“The Covid-19 pandemic is many things. Few of them are good” writes Mike Cassidy, Signifyd’s lead storyteller
But what is becoming increasingly clear is that the health crisis is acting as the Great Accelerator — pushing trends, societies, governments, geographies, individuals, businesses and technologies into the future at rates they otherwise would not be achieving.
And that is a positive.
The phenomenon is clear in retail, an industry that Signifyd works with to help build successful businesses that are customer-obsessed and future-focused. Given that perspective, we thought it would be interesting to pause in the midst of the chaos unleashed by the novel coronavirus and reflect on how this disruption is helping push retail and ecommerce forward.
We sat down (virtually, of course) with a panel of Signifyd experts, each coming from a different vantage point to ask about how the pandemic is reshaping us and how the transformation is likely to play out, not just for the next few months, but for a time when the pandemic is no longer with us.
Signifyd Co-Founder and CEO Raj Ramanand
The role of automation in retail adaptation
Raj Ramanand has seen the kind of resiliency that retailers exhibit on an everyday basis blossom into a solid survival skill in the time of COVID-19. He talks about the enterprise retailer that, like others, suddenly found itself operating with an ecommerce staff that had been sent home to work.
There were initial worries among the retailers’ executives about accessing necessary data and efficiently reviewing and processing online orders, which were exploding in volume, given widespread stay-at-home orders.
But the enterprise adjusted quickly, relying on automated and cloud-based systems, including Signifyd’s Commerce Protection Platform. The solutions allowed the retailer to scale up to meet the increased demand while still operating with the precision needed to protect the business and maintain success.
Ramanand says there are lessons for retailers about the ability to scale and adapt quickly to changing business conditions.
“I think most retailers are in a similar position today with this new work environment,” he says. “They've got this influx of volume coming in and they have these pressure points. Their people and processes don’t scale as much as their technology scales and they need new technology to help them scale some of those backend processes.”
Finding alternatives to traditional delivery and in-store buying
Ramanand says some retailers quickly found new ways to deliver the goods — quite literally in the case of a major home goods store that adapted within a week to the reality that its brick-and-mortar stores would close to keep customers and workers healthy.
“The heroic thing they did was to enable their stores to manage buy-online-pick-up-at-curbside and scale that very rapidly to grow their business,” Ramanand says.
The increase in the drive-up form of click-and-collect is growing rapidly. Signifyd data shows that curbside and click-and-collect orders have increased at times by as much as 350% compared to pre-pandemic sales. Adding the service is a direct response to fulfillment challenges brought on by big increases in online orders and the need to keep warehouse workers safely distanced and healthy. And it’s what consumers want, as is apparent by their adoption of the practice.
A new focus on ecommerce
With brick-and-mortar stores forced to close for weeks at a time, retailers exhibited a renewed and urgent interest in their online channels. While traditionally, online sales have been only a small percentage of an omnichannel retailer’s revenue, suddenly it was the only channel.
“The large offline retailers that didn't have an online presence, or offline retailers which had a very minimum online presence but were not investing in the channel, have realized the importance of online,” Ramanand says.
And even retailers with a history of selling successfully online are refocusing their efforts, he says. The way the two groups look at optimizing ecommerce, however, are different.
The first group is best served by taking an approach that Ramanand thinks of as the Mary Meeker model. The legendary Silicon Valley venture capitalist somewhat famously laid out a blueprint for the modern ecommerce company. Meeker’s key advice: Partner with providers who specialize in the services that support the core business of serving consumers looking for a memorable buying experience.
“So they should go with the Shopifys, the complete business in a box. They can get ramped fast; get online quickly and not sit there saying, ‘I’ll build everything from the ground up.’ So that would be the Shopifys, the Stripes, the Signifyds,” Ramanand says, listing the ecommerce platform, the payment gateway and fraud protection providers Meeker pointed to in one of her annual state of the internet presentations.
Those already ensconced in ecommerce are more focused on improving fulfillment in a time of rapid online order growth.
“I think they are seeing a larger push to thinking about fulfillment options, because that has changed,” Ramanand says. “What can I do to offer up different fulfilment options, improve wait times, figure out what products to show at the right time so they’re available to ship as fast as they can?”
Signifyd Co-Founder and Chief Product Officer Michael Liberty
Automation + cloud = the future of retail
Michael Liberty has watched the evolution of Signifyd’s products and the retail industry’s innovation since the company’s 2011 founding. This is different. This is evolution at warp speed. A daily transformation.
“Because of the speed with which this came on, retailers are gaining a new appreciation for automation in general and being able to scale up their operations quickly to deal with surges in orders,” Liberty says. “They’re used to having to scale up during holiday season, but they've got many months to plan for that. That wasn’t the case here. We see customers that are leaning on us more heavily than they might normally because they know we can scale up our capacity pretty rapidly.”
The challenge is that humans can only do so much more or operate so much faster or work so much longer. There are limits, particularly with whole departments working at home and apart from each other. Which is where automation comes in — and precisely where it should come in is particular to each retailer’s operations.
“No retailer can absorb a 2x-or-more increase in their volume and not run into some bottlenecks,” Liberty says. “For a lot of retailers, the answer to, ‘Where do the bottlenecks appear first,’ is, ‘Wherever you’re the least automated.’”
The conversations around automation naturally spark adjacent conversations around cloud-based services, especially when teams are working remotely and need to collaborate while accessing large stores of sensitive data.
“Really, any company that was depending on physically being on-premise for security was completely unprepared for this,” Liberty says. “They really had to scramble, so I think that probably caused a shift in the IT community about having a single point of failure where you actually need to have someone physically on premise to do their job or to secure information. You can’t depend on that in this environment.”
“I think this is the direction things were headed anyway,” he adds. “Again, it’s just accelerated by several years.”
Old Commerce Meet the New Commerce
Liberty and Signifyd are in a prime position to chart the changes in consumer behavior. And what has been clear for months is that consumers aren’t shopping the way they once did.
At its peak during the pandemic, ecommerce spending was up nearly three times above its pre-pandemic level, according to Signifyd data. Consumers who had rarely, or never, shopped online were buying in significant numbers at ecommerce sites — and then returning to them again and again.
So what to make of consumer behavior that exhibits itself during unprecedented times?
“I think a lot of it is here to stay,” Liberty says. “For one thing, there is just going to be a permanent reduction in brick-and-mortar stores. Some have gone, or will be going, out of business because of this.”
There simply won’t be as many physical places to shop. This will be especially true in sparsely populated areas. And many of the stores that remain are likely to be different from the large-footprint emporiums that were relatively common only a few years ago. In their place, think showroom-style stores made for browsing and trying out or trying on items that will ultimately be shipped to customers’ homes.
And certainly until there is a COVID-19 vaccine, people are going to think differently, not only about how they spend their time, but where they spend their time and with whom. For most, limiting potential exposure to the coronavirus will remain top of mind.
“I just don't know how much people are going to be wanting to expend their exposure budget, so to speak, on being out shopping,” Liberty says. “I think we have a hurdle to cross here.”
A New Way of Work
Signifyd has a legacy of remote work. Many of the first engineers hired worked remotely. In fact, Liberty as co-founder, was the company’s first remote worker. But having some employees — even a significant number of employees — working remotely, is not having the entire company work remotely.
So, has Liberty learned anything, found anything surprising or adjusted his thinking regarding the remote workforce now that the pandemic has forced Signifyd to go 100% remote — at least temporarily?
“It reaffirms some of the things I thought,” he says.
Like, that open and frequent communication is even more important when employees are operating remotely. Liberty advocates using open forums to chronicle the progress of projects and address challenges and raise questions or objections.
“When you have a large team, you need to make a pretty deliberate effort to make sure that communication is happening across teams. And there is a risk of becoming insular and somewhat balkanized with your best practices. You really have to make the effort to promote that communication between teams.”
As for surprises, Liberty says there was one — a pleasant one. Going into the shelter-and-work-from home phase of the pandemic, Liberty assumed it would understandably take time for employees to adapt to the arrangement. After all, those who were already working from home self-selected. It was the way they preferred to work. What about those who preferred an office setting?
“I thought more people would take a long time to adapt,” he says. “Naturally, you might anticipate that. For the most part everyone has rolled with that very quickly.”
With the home office comes increased flexibility. For instance, Liberty says, some employees attached to the Belfast office have chosen to work U.S. hours, in sync with their U.S.-based colleagues. That gives them time to care for their children in the morning, before swapping with a spouse or partner who picks up child-care duties in the afternoon and evening.
None of which means the office is obsolete, Liberty says.
“I think there is still a benefit to having people at the same location, face-to-face,” he says. “Maybe much smaller office footprints. You might have people who are just periodically coming into the office — a week in the office and a week out. I don’t think it’s the case that we’re looking at the mass end to the office.”
Signifyd Managing Director, Europe Ed Whitehead
Retail Resiliency Reigns
Ed Whitehead spends his days talking to retailers about their challenges, their aspirations and their strategies. What’s struck him since London went on lockdown in March, is the way merchants adapt to circumstances now — no matter how quickly they arise or how disruptive they are.
“Talking to one of the major grocers, Tesco,” Whitehead says, “we learned how they were able to match and prioritize for online grocery shopping a huge number of vulnerable and isolated people.”
Grocery delivery slots, of course, have at times been like gold during the lockdown and so for Tesco to determine how to serve people who most need delivery is certainly admirable. The initiative came as part of an effort that was admirable in its own right.
Ecommerce and click-and-collect have traditionally been a sliver of grocery sales. But that changed quickly when stay-at-home orders were issued. Tesco and other grocers were inundated with online orders. Tesco went to work hiring 4,000 new drivers and 12,000 workers to pick orders.
“They also expanded online shopping capacity from 500,000 per week to 1 million by the end of April, with a target of over 1.2 million weekly. This is obviously a huge increase in capacity over such a short time. It is really quite impressive.”
More remarkable is that retailers were able to exercise such agility while many on their ecommerce teams were working from home.
Consider CurrentBody, which shifted to a work-from-home model with the start of the pandemic. The brand sells sophisticated, electronic, at-home grooming and self-care products and has been growing rapidly for years. Its products obviously remained very popular during shelter-at-home, when people couldn’t visit barbers, stylists or spas.
The story was similar with Lyco, an electrical lighting seller, Whitehead says.
“Both have benefited from deploying Signifyd, fully automating the fraud review process, and thus allowing the customer service team to focus on managing customer inquiries,” he said. “With huge surges in people needing to carry out personal care such as beard trims, haircuts and other spa treatments from home, you could almost say CurrentBody is carrying out a critical service!”
The future of strolling the high street
The surge in ecommerce has been remarkable and a significant portion is likely here to stay. But robust retail will continue on the high street and in shopping centers, even if it will look very different from the way it looked in February.
“High street opened up on the 15th of June,” Whitehead says. “I walked past one of the local high streets and people were queuing around the block for Primark.”
Queues at Primark and stories of people waiting seven hours to get into IKEA made it clear, he says, that consumers miss the sensation of shopping and they are anxious to get it back.
“I think people will return to the high street because it is a core fabric of people’s social life and their daily activity.”
And yes, retailers will have to invest in technology to serve their customers in what will be a now-normal, if not a new normal.
“I think retailers need to make shopping more contactless actually,” Whitehead says. “There are a variety of ways to do that, whether it’s better virtual changing rooms online or the ability to really look at items. With ASOS, you’re able to put the dress on you online. You can try items on digitally.”
Other innovations will go a long way toward putting shoppers’ minds at ease while keeping them connected with merchants.
“Anything that lets the main research be done at home, even if ultimately the customer goes to the store for the final try-on,” Whitehead says. “I have seen lately is a type of remote personal shopping — so the store staff have their phone, which they use as a camera and communication tool and connect directly with customers at home browsing. They can talk them through the look, feel, style of the item and give a much better experience than simply browsing online.”
Signifyd Director of Engineering and Belfast Site Lead Tevor McCullough
The upside of working together while apart
As the site lead of Signifyd’s Belfast office, Trevor McCullough has helped guide a team of about 70 through the disruptions and uncertainties of work life in a pandemic. The Belfast team, which includes engineers, HR specialists, data scientists, customer success specialists among others, is accustomed to working together at its River House headquarters.
But that ended in mid-March, when like many, the team scattered to their homes to work from there. Initially McCullough was worried about the effect on morale and productivity.
“In fact, we haven’t seen any impact on productivity,” McCullough says. “In some ways the comradeship, our team aspect, has increased. Whenever people get put in stressful positions, it can either damage them, or it can bring them together. We've seen universally, across the team, people have come together to help each other while we’re in this situation.”
McCullough attributes the strong bond to compassion — the sense that everybody is living and working through this pandemic together. And everyone is working from home. Communication is heightened. If someone misses a meeting, or the proverbial memo, others are quick to fill that person in on important details.
“We’ve always had a pretty good or excellent team spirit,” he says. “So maybe it’s not such a big surprise that we’ve done so well in this period.”
The experience could drive change in the way the Belfast team works, but like Liberty, McCullough says that doesn’t mean the physical office is going away. In fact, the Belfast office is in the midst of an expansion.
There are positives that I’ve seen now and there are positives that might come down in the future,” he says. “People become more effective working from home, because we just become a bit more adept at it. We become more adept at communication.”
As team members develop those skills, it’s likely that will lead to more flexibility around how people work in the future.
Technology as a business savior in the time of COVID-19
The same factors that make working from home successful are helping Signifyd ensure that the company’s customers also navigate the pandemic successfully.
“We’re cloud based,” McCullough says. “That has allowed our engineers to continue to be productive at home and it’s also continued our operational effectiveness in terms of our uptime without disruption.”
Chances are, he says, that wouldn’t be the case if his team were relying on large, onsite infrastructure to keep ecommerce humming along.
The cloud has been vital, he adds, in a time when ecommerce order volumes have spiked and remained well above pre-pandemic levels for months.
“It’s not just the accessibility and the robustness of it,” he says. “It’s also the elasticity of it. We’ve obviously seen volume spikes. The elastic nature of our infrastructure has helped us handle sustained loads.”
All of which is reflected in everyday lives and the pandemic-driven societal changes that will have a lasting effect even once the novel coronavirus is vanquished.
“There obviously is an acceleration in the way people use technology and the way people are more open to the online experience vs. brick-and-mortar,” McCullough says. “It’s obviously going to encourage innovation around how people work and the technologies we employ.”
This article first appeared in the summer edition of the Sync NI magazine and it can be found here.
