The First Sale

The biggest distinction between online shoppers and non-online shoppers is that those that buy online do it all the time with all kinds of products and those that don’t buy online don’t buy at all.

So the biggest part of an online retailer’s job is converting a non shopper. Because once the life long behavior of touch, feel, fit and try has been broken shoppers will be more comfortable entering their credit card numbers for future buys.

The future of online retail isn’t in getting a larger share of Heather’s wallet, but rather, in getting more Heathers to buy online for the very first time.

What’s the biggest difference between buying online and offline?  Shipping costs.  Have you tested offering two-way free shipping to new customers?  Have you tested sending a hand-written thank you note with the order?

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Toward Higher Response Rates

Quantity centric attempts to improve email marketing effectiveness is far too scattered a strategy to ever have metric level dependability. However, it is true that people shop (more) when happy and this is an element marketers could consider when developing email marketing programs. And, it turns out, over a relatively large, related, sample size group behavior is astonishingly predictable. I call these events ‘Departure Trends‘.

For example, Ross-Simons Jewelers might realize that sending out emails promoting high ticket items to men in Chicago who are overjoyed by the Cubs entry into baseball championships has better response rates. Or that sending out emails when the weather is unexpectedly pleasant might lead to higher click-throughs; and conversely, local tragedies might make people respond sub-optimally.

Another idea would be to use market events as triggers. No one wants to buy when the markets are hitting new lows but this morning I heard the best market news all month and suddenly felt better. If I got an email announcing a sale I might just have bought the watch I’ve been saving for.

Most eCommerce sites are sophisticated enough to automatically send out an email reminders when customers abandon shopping carts. My suggestion is that they should hold onto the email till one of the events described above takes place.

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Memorable Quotes

If you don’t make it easy for customers to show their support, they won’t. – Andy Sernovitz

Discounts and promotions are taxes placed upon brands for being unremarkable. – Kevin Hillstrom

Advertising only accelerates the inevitable. – Roy Williams

To a worm in horseradish, the whole world is horseradish.

Successful marketing is about telling a story that matches your customer’s world view. – Seth Godin

Women of a certain age, with a certain amount of education, with a certain size family, living in a certain geography, buy for very psychographic reasons. – Michael Gerber

Shelves are places where things go to die. – Chris Anderson

Best way to get visitors to act is to appeal to their fundamental emotional motivations. – Tim Ash

Ease of use is use. – Apple

Inconvenience doesn’t scale. – Ian Rogers

In a world of infinite choice, context – not content – is king. -Rob Reid

If I have 2,000 customers on a given route and 400 different prices, I’m obviously short 1,600 prices. – Robert Crandall (CEO American Airlines)

The market is not seduced by logic; people are moved by stories and drama and hints and clues and discovery.  Logic is a battering ram, one that might work if your case is overwhelming.  Wal-Mart won by logic (cheap!), but you probably won’t. – Seth Godin

“I’m thinking, mother.  Don’t you ever think?” – This is what Bill Gates (as a young boy) said when his mother asked what he was doing in his room. (source:

Companies believe products and services exist on a vertical scale of unremarkable-acceptable-good-better-best.  I believe products and services exist on a horizontal plane. – Rishi Rawat

Any market that doesn’t have a price or quality continuum opens the door for a new business model. – Rishi Rawat

Every strategy has a trade-off, and that’s OK. – Rishi Rawat

Testing is awesome.  The most harm a test can do is increase sales by $0. – Rishi Rawat

The only way to guarantee all tests succeed is by not testing at all. – Rishi Rawat

Every situation carries a unique combination of advantages and disadvantages.  Genius is the clever use of one and avoidance of other. – Rishi Rawat

By the time a visitor is at your store they’ve already accepted they might have to use their credit card.  Close the deal. – Rishi Rawat

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Personas – Inside Out

While I love the idea of persona-driven retail strategy I hate the secrecy around it. We need to extend personas beyond internal use. Personas are more than just internal customer profiles and can actually be used during the shopping process.

I’m a total fashion dud. I would love to go to and select my persona

Age Group: young professional
Job environment: non-corporate
Travel: frequent
Location: Chicago (believe it or not work dress etiquette’s vary by city, I learned this the hard way)
Lifestyle: active
Taste: eclectic

Now, Nordstrom already has this profile on file so instead of having me guess who I am why not just present personas and let me pick the profile that best describes me. This is great for Nordstrom because they know way more about a specific persona than they do about a Rishi Rawat.

The same idea can be extended when shopping for someone else. Instead of guessing what my girlfriend likes I could just pick a persona that best describes her and have the system tell me what she’d like.

PS: I’m not sure if this system will work for women shoppers too.

Here is another idea related to the idea of opening internal information.

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Definition – Defection Latency

I shop for movies at Blockbuster only.  I am fully aware of Netflix and have heard great things about it, plus I hate the Blockbuster store experience and yet I only shop there.  This is what we call defection latency.  1 bad experience isn’t enough for me to leave, neither is 12 but at some point after that I will defect permanently.

Here is the lesson for Blockbuster: when the head of strategy sees the store layout and thinks ‘boy this is shitty’ but then looks at sales and sees that Netflix has hardly caused any defections this doesn’t mean the store isn’t really shitty and that customers don’t like Netflix, it simply means they’re taking time to shake off a shopping habit that’s been with them for 12 years.

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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


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