But the most refreshing part of his keynote during the Shop.org Annual Summit today was perhaps the unapologetic comments that Bass made about QR codes (doesn’t see the point), Facebook (can’t completely buy into the hype) and company organizational structure (he had a few choice words about some recent retailers’ changes). Regardless of whether attendees agreed with him, all likely walked away with a few topics to debate at this afternoon’s roundtables or this evening’s networking event.
At the crux of Bass’s presentation was five lessons he has learned in 15 years of selling online. The lessons themselves are fairly straightforward, but the food for thought he offered as a part of his keynote surely got the conversation started.
Lesson #1: Ecommerce is not just another store, nor is it just a cheaper marketing channel.
In order to fully utilize your website, Bass said, you cannot treat it like one of your stores. Why? Because the rhythms and dynamics on the web are totally different.
One example: web traffic tends to peak during the week while store traffic spikes on the weekends. (Meaning, the “in store” offers and doorbusters so popular on Saturdays and Sundays might perform best on Mondays or Wednesdays from an online standpoint.) Bass encouraged retailers to “shoot when the ducks are flying” – and the ducks are flying during the week online.
In addition, Bass said, metrics for success are completely different between the two channels. “If I go to any store person and ask about factors for success, no one is going to say easy search, speedy checkout. They’d say something totally different.”
Viewing your website as just another store is “the dumbest damn thing I’ve heard in my life,” Bass said. “If you treat it the same, you’re going to sub-optimize it.” And things just got more spicy from there.
Lesson 2: Org structure matters.
There are two ways the majority of retailers organize their company to account for ecommerce. In one structure, the ecommerce folks operate completely independently. The other model, which integrates ecommerce operations with the rest of the company, means that the marketing team handles both digital and traditional advertising, merchants and buyers work for both channels, etc.
According to Bass, neither of those arrangements works particularly well. “What you want to do is have it somewhere in the middle but skewed towards independence,” he said. In his view, the ecommerce group should be independent and report directly to the CEO.
In Bass’s view, the right structure is imperative to getting ecommerce the resources, and attention, it deserves. An ecommerce team reporting to marketing is only focusing on marketing, he said. An ecommerce team reporting to through stores is only focusing on – you guessed it – stores.
For better or worse, the web often forces change within companies, he said, “and the CEO is the only person that can give you the air cover to make those changes.” Besides, a CEO that doesn’t have the ecommerce team reporting directly to him or her may need a bit of a priority check, Bass said. “If a third of your sales are coming in from the internet, there is no more important strategic thing facing you. If you don’t understand that, you’re going to lose.”
Lesson #3: Focus, Focus, Focus. Don’t be distracted by shiny objects or bogus metrics.
There’s no doubt there have been plenty of “revolutionary” ideas in ecommerce that have made executives stop and take notice, but the challenge comes in cutting through the clutter and critically determining whether each new fad could improve your bottom line.
FourSquare was one example that Bass highlighted as a “shiny object” that may be more fad than function. “When you really look at what causes your website to win, it’s just a handful of things: search and fast checkout. These make customers’ lives easier,” he said. “FourSquare doesn’t make a customer’s life easier.”
According to Bass, all metrics should come down to search and fast checkout, and encouraged executives to be skeptical if other data is being highlighted. “You’ll start to see people throw out other metrics when they’re trying to sell you something that doesn’t work with those metrics.”
It all does come down to search and fast checkout, Bass said, but there are ways to do the basics well and focus on other elements of the shopping experience to increase sales. During his presentation, Bass walked through Charming Shoppes’ new site, www.FashionGenius.com. The site, which offers incredibly easy search functionality, uses an adaptive survey created from a million customer surveys and 10,000 in-person fittings to help women find clothes that will fit their body type and their personal style.
Bass called it “a Google for clothes” and said that, since yesterday, over 60,000 people have already taken a survey on the site. The success of the launch has defied the company’s expectations.
Lesson 5: Look at what lies ahead (and what shouldn’t)
One of the best lessons Bass has learned in ecommerce seems to be that looking forward may be even more important than looking back. And what’s coming down the pike? According to Bass, with an estimated 30% of store-based sales shifting online, store economics will “cataclysmically” change. And for stores, he said, “it’s going to get worse.” (In fact, Bass went so far as to recommend against long-term store leases – he is that confident that the web will impact physical locations.)
What else is coming down the pike that will revolutionize retail? Put your eyes on the iPad, Bass said. “You can’t play Angry Birds on your computer – it doesn’t work,” he said. “And the shopping experience on an iPad is empirically better than on a website. I’ve now come to believe that this is the single most important thing going forward.”
What is Bass not so hot on? Smartphones, he says. “If I’m a restaurant, or Fandango, I need to be doing the smartphone thing,” he said. “Smartphones matter depending upon your category” but aren’t applicable to everyone. (Discuss amongst yourselves.) Also on the “not so hot” radar: social media, which he thinks matters for service but not sales.
At the end of the day, retail executives may have had mixed opinions on Bass’s viewpoints. But he did give people plenty to talk about. And at a conference like this, that is always a very good thing.