Ken Natori, president, The Natori Co.

“Videos were completely controlled by us,” Natori says. “They had high production budgets and involved carefully curated and intentional content. That was the past.” 

Now, Natori says shorter, user-generated-content videos are more popular with consumers. The brand works with influencers and features some of those videos at the bottom of its homepage.  

“There’s a much greater appetite from consumers to see video not intentionally curated by the brand but more curated by other people,” Natori says. “There’s more appetite for video, and videos are more plentiful. The technology makes it much easier to post videos from a number of different sources.” 

Natori uses video commerce vendor Firework and artificial intelligence software vendor Agora for video and livestreaming content. Natori says he can record video and use Firework’s app to launch livestreams on its website. He plans to use video to give consumers a “behind-the-scenes” view of products and experiences. 

The retailer plans to work with more social media influencers in the future as well as film more instructional/styling content. The retailer also plans to give shoppers an inside look with more “casual videos,” he says. He plans to film parts of a supplier trip to the Philippines in the coming weeks to give consumers a look at how Natori’s products are sourced. 

“The technology allows us to be creative quickly and easily,” he says.  

The post Natori says user-generated videos resonate more with shoppers  appeared first on Digital Commerce 360.

Yoav Kutner

The distribution industry stands at a crossroads. For decades, the familiar model of manufacturers selling to distributors who then sell to customers has been foundational across industries. But with the emergence of digital tools that empower manufacturers to deal directly with consumers, this time-honored structure has faced deepening disruption.

While distribution remains essential, manufacturers can now own the customer relationship end-to-end with little input from intermediaries. Combined with the meteoric rise of ecommerce, this direct-to-consumer revolution threatens to make distributors obsolete. Amazon and other digital juggernauts are also building formidable logistics capabilities that threaten to undermine the function of traditional distributors.

To survive in this new paradigm, distributors must take a page out of the D2C playbook and undergo their own digital transformation. They need to reimagine their value proposition and business models for an increasingly tech-focused world. Distributors that fail to adapt risk losing relevance as manufacturers bypass them to sell directly to customers online. The choice for the distribution industry is clear: digitize or die.

The threatening dawn of D2C

D2C represents an existential threat to the traditional distribution model. Manufacturers are rapidly exploring innovative sales channels that feed directly to end users, taking cues from disruptive startups like Dollar Shave Club and Casper. These digital native D2C brands have shown that enormous success can be achieved when control over pricing, customer relationships, and end-to-end experiences is kept in-house.

For manufacturers, D2C delivers a gold mine of customer data to tailor products and personalize engagement. Combined with the explosive rise of ecommerce, producers now have direct access to vast pools of customers without the need for distributor middlemen. This trend is unlikely to peter out; between 2019 and 2022, customer-direct purchases increased by almost a third, with sustained growth forecasted through the middle of the decade and beyond.

As D2C continues to gain momentum, distributors are likely to find once-reliable clients starting to question indirect sales. This is particularly true of manufacturers who’ve sunk millions of dollars into their own digital capabilities, and, as a result, are rapidly seeking higher margins by eliminating intermediary markups.

A narrow window of opportunity 

Despite this, distribution remains essential across the majority of modern industries. Distributors provide vital value through their technical expertise, expansive product selection, and customer service. But much of this value can now be replicated or replaced through technology. Even the least future-facing manufacturers are wondering whether they need third-party distributors to the extent they once did — thanks, not least, to the sudden emergence of eye-catching alternatives.

Powerful ecommerce enterprises, like Amazon and Alibaba, have surged into the packing and delivery spaces, offering services once fulfilled solely by distribution specialists. Their expertise in digital shopping and advances in logistics allow cost-effective shipping of products — including large and bulky items — neutralizing an advantage established distribution players previously enjoyed. These digital disruptors are also beginning to match distributors in terms of technical proficiency, leveraging artificial intelligence, algorithms, and data analytics to close the knowledge gap.

For traditional distribution companies, the window of opportunity to secure a sustainable future is closing fast. But it isn’t too late for these tried-and-true providers to cement themselves as essential cogs in the ecommerce machine. To remain relevant in a rapidly digitizing world, they must recognize the need for reform, casting aside antiquated models to deliver the experiences that modern-day manufacturers — and their customers — want.

An investment worth making

Moving forward, distribution leaders must strive to deliver seamless omnichannel journeys formulated to meet fast-evolving customer expectations. Siloed channels and fractured data severely degrade these experiences, so the focus should be on unified commerce solutions spanning web, mobile, and marketplaces.

Investing in flexible, customizable B2B ecommerce platforms purpose-built for the distribution space provides a strong foundation for unified commerce, empowering distributors to blend digital efficiency with high-value account management and the other areas in which they excel.

To fortify fulfillment and logistics as customer demands escalate, distributors must also optimize supply chain operations for speed, transparency, and flexibility. They can achieve these operational improvements by digitizing warehouse management, selectively applying automation, exploring innovative last-mile delivery partnerships, and closely monitoring supplier relationships. While superior fulfillment and logistics remains a distributor stronghold, digital disruptors are advancing quickly, so established disruption players must urgently double down on this advantage before it evaporates entirely.

In both the short term and the long term, those that modernize their supply chains will gain a powerful competitive edge. However, to truly thrive in the evolving distribution landscape, distributors must expand their value proposition far beyond just moving products.

Doing so requires a realization that they shouldn’t be competing with manufacturers, but rather complementing their operations. This means providing services, insights, and specialist know-how that make them the expert distributor, an indispensable partner. With knowledge and relationships baked deeply into the customer experience, manufacturers will be less incentivized to cut distributors from the chain — especially in economically uncertain times when increasing value is imperative.

Ready to thrive 

There’s no doubt that D2C is here to stay, but manufacturers will continue to seek the services of digitally enabled distributors who provide value far beyond basic order fulfillment. That’s why, to remain competitive, distribution players must augment their value proposition by evolving into trusted advisors and strategic partners.

Getting this right relies on comprehensive digital transformation encompassing ecommerce, supply chain, and service delivery operations. Distributors that fail to adapt their business models and stubbornly cling to antiquated, unsophisticated approaches will inevitably fail.

Adapting to this new distribution reality is no small task. But it has become necessary for survival — and with the right tools and technology, it can be a remarkably painless process. With commitment to change, investment in digitization, and a tireless customer focus, distributors can reinvent themselves as next-generation enterprises ready to thrive in all market conditions — now, and in the future.

Yoav Kutner is co-founder and CEO of Oro Inc., an open-source business technology company serving B2B merchants.

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The bridesmaid dress retailer revamped its blog in Q2 2023 with a strategy, plan and one goal in mind: to have Azazie.com show up higher in search engine results, says marketing manager Keily Hernandez. 

Azazie has had a blog on its site since 2019, with search engine optimization as one of its goals as well as using it to promote giveaways and promotions without significant financial investment. But SEO wasn’t the primary focus, and the merchant didn’t have a team dedicated to managing it. As a result, Azazie did not rank highly in search results for its targeted keywords, Hernandez says. 

Now, Azazie updates the blog one to two times a week. Each month, Azazie picks a keyword to focus on, such as “bridesmaid” or “bridal gown,” and focuses all its marketing content, including social media posts, influencer content, content across the website and its blog, on that keyword.  

“We have everything point back to us as the leader of that keyword,” Hernandez says.  

This focused and integrated effort has led to a 24% increase in sales revenue attributed to organic search (which includes blog content) from April until September 2023, compared with that same period in 2022, Hernandez says. And the content is resonating with shoppers, as sales from shoppers who viewed Azazie’s blog content increased 50% from January through September 2023, compared with the year-ago period.  

Azazie is among the roughly half or so retailers that offer a blog or editorial content on their site, according to Gartner data. A Gartner analysis of 300 U.S. retailers (75 luxury retailers, 105 multi-brand retailers and 120 monobrands) in March 2023 finds that 47% of retailers have a blog or editorial content on their site, such as articles related to the products they sell, content about that category’s trends, company history or policies.  

Merchants cite several reasons why investing in editorial content can help their bottom lines, including more traffic from search engines, higher conversion rates and low return rates. But execution is key, as retailers will not see any return on their investments if they are not thoughtful and thorough with their strategies. And investments can be significant, as merchants may have to invest in internal employees to generate the content or hire outside agencies. 

Only 6% of online shoppers say blog content is an important feature for a well-designed and functional online shopping experience, according to a Digital Commerce 360 and Bizrate Insights survey of 999 online shoppers in October 2023. But shoppers put a higher value on similar content, which retailers could publish on a blog, such as how-to guides, at 19%, and an About Us page, at 12%. 

Data from research firm Forrester Research Inc. also finds that only a small subset of consumers consult a blog before a purchase. 3% of U.S. online adults who purchased clothing or footwear (online or in person), and 5% who purchased furniture or home improvement products in the past six months visited the retailer’s blog in the past month, according to data fielded between November 2022-March 2023. 

Yet, only 17% of shoppers say online retailers have met or exceeded their expectations with providing detailed product information such as origin story, history, business policies and sustainability. And only 12% said online retailers have met or exceeded their expectations with additional content such as how-to guides and blogs.  

Retail blogs boost SEO value, organic search traffic

While shoppers may not rely on blog content to make a purchase, retailers and analysts still believe it can be an important component in the online shopping journey. In fact, shoppers may not realize that a blog post was how they landed on that retailer’s site to begin with. If brands write their blogs and editorial content with search engine optimization in mind, it can have a large impact on bringing in organic traffic, says Brad Jashinsky, director analyst at Gartner.  

And organic traffic is important for Azazie. The wedding apparel retailer says about 10% of its site traffic and sales come from organic search, which includes shoppers finding its site from the blog articles. 

“I would think and I would hope that every company and every brand in every industry has a blog,” Hernandez says. “It’s kind of like the low-hanging fruit of organic content.” 

Chip Malt, CEO and co-founder of cookware brand Made In, says that roughly 25% of its site traffic comes from organic search, which includes shoppers who come to Made In’s robust blog. On average per month, its blog receives 2 million page views, and each reader views about six pages in the blog, Malt says. This shows good engagement, Malt says. On average, this is about 20% of the site’s overall page views, he says.  

What’s more, when Made In sends content-focused emails, the click-through rates are three times higher than its selling-focused emails, Malt says. Similarly, its content-focused ads on Google produce click-through rates at four to 10 times higher than selling-focused ads, he says. 

Education through content has been a part of cookware brand Made In’s strategy since Day 1, Malt says. Made In launched a blog six months prior to launching products on its cookware site and the fourth employee the brand hired was a part-time content contributor, he says.  

“Education is a part of the brand’s story,” Malt says.  

Made In sells high-end cookware that’s designed for cooking enthusiasts and is popular among professional chefs. For example, its 10-inch blue carbon steel frying pan is $109, and the brand’s average order value is $330, according to Digital Commerce 360 estimates. The blog helps to explain the value of its cookware.  

Today, the brand has 10 full-time employees on its content team, it publishes roughly 50 blogs per month and the blog ranks for 56,000 keywords within Google Search, Malt says. About 50% of these keywords are in the top 20 search terms on Google, with 25% of those on the first page of search results, he says.  

One of the top navigation tabs on MadeinCookware.com is “Learn,” where the brand publishes its founding story, recipes, care for its products and cooking techniques. As Made In has expanded its product lines to include bakeware and wine glasses, it also has added content to support these products as well.  

“If we are offering this line of cookware, we also want to keep up the pace of content. …. It’s something we wanted to do for our community,” Malt says.  

Retail blog content connects to shoppers post-purchase 

This large breadth of content distinguishes the brand from its competitors, such as All-Clad, Malt says. 

“Long term, we believe if you are shown All-Clad or Made In, and you walk out the door and you are on your own, and you went with Made In, you have all this helpful content behind you. And that makes the consumer go with us overall, because they see us as a value-add,” Malt says.  

All-Clad has a blog on its site with recipes and other product content. All-Clad did not provide a comment as of press time.  

Top online floral merchant 1-800-Flowers.com Inc. also invests in editorial content as a way to engage with shoppers, says chief marketing officer Jason John.  

It operates six blogs across its 17 brands, which include a variety of giftable products such as cookies and chocolates as well as flowers. The goal is to deepen the relationship with shoppers, so they don’t just view the e-retailer’s ecommerce sites as shopping destinations, John says. It updates each blog multiple times per month.  

“It takes us beyond one transaction and helps solidify us as a part of the customer relationship,” John says.   

1800Flowers.com addresses themes within each brand’s product assortment and customer base to appeal to shoppers. For example, topics that have resonated with consumers are about how to write sympathy cards, including pet sympathy cards, for its 1800Flowers.com blog, and articles about hosting holiday dinners for its food and gifting brand HarryandDavid.com.  

Results from retail blogs 

Web visits to its blog have increased 70% year over year, John says. Even more telling is that shoppers who view a brand’s blog content convert at a 3%-5% higher rate than shoppers who don’t. This speaks to the quality of its blogs, John says.  

“You need a North Star with content,” John says. “A lot of companies, you can tell they are putting out content to put out content, and they are putting out content for a commerce outcome. We don’t believe there is authenticity in that type of content.”  

While conversion metrics are a clear performance indicator, Made In says privacy regulations can make it difficult to track a direct conversion to a blog post, because many shoppers don’t accept cookies and may visit the site several times before deciding to make a purchase. The path to purchase becomes more muddled especially with products that are high-ticket and more considered, like Made In’s relatively pricey skillets and knife sets. Instead, Malt describes its investment in content as a “brand tax that we absorb,” meaning a cost of doing business for higher-end products.   

Besides increasing site traffic, results from investing in a blog shows up in other ways, Malt says, such as aiding in the customer journey, helping its customer service team and low return rates. If shoppers are more informed about the products they buy from reading the blog, they are more likely to purchase the right product for their needs and not return it. He points to its stainless-steel products, which have a less than 2% return rate, without sharing more. 

Roughly a third of the visits to Made In’s blog come from shoppers already on the website, and the rest from outside the site, such as search results, emails and ads. If Made In was only doing the blog for SEO purposes or completely focused on that as the goal, Malt would expect 99% of the traffic to come from outside sources. But that’s not Made In’s primary goal.  

The fact that a third is internal traffic shows that the content is providing value to shoppers as they consider the brand’s products. Instead of having an article only live in the blog section, Made In peppers relevant content throughout the site to aid in the shopper journey, Malt says. For example, on the search results page, it may surface a post about the difference between nonstick and stainless-steel cookware.  

“We believe content should be intertwined in the customer journey and are happy to have internal traffic get there,” Malt says. 

Using blog content in multiple ways is smart, Gartner’s Jashinsky says.  

“If you are going the extra mile to make great content, you need to make sure it’s discoverable, across social, across search, and product pages and search pages,” Jashinsky says.  

How retailers know what to feature in blog content

Made In surveys its shoppers via email and uses that feedback to inform its content strategy. Based on 20,000 comments, Made In determined it needed more blogs about how to care for its products post-purchase, and now publishes such articles regularly.  

“The nice part of being a direct brand is that people tell you exactly what they think,” Malt says. 

Made In’s editorial team plans the focus of its blog posts for each month. Each of the brand’s departments, such as its product, customer service and marketing teams, give input on their teams’ current priorities. For example, the product team may say that it is launching a bird beak’s paring knife that month and request at least two articles featuring the product. The customer service team might say it’s had an influx of shoppers calling in about how to season their carbon skillet and propose a video blog and step-by-step instructions on how to do this.  

“Customer service acts as a very direct line to our actual customer. So our customer service team has direct input into the content calendar,” Malt says. 

The customer service team’s input gets particularly high priority when planning the blog’s editorial calendar, as the articles they suggest can help them assist customers much faster, Malt says. For example, with the “how to season the carbon skillet?” question, instead of taking 10 minutes to write out tailored instructions for each shopper, agents can direct shoppers to a video or blog that addresses their need.  

“It’s an efficiency play,” Malt says. While Malt doesn’t have a direct KPI figure to tie to its retail blog, he knows speeding up solving customer service issues keeps agents and shoppers satisfied.  

Azazie also taps its customer service team for input on what it should include in its blogs.  

“If they have a question about a trend, we can respond and create a content strategy to that, that tying into what’s trending, and what we are also offering,” Hernandez says. 

For example, a common question shoppers call in about is sizing for a bridesmaid dress while pregnant. Azazie has a blog that provides examples and tips on this topic, but it was first published in 2016. So, the content team refreshed the blog with examples of Azazie’s current maternity dresses and relevant links to its products. The customer service team refers to this blog while helping shoppers and directs shoppers to read it.   

Azazie also looks to any interactions it’s gotten on social media and trends in the bridal industry to inform its content strategy.  

The blog is under the purview of its digital marketing team, and Azazie also employs an SEO consultant to help determine its content and execution. Overall, the blogs that gain the most traffic and lead to the most sales are the ones that are integrated into its overall marketing strategy and are tied to press releases and influencers, she says.  

“It’s a lot of moving pieces and work, in order to put a campaign behind a keyword, but those are the most successful, the ones with a content strategy,” Hernandez says.  

Involving multiple departments in content creation will serve retailers well, Gartner’s Jashinsky says. Retailers would also be wise to track which types of content shoppers click on, and use that information to personalize product recommendations and for ad targeting. This is a way to gather first-party data directly from the consumer, which is especially valuable now that cookies that track shopper behavior across the web are increasingly being phased out, and can greatly benefit retailers in the long term, he says.  

If retailers do decide to make a focused effort on improving SEO through blog content or guided selling tools like a quiz to match shoppers with suitable products, they should expect it could take a year or two to see results, not months, Jashinsky says.  

“We always tell clients, this is not something you can get up and running in a week or month,” Jashinsky says. “This takes many months to get up and running, and takes a year or two to start to see significant payout. So you really need to make sure you have a long-term strategy and you are ensuring you reallocate this content as many places as possible to make sure that investment pays off.” 

For something like a quiz that guides shoppers through a series of questions and links to relevant product pages, retailers should expect to pay thousands to tens of thousands of dollars to a vendor to build it, Jashinsky says. But to do an editorial program at scale — which may take a team of writers to publish content daily and collaborate with different teams, plus the technology to plug into personalization software — that could take hundreds of thousands of dollars to millions, he says. 

For Made In, these marketing costs show up as the salaries for 10 employees dedicated to digital content instead of spending these dollars on ads. Similarly, the cost of the blog for Azazie shows up in its marketing staff resources. 1-800-Flowers also has an editorial staff that “fluctuates” depending on the time of year, John says without revealing more. 

Retailers that do strategically invest in content often see an increase in traffic from organic search, and small increases in basket size and conversion rates for shoppers that engage with this content, Jashinsky says. This, of course, varies by how well the content strategy is executed and product category.  

“Whether you are selling online or in-store, it is a pretty cost-effective way to increase SEO and increase conversion rates, and typically almost every retailer is already creating content and already has a lot of these pieces in other parts of ecosystem,” he says.  

The post Retail blogs can deliver sales but only with a strategic plan appeared first on Digital Commerce 360.

Kris Harrington

To remain competitive as the business landscape continues to evolve, it’s absolutely necessary for manufacturers to keep up. Including digital tools in your strategy for 2024 is a crucial step toward securing future success. It’s not an option, but a necessity if you want to stay ahead of the game.

This article will explore the reasons why incorporating digital tools is so critical for your future manufacturing success.

Catering to the New Generation of Customers

Millennials and Gen Z already make up 45.5% of the US labor force, and that number will only grow. This new generation of customers, often referred to as digital natives, are redefining the marketplace. These tech-savvy individuals are accustomed to seamless online experiences and expect the same from the products they purchase. If you fail to provide digital tools, you risk losing out on this substantial customer base. Whether it’s online product configurators, ecommerce, or digital parts catalogs, these tools can enhance the customer experience and attract a younger, digitally driven audience.

Mitigating Financial Risk

Manufacturing is a competitive industry; not keeping up with technological advancements can have financial consequences. Investing in digital tools might seem like a financial commitment, but the long-term benefits far outweigh the costs. Streamlining processes, reducing errors, and increasing sales are just a few of the financial advantages that come with adopting digital tools. In contrast, resisting digital transformation can lead to inefficiencies, higher operational costs, and ultimately, financial risk.

Maintaining Market Share and Customer Base

As digital tools become more commonplace in the manufacturing industry, companies that embrace them gain a competitive edge. Staying relevant in the market requires staying ahead of the curve. 60% of B2B customers find buying products online more convenient than going through traditional channels. So those manufacturers who don’t adapt to digital commerce risk losing market share to competitors who offer a more interactive, digitally enhanced experience. Furthermore, customers may start to associate a lack of digital tools with outdated products and services, which could result in a loss of trust and loyalty.

Balancing Digital and Personal Touch

It’s important to note that while digital tools are crucial, they should not replace the personal touch that some of your customers may prefer. While a growing number of consumers enjoy the convenience of online interactions, some still value human connection through phone calls or emails. A well-rounded sales and service strategy should cater to both preferences, offering options for customers to engage digitally or through traditional means … meeting customers where they are on their own digital journey.

In conclusion, as we enter 2024, it’s important to recognize the significance of including digital tools in your plans. Failing to do so puts you at risk of missing out on a new generation of customers and exposes you to financial vulnerabilities. To secure market share and maintain customer trust, there should be a balance between digital innovation and the personal touch, ensuring a seamless and satisfying experience for all.

Embracing digital tools is not just an option — it’s a necessity for anyone looking to thrive in the ever-evolving business landscape.

Kristina Harrington is the co-founder and CEO of GenAlpha Technologies, which provides digital commerce technology for manufacturers. Prior to GenAlpha, Kris worked for more than 10 years in leadership positions at two large multinational original equipment manufacturers, Bucyrus International and Caterpillar, supporting the mining industry. In her various positions, she worked with internal stakeholders, dealers, and customers to deliver business results both in aftermarket and equipment sales. She can be reached at kharrington@genalpha.com.

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The post Why manufacturers can’t ignore digital tools in 2024 appeared first on Digital Commerce 360.

Nike ranks No. 9 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers.

Nike’s digital retail strategy

Chief financial officer Matt Friend said Nike consumers spent more time in brick-and-mortar locations in the quarter.

“But 90% of their shopping journeys are starting with digital,” Friend said. “And so we continue to believe that our digital and physical strategies of serving consumers are the right strategy to serve demand as we look forward.”

In North America, Nike Digital sales grew 4% in the retailer’s first quarter. Nike Digital refers to sales made through the retailer’s websites and apps.

At the same time, Nike Digital sales in Europe, the Middle East and Africa decreased 2%. And they decreased 3% in Asia Pacific and Latin America. In Mexico specifically, though, Nike’s “digital business delivered double-digit growth,” Friend said, without revealing more.

“We’ve increased the size of our supply chain in the last few years to be able to address the growth that we’ve seen in our business, both overall and in digital,” Friend said.

To improve that efficiency, he said, Nike has reduced digital split shipments so consumers don’t get two deliveries for the same order. It has also invested in “regional service centers that are closer to where consumer demand is.” In other words, it has improved its fulfillment by opening distribution centers in strategic areas.

Nike Digital sales in China

In the Greater China region, Nike Digital sales grew 6% in Q1. The footwear brand held a three-day sports festival called Sportchella in China.

“The team amplified the impact of the festival by partnering with Tmall to create the first Nike Super Brand Week, which drove more than 2 billion impressions,” Friend said. “And this partnership seamlessly integrated the events with a digital shopping journey that generated very strong consumer response and engagement.”

Tmall is an Alibaba-owned marketplace, along with Taobao. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by gross merchandise value. Tmall ranks No. 2.

Nike App increases Nike sales

The Nike mobile app had “strong growth,” Friend said. Nike mobile app traffic had high single-digit growth in the quarter, he said.

“We saw member activity continue to increase both in terms of engagement and buying behavior and a higher basket size, a higher AOV,” Friend said.

That drove “sustained momentum on the Nike mobile app” as loyalty members increased their buying frequency in the quarter, he said.

“We continue to see a growing structural advantage as more consumers start their shopping journeys with us on mobile,” Friend said.

Nike Direct revenue

Friend said member engagement through Nike Direct grew double digits in its Q1 compared with the year-ago period. Average order value through Nike Direct sales increased, but he did not specify how much.

Nike Direct refers to the retailer’s direct-to-consumer sales (online and offline). It grew 6% year over year in the first quarter.

In North America, Nike Direct grew 7%, led by 11% growth in physical store sales. Nike Direct sales grew 10% in China. They grew 6% in Europe, the Middle East and Africa, and 3% in Asia Pacific and Latin America.

How much does Nike make in a year?

For the fiscal first quarter ended Aug. 31, 2023, Nike reported:

• Revenue grew 2% to $12.94 billion, from $12.69 billion in the year-ago period.
• Profit also grew 2%, to $5.72 billion from $5.62 billion the year before.
• Similarly, Nike Digital sales grew 2% year over year in the quarter.
• Nike Direct, or the retailer’s direct-to-consumer sales (online and offline), grew to $5.4 billion. That’s a 6% year-over-year increase.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s Nike report.

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The launch into Target stores was 1.5 years in the making, Holloway says. Since the start of 2023, Bala has sold its products online at Target.com, which was a key component to the in-store launch, Holloway says.

“It’s the reason we are not launching in 200 stores but almost every store,” she says.

Overall, Holloway is excited for Target’s large audience, which will give Bala a reach that paid online media would not allow the brand to achieve, she says.

“For us, Target was always the North Star,” she says.

Overall, for Bala’s businesses, roughly a third of sales are wholesale. A third are from the Amazon marketplace, and a third are from its direct-to-consumer website, ShopBala.com.

“With such a big partnership with Target, next year could look completely different,” Holloway says.

Target is No. 5 in the 2023 Digital Commerce 360 Top 1000.

Influencers promote Target launch

Since Q2 2022, Bala has worked with influencers to promote and sell its products. It calls them ambassadors. The brand has more than 400 ambassadors who use Bala products in their workouts and post about the products on social media.

“We reach audiences we otherwise wouldn’t have,” Holloways says about working with influencers. “It directly impacts our growth. It’s a mini machine of sales people and marketers.”

Influencers receive a coupon code they can share with their followers. Then, the influencers receive a commission on those sales. The commissions range from 5%-10%, says Brooke Konzelmann, Bala’s head of public relationships and partnerships.

For the Target launch, Bala contacted 10 of its highest-performing influencers to post about the launch and promoting the three SKUs that Target will sell in Target’s exclusive color, Ocean. For example, a mom posted a workout routine of how to use Bala’s products for a post-partum Pilates workout, and then linked to the products to buy on Target.com.

Bala’s profit margins are typically higher if shoppers buy directly from them versus a wholesaler. But this isn’t always the case, Holloway says.

“These days, customer acquisitions costs are so high,” she says.

In fact, 59% of retailers rank costs/profitability of campaigns as their biggest marketing challenge, according to a Digital Commerce 360 survey of 97 online retail marketers in May 2023.

So, while shoppers may spend more money on Bala products when shopping directly on shopBala.com compared with a wholesaler, Bala still has to factor in the cost to get that shopper to its direct-to-consumer website. It doesn’t have to factor that cost in for its products sold at Target.

Balancing sales channels

But to survive as a business, Bala needs both wholesalers and direct-to-consumer, she says.

Digitally native brands have historically focused on sales through their direct-to-consumer websites. But like Bala, more have diversified into selling in other channels. Of the 80 digitally native, vertically integrated brands Digital Commerce 360 ranks in its Top 1000, 42 of them sell on a marketplace.

Overall in 2023, Bala plans to sustain the large growth its had during the pandemic. Its goal is to continue to have sales growth in 2024, Holloway says.

For sporting goods retailers in the Top 1000, online sales as a category grew 0.04% in 2022. That’s well below the Top 1000 growth rate of 5.1%, according to Digital Commerce 360 Research.

“Target is going to play a huge role in that growth because if the partnership goes well, Target will easily be our biggest retailer,” she says. “And then, sky’s the limit.”

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Kris Harrington

In today’s digital age, ecommerce has become an essential tool for businesses across industries. For original equipment manufacturers (OEMs) in the manufacturing sector, implementing ecommerce presents a multitude of benefits. This blog post aims to guide OEMs on how to write a persuasive business case for integrating ecommerce into their operations. Specifically, we will explore how digital self-service tools, such as ecommerce platforms, can significantly reduce administrative burdens and drive business growth.

Reducing Administrative Tasks:

One of the primary advantages of implementing ecommerce in a manufacturing business lies in the substantial reduction of administrative tasks for various teams. If you were to take a close look at the percentage of time your customer-facing teams are spending on administrative activities, you will likely find it is anywhere from 40% to 60% of their daily activity. Efficiency gains in administrative tasks translate into significant time and cost savings. Let’s examine the primary areas where these benefits manifest in an equipment and parts business:

1. Customer Service: By offering a digital self-service platform, OEMs empower dealers and customers to find product information, track orders, and access support resources independently. This streamlined approach reduces the volume of routine inquiries and frees up customer service teams to focus on more complex issues and proactive customer engagement.
2. Technical Service: ecommerce platforms can provide comprehensive product documentation, troubleshooting guides, and self-help resources. By enabling customers to resolve technical issues independently, OEMs can reduce the strain on their technical service teams, leading to improved response times for critical cases.
3. Sales Teams: With ecommerce, sales representatives can spend less time processing manual orders, answering calls or text messages for price and availability, or fielding questions regarding when an order will ship.  They will spend more time engaging in value-added activities like building customer relationships and driving revenue growth. Automated order management and self-service capabilities empower dealers and customers to place orders directly, reducing the administrative burden on sales teams.

Business Growth Opportunities:

While the administrative benefits of ecommerce are compelling, the true power of this digital transformation lies in its ability to drive business growth. Let’s explore how ecommerce can unlock growth opportunities for OEMs and aftermarket organizations businesses:

1. Product Recommendations and Upselling: Ecommerce platforms equipped with recommendations can help organizations analyze customer behavior, purchase history, and preferences to provide product suggestions (like kits and product upgrades). By leveraging upsell and cross-sell functionality, OEMs can increase average order value and revenue per customer. In traditional environments where call and email volumes are high, it is very challenging to be proactive in this manner for every opportunity and customer.
2. Serving Long Tail Customers: Long tail customers may have lower purchasing volumes individually but collectively represent a substantial market opportunity. Digital self-service tools enable manufacturers to efficiently reach and serve long-tail customers who may not warrant extensive personal attention from sales teams. By offering a user-friendly ecommerce platform, OEMs can ensure these customers have access to product information, support resources, and a seamless purchasing experience from anywhere in the world. Most often, these customers are better serviced through ecommerce as getting to them can cost both time and money.
3. Optimized Pricing Strategies: Ecommerce platforms allow manufacturers to implement consistent pricing strategies, offering personalized discounts, tiered pricing, or promotional campaigns. These pricing capabilities, coupled with data-driven insights, enable businesses to maximize margins and increase revenue.
4. Improved Inventory Forecasting: By implementing ecommerce enabled with a good analytics engine, OEMs can analyze search trends to determine what customers are searching for but not ordering. If these orders are lost due to no product availability, planners can make adjustments to forecasted demand to ensure the right inventory is on the shelf. In the aftermarket, it is commonly known that inventory is often more important than price when equipment is urgently required to get back to work.
5. Faster order-to-cash process: By providing customers with a self-service online platform, manufacturers enable them to browse equipment and parts catalogs, place orders, and make payments seamlessly. This eliminates the need for manual order processing, reducing the potential for errors and delays. With automated order fulfillment and integrated payment systems, manufacturers can accelerate the order processing timeline, leading to quicker order confirmation, shipment, and invoicing. Ultimately, the faster order-to-cash cycle improves cash flow, enhances customer satisfaction through prompt order fulfillment, and drives overall operational efficiency.
6. Enhanced Customer Satisfaction and Loyalty: A well-designed ecommerce platform offers convenience, self-service capabilities, and a seamless purchasing experience, leading to increased customer satisfaction. Satisfied customers are more likely to become loyal, repeat buyers, fostering long-term relationships and generating sustainable revenue streams. For OEMs, a better aftermarket customer experience translates into purchasing your whole goods again in the future. The annuity from a great customer experience cannot be understated.

Building the Business Case:

When constructing a business case for implementing ecommerce in a manufacturing business, it is crucial to highlight the quantifiable benefits and tie them back to the organization’s strategic goals. Consider the following points:

1. Cost Savings: How much time is your customer service and sales team spending on administrative tasks today? Calculate the potential time and cost savings resulting from reduced administrative tasks across customer service, technical service, and sales teams. Emphasize the efficiency gains and the resulting resource reallocation.
2. Revenue Growth: Demonstrate the potential revenue growth opportunities by leveraging ecommerce, including increased average order value, expanded customer base, optimized pricing strategies, better inventory management, faster order-to-cash, and improved customer satisfaction leading to customer loyalty.
3. Competitive Advantage: Highlight how ecommerce can give your manufacturing business a competitive edge by meeting customer expectations for digital self-service, personalized experiences, and convenience. Discuss the potential risks of falling behind and potential loss of market share.
4. Long-Term Viability: Articulate how embracing ecommerce aligns with industry trends, evolving customer preferences, and the shift toward digital transformation. Illustrate the potential risks of not adopting ecommerce and the benefits of future-proofing your business.

In conclusion, implementing ecommerce into your customer support processes brings significant benefits, particularly in terms of reducing administrative tasks and driving business growth. By streamlining customer service, technical service, and sales team processes, OEMs can unlock efficiency gains and allocate resources strategically.

Additionally, leveraging ecommerce enables revenue growth through product recommendations, improved service to long tail customers, optimized pricing strategies, faster order-to-cash, improved inventory turns, and increased customer satisfaction and loyalty. By constructing a well-crafted business case that outlines these benefits, OEMs can secure the necessary investment for implementing ecommerce and position themselves for success in the digital era.

Kristina Harrington is the co-founder and CEO of GenAlpha Technologies, which provides digital commerce technology for manufacturers. Prior to GenAlpha, Kris worked for more than 10 years in leadership positions at two large multinational original equipment manufacturers, Bucyrus International and Caterpillar, supporting the mining industry. In her various positions, she worked with internal stakeholders, dealers, and customers to deliver business results both in aftermarket and equipment sales. She can be reached at kharrington@genalpha.com.

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But with the new generative artificial intelligence tools available to brands, it could be “10 to 100 times faster than the manual process for image creation,” Perino says.

“That’s a great opportunity to do something quickly versus having to wait for a photoshoot or having to use stock images,” Perino says.

But right now, Perino is not confident generative AI is ready to create images from scratch for its brand. For example, if the brand were to say, “create a Ghirardelli logo,” Perino is doubtful the AI would get the logo exactly right.

And getting it exactly right is critical.

“We have very high expectations for how our images to look,” she says.

Where Ghirardelli Chocolate Co. is currently using generative AI is for editing images on its product detail pages. On a recent photo shoot for its new no-sugar-added baking chips, the brand used generative AI to remove part of a napkin in the image and fill in the background with a part of the product’s bag.

Ghirardelli uses AI to decide how to tweak product images

But editing is as far as Ghirardelli will let the generative AI create. The brand will, however, use artificial intelligence to help guide its decisions about what images should look like.

Since Q2 2023, the brand has used image-scoring software Vizit to evaluate its images. Vizit uses artificial intelligence to analyze how impactful an image is and to catalog the attributes of the image. Based on publicly available metrics, such as likes or shares on a social media website, Vizit can analyze and score an image, and suggest tweaks.

The technology is helpful when deciding which images to use on product detail pages and the changes Ghirardelli might make so the images perform better, Perino says. For example, Vizit’s technology scored many of its closely cropped baking images higher than those that were zoomed out, and so those are the ones Ghirardelli will use on its page, Perino says.

Instead of having a 2D static image of its chocolate chip bag, another tweak Vizit suggested was to have the image on the package “burst” off the package for more of a 3D look. In the same image, Vizit also suggested to make the text larger for “12 oz.” With these tweaks, Vizit scored the image at a 95, meaning it has a high likelihood of converting shoppers, compared with the image without these changes, which it scored at a 6.

Vizit’s AI technology scores Ghirardelli’s package image above lower compared to the one below with the chocolate chips bursting off the package and the 12 oz. bag size in a larger text size.

Perino did not share any data about increases in conversion since using Vizit’s technology. Vizit says its clients typically have a 15%-25% increase in conversion rate when using the images it suggests, says CEO and founder Jehan Hamedi. Hamedi did not share how many clients it has, but in 2021, he told Digital Commerce 360 that Vizit has less than 100 brands that use its technology, including padlock products MasterLock, shoe brand Reebok, and food brands OceanSpray, Tyson, Cliff Bars and Mars Petcare.

Brands jump on using AI technology

While Vizit’s technology doesn’t use generative AI, it uses artificial intelligence to help brands more effectively and more efficiently increase sales, Hamedi says.

“Where the rubber really meets the road for these businesses is how AI and these tool sets actually help drive sales,” Hamedi says. “Because at the end of the day, every brand is in business and exists to sell products and create positive outcomes.”

With the popularization of OpenAI’s ChatGPT generative AI chatbot, Hamedi says many in the ecommerce industry are talking about AI and becoming more educated on how AI can be practical for businesses.

“It’s created urgency among our customers about how to adopt AI because it’s a new arms race,” Hamedi says.

Ghirardelli’s future applications of generative AI

Ghirardelli has plans to use generative AI in other ways in the future, such as  creating product copy on the product detail page and updating product copy with relevant search engine optimization (SEO) words and for creating images, Perino says.

“We are excited about artificial intelligence as a digital technology and how can it help us be faster and more nimble, and how do we update, create and improve our content,” Perino says.

For example, Ghirardelli wants its product detail pages to be updated with seasonal SEO words, such as chocolate for Halloween, Christmas, Mother’s Day and graduation. Today, the brand manually updates this copy to ensure the detail pages can show up high in search results.

Ghirardelli, however, finds that generative AI is not yet refined enough to have mastered brand voice and tone, and it is waiting until it improves before having a tool write copy to go live on its site.

“We’re excited,” Perino says. “It’s such an interesting time with AI right now, but it needs to be tempered with a bit of caution and guardrails.”

Brands should use caution with generative AI right now

That’s particularly true for a food manufacturer like Ghirardelli, given strict government regulations about food and beverages. For example, Ghirardelli can’t call some of its products that might be commonly referred to as “white chocolate,” because they do not contain cocoa and are not technically chocolate. Instead, it labels products as “white baking chips” or “vanilla flavored.” Perino isn’t confident that generative AI would understand this distinction.  

At this early stage of generative AI, brands should have a cautious approach to using the technology, says Kassi Socha, director analyst, retail, at research firm Gartner. If brands are using generative AI today in their business to create content, she suggests still having manual oversight before anything is published.

“Generative AI can suggest copy and suggest opportunities, but there still needs to be a team in place to validate some of the outputs,” Socha says. “With any machine learning or artificial intelligence, it’s only as good as the inputs, and it take time to optimize and learn.” 

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“These tools are great — but, caveat — we found they don’t quite meet our needs for a number of reasons,” says Dean McElwee, director, global ecommerce collaboration at The Stanley Black & Decker Company.

Stanley is looking for ways to speed up creation and optimization of product detail page content for its 200,000 SKUs. For a human to do this work, it takes about one hour per product detail page, McElwee says. The goal would be to have this reduced to about 10 minutes, which would mostly be a human validating the content and checking with the brand’s legal department for any flags.

Stanley Black & Decker’s AI product description generator pilot

The pilots looked at generative AI vendors Jasper.AI and Copy.AI side-by-side in creating product descriptions and detail page content for 10 different categories across a mix of its brands in English, Spanish, French and Portuguese. Stanley measured the performance across a few factors including accuracy, readability, tone of voice, style guidelines, legal parameters and usability. Neither tool scored perfectly, and each had a few errors across all the measured categories, with many errors in the tone of voice and style guidelines categories.

For example, Stanley Black & Decker has several brands, each with its own audience, including its do-it-yourself-focused brand Black & Decker, and its professional power tools brand Dewalt. The Dewalt shopper wants information quickly about how the tool will work and a quick demonstration, while the Black & Decker shopper needs more information, education and inspiration. The AI tool created content that did not match the tone of voice of each specific audience, such as using exclamation points for Dewalt shoppers, McElwee says.

“These tools don’t really understand nuance and tone of voice,” McElwee says. “Even if we were to use them, we need to go in and check tone of voice and in some cases, rewriting a large portion, which negates the use case of speeding everything up.”

AI product page generates needs to create country-specific content

How the tool translates content is also important to the global company. Even if the language is the same, countries have specific terms for words that are important when describing how products work. For example, in the U.S. the term for the concrete where pedestrians walk is “sidewalk,” and in the U.K. the term is “pavement.” When describing how to edge grass, the merchant needs to use the correct term in the product description.

Using the correct term also greatly impacts SEO. A U.S. shopper looking for a weedwacker, will not search for a “string trimmer” or a “strimmer” which is what shoppers in the U.K. and Ireland call this product.

If the term “weedwacker” is not consistently used on the page, the product will not show up high in search results in Google or on a retailer’s website.

“When people search for things on the internet, it’s unbranded normally with a category-based descriptor,” McElwee says.

Country-specific content is also important for shoppers when it comes to units of measure, including voltage, which matters when shopping for tools. The AI tool would need to learn that even if the product is the same, the language would have to be different based on the website.

The manufacturer also ran into issues with what it would call “claims.” For example, the tool would generate content such as, “These are the best ear pods and they will last longer.” That type of content would be considered a claim, and Stanley’s legal department would not approve that content, McElwee says.

Stanley Black & Decker continues to look for a generative AI product page tool

Because of all these issues, the manufacturer is going to continue looking for a generative AI vendor that could help it efficiency optimize its product detail pages. An optimized product detail page (PDP) will ensure that the keywords on the page have high ranking for search engine optimization, and the text provides shoppers with a clarity of how the product works, McElwee.

Stanley Black & Decker is among the 5% of retailers that are using AI and it is not meeting their expectations, according to a Digital Commerce 360 retailer survey of 97 retail marketers in May 2023.

Of Stanley Black & Decker’s 200,000 SKUs, McElwee estimates only 5-10% of them are optimized. While that sounds like a small portion, that small number of SKUs is responsible for roughly 80% of its revenue, he says.

Generative AI would help free up more if its copy writers to oversee the tool and get more pages optimized. If more of its product detail pages are optimized, that translates to more revenue, he says. He does not believe it would mean a reduction in headcount.

“We still need a human to check for tone of voice, put it in through legal,” McElwee says. “It’s quite specific and nuanced to our brand and where they are sold in the world. … I hope it might work faster, hopefully get more done, more efficiently.”

There is not a set budget for implementing a generative AI tool. It’s too early what a tool like this would mean for conversion rate impact, he says.

Stanley Black & Decker’s generative AI future

One generative AI vendor the Stanley Black & Decker is looking at piloting next creates and generates results that are more based on that brand’s website content. In contrast, the previous vendors were fed website content, but also relied on other publicly available web content that OpenAI fed into the ChatGPT language model.

While McElwee is hopeful about the technology being useful for its business, he is realistic about its potential.

“We’re going through the Hype Cycle,” McElwee says about research firm Gartner’s methodology about evaluating new technology.

He says generative AI is somewhere between peak of inflated expectations and trough of disillusionment. Meaning, many are excited about generative AI, but soon executives will realize that it can’t solve every imagined use case for their business.

“It’s still immature,” he says.

In a recently published blog, Gartner places generative AI for sales at the peak of inflated expectations.

Gartner places generative AI for a sale application at the peak of inflated expectations on its Hype Cycle for revenue and sales technology. Image courtesy of Gartner.

McElwee estimates that it will be 18 months before Stanley Black & Decker is actually use generative AI in its business.

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• Hospitality
• Corporate wellness
• Multi-family residential
• Education
• Health care
• Gyms
• Community wellness

Peloton says it will use the new program, Peloton for Business, to offer equipment and content-based solutions to B2B customers as part of its commitment to empower anyone, anywhere, anytime.

Peloton for Business

The launch of Peloton for Business comes about three months after the manufacturer launched a new marketing campaign to revitalize its brand by shifting the perception that Peloton equipment is only for in-home use. Instead, the new campaign’s messaging will position Peloton as being accessible to fitness enthusiasts of all levels and ages.

With Peloton for Business, commercial clients can provide their employees unlimited access to a Peloton Bike, the Peloton app — which provides access to Peloton instructor-led classes across myriad exercise disciplines — preferred pricing on Peloton equipment, and unique corporate engagement experiences as an employee benefit.

Unlimited access to Peloton bikes

The Peloton app typically costs as much as $24 a month, depending on the options for which users sign up. Commercial clients can also use unlimited access to Peloton bikes as a way to allow their customers to use the equipment free of charge in hotels, multi-family residential gyms, community wellness centers, as well as corporate office gyms and campus recreation facilities.

Peloton for Business will also provide commercial clients access to enterprise-level partnerships that deliver exclusive programming and offers for the audiences of partner brands and organizations. Currently, Peloton for Business is available in the United States, Canada, United Kingdom, Germany, and Australia.

Peloton says that, worldwide, 7.5 million riders have used a Peloton bike in a commercial setting the past 12 months. In addition, more than 93% of Peloton’s commercial clients that offer Peloton Corporate Wellness as an employee benefit have renewed the benefit.

Peloton personnel

Greg Hybl, SVP and general manager, Peloton for Business

As part its commitment to B2B sales, Peloton hired former American Express Co. veteran Greg Hybl as senior vice president and general manager of Peloton for Business. Hybl brings more than 20 years in the strategic partnership, commercial, and business development spaces.

“Our goal is to be a solution-oriented partner that provides customizable options for each client’s unique needs, regardless of a company’s size,” Hybl says in a statement. “By offering both holistic and individualized solutions, we can now widen our client base to include small and mid-sized organizations, in addition to the larger enterprise businesses we currently serve.”

Peloton’s commercial clients represent a variety of industries and sizes. Commercial clients include employee benefits management platform provider Sequoia, hotelier Hilton, the YMCA, Volvo Car USA, and file-hosting service Dropbox.

Seqouia recently launched Peloton in its Wellbeing Bundles, an invite-only network of curated health and wellness vendors. Sequoia clients now have the opportunity to offer Peloton’s classes and corporate engagement experiences to their teams.

“In our pursuit to provide our clients with the most innovative wellness benefits, Peloton for Business was a natural progression as it offers the opportunity to provide employees with access to world-class fitness and wellness content anywhere, anytime, and enables team members to feel more connected to each other,” Kaleana Quibell, Seqouia’s vice president of Wellbeing, says in a statement.

Hilton expands Peloton deal internationally

In October 2022, Hilton began adding Peloton bikes to fitness centers at its properties in the United States. Hilton has since expanded the agreement to properties in Puerto Rico, Germany, the United Kingdom, and participating properties in Canada. Hilton has deployed about 5,800 Peloton Bikes at its properties in those countries and Puerto Rico.

“We know that wellness is a top priority for travelers around the world,” Amanda Al-Masri, Hilton’s vice president of global wellness, says in a statement. “And we have delighted so many guests with this partnership.”

The YMCA is expanding its partnership with Peloton to deploy Peloton bikes at select locations through a new agreement with YMCA associations in San Antonio and Chicago. The YMCA will pilot an integrated hardware and app experience in dedicated Peloton spaces within their fitness facilities in those two cities. The pilot aims to increase accessibility to fitness through industry-leading content, experiential activations, and community events.

Volvo Car USA is partnering with Peloton to improve, reward, and support its employees’ health goals in and out of the office. It provides access to the Peloton App, a Peloton All Access Membership, and discounts on hardware including the Bike, Bike+, Tread, and Guide. The automaker has also placed Peloton Bikes in its existing employee fitness centers.

Dropbox, which partnered with Peloton during the Covid-19 pandemic to create a full-service wellness platform, provides employees in the U.S. access to the Peloton App, Peloton All Access Membership, and discounts on hardware including the Bike, Bike+, Tread, and Guide.

Peter Lucas is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.

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