Stephan Schambach, CEO of NewStore, has been helping physical retailers build online stores for the last 35 years. Schambach founded Intershop and built the first standard software for online shopping; he’s the engineer/entrepreneur behind Demandware, which put retail in the cloud and was acquired by Salesforce for $2.8 billion. NewStore, Schambach’s latest venture, brings the e-commerce experience into physical stores.
I recently spoke with Schambach about how e-commerce trends can improve customer experience in physical retail stores, e-commerce trends that will translate to retail and hospitality in the near future, and what it takes to successfully harness market trends and drive organizational hyper-growth.
Customer Experience Is Supreme
According to Schambach, a consumer in a store utilizing NewStore software has an experience similar to a shopper in an Apple store. In an Apple store, all of the associates are trained to handle every one of the customer’s needs; they can handle technical issues, sell the latest Apple products, and ship inventory directly to the customer’s home. Schambach noted that associates in Apple stores conduct all of this business on their phones. That is what NewStore enables retail associates to do: it’s an Omnichannel-as-a-Service platform that allows brands to run their retail stores on smartphones.
In the current model, a shopper goes to a store. They try on apparel; let’s say they like a certain pair of pants, but the store doesn’t have their size. The shopper talks to a retail associate, who then goes to check inventory, and perhaps phone another store to see if they stock the desired size. The associate may then direct the customer to the appropriate place.
NewStore removes this back and forth; the sales associate is able to see via the app the store’s inventory and handle the customer’s need. The associate is also able to order the appropriate items and ship them directly to the customer’s home, in the same way that an online shopper at home can order items and have them shipped. The NewStore iOS also enables associates to communicate directly with the customer via the app, converse with other employees, and gain insights into the customers’ buying patterns.
Global Brands, Local Complications
While the customer experience is seamless, there are many complications when it comes to operating SaaS companies globally. Schambach’s NewStore works exclusively with global brands, or brands with global ambitions. Yet the retail experience is, by necessity, local: laws and regulations govern commerce, and different locales have different tax considerations, currencies, and languages.
Schambach notes that customers are increasingly loyal to specific brands and want to be treated as valued customers of that brand. Schambach’s strategy for growing NewStore is to deliver exceptional CX for brand devotees who are current customers, and then to focus on new customer acquisition. NewStore’s Omnichannel-as-a-Service iOS allows for a “local experience across the globe,” managing local languages, tax compliance, payment methods, and shipping methods, enabling customers in any of the 40+ countries in which NewStore currently operates to purchase their favorite brands with as little friction as they would browsing online.
Lessons In Hyper-growth
NewStore has experienced 250% revenue growth year over year. Previously, Schambach founded Demandware, which was acquired by Salesforce for $2.8 billion, and Intershop, which had an IPO of two billion dollars. I wanted to know what Schambach has to say about successfully navigating businesses through periods of hyper-growth.
Schambach said that in order to be in a position to experience such rapid growth, you must be at the forefront of multiple trends that work in tandem with one another: “It’s about finding reinforcing trends that make something new possible.” He also said it’s necessary to build entrepreneurial structures within the business and allow teams a high level of independence–the ability to try three or four different approaches to identified, measurable goals.
Another lesson Schambach has for entrepreneurs: “Take the money when you can get it.” Schambach said entrepreneurs should accept money when it’s offered, even if they don’t see a current need for it–having cash on hand makes it easier to attract investors. Schambach advised that entrepreneurs should utilize careful financial planning to ensure they’re spending the money wisely.
E-Commerce To In-Person Experience: Coming Trends
I was curious to know what trends Schambach forecasts as the e-commerce experience bleeds more and more into physical reality. Schambach said we can expect to see investment in consumer shopping apps beyond just a mobile website. He also said that, increasingly, retail and hospitality businesses will bypass credit card terminals to perform transactions. For instance, after a meal, a waiter will process a restaurant patron’s bill on a phone directly at the table, skipping the back and forth of slipping a credit card into an envelope, processing the payment, and returning it.
Schambach also said we can expect to see QR codes on items consumers buy. This QR code, once scanned, will tell the consumer information such as where the item was made, the conditions in which it was made, the materials used, and the item’s potential resale value. As Schambach noted, consumers are concerned about sustainability and want to know that the items they purchase will not later be discarded.
When Curiosity Meets Opportunity
Schambach has always been always intensely curious about how things work. As a boy growing up in East Berlin under the Iron Curtain, he would take apart electronics in his parents’ basement. Schambach enjoyed taking apart–and putting back together–these electronics, even his parents’ prized possession: a color TV, extremely rare in East Germany and a gift from a distant relative in the West. To Schambach’s relief and delight, he successfully put the TV back together.
When the Berlin Wall fell and Scambach visited West Berlin for the first time, he saw the opportunity before him and knew he had what it took to be successful. Said Schambach: “I knew I had much more opportunity than I thought I would ever have, because I was a good engineer and I was willing to combine that with entrepreneurship.” Another inflection point for Schambach in which he knew his career was moving “up and to the right” towards the top quadrant in a 2×2 matrix was when he got his first software company Intershop financed, becoming the first software VC investment in Germany.
Schambach’s innovation and ability to identify and harness market trends have kept him on that upward trajectory.