Retail, in the eyes of the everyday customer

Many retailers look at their online channel as just another mode to complete a sale.  But that’s a low yield strategy.  Smart retailers use their online channels to do things that are either extremely expensive or impossible offline.  And the smartest ones execute ideas that are brilliant AND inexpensive.

Ever since discovering eyebuydirect.com through getelastic.com I’ve considered their Wall of Frame a brilliant example of how an online store can be used to do something entirely new.  The best way to convince a customer to buy from you online is to demonstrate how it benefits THEM.  Everyone talks about price advantages and better service blah blah but Wall of Frame is something tangible, something the customer can compare with how they shop offline and see a clear benefit.

What impresses even more is discovering a competitor who sees Wall of Frame, realizes they cannot compete on execution but manages to find a cost effective workaround that seems to work just as well.

That retailer would be Debby Burk Optical.  They’ve created something new with the help of Skype.  If a customer has a Skype account they can make a frame selection and have a Debby Burk associate wear and demo it through Skype video conferencing.  The idea is not fool proof: everyone does not have Skype and just because a frame looks good on a model does not mean it will work for the customer.  Someone who has seen Wall of Frame will remain unimpressed but Debby Burk is making an intelligent bet most of their customers have no idea what Wall of Frame is.  For them seeing Skype is a quantum leap.  Best of all, adding Skype did not require additional development costs.

A year from now if Debby Burk sees Skype interactions increase conversions 10% they can take supplemental income and reinvest it to build their own Wall of Frame.

Lets say this is your store locator page….

Store locator page

…and a searcher from Chicago lands on it.  Normally this would lead to an abandon (because you don’t have a Chicago location) but there may be a way to convert this exit into a sale.  Right at the bottom of the page I’d post this message:

“If you couldn’t find a local store please leave your email address with us.  We’re opening stores all the time and would love to notify you the moment a local store opens.  And because we feel bad for being unable to help you today we’ll email an exclusive discount coupon for you to share with one of your close friends who live near our 14 national stores.

PS:  When we open a store near you we’ll send you a discount coupon too!”

I have always believed that to succeed online etailers need to think about doing things that are impossible offline. Woot.com exemplifies this idea with their ‘one product a day’ format because they know no retailer can economically copy them. But then we also have instances were retailers flip the game, noticeably Blockbuster’s foray into the DVD rental market which was exactly the same as Netflix except customers could also walk into stores for new DVDs.

Anyway, back to my story.

This morning I came across a video for the new Borders store and it’s bloody awesome. The reason why this will work is because instead of fighting online retailers Borders has created a store with features unavailable online. Have a look:

Related Article: Retail 2.0

Retailers (with offline businesses bigger than their online channel) would argue that their store shoppers fuel online sales. This argument is fair but these retailers also claim 95% of all online sales come from their offline shoppers. This I have a problem with. The percentage is large, I give them that, but it’s not 95%. I suspect around 60% of online sales are influenced by store shoppers.

There are many retailers whose store I would never physically visit (JoAnn, Michael’s and Autozone come to mind) but I wouldn’t mind visiting their site and reviewing their brand experience online. See, I believe online experiences can create offline loyalty.

The good people at Golfsmith International place store availability below their ‘add to cart’ button. This is a best practice item and deserves adoption.

I have talked abut the ‘Grand Retail Unified Theory‘ in detail and very strongly believe this is where the future of eCommerce lies.  So far most eCommerce strategy has been focused on building a stores and jamming traffic through SEM/SEO.  This is redundant because it leads to a 4% conversion rate.  At best.  Back in the day when paid advertising was cheap no one really cared if click-throughs were unqualified, but now, advertising costs have rationalized and the glory days of blanket advertising are numbered.

But this is good because it has re-highlighted leading edge thinkers like Avinash Kaushik and Eric T. Peterson who rightly believe that the true power of the online medium lies in its ability to reveal ‘intent’.  What they are saying, in effect, is that the online experience should be a close approximation of customer aspirations.

Another idea that further reinforces the grand retail unified theory is presented below:

Retail supply chain is hugely sophisticated.  Most retailers know exactly where a specific product is: store, warehouse, transit etc.  So with such high levels of sophistication why not bring some of that magic online.  While browsing Macys.com every non first time visitor should be able to see which SKU’s are available at the local Macy’s store.  In fact the site should have a feature that allows browsing of only store specific inventory.

Talbots.com attempts this by placing a tag called ‘find this item in a store’ but this is a global tag and does not filter by store.

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.

While trying to find the nearest store location for a footwear company I was given the following options:

Are you selling magic shoes?

Traditional retailers (across every single product category) have done so poorly compared to their younger online cousins that it’s not even worth discussing.  The domination is so complete many seem to have stopped trying altogether.  But in the retail world ‘real experiences’ still matter and retailers own the ‘real’ part of the equation.  Multichannel retailers with online stores need to look at it as a way to both preserve existing customers and attract new ones.  The objective is to create widgets that play to the retailer’s strengths.  Retailers like Circuit City have features like buy-online-pickup-in-store and and it would be hard for a pure-play online retailer like newegg.com (which is an Internet Retailer top 10 company) to steal a customer accustomed to Circuit City’s innovative widget.  This is how all retailers need to think.

Many people buy offline and then do in-store alterations. If this data were captured at the store level it could be presented when customers purchase/browse online. Additionally, integrating offline purchase history will allow browsers to see a list of products they have already bought; both online and offline. This is especially useful when someone is trying to buy a shirt and is not sure if they already have a similar color at home. This feature could also be used to make online accessory recommendations for clothes that were bought offline.