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EXCLUSIVE INTERVIEW

Rough Times for Angels: Q&A With MarketStar Chairman Alan E. Hall

You might say that entrepreneur Alan E. Hall lives in two businessworlds. Don’t complain to him how challenging it is to grow a businessin today’s fragile economy. He knows those struggles firsthand as abusiness owner. He also knows how next-to-impossible it is forstartup business owners to find financial backers.

He is the founder and chairman of MarketStar, a US$4 billionsales outsourcing company that is part of Omnicom. In thisrole he is responsible for determining the company’s vision, strategyand culture, as well as client and employee advocacy.

Hall is a player in the venture capital sector as well. He is an angel investor, and he runs several private equity funds.

His exposure to the many sides of business and finance give him aunique perspective on how startups can secure funding in thisturbulent economy and what are investors want in potential investees.

“This is the most difficult financial environment I’ve even seen,”Hall told the E-commerce Times.

Business Menu Full

To say that Hall has a lot on his plate is putting it mildly.Everywhere he turns, he tastes morsels of economic ingredients.

For instance, he is a member of the Board ofTrustees for Weber State University, chairman of the Utah TechnologyCouncil, a trustee of the Intermountain Healthcare Foundation, amember of Wells Fargo Bank’s Northern Utah advisory board of directorsand a trustee of World Trade Center Utah.

Hall, along with his wife Jeanne, is the founder of the Hall Foundation, a private charitable organization. He is also founder ofseveral investment funds, including Mercato Partners and Island ParkInvestments. Additionally, Hall is the founder of severalentrepreneurial organizations, including Grow Utah Ventures and GrowAmerica.

Honored by multiple organizations for his business endeavors, he mostrecently was named the Mountain West Capital Network’s (MWCN)Entrepreneur of the Year for 2009.

The E-Commerce Times spoke with Hall about his panoramicview of the world of funding business finances. His funding forecastleaves young startups with a sense of guarded hope. It gives moreestablished entrepreneurs a bit more to hope for when looking for afunding source.

E-Commerce Times: How different is the role of providing fundingin today’s market?

Alan E. Hall:

As an angel investor, most of us tried to learn thestock market. We lost a lot of our liquidity and are holding firm withwhat we have left. Most angels have left the game to the sidelines.The money just dried up.

ECT: Is it more a situation where angel investors are sitting ontheir money until better times arrive?

Hall:

Angel investors are hurting just as much as the startups lookingfor money. These are very challenging times. None of the federaleconomic stimulus money comes our way to help struggling newbusinesses.

ECT: When might startups expect to see money flowing their way again?

Hall:

We don’t know when this money crunch will end. It will take acrystal ball. Venturing a guess, I’d say maybe a year or more. Thenwe’ll see a slow improvement in the money flow.

ECT: What do startups have to do to attract funding today?

Hall:

I have 60 angel investments. I go to all of them and tell them tosurvive. I urge them not to go out of business. Instead, they need tokeep their concept going. They have to cut spending where they can.

ECT: What is the best advice you can offer to young startup owners?

Hall:

These are really terrible financial conditions. Some companieswill come out of this intact. But those with a lot of payroll willfind it very hard to survive.

ECT: What do you see around the financial corner as far as theatmosphere for startups seeking investors?

Hall:

Even though money is scarce for startups, I tell people to tryfinding investors. I also warn them to expect the worst-case scenario.

ECT: How are young companies faring with more traditional sources of funding?

Hall:

Another bad side of this picture is that bank capital is alsoupside down. Banks want collateral for business loans. Most startupand many surviving entrepreneurs have nothing to put up.

ECT: What is the relationship between your private equity fund(Mercato Partners) and your angel investments?

Hall:

I don’t see my activities as a conflict. Rather, I try tocoalesce and combine them to be mutually beneficial.

ECT: What are investors looking for in qualified startups?

Hall:

On the venture capital side of things, we have money. To get it, acompany needs at least $5 million. We’ll give such qualifiedestablished entrepreneurs $5 to $10 million to help them grow theirbusiness.

ECT: So you’re not saying that the economy is totally againststruggling new businesses?

Hall:

It all depends on where they are situated in the market. There ismoney out there for established companies trying to grow theircompanies.

ECT: What worries you most about the economic recovery cycle?

Hall:

Because we (angel financiers) are on the sidelines, two or threeyears later, those startups still in business will be behind the curveregarding hirings and other business factors. That will have a rippleeffect for 10 years or so.

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4 Tips To Attract a Younger Customer Base

young adults

The need to allure younger shoppers today is redefining marketing strategies for retailers who know that growing a youthful base of loyal customers is an essential process for long-term success. However, the digital road to converting younger shoppers to adopt a new brand or favorite merchandise depot is often marred with bumps and detours.

Some of the more effective marketing tactics that attract a younger shopping demographic involve mastering the hallways within social media outlets. That process draws on how to put influencers to work in drawing in new brand followers.

Targeting young individuals can create brand affiliation and build brand loyalty. To do this effectively, retailers must think beyond the immediate sale. That means learning how to track social trends as well as using an expanded toolkit of marketing and customer retention strategies. Knowing what works for your competitors cannot hurt, either.

Attracting and engaging with a younger target audience is no longer optional; it is an essential marketing goal. The big question is: how to do it?

Marketers and online retailers who have found useful answers to that question shared their insights with the E-Commerce Times.

Make Convenience Count

That slogan proved to be an effective approach for Ambition Digital, a digital marketing agency in Edinburgh, U.K. One of its clients is an e-commerce company in the clothing niche. The agency built the store’s website with a focus on offering a diverse range of payment options, explained Gatis Viskers, director at Ambition Digital.

“They got started during the lockdown in 2020, and that is when online shopping saw explosive growth. Our research found that above all, younger audiences favor convenience, flexibility, and the smoothness of online shopping over traditional high street-shopping experiences.

“So, one of the easiest and most profitable ways e-commerce retailers can achieve this is by offering a wide range of payment options — particularly buy now, pay later options,” he told the E-Commerce Times.

Ambition Digital connected the website to the Klarna payment solution. The retailer saw a 55 percent increase in sales within two months. Most of the sales using Klarna came from tech-native millennials and Gen Zers — the all-important 18-to-40 age demographic. That approach also resulted in less cart abandonment and higher average order values.

“This is why I see these types of buy now pay later payment solutions as one of the most important trends in e-commerce for 2022 and beyond, especially for online retailers looking to attract a younger audience,” Viskers said.

Part of that convenience factor can help create brand affiliation and build brand loyalty among a younger customer base, added Alex Williams, CFO at FindThisBest. The younger generation is very much focused on cost savings. He believes offering more value for less price is the best way to attract young consumers.

“One of the best ways to get the younger generation of Gen Z and Millennials to focus on retail products is to offer experiences rather than products. The newer generation is very much focused on festival culture, which retailers can take advantage of,” Williams told the E-Commerce Times.

Do this by taking the retail experience out of your brick-and-mortar store and arranging events to showcase your products, he explained. This way, young adults will be more inclined to pay attention to your products.

Focus on Social Media

Retailers who make effective use of social media platforms can effectively reach the young demographic, observed Aviad Faruz, CEO at Faruzo, a jewelry and accessories retailer. But before devising a social media strategy, the product’s intended purpose should be clearly stated. Also, your campaign should be designed around it.

“I would recommend the product packaging to be colorful, as to attract young audiences,” he told the E-Commerce Times.

Everything from news to entertainment is now available on social media devices. Having a presence on social media can completely change the outlook of your brand, Faruz added.

“Social media could also act as a potential marketplace for your brand and engagement on different platforms ensures increased revenue,” he said.

Gen Zers will soon comprise the largest cohort of consumers in the U.S., observed Kayla Marci, market analyst at Edited. Insider Intelligence projects the number of digital buyers in this age range to surpass 41 million by 2025.

“American Gen Zer’s favorite trends are rooted in nostalgia, with Y2K and 70s influences boosting the sell-outs of straight leg jeans, cut-outs, and psychedelic prints,” observed Marci.

“Off the back of the #BamaRush TikTok phenomenon, preppy and collegiate aesthetics resonate with consumers returning to campus. As the season changes, Pinterest searches for seasonal outfits are heating up, indicating demand from this consumer group,” she told the E-Commerce Times.

Tap Into Young Buyers’ Mindsets

To better attract a younger customer base, marketers must optimize their online channels to appeal to a younger audience. Millennial and Generation Z consumers are avid researchers. They spend a significant amount of time studying and evaluating brands before picking from whom to buy, suggested David Bitton, co-founder and CMO of DoorLoop.

“During the exploratory stage of the customer journey, they check the company’s social networks for reviews, recommendations, and comments posted by others who have used the product or service or interacted with the company,” he told the E-Commerce Times.

Maximizing your social channels by showcasing customer reviews and testimonials demonstrates your value to these younger customers. This boosts sales and revenue. Younger customers are also more inclined to post a review if they have a positive experience interacting with your company and using your product, noted Bitton.

“They’re also more likely to share their experiences on their social media profiles, increasing your brand’s share of voice through word-of-mouth,” he added.

Also, retailers should shape marketing efforts to reach these generations and truly construct marketing campaigns that will resonate with them. Do this by learning everything you can about them. Doing so allows you to obtain a deeper grasp of their generation and their various points of view, he explained.

“Millennial and Gen Z consumers lived during economic downturns, a pandemic, and a slew of other calamitous events that shaped their perspectives and the way they value money in comparison to older generations,” observed Bitton.

Having a finger on the pulse of social trends is more important than ever before to attract young consumers. When marketing to younger customers, keep in mind that their attention spans are likely to be relatively short. As a result, you should always be on top of trends and what is currently trending to keep them from becoming bored with you, he recommended.

“If you do not keep your social media material, website, and promotional strategies up to date with relevant content as trends change, your clients will go to your competitors, who constantly provide relevant marketing content,” warned Bitton.

Don’t Discount Influencer’s Role

It is important to keep up with social media trends to attract more young consumers. Younger consumers are way more reliant on social media than they were a few years ago, cautioned FindThisBest’s Williams.

“Social media platforms are not just there for connecting with family and friends but also to stay up to date with the latest happenings in the world. The rise of influencer culture has pushed consumers towards seeking advice and recommendations from social media. In such times, marketers need to be on top of every upcoming trend,” he said.

Influencer marketing is gaining traction in an age when people are tired of sales tactics. More than 40 percent of Millennials use ad blockers. Long before they make a purchase, consumers engage in online interactions with their peers. Brands must be a part of that conversation to be effective, said Williams.

Influencers can reach a specific audience while also creating trust if they are used wisely. This is significant since many consumers distrust advertisements and will not base their purchasing decisions on them.

However, paid influencers face increased pressure to reveal sponsorships. So consumer opinion toward sponsored influencer posts is more akin to advertisements than word-of-mouth validation, noted Williams.

“This shift in mood does not, however, imply that influencer marketing has lost its allure. When it comes to producing influencer activations, brands just need to be more inventive,” he said.

Jack M. Germain

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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Piecing Together the Supply Chain Puzzle

supply chain

Supply chain issues have haunted businesses during the past several months. Given the status of the pandemic and other challenges, they probably won’t be resolved any time soon.

The best e-commerce businesses can do to mitigate these issues is to adjust their own practices, timelines, and needs to ensure that they can continue serving customers and being profitable.

The E-Commerce Times spoke with several experts to get their perspective on what’s going on with supply chains and how online sellers can adapt to the disruptions.

“There is an unprecedented volatility and disruption in the end-to-end supply chain,” said Lisa Anderson, president of LMA Consulting Group.

“Manufacturers cannot keep up with demand. Material shortages are common. Transportation issues and delays plague the system, and consumers’ expectations continue to rise. With volatility in both demand and supply, service and profitability suffer,” she explained.

Reasons for SC Disruptions

There are a variety of causes for the disruptions in supply chains, and all together they’ve had a domino effect.

“Since the onset of the global pandemic, e-commerce businesses have been faced with a turbulent supply chain,” Mitchell Bailey, COO of Kaspien, told the E-Commerce Times.

“Even Fulfillment by Amazon, which was long considered a gold-standard for e-commerce fulfillment, was challenged under the pressure. The supply chain has slowed due to worker shortages and increased demand for e-commerce, among other issues brought on by the pandemic,” he observed.

The supply chain disruptions are attributable primarily to the pandemic, but other challenges in the manufacturing, economic, and business landscape have contributed to the situation, as well.

“There is definitely a widespread labor and talent shortage,” said Anderson. “Partly due to Covid, partly due to the extension of unemployment benefits, partly due to the retirement of scores of workers, and then due to the increasing need for talent, there are shortages throughout the supply chain.

“The end-to-end supply chain got out of balance during Covid. China shut down when the U.S. was still robust; then the U.S. shut down when China started to come back online. Certain industries shut down completely while others were in high demand. There wasn’t enough flexibility in the supply chain to move the resources to where they were needed the most.”

Demand for specific products, too, has changed, and the effects of other unexpected events have added up.

“Covid also created significant demand for certain types of products such as computer chips,” noted Anderson. “That created further unbalance. In addition to Covid, the Texas freeze caused additional disruption in the supply chain. The ship that got stuck in the Suez Canal also created further supply chain disruption. With supply chain issues occurring around the world, backup plans are no longer valid.”

Alternative Fulfillment Options

Because supply chain challenges are currently par for the e-commerce course, businesses must adapt and be agile to stay afloat. One answer, according to experts, is to diversify.

“Supply chain breakdowns happen more frequently than most companies expect, and the impact of these disruptions is growing,” said Bailey.

“Businesses must concentrate on restoring the supply chain in the short term and strategically diversifying over the long haul. Political, economic, climate, and cyber hazards are the most common external risks that supply chains face.”

“In these aspects,” he added, “organizations must identify and understand their vulnerabilities. These occurrences can raise raw material prices, make shipment more complicated, lengthen customer lead times, and increase supplier risk. Although any business can be affected by these factors, some are more vulnerable than others.”

Making use of alternative fulfillment choices is another strategy that e-commerce businesses can employ.

“Alternative fulfillment options are one way to deal with supply chain challenges,” Guy Bloch, CEO of Bringg, explained to the E-Commerce Times.

“By expanding pick-up options, such as curbside pickup and buy online and pick up in store (BOPIS), businesses can manage e-commerce fulfillment costs at scale and provide the convenient options customers expect to see at checkout.”

Changing logistics plans can help ease the burden of supply chain disruptions.

“Another solution is to work with multiple delivery partners, which allows retailers the flexibility to alter loads according to the peaks and drops in demands,” said Bloch.

“Finally, consider introducing a hybrid model that incorporates employees, internal fleets, and even third-party fleets. This allows for retailers to manage orders based on the individual business logic and operational needs of the company,” he suggested.

Ultimately, better use of supply chain data can also help.

“For many e-commerce operators, strategies around how assortments are adjusted to the supply chain are typical,” Randy Mercer, VP of global product management at 1WorldSync, told the E-Commerce Times.

“Beyond this, a deeper focus on the acquisition of thorough supply chain data should be adopted by e-commerce platforms to avoid surprises related to the intended online assortments,” he advised.

Communication all along the supply chain is important and having multiple plans and back-up plans in place is key.

“All merchants need to be in continuous contact with their suppliers in order to foresee potential disruptions and challenges,” said Miva CEO Rick Wilson. “Then they need to start working on Plans B, C, and D, just in case.”

Managing Future Challenges

Supply chain disruptions are likely to continue, and ultimately, controlling the pandemic is going to be necessary to bring supply chain problems to an end, according to Wilson.

“If raw materials are impeded either because there aren’t healthy available workers to get those materials, or they can’t be shipped due to shipping constraints or closed borders, then that supply chain will have constraints and disruptions at some point in the process,” he said.

“So, as long as the pandemic is uncontrolled, we will still see problems. This will eventually fix itself, but the solution lies in pandemic control more than in supply chain innovations, which can only make the best out of a difficult set of variables.

“Returning to a more balanced state is likely to take a few years as we vaccinate more people, get more natural immunity from prior infection, and the pandemic evolves into a more traditional seasonal and less lethal virus,” Wilson noted.

Over time, however, adaptions in business practices might also lessen the effect of unavoidable supply chain disruptions — whether those are caused by the current pandemic, surges in consumer demand, or innumerable unforeseen circumstances in the future.

“The problems are likely to increase,” said Bloch. “In the future, if companies successfully pivot and adapt to the problems seen over the last 18 months, the issues may decrease.”

With help from a variety of new technologies, as well as a certain amount of creativity and ingenuity, e-commerce businesses can find ways to deal with ongoing and perhaps inevitable supply chain disruptions.

“New technologies for better order management, last-mile delivery and inventory management are all promising solutions to current supply chain problems,” Amit Shah, chief strategy officer and U.S. general manager for VTEX, told the E-Commerce Times.

“Whether or not these problems persist, companies of all sizes are realizing that they need the latest technology to help them tackle current issues and anticipate proper solutions for future problems.”

Vivian Wagner

Vivian Wagner has been an ECT News Network reporter since 2008. Her main areas of focus are technology, business, CRM, e-commerce, privacy, security, arts, culture and diversity. She has extensive experience reporting on business and technology for a variety of outlets, including The Atlantic, The Establishment and O, The Oprah Magazine. She holds a PhD in English with a specialty in modern American literature and culture. She received a first-place feature reporting award from the Ohio Society of Professional Journalists, and is the author of Women in Tech: 20 Trailblazers Share Their Journeys, published by ECT News Network in May 2020. Email Vivian.

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