Just Because YOU Care About Your Suggestion Box Doesn’t Mean Your Customers Do Too…

In the last 20 years I have had bad customer experiences no less than 1,200 times and yet I can’t remember one instance when I actually filled a feedback form.  So the store never really knew I was unhappy.

Fortunately, in the online world feedback feature comes standard.  When a customer is unhappy you don’t need to ask but observe how they navigate your virtual store and their emotions will flash on the screen for all to see.

Like this idea?

Leave a comment

How To Convert A Liability Into An Asset

Panera Bread is one of the few coffee retailers that actually offer customers free Internet access and I can’t even tell you how much I feel endeared to the brand because of this. But I also know Panera is giving free Internet in hopes of getting me to buy more stuff (which, I don’t think I really do) so it’s quite natural for Panera to not like Internet users who buy one cup of coffee with free refills for $1.69 and then spend hours surfing the net.

According to compete.com 313,839 people use the Panera WIFI every month making it the 5,961st most popular site in the world (I wonder if the management team at Panera is aware of this!). The way I see it Panera is experiencing all the pains of providing a great service without any of the benefits. How do we use the service to dramatically enhance brand experience? Historically, coffee shops have been places where people of diverse backgrounds converged to discuss things so why doesn’t Panera allow it’s customers to discuss topics online? The WIFI login page could have a list of topics ranging from politics to dating where people could post messages and even chat with other Panera patrons all over the country. Sure, some people will misuse the service and sit around longer but I believe overall it will only enhance the Panera brand.

Like this idea?

Leave a comment

What Can The iPhone Teach Retailers?

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 2nd, 3rd or even 7th 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.

Like this idea?

Leave a comment

Bad Usability Vs. Good Usability

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

Good Usability

Bad Usability
nwa.jpg

Like this idea?

Leave a comment

What Is The Next Channel Opportunity?

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.

Like this idea?

Leave a comment

Nearest Store Location

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

Are you selling magic shoes?

Like this idea?

Leave a comment

What Heinz Discovered

Retail merchandising strategy is almost completely governed by the principle of price elasticity.  It follows that if price of a product is increased overall units sold drop and vice versa.  But this is not always the case.  Heinz discovered by increasing the size of ketchup bottles from 24oz to 36oz sales increased with no reduction in buying frequency.  Turns out consumption of ketchup follows its own convention.  Mothers buy ketchup for kids so when there’s less than 3/4th left they ask their kids to go slow and consumption rate falls.  With the 36oz bottle 3/4th is still a lot.  When consumption was viewed side by side it was discovered they got over at approximately the same time.  The replacement of 24oz with 36oz helped Heinz increase ketchup sales 13%.  Kaching.

Related article: Price Elasticity Parabola

 

Like this idea?

1 comment

Not Either Or

Every time the cash register rings two kinds of analysis are possible. The traditional way is to look at the transaction itself (size, frequency, category etc). The alternative is to measure everything leading up to the purchase; things like, other products considered, time taken to make purchase decision, customer history etc. Retailers should look at both.

Like this idea?

Leave a comment

Offline Vs. Online

My previous post about bluenile.com has gotten me thinking. The fact that an online retailer (with 0 offline stores) is able to generate 5 times the online revenue of its closest rival (which happens to have 2,700 offline locations) should be a lesson to retailers who believe selling online is hard because browsers can do a Google searches to find cheaper alternatives. Maybe it’s just me but when I find the right product I don’t try any harder to find price alternatives online than what I would in a retail store. If that were the case I’d have set walmart.com as my homepage. The truth is that online customers are no different from their offline brethren.

The other fact that retailers often forget is that brand loyalty is not something that only benefits them; it also benefits discerning customers because it allows then to build a trusted network of sources for products and services. To assume the same customer would be loyal offline but not online is flat out wrong.

Like this idea?

1 comment

The Cardinal Rule

Compelling online experiences (not traffic) drive sales. Consider a company like BlueNile.com which is able to generate annualized web revenues of $169 Million through just 739,000 online monthly visitors. Translation: every customer that walks into bluenile.com (with or without an intention to buy) ends up spending $19 dollars (and change) at the store. That’s a really big deal and I believe it is heavily influenced by BlueNile’s ability to create a truly compelling and differentiated online experience. Instead of throwing money at just bringing people to their site BlueNile has chosen (quite wisely) to focus on making sure that those in their store end up buying.

Update: Since I wrote this post I received serious flack for my elders. They attribute this $19/visit to the expensive items at bluenile.com. I disagree. This figure was derived by a numerator (revenue) and a denominator (buyers). Because wedding rings are a high consideration item it follows people look around quite a bit. This inflates the number ‘just browsing’ visits (denominator) to bluenile.com thus effectively canceling the effect of the numerator. Comments? opinions? please share.

Like this idea?

6 comment