Category: Cross-Channel

The iPad: A Retail Revolution?

There I was standing in line at the Apple store at 8:30 on the morning on April 3, waiting to pick up a brand new iPad. My mission? Check out this new device to see how retailers might use it to get ahead. Yeah, OK, and I really wanted one for myself, too. But I was legitimately interested in playing with it to determine good retail uses. And I definitely think there are some potentially revolutionary ways retailers can take advantage of the iPad.

Yes, it’s really something profoundly different

Understanding the value of the iPad starts with understanding why it is truly different than anything we’ve seen previously. Many of the attributes you might use to describe it have existed previously, but it’s the combination of those attributes that truly represents the revolution. The fact that it’s self-contained, light weight, and unburdened by a keyboard and a mouse means that it’s easy to hold and carry around. And it’s easy to share with others. It turns on instantly, and the battery lasts for a long time. The touch screen interface feels natural and intuitive. The apps it can run are powerful and capable of more functionality than most web pages. The combination of these attributes provides a powerful platform for retailers to leverage.

Here are just three ways retailers can leverage the power of the iPad:

Take catalogs to the promised land
For years, we’ve had visions of using technology to take catalogs to a new level. But online versions of our print catalogs just haven’t really taken off. Sure, we’ve added hyperlinks to make them interactive, and some have even incorporated multimedia elements, but the online versions really haven’t bested the old fashion print version. I believe a main contributor to the lack of the online catalog’s success is the fact that it’s just not comfortable and cozy to flip though an online catalog. Viewing on a computer screen using a keyboard and a mouse is not comfortable and convenient. The extra benefits of the interactive nature lose out to the lack of comfort in browsing.

But the iPad brings the comfort. It’s easy to sit on the couch and flip through pages with your fingers. It feels pretty natural. It doesn’t get hot, and it’s easy to just turn it off when little Suzy needs help with her homework and instantly turn it back on later with a single press of a button. Interactivity and personalization are possible with an internet connected device, of course, so catalogs created for the iPad can be extremely relevant, fun and informative. And they provide a direct connection to purchase capabilities. It’s really a beautiful thing. I believe catalogs that take advantage of these capabilities will be a huge hit with consumers.

Sales floor assistant
Part of the dream of true cross channel integration is the ability to bring the advantages of technology into the physical store in a way that can improve the shopping experience for our customers. Initially, some retailers used kiosks or POS-to-web integrations to provide these experiences. Lately, we’ve had lots of discussions about providing these capabilities to the mobile phones our customers carry with them into the store.

With the iPad, a sales associate can carry with her all the product data, the customer data, and the recommendations available online. Because the device is so easily shareable, she can easily pull up recommendations and hand them to the customer. She can show the customer how the brown lounge chair he’s viewing in the store would look in the red color that’s available via special order and place that special order on the spot. Or she can play a demonstration video of the food processor that struck the customer’s interest and easily show customer reviews. The possibilities are endless.

Virtual planogram and visual merchandising guide
Many retailers are still creating giant visual merchandising and planogram books, printing and binding them, and snail mailing them out to each store. It’s a costly process and not very flexible or efficient. Last minute changes mean reprints or sloppy additions to the original book.

With iPads at each store, we can send full color, highly customizable guides that are custom made for each store, if desired. They will be easy to carry to the racks, and they can even have built in check boxes to help track when the work is done. Efficiencies abound.

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Of course, there could be s significant capital investment to stock each store with set of iPads, and some of the consumer catalog capabilities I mentioned will not bear much fruit until the iPad is more common — or until the inevitable stream of competitive products hits the market and reduces costs. But there’s little doubt these types of devices will become fairly ubiquitous. And when they do, the retailers who are ready take advantage of the capabilities will be the retailers who come out ahead.

What do you think? Do these ideas seem nutty? What ideas do you have?


Social, mobile and other bright, shiny objects

It’s official. Social media and mobile commerce are this year’s bright, shiny objects. I recently attended a couple of industry conferences where those two topics dominated the agendas, and the trade mags and email newsletters are full of articles on everything social and mobile.

Heck, I’ve also written a white paper and blogged about social media.

Don’t get me wrong. I think social and mobile are important opportunities for us to improve our businesses. I just don’t think we should focus on them to the exclusion of some of the core aspects of our sites and businesses that still need a lot of work.

The level of our success with any of these new technologies is going to be limited by the effectiveness of our core site capabilities and constrained by any internal organizational challenges we might have.

Here are some topics I’d love to see get a little more press and conference content time:

  • Usability
    From my vantage point at ForeSee Results, where I can see customer perceptions at many different retailers, it’s clear that our sites have not come close to solving all of our usability issues. In fact, I’ll go as far as saying improving usability is the #1 way to increase conversion. I’m currently reading a book called “The Design of Everyday Things” by Don Norman. The book was written in the ’80s (I think) so there’s no mention of websites. Instead, he talks a lot about the design of doors, faucets and other everyday objects and, most interestingly, the psychology of we humans who interact with these things. The principles he discusses are absolutely relevant to web page design. Other books, such as “Don’t Make Me Think” by Steve Krug and anything by Jakob Nielsen are also great sources of knowledge. I’d sure love to see us cover these types of topics a little more in our conferences and trade mags. Also, how do different retailers approach find and solve usability issues? In the end, if the experiences we create aren’t usable our social and mobile strategies won’t reach their potential.
  • Organizational structure
    How often do we come back from a conference with great new ideas about implementing some new strategies (say, a new social media or mobile commerce strategy) only to run into competing agendas, lack of resources or organizational bureaucracies? Discussing and writing about organizational structure doesn’t have the panache of social media or other exciting new frontiers, but there’s little doubt in my mind that the structure of our organizations can make or break the success of our businesses. When we were first setting up the organization for the new Borders.com, we spent a LOT of time studying the structures of other companies learning about the pros and the cons from those who lived through different schemes. It was hugely useful and more interesting than you might think. Mark Fodor, CEO of Cross View, just wrote an excellent piece for Online Strategies magazine that discussed the hurdles involved in going cross-channel and included a very good discussion about the need for mindset shifts. I’d love to see these topics further explored in interactive environments at industry conferences.
  • Incentives
    Books like Freakonomics make strong cases for the fact that incentives drive our behaviors. I’d love to hear how other companies set up their internal incentive structures. And there are multiple types of incentives. Certainly, there are financial incentives that come in the form of bonuses. But there are also the sometimes more powerful social incentives. What gets talked about all the time? How do those topics of discussion influence people’s behaviors? How do all those incentives align with the needs generated by new strategies to maximize the power of social media or mobile commerce?
  • Data/analytics storytelling
    We have so much data available to us, and we all talk about being data driven. But how do we get the most from that data? How do we use that data to form our strategies, support our strategies and communicate our strategies. John Lovett of Web Analytics Desmystified wrote an excellent piece on telling stories with data recently. There are also several great blogs on analytics like MineThatData, Occam’s Razor, and the aforementioned Web Analytics Demystified. I’d love to see more discussions in trade mags and conferences about how to get the most from our data, both in analyzing it and relating the findings to others.
  • International expansion
    We used to talk a lot about international, but it doesn’t seem to be a big topic lately. Yet the opportunities to grow our businesses internationally are immense. So, too, are the challenges. Jim Okamura and Maris Daugherty at the JC Williams Group wrote an absolutely excellent white paper late last year on the prizes and perils of international expansion. Jim did have a breakout session at last year’s Shop.org Annual Summit, but I’d love to see more discussion from retailers who have gone or are going international to learn more. Or it would also be good to hear from those who simply ship internationally or those who have decided to stay domestic to learn more about their decision making processes.
  • Leadership
    Leading lots of people and convincing big, disparate groups to do new things is hard. I just read the book Switch: How to Change Things When Change is Hard by Dan and Chip Heath. There are some amazing tips in that book about implementing change in organizations (and in other parts of life, for that matter). I would love to see more discussion of these types of leadership topics that help us all implement the changes we know we need to make to take advantage of new opportunities like social media and mobile commerce.

I know a lot of these topics are more business basics than retail or e-commerce specific. But the reality is we need to be our absolute best at these business basics in order to implement any of our new ideas and strategies. I personally always enjoy talking to other retailers about some of these basics, and I certainly never tire of reading books that expand my horizons. I’d love to see more about these topics in our conferences and trade mags.

But these are just my opinions. I’d really love to know what you think. As a member of the executive content committee for Shop.org, I’m actually in a position to influence some of the excellent content that my good friend Larry Joseloff regularly puts together. But I’d love to know if you agree or not before I start banging the drum. Would you mind dropping me a quick comment or an email letting me know if you agree or disagree. A simple “Right on” if you agree or a “You’re nuts” if you don’t is plenty sufficient; although, I certainly appreciate your expanded thoughts if you’d like to share them.

Please, let me know what you think of my little rant.


Beyond the Buy Button: The Huge Additional Value of Retail Websites

Sometimes, I think we focus so intensely on the e-commerce sales of our sites that we miss the overwhelming additional value they bring to our businesses. Retail websites, particularly for multi-channel retailers, are more multi-dimensional than any other channel and any other brand vehicle. We fail to recognize the value of these sites beyond the buy button at our own peril.

Some are starting to see the additional value. During her presentation at the Retail Innovation and Marketing conference in San Francisco last week, Express Chief Marketing Officer Lisa Gavales talked about her epiphany surrounding Express.com’s value to the brand. It was Express.com’s traffic numbers that sparked the light bulb in her head. She realized that Express.com got as much traffic in a week as all of the Express stores combined. In other words, half of Express brand interactions were occurring on Express.com. Lisa immediately understood the marketing value of such high levels of engagements from Express’ customers. So much so, in fact, that she came to a conclusion she deemed controversial during her presentation — Express.com should be a marketing vehicle first and a direct sales channel second.

After the presentation, my good friend Scott Silverman, Shop.org’s Executive Director, asked me if I agreed with Lisa’s positioning of Express.com. I rambled on a bit before essentially saying “yes and no.” I’ll now take this space for what I hope is a more coherent answer.

I completely agree with Lisa that retail websites are much more valuable to the overall business than their direct sales indicate. Applying resources and strategic importance to sites based only on their percentage of sales is a mistake that could prove very costly in the long run. Customers use our sites for many reasons beyond direct transactions and our failure to highly prioritize those intentions is a disservice to our customers that will affect our bottom lines. But the value of our sites goes well beyond just marketing and direct sales and simply switching priorities is not enough. Furthermore, I worry that prioritizing marketing higher than everything else will lead to the types of conversion problems I previously discussed in my post “Conversion tip: Don’t block the product with window signs.

Let’s consider some of the many values a retail website provides for a multi-channel retailer:

  • Marketing vehicle
    As Lisa noted, the marketing value of our websites is immense. We are getting tons of traffic, and each engagement is an opportunity to enhance our brands. (Of course, if we’re not careful, the opposite is also true.) Websites are a highly efficient way to strengthen the Customer Engagement Cycle. Both online and offline marketing vehicles can direct customers to our sites to further enhance our messages. Our sites are also a great way to tell people about our stores on both a collective and an individual level.
  • Merchandising vehicle
    Customers come in droves to our sites to learn more about the products we sell, whether they intend to buy online, over the phone or in our stores. Our sites have to essentially be our best and most knowledgeable merchants. They have to lead customers to the right products for them and provide the right information for them to make a selection, regardless of the channel where the purchase takes place.  This is a huge, often untapped, opportunity for quality merchants to reach their customers and sell them the right products.
  • Customer research tool
    This is a bit of a double entendre. As mentioned above, our customers are certainly using our sites for their research. But we can also use our sites to learn more about our customers. There is a wealth of information to be had about what our customers are doing and what they desire. Not only can we see what they purchase, but we can also use web analytics to see what they look at. With tools like those provided by ForeSee Results (shameless plug), we can also know what they are thinking, what they are intending to do, and how they are perceiving our brands. All of this can be done fairly easily and inexpensively in ways that are either impossible or impossibly expensive in the physical world.
  • Customer relationship enabler
    We can continue to build relationships with our customers by applying what we’ve learned above to give them better experiences. The applied knowledge of our merchants combined with the long-lasting memory of our websites should allow us to constantly serve our customers better. As we focus on building those relationships with more personalized site experiences, more informed personal interactions via contact centers and in-store, and more relevant email and direct mail communications, we will build stronger loyalty with our customers.
  • Community builder
    Websites also give us ways to connect our customers with each other. Our brands can act as a central hub for like-minded customers to find each other and help each other find products that meet their needs or solve their problems. How great is that? We can make these connections both via our own sites and via social networks like Facebook. Either way, it’s another way for our brands to provide services for our customers. Our sites can also allow our brands to be more localized by providing additional vehicles for our stores to connect with their communities.
  • Sales driver — in-store and online
    And, of course, we can sell stuff. We can sell lots and lots of stuff online. Our sites are still not where they need to be for maximum usability, so we have plenty of opportunities to improve their ability to sell directly. But we also have lots and lots of opportunity to drive traffic into our stores. We can show inventory; we can let people buy or reserve online and pick up in-store; we can host coupons;  we can help people find a store close to them; we can provide reviews and recommendations to people standing in our stores (whether via kiosks or mobile phones). The possibilities are endless.

These site values are not mutually exclusive. Their value in combination is exponentially higher than any one individual value. Therefore, it’s critically important to consider our sites holistically when determining their place and priority in our strategic plans. We need to consider their combined value when we determine allocation of resources and organizational structure.

Too often, though, resources and executive attention are not apportioned to the site according to this additional value. And we often don’t even measure these additional value points (which might explain the lack of resources and executive attention). If our most important measures of our sites revolve solely around direct sales, we will continue to minimize the importance of all other values of our sites.

I believe the multichannel retailers with the brightest futures in this new decade will be those who fully embrace and leverage the multi-dimensional value of their websites.

What do you think? How is your site valued in your organization? What retailers do you think are most recognizing the additional value of their sites?


Sitting in the “Marketing Hot Seat”

My good buddy Adam Cohen, a Rosetta partner who heads up their Search, Online and Social Media businesses, issued a challenge called “The Marketing Hot

You’re the CMO.  You
have a marketing budget of $1M.  Your company is a consumer product
company, relatively unknown / early stage.  Customers who know the
product like it. CEO wants ROI within 12 months.  What do you do?

I thought this would be a fun exercise to take on, particularly because the scenario placed me in the seat of a manufacturer, publisher or product company. Would my retail oriented perspective provide a different line of thinking than would typically come from a manufacturer, and would that perspective be worthwhile? I’d certainly love to know your thoughts.

My take is actually the first one Adam posted on his blog, A Thousand Cuts. Check things out over there over the next few weeks to see perspectives from the other 12 bloggers.

Here’s my answer to Adam’s challenge:

OK.
Setting aside all the caveats about the fact that I don’t know what the product is, what it costs to make and what our margins are, here’s generically how I would approach the situation:

Strategy

  1. Thoroughly understand the customers who like our product
    The customers who know our product like it. We need to find out why, in their words, and determine what personality traits, hobbies, demographics, etc. in those customers are relevant to their liking our products so that we can speak to others like them.
  2. Get our online destinations right
    With a relatively small marketing budget, we’re going to need to maximize our online strategy. (Actually, we should do that even if have a large marketing budget.) We need to make sure our website and our retailer websites are highly usable and highly effective in merchandising our product and providing the ability for customers to easily spread the word about us.
  3. Drive traffic with whatever budget is left
    Only when we have ensured that we have solid destinations for our traffic will we start to actively search for traffic.


Tactics

  1. Learn as much as we can about the customers who most love the product.
    Why do they like it? What are there personality types; let’s use the Myers-Briggs personality test and really get a  thorough understanding of these folks. How do they describe our product? Let’s pay attention to the words they  use as we’re going to reuse those words in our copy.
  2. Hire ForeSee Results to measure our site’s effectiveness from our customers’ perspectives.
    I realize this may seem self-serving since it’s my company, but I was a client for seven years before joining the  company three months ago, and I’ve see how well it works.  So, I want it in this role. So there! We’ll use  measurements, analysis, Session Replay and usability audits to ensure we’re providing the best experience  we can.
  3. Hire Bryan Eisenberg to develop archetypes and to implement Persuasion Architecture on our site.
    We need to speak to customers in language that resonates, and Bryan understands how to do that. We’ll also use  his language for product descriptions and other content we give to retailers for their sites.
  4. Create a high quality product video.
    We’ll use this video on our own site and we’ll give it to retailers for their sites. We’ll focus on the key aspects  customers love and use copy that includes words that resonate with those customers. We’ll also show real  customer testimonials.
  5. Launch customer reviews and customer forums on our site
    We need to make sure our customers can openly provide their thoughts about our product, even when  they’re negative.
  6. Launch several blogs on our site
    Since we only have one product, we need to provide some fresh and compelling content on our site to give people a reason to come back. The content doesn’t need to be about the product all the time. It can be able anything, as  long as it’s compelling. I’ll focus on general marketing, our CEO can blog about leadership, and we’ll find some  people to blog about topics our customers are interested in. All of this blog content will also be great for SEO.
  7. Launch a marketing campaign to retailers informing them about key customers and teaching them how to sell the product
    Our initial marketing efforts will essentially be internal. Let’s get the sellers pumped up and doing their jobs well  before we send customers their way.
  8. Develop a widget for retailers that gives customers the ability to easily share information about the product
    We need to give our customers ways to share information about our product on their own in a way that is easy and  positive. Let’s create a fun widget that people want to share on Facebook, Twitter, email, etc.
  9. Get our SEO right, buy search terms, send emails, run re-marketing campaigns, etc.
    I don’t want to minimize the value of these techniques, but we really need to make sure our destinations are right  before we add lots of traffic.So there you have it. My main point here is to focus on the customers first, the destination second and the traffic driving last.

What do you think? Does my strategy make sense? How would you have addressed the challenge? Do your manufacturer/publisher/product partners address your needs?

The Case to Cross It Up

For any retailer with more than one channel, becoming cross-channel is a critically important way to fully leverage its assets to provide a greater experience to its customers, which ultimately leads to more customer retention, brand loyalty and, of course, sales and profits.

In an effort to highlight and tackle the issues associated with implementing cross channel strategies, Kasey Lobaugh of Deloitte Consulting and Jim Bengier of Sterling Commerce pulled together a Cross Channel Retail Consortium of retail thought leaders that included executives from a cross section of retailers as well as some industry analysts, vendors and yours truly for a day of discussion this past Sunday on the strategy, tactics and challenges of implementing effective retail cross channel experiences for our customers.

Before I delve deeper into my thoughts on the day, it’s probably worth defining “cross channel.” Many times, “multi-channel” and “cross-channel” are used interchangeably, but I don’t think they’re the same thing at all. “Multi-channel” is simply operating in more than one channel while “cross-channel” is leveraging the strengths of each channel to create an overall customer experience that is greater than the sum of its parts. It’s 1+1=3.

Sounds great, right? So, why aren’t more retailers doing it?

Three basic themes emerged from the group:

  1. Lack of executive and board level understanding of the value of customers transacting in multiple channels (and, conversely, the negative affects that occur when customers are prevented from interacting with a brand across channels)
  2. Lack of incentives for various employees, from executive to front line staff, to encourage shopping across channels
  3. IT systems limitations

So, let’s tackle these issues one-by-one.

1. Lack of executive and board level understanding of the value of creating cross channel experiences

The group agreed that getting the buy-in of the CEO is critical. No one believed, and I certainly agree, that a strategy as all-encompassing as creating a cross channel experience has any chance at success without the CEO actively driving it. So, just get the CEO to support it. Easy, right? Not so much.

In my experience, the best way to convince a CEO of the value of any strategy is to show him or her how it will maximize profits. One retailer in the room was able to show the value of customers shopping in multiple channels pretty easily by tracking customer transactions in all channels through a loyalty program. Others were able to do the same in various degrees, but the general concern was the potentially high cost of discounts provided in exchange for such information. (I have lots to say about loyalty programs, but I’ll save that for another post). Janet Sherlock of AMR Research extolled the virtues of emailed receipts as an environmentally attractive and altogether less costly alternative option to harness ID’d transactions. I find that proposal extremely intriguing.

While transactions tell us about customers who completed transactions in each channel, they don’t tell us about customers who researched online to buy in store or customers who took a look at products in store before buying online, and the group longed for an industry standard metric that could be used to assess the amount of sales influenced by the another channel.

Another driver of CEO support is attention to the issue from the Board. One retailer said all it took was a bad experience by one 17-year-old granddaughter of a Board member to get the issue front and center. Funny how life is, isn’t it? Who could imagine that one young girl’s frustration can drive a strategic shift in a major national retailer? But maybe the lesson here is about the importance of getting decision makers’ heads out of the financial spreadsheets and into real-life experiences to help them understand how their companies are (or are not) serving their customers.

2. Lack of incentives for various employees to encourage shopping across channels

One retailer described the challenges of focusing on customer experience at a retailer that is driven by “an imperialist merchant organization.” (There was no way I could write this piece without including that quote.) Merchants, by their nature, tend to care a lot more about product than customers. But in the end, they’re generally heavily driven by sales, margin and turn metrics. There are many cross channel strategies can be implemented to help merchants drive these key metrics.

For example, the web has many selling capabilities that are nearly impossible to achieve in store because of physical constraints. Customer reviews are extremely popular online and customers regularly report using them to make purchase decisions (both online and in store); however, they are very difficult to make available in a physical environment. Some retailers are making them available via in-store kiosks, but the kiosks are a large capital investment to make if they’re not already available. But just about everyone’s got a computer in his or her pocket or purse these days. Let’s make more use of mobile phone technology to give people access to customer reviews, recommendations, wish lists, gift registries, etc. in store while they’re standing in front of the products.

There are also advantages in stores than can be leveraged online. Many retailers have incredible experts in their stores. How can those experts build content that can be used by customers and other employees alike to improve the shopping experience? How about security? Should retailers start to look for ways to accept payment in their stores for web orders when customers aren’t comfortable paying online? Believe it or not, there are still a lot of customers out there who aren’t comfortable using a credit card online, and in this economy there are more and more customers who aren’t comfortable or aren’t able to use credit cards period. But they’re still interested in buying from us, and we should find every way we can to help them do so.

3. IT systems limitations

There’s no question that IT legacy systems cause us a lot of trouble when we try to integrate our customer experiences. But I also wonder how many times we fall back too easily on such an excuse. I’ve written about my Tree Stump Theory previously, and it’s certainly prevalent in this case. We have a lot of compelling reasons why systems prevent us from implementing such key capabilities as the ability to accept returns of online purchases in store. But guess what? Our customers don’t know those reasons, and even if they did, they don’t care. While many retailers have found ways around the returns issues, just as many still have not. Either way, the case to prioritize such efforts should rely on some of the same techniques described above to make compelling cases to the CEO and the incent imperialist merchants.

Pure play retailers, and especially Amazon, continue to grow at rapid rates by pulling more and more market share. Multi-channel retailers have assets in their stores that pure plays don’t, but it’s going to take implementing true cross channel strategies to leverage those assets in a competitively advantageous way. Let’s cross it up!

What cross-channel strategies have you implemented or are considering implementing? What are the barriers to cross-channel in your organization?

Photo credit: Wikimedia Commons



Retail: Shaken Not Stirred by Kevin Ertell


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