoned cart, because we have information about our customer, we can offer personalised discounted products and additional support/help/consultancy
- the financial services play an important part here: buy now, pay later. We need to push for less and less cash on the courier
- it is important to understand why that cart has been abandoned
- digital marketing combined with AI CRM help us understand the customer in the context of all his/her actions that we need to unify
- we are thinking of subscriptions for the supermarket area but we anyway have a very simple and fast reorder option with high visibility in the menu, so you can reorder what you have previously bought.
- subscription is a priority
Lesson #4: No more fake reviews (and attitude) as of May 28th, when the new Omnibus Directive comes into practice (not yet for attitude, but follow me for more tips)
f. Reviews, what % is for real
- Starting with May 28, the new Omnibus Directive comes into practice, therefore the authenticity of reviews becomes a must. So easy!
g. Education - what should you do?
- the number of projects and challenges are increasing, therefore the education is needed among specialists
- many remote specialists/talents - meaning more and more companies have access to the same talents
- due to the accelerated market increase people’s education was left behind
- we have a good practice example with the Politechnic University
- it is not enough, we are trying to bring to some schools certain specialisations (like trade schools) with the help of the education institutions and passionate people
Lesson #5: We still do not fail or we fail just “a little through this, through that, through the essential parts” - Ion Luca Caragiale, drama writer (but seriously, the traditional media is still having more power to convert and you can not make performance without awareness)
h. A failed marketing campaign example
- 3 steps pro-vaccination campaign and its importance (well done, FD, for giving this real example of failure! We should all fail more and more often)
- a year ago the marketing budget split was: 60% traditional (OOH, TV, etc), 40% digital
- 2022 marketing budget split: 60% digital (but it still does not have the power to succeed), 40% traditional
- if you do not invest in the dacă customer acquisition on top of the funnel (awareness), then it is not worth it becuase you can not make performance
- event marketing is the most difficult
i. Paying in crypto in ecommerce - how do you see it?
- very slow and with high transaction fees
- Visa + Mastercard are very ok for us
- for higher values - like buying a Tesla - it can work, but not on mainstream products (not yet)
j.What personalities do you follow, what do you read, where do you get your inspiration from?
VTEX: anything that is related to work-life balance (eg Gary Vee, Robin Sharma)
FD: Memoirs, No Rules Rules - the extraordinary organizational culture book by Netflix founder (highly recommende), Humankind by Rutger Bregman
Glovo: any interaction can help us develop
Lesson #6: When you have something to ask, do it, do not overthink!
I had two questions to ask but somehow did not ask them, so I write them here. Whoever from the panel reaches to them and actually answers them will get my book The Story of the Unicorn who Ran from the Office to Rio with an autograph - this was actually the trick of a GM’s PA to check if we read her follow-ups:
- How can you push for better courier behaviour predictibility in order to avoid so much cash (as this is the number one reason for choosing cash on delivery versus epayment)
- You are stocking up due to price increases in transporation and logistics delay - how does this meet your sustaibability objectives?
The second pannel was “Going Strong, Going Digital” and it consisted of:
- Albert Davidoglu, Chief Executive Officer Macromex
- Ioana Molnar, Owner și General Manager Magnolia Flowershop
- Ruxandra Hurezeanu, CEO/Founder Ivatherm
- Raluca Duță, Chief Marketing Officer L’oreal Romania
Lesson #7: How hard is it to enter the international market? The first customer (cut) is the most difficult (the deepest)
How was Q1 2022?
- good (the food sector was affected by inflation and product availability)
- +150% increase (delayed exports from Q4)
- Romania registered +30% increase due to digital promotion
- 40% from business comes from export
- 2 digits growth post pandemic (on digital)
- mythbusters on entering the international market: the first customer is the the most difficult
- good, the beauty industry has increased also during the pandemic, we grew 2x versus the market
- the make-up category decreased, but skin care and personal care were on rise
- the inflation and the price increases have increased the cosmetic spending
Lesson #8: Best customer insight - emotions are expressed with the help of flowers and emotions are there no mattter of pandemics and wars
- it was ok, the end of the pandemic meant a switch from online to offline (+20% growth in Q1)
- emotions are expressed with the help of flowers and emotions are there no mattter of pandemic, wars
- we launched our website in 2001 (we used to sell online 1 bouquet per week). But it is important to persevere even if you do not see results. Now we sell 50% online
- 40% from the online buyers are Romanians from DIASPORA (second best customer insight)
- the physical flower shops are rather for PR
- we have our own couriers - they cover 70% of the order over the country, we use partners only for 30%
A recent survey (but I do not remember who did it) says that 50% wish to cut expenses, but still keep their lifestyle (typical Romanian, meaning impossible)
b. Product trends
Lesson #9: young customers do not want anymore their mothers’ favourite brands - so do not try mom/daughter approach
- green, natural, transparent (in terms of ingredients), sustainable products
- R&D - France, Romania, researchers & doctors, average length for developing a new product is one year
- multitude of new brands (hundreds)
- young customers do not want anymore their mothers’ favourite brands (third best customer insight)
- the new brands that resist the competition are the ones that offer a plus in quality
- vegan products (Horeca) - 20-25% of products are vegan
- pathology - anxiety of choosing
- +20% average order increase
c. Unloyal competition
- we have not faced faked products so far
- the flowers should have some standard dimensions - by example the length of the rose stems is an index for durability. The longer the stem, the longer the flower will resist. (fourth best customer insight).
- we import our flowers from Columbia, Netherlands, Kenya, Ecuador
- we import from Canada, USA, Asia
- containers prices have risen from $ 1.500 -2.000 before the pandemic to $ 15.000
d. How do you sell online?
- own shops, marketplaces (Emag, Farmacia Tei, etc)
- Tik Tok is converting very well
- Livestreaming China - we sold 10k products in 10 minutes, but we had to discount massively. The best livestreaming in China is on Single’s Day
- the best conversion is through FB: The message is the one that stays over time, not the flowers, the flowers die (fifth best customer insight).
- if a company has manners, the marketing and PR will come after, we do not struggle to bring PR, it will come (this lady from Magnolia was a wise marketing fountain).
- two selling platforms on a VTEX solution:
1. bocado.ro (Horeca)
2. mercato.ro (Retail - proximity shops)
higher spending on both versus offline
Viviana Iosub, e-Commerce Manager at Macromex detailed both platforms in a separate presentation. Macromex is a 100% Romanian company with a length of activity of 20 years, 13.300 delivery points and 2 hubs, out of which one is the biggest refrigerating storage in Romania. Best known brands: Edenia, La Strada, Corso.
The third pannel was after lunch so start bearing with my bohemian approach (at least I am honest). The pannel was “Commerce Ecosystem - 2022 Data” and it consisted of:
- Valentin Radu, CEO Omniconvert
- Daniel Nicolae, CEo & Co-Founder Innoship
- Mihai Vînătoru, Managing Partner Digital Workforce
- Sasha Zakharenko, Senior Solutions Consultant Zendesk
a. How does the commerce ecosystem look like?
- education focus (we struggle to create an environment for the people to develop)
- bad prioritisation (as a mistake) + short termism + lack of internal alignment
b. The effect of war in the next months
- luxury focus decrease, inflation, recession
Lesson #10: Invest in your team and do not fool yourself, you are the easiest to be fooled
- focus on your client - take time to understand needs
- ecomm - invest in your team
- “you must not fool yourself & you are the easisest to be fooled”
- continue to invest in your partners
- invest in AI
- keep your customers happy, new customers are costy
The fourth and last pannel was “Rising to the Top: Entrepreneurs Journeys” and it consisted of:
- Radu Savopol, Founder 5 to go
- Adina Crăciunescu, Managing Partner, DIANA group of companies
- Mariana Constantinescu-Brădescu, Managing Partner PIATRAONLINE
Lesson #11: Listing your product in digital commerce versus retail is much faster and sometimes a hybrid channel is the answer
5 to go:
- a brand that innovate every 6 months - a new syrup flavour (hard to invent because there are already hundreds) named Makalu Sisha (Makalu is the 5th highest mountain top in the world) and Dolce Gusto capsules to follow soon
- a concept that started from a garage and now has 370 coffee shops
- we are not speciality coffee, our blend is done specially for us in Italy
- 30-35 employees
- our next opportunity - retail & retail commerce (like Starbucks, Costa and Tim did - they managed to create brands starting from HORECA)
- we hope to extend with our concept in other markets
- digital commerce - we listed our products very fast (Bolt, Glovo, Bob Concierge), much faster than in the traditional retail where things are very slow despite our huge awareness
- lesson: you do not limit yourself to only one product
DIANA Group of companies:
- 31 y.o. company, 1.400 employees
- exhibitions/fairs can not be exchanged with the digital experience
- we saw big increases for prepared meat, including beef when the cooking TV shows got popular on TV (sixth best customer insight)
- showroom in Băneasa, the exit city zone, so that it is accesible, you do not need to drive 3 hours to reach it
- 10% online sales (but in fact these are hybrid sales, cause the customer comes from digital in the showroom)
Last, but not least, the conference moderator - Alexandru Goagă, Communications Specialist Eastern Europe VTEX - was the best fit for the job.
And P.S. - Corina Cimpoca, Founder MKOR Consulting presented the results of a survey on the e-commerce market, but I will treat this topic in a separate blog post, I have already drained your energy with a long read.
Thank you, Ioana Grigore, for inviting me. It was time very well spent!
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