Month: September 2020

Disrupt 2020 will feature approximately the same number of attendees — at least 10,000 — and about the same number of expo presenters — 485 — that its 2019 event drew, said TechCrunch director of operations Joey Hinson.

But it has also hit upon a number of new product features and ideas that it expects will become fixtures in future TechCrunch events.

 “I don’t think we’re ever going to walk away from the digital layer we’ve added,” Hinson said. “There’s this layer of data and efficiency that we’ve experienced as we’ve figured this all out that I don’t think we can walk away from in the future.”

After deciding in late March that Disrupt would have to be virtual, TechCrunch’s business team began reaching out to vendors in the virtual event space, using notes and research provided by one of the site’s editors, Greg Kumparak. Preserving the quality of the content and presentations, maximizing networking opportunities and preserving as much of the feel of the expo hall as possible were among the top priorities.

Years of covering the startup world helped. “We basically skipped the line with a lot of different companies,” Hinson said, noting that some of the vendors it wound up choosing had presented or attended Disrupt in years past.

Some solutions TechCrunch hit upon were logistical rather than technical. To mitigate screen fatigue without cutting down on sessions or presentations, for example, TechCrunch expanded Disrupt from three days to five, with tracks running across multiple time zones; U.S. Disrupt programming begins at 9am, ET, and normally runs until early afternoon, while Disrupt Asia programming begins after 10pm, ET.

But some solutions were technological. To create a more visually engaging setting for Disrupt’s programming, TechCrunch created a 3D rendering of the Moscone Center using a combination of green screens, real sets and video call-ins from guests.  

Disrupt’s programming is also crammed with reminders that Disrupt is celebrating its ten year anniversary, TechCrunch managing editor Jordan Crook said. A group of presenters who have attended and presented at previous Disrupts, called the TechCrunch Ten, are layered throughout the programming, using testimonial videos as well as a content segment called the Pitchdeck Teardown, in which the TechCrunch Ten, which includes venture capitalists such as Aileen Lee (maybe name one more?), offer feedback on several early stage startups’ pitch decks.

Crook built more breakout and networking sessions into each day’s programming too, and the events team added product features to connect attendees with similar interests. One, called CrunchMatch, suggests attendees to one another based on their interests and invites them to connect; another will randomly pair people who selected the same topics when they registered for video chats. Attendees can also convene small groups and hang out via video chat during programming sessions.

To preserve the serendipity of finding a random booth in the convention hall, exhibitors can announce, using notifications, that they are hanging out live at their virtual booths.

TechCrunch cut ticket and exhibition prices for Disrupt this year roughly in half: Prices for individual tickets begin at $350, down from $695 last year, while exhibition passes cost $445, down from over $1,000 last year. TechCrunch is also selling a Disrupt Digital Pass for $45 that offers access to one stage of programming, but does not include CrunchMatch.

Even at those prices, stiff by virtual event standards, Hinson said TechCrunch expects between 10,000 and 15,000 attendees this year, roughly in line with last year’s attendance figures.

While ticket revenue will be down, sponsorship revenue, which accounts for at least 50% of Disrupt’s revenues, will be up year over year, thanks to more expensive sponsorship packages; Disrupt’s 35 sponsors, which range from AppsFlyer to Toyota, are paying 6% more for packages this year than last year, Hinson said.  

That’s partly because the digital version of Disrupt offers opportunities that an in-person event wouldn’t. For example, Disrupt will feature more branded content sessions and presentations than in years past, and sponsors will be able to more easily track who attends those presentations, giving them a chance to gather leads.

“There are a lot of ways to drive registrations in a way that you can’t do at an in-person event,” Hinson said.

While most media companies are grappling with the differences in revenue between in-person and digital events, many see opportunities in the ability to track and measure what happens in a digital environment. “I think the byproduct of there being a lot more data that gets generated as a result of these systems creates that opportunity [to monetize more effectively],” said Eric Fleming, the cofounder of the experiential agency Makeout.

But, Fleming added, many advertisers will need to see proof that that works before committing to spending. “You kind of need a case study to have a solid argument for an advertiser.”

“We’re targeting each of our audience segments with the most relevant message based on their relationship to Walmart,” said CMO William White. “We’ve thought about if you’re just an occasional shopper to if you’re a full omnichannel shopper who is already using online pick-up and delivery, running the gamut [of what we have to offer].” 

With the tailored ad approach, Walmart is using the data it already has on its customers to not only serve the most relevant ads to potential Walmart+ subscribers but to hopefully garner more subscribers in doing so.

The company is using a variety of channels including a “robust performance marketing” program with ads on platforms like Facebook, Instagram and Pinterest to acquire new subscribers for the program. White declined to share subscriber goals for Walmart+, how much the company is spending on advertising for the Walmart+ launch or break out how the company has divided its media budget for the new program.

In 2019, Walmart spent $630 million on media, according to Kantar. That figure excludes how much the company would have spent on social media channels as Kantar doesn’t track social media spending. 

To create a variety of ad options to serve, Walmart gave early access to Walmart+ to 22 families and filmed them using the membership program. “We have so much content because of the approach,” said White. “We have so much that we’ve been able to cut that down for the right message for different types of audiences.” 

While Walmart is looking to attract subscribers with a variety of messages, the television spots lean on the convenience of the program, which offers same-day delivery, rather than price advantages. That’s a “key difference” from Amazon’s approach to advertising Prime, according to Eric Heller, executive vp of marketplace services at Wunderman Thompson Commerce, as “Amazon Prime is definitively a price and promotion program.” 

Once a customer does sign up for Walmart+, the company is using a “very robust” customer relationship management, or CRM, strategy to retain those new Walmart+ subscribers, according to White. Walmart is not only thinking about the messages it will serve as it “welcomes people into Walmart+ from a trial standpoint” but aiming to serve the appropriate messages throughout the trial to “having churn prevention,” said White. 

“We’re using predictive models to make sure we’re reengaging those who might be likely to cancel to reactivating people in the event that they have. We’ve been very thoughtful about the entire journey to bring it to life.” 

As previously reported by Modern Retail, Walmart is currently focused on customer retention and experts expect the membership program to help boost those figures.

Overall, Walmart is just beginning to roll out and market its membership program. While Amazon’s Prime program has long been dominant, Walmart’s challenger will “create a better program for all of us,” said Heller. “The more competition Prime has, the better Prime will be. Amazon hasn’t had a real competitor [in this space].”

In March and April, demand for certain products like travel accessories and wedding attire all but evaporated as those activities became impossible to do under stay-at-home orders. While sales have started to rebound this summer, many of the companies that sell products in categories that were hit hardest by the coronavirus say that revenue is still lower than it was during this time last year.

With social distancing projected to continue for the foreseeable future, startups are acknowledging that they are going to have to offer some kind of unique discount to customers in order to bring in enough cash to help the business survive. But by doing so, they risk becoming dependent on relying too heavily on sales to get rid of inventory., if they do them more than once or twice a year.

“To be transparent, we hadn’t needed to do [a sale],” said Away’s senior vice president of brand Selena Kalvaria. “We had very strong sell through of our products, and very strong momentum over the holidays.” But in April, Away co-founders Steph Korey and Jen Rubio said the company’s sales fell 90% at the beginning of the pandemic, and the company was forced to make some layoffs.

Kalvaria said that Away has seen an “increase in momentum over the past few months,” but declined to give specifics. She also said that on Wednesday, the first day of Away’s sale, the company brought in more sales than on Black Friday and Cyber Monday combined over the past five years. Kalvaria added that Away decided to host its sale now in part to make way for some new products that the company is planning to release at the end of this year and the beginning of 2021.

That speaks to another challenge that some DTC startups are grappling with: it’s not just that their sales have fallen, they also need to make sure they clear out a glut of inventory left over from the beginning of the year. 

Aaron Luo, CEO of luxury bag brand Caraa, said that as of now, his company has decided not to host a sitewide sale during the coronavirus pandemic. Caraa only offers discounts on select “last chance” inventory it is trying to clear out, as well as a Black Friday sale. Even though Caraa’s sales dipped in April and May, because the company owns his own factories, Luo said that he doesn’t feel the need to have a sale to clear inventory.

“Because of our relationship with our factories, I can can get away with very, very quick reorders, and very [small] minimum order quantities,” said Luo.

Luo said that he’s been resistant to offering sales outside of Black Friday, because he doesn’t want to train customers to just wait to purchase until there is a sale. But the reality is that many customers are already trained to look for details, particularly now when they know many retailers are hurting due to the coronavirus.

Matt Gierl, chief marketing officer for tuxedo rental startup The Black Tux, said that shortly after the coronavirus pandemic hit the U.S., the company started receiving more emails from customers asking if the company was going to be having a sale soon. In addition to rental, the Black Tux also sells brand new suits. For older suits that The Black Tux is about to discontinue, the company also gives rental customers the option to pay to keep them.

“They were [also] very interested in buying, and I think it had to do with the fact that they were unsure if their wedding date was going to be moved, and wanted have the garment in hand,” said Gierl.

Like Caraa, Gierl said The Black Tux saw a dip in sales in April and May. Sales began rising again in the summer, before starting to plateau heading into the fall. “We’re kind of in a holding pattern right now,” he said, as people wait for coronavirus cases to go down in the U.S. 

So with fewer customers renting, The Black Tux decided to offer its first-ever sample sale in May, putting up some of its older suits up for sale at a 40 to 50% discount.  The Black Tux also donated 10% of every sale to the CDC Foundation. The company ran the sale for two months, because tuxes are “not a super quick purchase decision.” After the end of two months, The Black Tux ended up donating over $35,000 to the CDC Foundation.

Web Smith, founder of e-commerce newsletter 2pm Inc., predicts that customers could see more sales from direct-to-consumer brands in the lead up to Black Friday, as these startups try to get ahead of a crowded period when nearly every other traditional retailer will be offering huge discounts. He said that in the case of Away, he doesn’t think the brand will be hurt by having a one-time sale.

“If you were an industry that was depressed by covid, I don’t think consumers are going to hold it against you when you go back to full price,” he said.