Retail, in the eyes of the everyday customer

Shopping should be an experience and if you really want to grow your online channel focus on building experiences unavailable at stores. For example, Lucy Activewear has a section called ‘favorite looks’ where they pair clothes into various looks (thanks to The Glam Gals for writing about it). This is a good strategy because this experience is unavailable at retail stores.

Another effective approach is creating expert opinion. Your style gurus couldn’t possibly meet every customer at every store but they can make recommendations for your web audience.

And finally, make sure your web-store is authentic. There is a reason why an unpolished format like blogging is so popular. I believe that reason is authenticity. Imagine if the person managing ‘favorite looks’ was allowed to pick best matching accessories even if they weren’t available on lucy.com? This would elevate them to impartial style guru status and make customers like the site even more because they would now remember lucy.com as an authentic shopping destination.

Related article: Recommending products even when they’re not yours

No matter how you slice and dice it any mass produced item is a commodity. And in the world of commodity a retailer has five alternatives for growth:

- Exclusive rights (with manufacturer)
- Volume discounts (from manufacturer)
- Visibility (through advertising and retail presence)
- Service
- Lowest prices

But for a retailer that does not ‘own’ any of these advantages selling stuff can be a big challenge. Figuring out a creative way to differentiate is key. Here are a few examples of companies that have figured out those creative alternatives:

- Duluth has taken on an interesting approach to visual merchandising (all the images below are paintings!)

- Yelp has reinvented email marketing by converting customer reviews into well written articles

- Woot has reinvented the art of copy

While in school at Ypsilanti it gave me great pleasure to know a retail giant had first started at our neighbor city. This retail phenomenon was Borders. But as I evolved in the multichannel space I wondered why Borders never considered selling online. Was it because their arrogance made them believe Amazon.com could never replace the community aspect of a store and is this way they brazenly chose to use Amazon.com as their virtual storefront? Could it be they realized they would never out price Amazon so they stuck their head in the ground and imagined Amazon didn’t exist?

Whatever their reason, to me it was clear like many retailers back then and today Borders looked at their online store as a simple self checkout lane. And when you think of it that way it makes perfect sense to outsource the job function. Maybe this explains why Borders has hired two banks to figure out way to sell their business.

So what is the lesson here?

I think Borders underestimated their own customers when they automatically assumed ecommerce was a simple lowest-price-wins game. Sure Amazon had the strength of a huge selection and sure they pioneered customer reviews but they did those things to play on the weakness of retail stores. Amazon knew book stores would take years to expand inventory and this provided a perfect opportunity for Amazon to grow without much resistance. For Borders to buy Amazon’s bluff and believe customer reviews was the secret sauce is foolish. When I buy a book I value the opinion of Jack207 but I place higher value on the opinion of a real expert, someone who professionally reviews books. Amazon had too wide a selection to hire experts so they never went that route but this was an advantage Borders owned. Their other advantage was strong publisher relationships and they should have used it for exclusive author interviews (similar to what they do now). Finally, they should have leveraged store presence and allowed customers to browse locally available books by zip code. The bottom line is Borders should have changed the balance of power by playing on their strengths because despite what Amazon told the world deep in their hearts they knew the ace lay with Borders.

We will miss you.

Whenever clients inquire on tips to attract new users I always suggest they focus on core audience and use them to expand brand footprint. Classic evangelism. I still believe this is the most cost effective and enduring way to acquire new customers but propagating a brand story one customer at a time can be very slow. For a product like Ambient Umbrella the word will spread fast but the truth is 98% of products will never generate this kind of buzz. Mass advertising is way too expensive and evangelism is too slow so what is the way out? Burstvertising. The concept behind burstvertising is simple, 90% of the time the company executes marketing strategy focussed on evangelism but then 10% of the time they use a burst channel. An example would be what Garrettwade did yesterday when they bought huge inventories of banner ads on major networks. I now believe this approach may be the one that delivers maximum impact for retailers.

Without a doubt GarrettWade is an awesome multichannel retailer. Their site is beautiful yet functional, they have a strong catalog business and their tools are exquisite. I bet people who buy at their site tend to stick around, I also bet people who buy at garrettwade.com love tools. But then this morning I noticed a garrettwade.com banner ad on CNN. The moment a brand opens up to the general audience they need to be aware that it’ll draw a whole slew of unexpected visitors: curious clickers, people ‘kinda’ interested in tools, gift seekers, people who are interested in tooling but don’t know how to start, etc. Now if the strategy at GarrettWade is to simply expose the brand then their landing page is OK but it does represent an opportunity for them to move beyond building awareness to moving customers along the buying process.

This is the ad:

This is the landing page:

In order to improve effectiveness of their landing page I would definitely focus on two groups:

- Gift buyers
- People interested in tooling but don’t know how to start

For the Gift buyers I would create a Gift buyer page where I would educate customers on how GarrettWade makes for a meaningful gift (which it clearly does) and ask questions about the gift receiver’s project habits and then recommend tools. I tried typing in ‘gift’ and ‘gifts’ on their search box but only saw a list of products.  GarrettWade could do more.

People interested in tooling (but with no knowledge) will most definitely click on those CNN ads and this presents an opportunity for GarrettWade to capture a first time buyer. They should create a learning center, with tons of how-to videos and starter projects.

Anyone knows that in order to sell retailers need to have beautiful product photos. We believe customers want to pan in and out zooming all the way down to the manufacturing batch code. We also believe copy plays a role. But how do we measure what influences more? Is there a company out there that has the guts to remove traditional images and use the power to copy? Turns out there is. The company is called Duluth Trading. These guys are outright different, if you visit duluthtrading.com you’ll see every product is a painting, and these guys are selling workman’s tools!!

What’s ultimately brilliant about the company is just how cool it is. The philosophy of the company is so genuine I am immediately drawn. They write brilliantly and I know they only feature products they love. As a consumer this is really what I am looking for.

My previous posts (A Million Little Pieces and The Mall Effect) postulate product categories sold through department stores will eventually migrate online and that the online channel will soon become their biggest revenue source. But in order to understand this migration lets also explore the birth of the department store. Department format came about as a solution for efficient retail:

- Stores such as Nordstrom act as filters. Their customers can look at the 30 watch varieties carried by the store and be relatively confident about value, quality and style. Nordstrom liked this format.

- An entrepreneur with a new idea needs help with marketing and Nordstrom helps them build exposure. Therefore entrepreneurs with new product ideas like Nordstrom.

- Customers enjoy the idea of doing all their shopping at one location.

The convergence of these three preferences makes the department store format a win win solution. But now, with the growing use of ecommerce by the general shopper, brands can start existing independently online. And this change has a far reaching effect. The biggest change is that now entrepreneurs with smart ideas don’t have to get approval from buyers at department stores. They can relatively inexpensively identify their core audience, market to them and see if those early adopters decide to buy online. For products with a more mass appeal department store format will continue to serve as an awesome distribution network but those that demonstrate appeal through their independent online channel should be able to negotiate well (and hard) with department store buyers. Without this change ideas like SLEEPTRACKER might never have seen the light of day (literally).

Onlynaturalpet.com doesn’t only let customers write reviews, they also respond to them.

By all measures email marketing is clogging our inboxes. But read this email:

Needless to say I renewed my subscription.

I’m not sure if this is a new idea but I just saw it, and loved it.