Consumers are really switching to making purchases via Instagram and TikTok
The pandemic accelerated the shift to omnichannel purchasing—the tendency for consumers to purchase items through Instagram, TikTok, or a brand’s website, on top of visiting a traditional brick-and-mortar shop.
That was the takeaway from Fortune’s Reimagining Customer Experience virtual summit on Monday with top executives from brands such as Stitch Fix, Build-A-Bear, and Signet Jewelry.
Most brands were already aware this was coming down the pike, but hadn’t fully embraced until every American consumer was suddenly trapped at home with fewer opportunities to spend money in person.
“Our research tells us 90% of sales start on a mobile phone,” said Fran Horowitz, CEO of Abercrombie. But here’s the catch. Shoppers aren’t just typing “Abercrombie” into a search bar and aiming to shop from a brand they know and trust.
Instead, buyers are catching wind of fashion trends on social media, then clicking through an influencer’s or friend’s page to purchase.
“Social commerce and social selling is the future,” Horowitz added. “That’s where this consumer is headed, and you have to make sure you’re on these channels. The consumer believes their customer more than they believe the brand anymore.”
Other companies saw unexpected growth from consumers looking to make connections with loved ones from afar. Build-A-Bear CEO Sharon Price John said that was the case for a company that has long considered itself a mall-based, experiential retailer but saw triple-digit growth in 2020 as it leaned into online offerings. Build-A-Bear launched a 3D bear builder, which is an animated experience in which you can build a stuffed animal from your phone, and the company soon learned its shopper demographic was changing.
“Now 20% of our sales are online,” John said. And as Build-A-Bear celebrates 25 years, she said the company realized that 40% of their total sales are from teens, tweens, and adults rather than adults buying on behalf of children, which had been the norm.
“People wanted to send love to people [during the pandemic] so the gifting category started to pop up for us,” John said. Build-A-Bear launched “Heart Box” to lean into that space, which includes not just a stuffed animal but aso accessory items like tea and candles in a gift box.
Nadia Boujarwah, cofounder of Dia & Co, a plus-size fashion company that offers personal styling, said one advantage for U.S.-based companies amid the pandemic was that they need not reinvent the wheel to meet customers in this new virtual age.
“In reality, we don’t need that much imagination in the U.S. to imagine what comes next because we’re so far behind other consumer markets,” she said.
Part of that was the shift away from search-driven purchases. Companies like Dia & Co are being discovered through word of mouth or social channels. Consumers are stumbling upon products, in other words, versus seeking out something they need or want. And in order to compete in that market, companies need to have a presence across all channels.
That was a necessary shift for Bill Barton of Bob’s Furniture. The company leaned into what he described as an omni-cart during the pandemic.
When it comes to furniture, Barton explained, consumers do a ton of research because it’s typically one of the most expensive purchases they make aside from a home or vehicle. Many customers will find a couch online first. Then, they’ll venture to a store to test it out in person. Associates at the stores are able to pull up a customer’s cart to show them the items in person. But customers like to go home without buying, think it over, and complete the purchase online later on. Having a virtual cart they can take with them has made it all quicker.
“The omnichannel cart has been a game changer for us,” Barton said.
Signet Jewelry CEO Gina Drosos described the improvements her company made to virtual try-on options for rings and earrings through the online store by improving the software that superimposes rings on photos of a customer’s hand. Signet then began assigning one of 700 on-demand, fully virtual assistants to see a customer through the shopping experience. In other words, a real human—not a bot.
“For us, getting to the heart of what customers care about when making a jewelry purchase decision has been key,” she said, and those two things are advice plus visualization. Now 72% of customers, she cited, begin their purchases online before opting for something like shipping to a store or curbside pickup.
As far as supply-chain issues go, Blue Apron credited its established relationships with individual farmers with keeping their produce fresh, in stock, and on time.
“An item of clothing that arrives two days late is less impactful than a zucchini that arrives two days late or certainly a piece of chicken,” said CEO Linda Findley.
But because Blue Apron started 10 years ago with an intent of changing the food supply chain, those cultivated relationships have helped during a time of flux.
To combat a national labor shortage, Erik Frederick, CEO of Uno Pizzeria & Grill, said the key was to focus on employee retention rather than recruitment. The company rolled out employee referral bonuses and gave all store managers a pair of roundtrip tickets as a thank-you to maintain morale.
“That was back in June when COVID was ‘over,’” he joked. All agreed that pandemic aside, these shifts are here to stay.
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