At the 2022 edition of CommerceNext, leading retailers J. Crew and Saadia Group sat down to answer the question, "Are Cryptocurrency, Blockchain, and the Metaverse Really Retail's New Frontier?” in a panel discussion led by Michael Scholz, VP of Product & Customer Marketing at commercetools.
“The Next Wave of Growth” was the theme at the trailblazing CommerceNext 2022 conference. As cryptocurrency, blockchain, metaverse and NFTs are capturing the imagination of retailers and consumers, it’s inevitable to consider if these trends represent real growth opportunities. And if they do, explore what eCommerce infrastructure is needed to power through these new ways of engaging customers.
During the well-attended breakout session led by Michael Scholz, VP of Product & Customer Marketing at commercetools; Sanjeev Tanugula, SVP, Head of Digital Technology and Innovation at fashion retailer J. Crew; and Nick Kaplan, Chief Growth & Innovation Officer at Saadia Group, owner of Aquatalia, Lord & Taylor, Olivia Miller and more, shared insights on how they see these new trends playing out, the importance of failing fast and what they see as the ideal eCommerce tech stack.
Prospecting new trends through the consumer lens
Understanding what’s hype and what’s a trend worth pursuing is hard work — and for a retailer, the key is to look at each trend through the consumer lens. To kick off the conversation, Sanjeev explained his first question is always, “Does it make sense to our clients?” At the same time, he also has to consider if the trend fits the company’s business model. But while Sanjeev pays attention to everything happening in the market, that doesn’t mean he’ll pounce on every upcoming trend. “Does it make sense to go after? Or does it make sense to pause and hold? That’s the approach we’ve taken at J. Crew.”
Nick expanded on that thought process, “Everything is really a cost-benefit analysis and opportunity cost measurement. It’s about thinking: are we a first-mover or is it more mainstream? It’s about when it’s time to get in.” While Nick said the Saadia Group is aware of all the trends, they avoid committing to anything too quickly, preferring to wait for the moment when “accessibility at a reasonable cost of entry” makes it sensible for the company to jump in.
How retailers rank the newest trends
While the group agreed it doesn’t always make sense to be the first-mover, there are trends worth keeping a close eye on, such as the blockchain and metaverse.
In Nick’s opinion, “The metaverse technically is something more of interest.” He explained he sees it as an avenue to build communities for Saadia’s brands and commercialize them, pointing out, “We all crave that one-on-one, and that’s a space where I think we can do that.”
Sanjeev shares a similar view; however, J. Crew looks at the metaverse more from a brand perspective than a revenue channel. But, he says, it’s still unclear whether the fashion retailer will have an actual presence in this virtual space — again, it depends on whether or not their customers will be there.
The blockchain offers a more critical opportunity for J.Crew as Sanjeev believes it could enable the brand to achieve its sustainability goals. Because the blockchain is a digital ledger that gives information that can’t be tampered with, plus has an inherent traceability aspect, he feels it has the potential to establish trust throughout the entire supply chain of a product.
When considering cryptocurrencies, it all depends on how the trend evolves and, again, if it becomes a payment method consumers expect. “If crypto becomes one of those choices in the future, that’s what we’ll offer,” said Sanjeev. Nick echoed the same viewpoint. He said Saadia Group is taking a step back before making inroads into crypto, pointing to concerns over the volatility aspect of the currency and the lack of a central authority. “The biggest advantage [of crypto] is the lack of central authority (...). But it’s also a weakness, in a way,” concluded Sanjeev.
Nick brought up that his team spends a ton of time looking at what’s happening in China — trends like social commerce, live streaming,and topical content — to inform Saadia’s overall strategy. He also pointed to the digital wallet as something worth watching. “Email doesn’t matter that much in China,” he said. While he said it’s unclear whether Americans are going to embrace it the way the Chinese have, he is hopeful. “If we can get the digital wallet and change email, which is terrible. It's like, it's an arms race to get into the inbox, and it's unhealthy for the consumer.”
With so many trends to keep track of, Sanjeev and Nick remain in exploration mode. “We feel that the metaverse, bitcoin and even NFTs are there. But on the other hand, all of that is sort of the proverbial back burner,” Nick wrapped up.
eCommerce tech stack as an enabler to fail fast
An eCommerce solution's role is to deliver agility, nimbleness — and the ability to fail fast. “The platform should not be binding. You should have the flexibility so that we can try out things,” Sanjeev pointed out, emphasizing how the flexibility of trying out new trends, even if they fail, enables retailers to stay at the top of their game.
For instance, the next frontier in fashion tech is to bridge retail with digital experiences in virtual fitting, sizing and styling. “How do you solve the sizing challenge? How do I know 32 is for me?” questioned Sanjeev. He also mentioned that none of the available solutions are mature enough — and that’s why having a modularized eCommerce solution is critical. By plugging in different components, fashion retailers can test the waters and bring the best solution to the market.
Nick agrees with this strategy, adding that it’s key to focus on SaaS and cloud-based solutions, factoring in the speed and ability to change course quickly. And while he stressed the Saadia Group is trying to be as late with implementing new trends as possible, he also asserted, “If you don’t bet, you’re done. It’s an arms race that we’re all participating in… this consumer is fickle and you’ve got to change with her to be what it is she wants, and if you don’t, you’re yesterday's news.”
No matter which trend retailers choose to put time and money into, their eCommerce tech stack has to provide an environment for experimentation and iteration that ensures they can fail fast — so they can get back on their feet even faster. And that’s something everyone agreed on.
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Manuela Marques Tchoe is a Content Writer at commercetools. She was a Content and Product Marketing Director at conversational commerce provider tyntec. She has written content in partnership with Facebook, Rakuten Viber and other social media platforms.