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Embrace Showrooming

Showrooming doesn’t sound like an eCommerce term.
I’m fascinated by the concept of showrooming, because it blends traditional retail with eCommerce and mobile commerce. I’ll be honest though, I’m not a big retail shopper. I fit in that category of men that make a list before I enter the store. With a list, my shopping experience becomes like an exercise in pick-and-pack. Easy is as easy does.

Wikipedia defines showrooming as “the act of examining merchandise in a brick and mortar retail store without purchasing it there, then shopping online to find a lower price for the same item.“ While I’m well versed at online shopping, I thought it would be best if I turned to my wife for a more educated opinion on showrooming.

A research group of one turned into a smaller group.
The great thing about interviewing my wife, is that I immediately gained access to the thought patterns and behaviours of her friends (Because women talk about shopping). That’s good, because it helped to give a more rounded opinion on this subject. I captured a few key thoughts from her:

1. “When I’m in a store I need the object right then.” – My wife doesn’t really get the showrooming mentality. She’s in a store to make a purchase at that moment. She generally shops a store based on past association with the brand, convenience of location, and pricing.

2. “I don’t have time to go and research all of the prices and make purchases at different retailers.” – Similar to her first thought, she said that her schedule with multiple kids at home just doesn’t allow the luxury of this level of research. To me, seeing all competing prices for a product in one place is the beauty of a price grabber program. But in her mind, she allocates time to shop and then moves on to the next commitment of the week. She doesn’t want to repeat shop.

3. “Some people will do anything to get the lowest price they can find, regardless of the time and steps to get it.” – She’s right about this. It describes the price conscious customer segment that will work a little harder to find the lowest price when price is the biggest factor in the decision purchase. Coupons and Showrooming are great examples of this.

4. “People take pictures of products for different reasons. I have friends that pictures for patterns and then will make it at home. One time I took a picture of three dresses and sent them to our daughter to see which one she liked best.” – In other words, not everyone takes pictures of items to then go home and try to find the product online.

My take-away from the interview was that showrooming isn’t used by everyone and isn’t always used to purchase a product elsewhere. But it is a consumer behavior that is enabled by technology and will get the attention of retailers.

Retailers need to embrace the practice, not trick consumers.
A behavior I found disturbing was in the report from Samuel Greengard, of CMO.com which discusses the threats that retailers feel from the practice.  Greengard writes about some of the techniques retailers have used to combat issue such as trying to get unique UPC codes and blocking access programs from within their store space.  Come-on, really?

Just like Brands can’t control the conversation about their products and services on social sites, retailers won’t be able to control consumer behavior like showrooming, nor should they. That’s a point that Greengard makes as well. My thought is why can’t retailers spend all of that intellectual and project time time creating ways to embrace the consumer behavior?

One idea is to show competitive pricing on some common products right in the store. I’ve seen this at Grocery stores and automobile service shops.  They’ll save you the time and it’s good for the store owner because they know where they stand in market pricing.

Another idea is to promote the benefits of buying in the store. I’m thinking of things like no hassle returns, take it home today, shopping rewards cards, etc. Alternatively promote an online sale from the online store of the retailer.

Consumers will only get more versed in using technology to help them with everyday tasks. Retailers should embrace showrooming and find ways to benefit themselves and the customer.

Takeaways from eTail West Day 2

The prevalent theme in the early discussions on day 2 of eTail West was multi-channel strategy.  Seems like a no-brainer that you need to operate as ONE company. However, based on the questions from the attendees, you can see that challenges *and* opportunities exist within organizations for how to allocate revenue and control channel rivalry.

Another repeated message was “get mobile”. The early retail adopters are filling the space quickly and your industry may already be filled with competing mobile applications. So get busy.

Here are the highlights of my bullet notes from the opening sessions and track B on social media.

Bob Cell – CEO – MyBuys

  • Marketing should not be based on events of the past. Use what you know about the customer combined with predictive modeling to suggest/personalize the experience.

Vincent Ragueso – Vice President eCommerce – 1800Flowers.com – Distributing your Store

  • Building a mobile program
    • Broad mobile strategy
    • Optimized shopping via wide array of devices
    • First to market in their category and continued evolution
    • Utilized external vendor for expertise and speed to market
  • Smartphone penetration growth 20% now, on pace for 40% over next two years
  • Key Takeaways
    • Have a broad mobile strategy
    • SMS – Take advantage of it
    • There will be more eCommerce transactions on Facebook. Get involved.
    • Differentiate your social media strategy.

Jason Bertrand – Manager of Online Campaigns – Under Armour

  • Revenue attribution – the process of tracking, sequencing, and valuing the contribution of revenue for activities across business channels.
    • Example
      • User clicks on display add and go to email list
      • Few days later visit store but no purchase
      • Few days later go back to site and purchase
      • How do you credit and attribute the revenue from this transaction for the activities leading to it?
      • First touch point is the “introducer”
      • Middle touch points are “Influencer”
      • Last is the “closer”
      • Use the data and knowledge from the touch point funnel to help make decisions for media buys and advertisement budget.
  • What should a revenue attribution solution include?
    • Order and sales level attribution
    • Profit level attribution (may need to send profit data to provider)
    • Able to provide product-level analytics
    • View based conversion tracking (email opens, banner views)
    • Purchase path reporting
    • Attribution exclusion capability

Panel Discussion – Decisions to Prioritize Projects
Marc Miller – SVP eCommerce – Aeropostale
Carol Steinberg – SVP eCommerce – ShopNBC.com
Lewis Goldman – SVP Marketing – 1800Flowers.com
Jamie Iannone – EVP Shopping – Barnesandnoble.com
James Keller – SVP Marketing and Business Development – Shoebuy.com
Igor Gorn – CEO – SysIQ

  • How do they approach project prioritization?
    • (NBC, Aeropostale) – Capital budget/Operations expense budget – Review capital expense budget items each month.
    • B&N – Have a 12 to 18 month roadmap. Assign product manager/owner to each product responsible for value and ROI.
  • NBC -Looks at margin dollars by category. Allowed to go over budget if it bringing in more profit.  They setup mini P&Ls for each program.
  • 2010 Priorities
    • NBC – Mobile apps, social, video
    • Aeropostale – Mobile, Facebook, International reach
    • B&N – Digital, Store integration
    • Shoebuy – Selection and service on website, International reach
    • SysIQ – Personalization and one-to-one marketing
  • B&N – Using agile methodology for development

Jamie Iannone – EVP Shopping – Barnesandnoble.com – The changing landscape of eCommerce

  • Presented a video on B&N nook eReader.
    • The Nook is built on the Android platform
  • Discussed iPhone application
    • Store locator
    • Find events
    • Add stores to contacts
    • Promotion – Free coffee if you download the application. Received a free cup of coffee in the store.
  • B&N currently uses 6 different twitter handles dedicated to specific topics
  • Use of weekly voice of the customer panel meeting
    • 15 customers under NDA
    • Connect product managers with real customers
    • They are not paid in cash. They are sent coupons.

Miguel Almeida – Vice President Online Merchandising – Walgreens – Beyond eCommerce Linking Solutions for customers via the web

  • Optimal wellness program
    • Track and monitor specific health conditions
  • 3Cs of Web site real-estate allocation
    • Content
    • Commerce
    • Community
  • 3x more sales value from multi-channel customers
  • Give customers a choice for all channels. Make the channels reinforce each other.

Steve Zapf – EVP Multi-Chanel Management – Guitar Center/Musician’s Friend

  • Interesting presentation blending in video and eCommerce concepts. Quite honestly, I was mesmerized by ZZ Top with Santa’s elf.

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Track B – Community, Social Media & Predictive Modeling

Keith Mercier – VP GAP Online – GAP

  • GAP Then – The “push” approach – No interaction with customer
  • GAP Now – Beyond “push”
    • Leverage store employees to add content
    • “Born to Fit” campaign
    • Challenge from campaign to ongoing catalog
    • Facebook contests
  • 3 takeaways
    • Go where the traffic is
    • Aggressively recruit a fan base
    • Be authentic in everything
  • Reviews do drive conversions. Their A/B tests proved it out.

Pedro Santos – Chief Strategist – Akami

  • Behavioral targeting is difficult if you are not careful with the data
  • What are the goals?
    • Awareness?
    • Persuasion?
    • Response?
  • Where in the purchase funnel can audience be found?
  • Akami hosts a shopping data cooperative
    • 550+ web sites contributing anonymous data
  • Predictive Targeting
    • Reach “right” in market buyers
  • Future
    • No need for pixel tagging to track behavior
    • Broadens reach of tracking

Panel Discussion
Cost-Effective Innovations in Social Media that Drive Sales
Eoin Comeford – VP Marketing – Moosejaw
Jamey Maki – Director eCommerce – Golfsmith
Lauren Coberly – Director Worldwide Marketing – Kodak Direct
Rich Lesperance – Director of Online marketing – Walgreens
Prashant Nedungadi – CEO – IM Shopping

How did social media get started?

  • Golfsmith – Polled fan base. Looked for ways to increase followers.  Giveaways to promote awareness and attention.
  • Kodak – Half of product lines that make up 70% of revenues today didn’t exist 5 years ago. As they reinvented the company it was the perfect time to get into social media.

What are the Goals for 2010?

  • IM Shopping – Conversion rates
  • Golfsmith – Increase mass
  • Moosejaw – Increase engagement and excitement – 20 days of decent giveaways.

How do you measure ROI?

  • Kodak – Engagement in social media helps search engine rankings. They have not seen the success Dell has with coupons. They look at brand lift and awareness. They look at engagement metrics.
  • Walgreens – Looks at sign-ups, sales. Realize though that Brand engagement can be fuzzy.

Do you have a dedicated social media team?

  • MooseJaw – Yes. Without constant content and immediate response then don’t play.
  • Kodak – chief blogger, chief listener, several part time responsibilities

Do you have suggestions on tools?

  • Golfsmith – Lots of free tools. Recommend look at Mashable.com

Phyil Arrington – Manager of Operations – The Body Shop – Engaging the Right Community

  • The body shop targets communities that are passionate about the same things that they are
  • Engaging Blogger Communities
    • Beauty
    • Mom
    • Values
    • The beauty bloggers are very influential in their niche
  • Through Facebook
    • Exclusive content
    • Engage customer complaints
    • Secret Santa tab – Each day post different coupon code and then give click through to the eCommerce site.
  • Through Twitter
    • Share beauty tips
    • Retweet influential blogs
    • Announce special deals and promotions
    • Promote causes that corporate supports
  • Investment in this channel is not always easy to measure and there is a definite effect on the traffic and conversion rate on the site when you tap into the right community.

Takeaways from eTail West Day 1

I have the opportunity and privilege to attend the eTail West conference in Palm Springs this week. This is a large industry conference for Internet retailers that provides tactical and strategic studies, networking, and salesengagements. To knowledge share with others at the event and the community at large I’m providing a few of the highlights from my notes today.  In general, a few themes I noticed were:

  • Get back to basics. Focus on driving traffic, make your site easy to use, and segment your customer profiles.
  • Integrate your channels for a seamless brand experience.
  • Social or New Media areas are relevant, but they should be a piece of your overall strategy and customized to your business needs. For the first time I heard some retailers question its relevancy because they have not had success in that space yet.
  • Mobile is here.  Are you in it?

My session/speaker notes are in bullet statement format rather than a typical blog post commentary.

Paul Elliott – Partner Acquisition Marketing- Rosetta

  • Mobile is no longer just for leading-edge retailers.
    • 1 in 5 consumers used mobile phone last holiday season to assist with shopping.

Bill Bass – President – Charming Shoppes Direct (Lane Bryant, Fashion Bug, Catherines)

  • Number 1 goal of eCommerce overhaul: Make it easy to shop
    • Focus on web 1.0 and not 2.0
  • Make sure onsite search works for what consumers know (not SKUS)
  • Banner ad retargeting
    • A/B test found that banner retargeting did not work.
  • They use their sibling brands on the top of their site as navigation tabs.
    • Attempt to cut down on the number of abandons leaving the brand family. (leakage)
  • Flat rate shipping message up front helps to reduce shipping abandonments.

Larry Freed – President and CEO – Forsee Results

  • Forrester says that conversion rates in 2009 averaged 3.4% for online retailers.
  • On average 55% of visitors come to your site to research information, while 36% come with the intent to purchase.
  • Conversion rates as a metric is flawed if you are using search marketing to drive traffic to your site. Think of ways to measure different conversion rates depending on source of traffic.

Jack Jia – CEO – Baynote

  • The essence of targeted marketing is context. Focus on presenting like products within context of main product.
  • With the Baynote product, the web site displays content dynamically based on what previous users have chosen and where they have navigated. The idea is that they are choosing things within a specific context.  (Wisdom of the crowd)

Pete Howard – Senior Vice President – Staples

  • Customer touch points
    • Staples.com
    • Customer reviews
    • Catalogs
    • Direct mail
    • Telesales
    • Retails stores
    • Chat reps, Facebook, Twitter
  • Factors that are highly correlated to a 5 in the delivery business
    • On time delivery
    • Ease of finding product
    • Clarity of promotional  offers and product descriptions
    • Helpfulness of delivery driver

Richard Gerstein- SVP Marketing-  Sears Holding

  • New tagline “shopyourway” – all channels equal.
  • The dead-end shopping experience is the worst shopping experience.
  • Examples of cross-channel integration happening in Sears
    • Free shipping for any catalog product not stocked in store
    • Personal Shopper – iPhone app where someone will call to make a purchase based on photo they select.
    • Manage My Life – Download all product manuals for things that you own into a profile.
    • Real time price check – Can check competitor’s prices in store.
    • Group Give – Multiple people contribute towards a single product.
    • LayAway for online purchases
    • Market Place – Affiliate program for small retailers (similar to Amazaon Affiliates)

Nathan Decker – Sr. Director eCommerce – evogear – Product Ratings and Review

  • Develop strategies to acquire reviews
    • Seek all information
    • Leverage the content
  • All fair reviews are open game
    • Negative information builds domain trust
  • Encourage honesty in customer reviews
  • Try to get 4-7 reviews per item because purchase percentage is highest in this category.
  • Tactics
    • “Write a Review” link on product page
    • Follow-up email
      • Send email 20 days after transaction happens
      • Sparse marketing in this email
    • Contest – Leave a review and be entered in contest.
      • Increased submissions by 49%
    • Use review headlines and star ratings
    • Sort-by filter on site for products with “Most Reviews”
    • Serve up review data so that search engine bots can capture and serve.

Verisign – Tim Callan – VeriSign – VP Marketing, SSL

  • Consumers reward sites that use and display best-in-breed security
    • Use-email properly
    • Use recognized security badges
    • Display the green address bar (Extended Validation SSL Certificate)
    • Communicate to your customer
  • Challenges
    • Increasing use confidence to transact online
  • Compliance
    • FTC guidelines (16 CFR Part 314)
    • NIST NSI Guidelines (SP 800-122)
  • Online Fraud continues to rise
    • Unique Phising sites detected is growing month-over-month
  • 48% of scanned computers have some type of mal-ware
    • The worst is key logging.

Michael Cooper – VP Specialty Channels – Home Depot – Multi-Channel Retailing

  • Creating cross-functional collaboration
    • Store Buy In – Stores get credit for sales
    • Merchandising alignment – Organizational synergies, Assortment alignment.
    • One voice to customer – Marketing messages consistent across channels
    • Stores sales facilitation – Browseable store SKUs.
    • Digital orange apron – online workshops, how-to-videos, online showrooms.
  • Ability to return online purchases at a local store
  • Redeem gift cards online
  • Multi-channel expectations
    • Consistency with online prices and store prices
    • Visibility to store assortment and inventory availability
    • Online purchase for in store pick-up
    • Status updates for special orders and deliveries
    • Online tools to estimate the cost of a project
  • Takeaways
    • Align metrics across the enterprise
    • Cross-Functional Collaboration

I’ll post my notes on eTail West day 2 tomorrow. You can also follow my thoughts on twitter.