Retail, in the eyes of the everyday customer

A LOT. Apple knows as much about the cell phone business as Nokia knows about the PC, yet only one of them is going to add $10 billion to top line revenue through their new shiny product.  So what’s the lesson for the rest of us?

The good news is that this illustrates (once again) that understanding consumer aspirations is the only real way to launch blockbuster products and so every retailer (once again) has an opportunity to do what Apple has done and it doesn’t matter if your space is furniture, apparel, footwear or home appliances. The bad news is that Apple has demonstrated (once again) that moving from zero to complete domination can be both quick and decisive so it’s not enough to just look at your 2^nd, 3^rd or even 7^th top competitor because it could be a new entrant that radically alters your industry. Creating conversations with evangelists is often the most effective way to generate new ideas that really work. It’s easy to do this; companies like Coach literally send out emails to their most loyal customers and ask them if they like new designs, others like Under Armour spend a lot of time talking to athletes about how products feel and work on the field. It’s no surprise then that the revenue of Coach and UA have been growing at clip rates of 30% and 100% over the last few years.

While there is much discussion on this topic identifying one from the other is not so hard:

Good Usability

Bad Usability

There has been a lively discussion on the true identity of the online shopper.  One of the most prevalent beliefs is that if all the potential shoppers were grouped they could be neatly divided into two groups, one that shopped online and one that didn’t (with little or no overlap).  I have a problem with this theory for two reasons: one is that it forces marketers to deploy two different strategies because the assumption is online shoppers have a different set of motivations.  The second reason I am in opposition to this dichotomized view is that it’s flat out wrong.

There is significant overlap between online and offline shoppers.  I’d go further and say that the ‘overlap’ is the fastest growing segment.  I’d go even further and describe this ‘overlapped’ demographic: I believe these customers first shop offline and then (gradually) migrate online.  This migration represents a significant strategic opportunity for retailers not only because it’s a more efficient channel but also because it is completely measurable.  Therefore, I would invest a big chunk of my budget toward facilitating this migration.  Defection at this stage is the most dangerous kind because it represents a permanent change in behavior.  Of all the metrics available to retailers the “% catalogers that transitioned online” and “% store shoppers that transitioned online” is the most important.