Shop.org FL/The role of a next generation site within a broader retail strategy

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I really enjoyed the recent Shop.org “First Look” event in Florida – as it is always fun to pick one’s head up from the day to day and speculate about the future.   I was fortunate enough to be part of a panel of presenters who collectively investigated where “things” may be going over the next five years or so.  What a refreshing change to be able to render an opinion… that requires absolutely no supporting data or facts!  Surprisingly enough, but for the Gartner scenario where everyone ends up hostage to “googazon”, most of the discussion within our group almost felt like ‘consensus’ – and the next wave of what is required is fairly intuitive.  I personally tackled the topic of extending my eCommerce 3.0 point of view (you can get my whitepaper at www.scene7.com) – to discuss how a next-generation ecommerce experience (aka EC 3.0) could become the central component to a very different retail experience across all touch points. While the whitepaper provides the pre-requisite information for the remainder of this blog entry to make sense, if you are strapped for time, my previous blog entry at least gives the cliff notes version.

My premise on the role of a EC3 site in a broader retail strategy is as follows:
Once upon a time there was “old school” retail – the store that provided superior attention and service – places such as corner hardware stores and shoe boutiques.  When you would enter these stores, you would be greeted by name, asked appropriate questions about what you need… and be taken to the exact product to fill your need.   A successful and fulfilling experience – and one that would cost you a slight premium.   As the years have gone on, the evolution of “Mass Retail” has put a bit of a squeeze on Old School – as the advantage to the consumer of Mass Retail is price, selection and convenience.   So if you are cheap… busy… or want to be sure you’ve seen every possible choice, Mass Retail nails it for you.   However, the notion of personal attention or individual service goes out the window.  The more I thought about it, the more it feels like a really, really superior “eCommerce 3.0-like” web offering could bridge the gap between these two worlds – giving the consumer the best of both.

Before launching into the “after” – let’s discuss the current state of your typical retailer and how they are organized to “go to market”.   Most retailers have two, if not three, key channels:  stores, catalog and web.  Each group has fairly independent marketing efforts – with the goal of driving consumers to its channel.   Each group has fairly independent ‘experience’ efforts – with the web team optimizing their website, the catalog team optimizing their catalogs and the store team optimizing their stores.   Sitting in the middle of this is the ‘consumer’ – treated largely as a big, single segment – bombarded from different directions by the disconnected marketing and experience efforts of this given retailer.  I was recently talking to one of my biggest clients who told me that each channel ‘competes’ to get slotting for their email list – as everyone wants to use it so much they all now get an allocation.   Yikes.   Anyway, there is some rub-off between the channels – such as the catalog drop causing a spike on the web (effectively being a marketing vehicle for the web itself) – but in reality, I generally see a “one size fits all” approach where there isn’t much thought given to an integrated strategy across channels – and one that treats different customers…. well differently.  Also, as a marketer at heart, I see a tragic lack of global optimization of spend on marketing and experience — buy more keywords, send more emails, drop more catalogs or buy more mass media?  These decisions are often made by different people who are not looking across… nor are they caring about the collective, disintegrated bombardment of the customers (in a world that already has way too much marketing noise).

So, how can the future look better?  Well first, you, the retailer, can have a unified ‘mass marketing’ effort that includes all forms of marketing (including the catalog itself) that has the goal of establishing your brand and generating individual new buyers (or to re-activate customers who have been gone for awhile).  Then spend to generate value across vehicles such as web marketing, mass marketing, email marketing and ‘catalog marketing’ can be fully optimized so each incremental penny into the “mass” marketing bucket then generates the maximum result.  OK – so you now have these individual buyers dropping out of your marketing efforts.   Now, with an eCommerce 3.0 type website offering – you can begin to offer customers a personal, tailored experience -  moving back into the realm of “Old School” retail – where a customer provides information about herself and transacts with you – and you fully customize her site experience to reflect her individual situation. This starts the “give to get” cycle that encourages information sharing from each customer as you  provide value in return.  While I cannot re-summarize all the EC3 principles here – it would be things such as the “My Gymboree” experience where I get a unique look into the store (product, promotion and navigation) for each of my kids. And if all the EC3 principles are implemented, the retailer ends up offering a ‘customer portal’ where each individual consumer can have a quick glance at everything that is relevant to him about a given retailer – which products, current promotions, store related events, etc.   So now, you are managing your relationships with each customer on an individual basis – and no longer hitting her from three angles with generic marketing and experience.

So, let’s move into how you change the way you market to your ‘individual buyers’, facilitated by the relationship you’ve built via the EC3 site.  The EC3 site experience now encourages transaction and information sharing – building a detailed customer by customer profile.  Through this, you are in a terrific position to go to ‘micro marketing’ with each given customer – no longer wasting the ‘one size fits all’ marketing dollars on this customer (nor annoying them with it).  To do so, you have to develop a “Digital Marketing Engine” (which does not fully exist at this time – but it will) – where it can provide individual, relevant marketing to each of your individual customers who came out of your ‘mass’ efforts.  For example, let’s say “Mary Decker’s” MySite has some relevant change – such a new product arriving that would complement her purchase history – or one of her favorite products about to go out of stock in her size – you can now trigger an email or a print piece to her to inform her that she should return to her MySite to check out the latest, fresh look at her store.  This draws her back in, encourages her to transact and/or share more information – and provides her superior “old school” service that is both relevant and timely.  This will not feel like marketing – it will feel like service.   This can easily extend to marketing related to ‘drive to store’ where something is available locally and immediately… and even into mobile marketing.

From this strategy, you now:
* Optimize your “mass” marketing spend to meet branding goals and generate individual buyers
* Treat individual buyers differently – by giving them a tailored EC3 experience, fueling the ‘give to get’ cycle where they build up a personal profile with you
* No longer bombard your individual customers with mass approaches – but instead, micro-market to them which comes off like a service
Your integrated strategy is now less about ‘channels’ and more about individual empowerment, personalized service and global optimization of spend and experience.  Not bad.

So much of this thinking is driven by my experience with Eastbay.com – where I loyally buy my basketball shoes.   I am continually surprised with the frequent and generic nature of what they send me in the mail and via email.   As they know so much about me – my selected category, my size, my purchase frequency, my responsiveness to certain promotions, my color preferences, my returns history, what cross sells work with me, etc. – I would expect that at some point, I will get my own Eastbay store that is relevant to me – and get marketing that is both timely and relevant (as the catalogs featuring softball are interesting, but not likely to trigger engagement from me).  Those who figure this out first will win individual customers… for life.

So, as an eCommerce professional, where do you start?  Since the typical eCommerce team is not in a position to overhaul their corporate “go-to-market” approach, you can start by putting your EC 3.0 foundation in place where you begin to provide a superior experience on your site – and begin this ‘give to get’ cycle with each individual customer.   The only trick here is that you will need to have the courage to ask for increased investment in the web – a great site is not done with a hacked together foundation or a shoestring experience budget.  From EC3 success, you can begin fiddling with ‘micro marketing’ within your web charter – and believe me, it will work.   We’ve done this in a non-systematic way with some of our clients…. and the results are compelling.   After you have the proof points, form your site and your micro-marketing efforts – you then would be in a great position in initiate a dialog at the executive levels around adapting your go to market approach as a company.

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One Comment

  1. Posted March 18, 2007 at 9:59 am | Permalink

    Doug, great post.

    I have been relating online technologies to offline analogies for some time now. When I first started Coremetrics, I used to tell customers the story of Sam Walton (as told in his book “Made in America”) and how he would observe customer behavior in the store (and teach managers to do the same). Coremetrics was just taking that same practice online, and wrapping services and better reporting around it. I decided to name the first Coremetrics reporting system “eLuminate” because we were “illuminating the black-box of an online retail store to enable you to see behavior, just like Sam Walton taught and practiced”.

    At Bazaarvoice, I built the story into our name. You can read the story here:
    http://www.bazaarvoice.com/company.html

    I also thought you may be interested in my post on “closing the tactile gap between offline and online”, written last year around this time:
    http://www.bazaarblog.com/2006/03/08/closing-the-tactile-gap-between-offline-and-online/

    See you in Florida!

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