Online Loyalty Through Research
By John Hennessy, Vice President, Concept Shopping, Inc.
(www.conceptshopping.com)
A recently released Consumer Preference Index survey from Prospectiv of Woburn, MA – a provider of customer acquisition, e-mail marketing and data analytics solutions – found that while 89 percent of consumers polled said they prefer to make holiday purchases mostly in-store, 71 percent said they intend to use the Internet to research and compare products and prices before heading out to malls, department stores and discount stores.
Along with doing shopping research online, 35 percent of consumers said they will increase online spending for gifts this year, according to the CPI survey. Fifty-five percent said they make their online holiday purchases earlier than in-store purchases.
The convenience of shopping from home or the office, 24/7, is the number one reason for gift buying online, said 57 percent of online shoppers polled. Nineteen percent of online consumers said they shop via the Internet to avoid the holiday crowds.
“Even though the majority of consumers plan to make their holiday purchases in-store this season, the data show effective marketers should use online marketing to drive consumers to their retail location,” said Jere Doyle, president/CEO, Prospectiv.
Moderator’s Comment: Is an online presence, whether offering e-commerce or not, a requirement for being successful in retailing today? How does a retailer’s
web site translate into consumers’ perception of the customer service offered by that business?
Web research begetting in-store sales appears not to be related to loyalty, but it is all about loyalty.
If a survey indicates a shopper preference for research online before making purchases, any retailer or product marketing who is not providing sufficient
online resources to satisfy that customer requirement is not demonstrating loyalty to its shoppers. They are also leaving the door wide open for a competitor to acquire their
customers through superior services.
This has nothing to do with a specific loyalty program but everything to do with a loyalty approach to customers. –
John Hennessy – Moderator
I suppose the local “Mom & Pop” shop may not need a web site to survive within its community. Any retailer with plans to survive over the long term, or to grow at a reasonable rate, will need a web site. Consider it the first step in multi channel retailing.
Multi channel retailing is nothing more than enabling a consumer to purchase an item through the sales channel of their choice. If the retailer does not have the sales channel available, it may not make the sale at all.
BTW, there are numerous studies available that show how much money an on-line shopper spends compared to those who do not use the internet. The difference is significant. Those who shop on-line, then buy, tend to spend more and generate higher profits.
Yes, an online presence is required for any retailer — just as it is required for any business of any kind.
Companies that continue to outsource the web presence to another firm (e.g., Borders –> Amazon) are making a terrible mistake. Senior management (and shareholders) should not allow this to happen.
Any medium-to-large company that can’t manage a retail-oriented web site (even a simple one) shouldn’t be in the retail business at all.
Just as no one would open a store without a sign, no one should have a store without a web site. The site can have employee recruiting info, customer service info (location list, store hours, returns policy, etc.), supplier info (links to supplier sites, lists of brand names carried), product descriptions, promotion information, etc. It need not have pricing and it doesn’t have to accept orders. However, the more features it has, the stickier it can be, assuming the features are presented competently. More and more people use the internet for research to save time and gas and because the stores simply don’t answer phone calls competently, and have major staff problems (poor training, poor attitude, overwork, etc.). It really helps when the brick and mortar locations are in alignment with the web site. Typical Macy’s ad (dated 11/6/2005): “Store offers do not apply on macys.com, and macys.com offers do not apply in store.”
Maybe they should call it notmacys.com.
There is no question retailers have seen a shift in the way consumers prefer to shop. Having an online presence is certainly not a requirement for retailers to have success in retailing today, but it is major ingredient in the recipe. Retailers without an online presence are hindering their chances for success, especially if their competition is one step ahead and offers this service.
The most significant part of this poll is that 71 percent said they intend to use the Internet to research and compare products and prices before shopping. Successful retailers look at their online presence as an extension of their services and they know this service will become increasingly important from a competition and customer satisfaction standpoint in the near future.
I agree with what’s been said here.
The real question to me is why wouldn’t a retailer have a web site? The cost of entry is not great, depending on the complexity of the site; it offers one more touchpoint between the retailer and the consumer; and most e-tailers receive higher scores on customer service surveys than b&m (I believe because expectations are lower, but perhaps, because retailers pay more attention because it’s new).
Yesterday’s NYTimes reported that Wal-Mart is regarding the net, and specifically, Google, as, perhaps, their greatest competition exactly because it allows consumers to shop and compare before leaving home.
Twice recently I was searching for a particular item. My intent going online was just to gather information as to who might have what I wanted and what the price points were. In both cases, (and for very different reasons), I found exactly what I wanted online, I knew what the marketplace was charging, and was able to order online immediately. The stickiness of the online environment is powerful.
To end the story with a warning for retailers: one of the items I bought came from a store I will never enter again because of repeated bad experiences, but they won the online competition. I would have sworn this retailer (and it’s one of the big ones) had lost me forever as a customer, yet their online presence saved a hefty sale. It’s just too easy.
I wouldn’t characterize an online presence as absolutely necessary for success, but given that consumers are actively using the internet to make their shopping decisions, it seems safe to say that it is a key ingredient in competing more effectively.
However, I would caution retailers to avoid making the internet itself the objective and instead focus on using the internet to achieve your corporate goals of profitably driving sales and improving customer service. Put in the effort to develop a web site and email effort that will motivate customers to shop with you and keep them satisfied after the sale.
The internet offers efficiency that simply can’t be achieved through regular print circulars or broadcast advertising. What makes it most powerful, however, is that a properly designed Web/Email effort puts the customer in control of what they see. Customers effectively sell themselves by seeking out information on the items they are interested in purchasing.
If 71% of customers go online to do product and price research and if those customers want to check the selection, offering, or price at a specific retailer, why would a retailer not want to have an online presence? The caveat is that since research results indicate that if consumers are not pleased with your web site, they are less likely to visit your store. So the online presence cannot be perfunctory; it needs to function well for your consumers.
The short answer is clearly, yes. A retailer needs, at a minimum, a ‘web presence.’
I think there are two issues. One is the concept that you ‘must’ have web retailing. The other is that few retailers realize the real value of the net. That is, the real value of the net is what I have always referred to as ‘net influenced sales.’
The more retailers focus on one, the more they miss out on the other. The retailers that really use the net as a form of media dedicated to their customers and their sales, the better off they will be. The more they focus on just net sales, the more difficult they will find the net as a mechanism to build sales.
As the study shows, more and more consumers are using the net as a means to gain information. That is, a form of media. It’s a form of media that can greatly influence behavior given the information that they are seeking is available.
Transforming the information that this study provides is the real challenge.
I think Karen’s experience will be widespread this year–consumers intending to research online but ending up buying online. It shouldn’t be an either/or choice–loyal to a retailer should mean patronizing that retailer, online or offline. Retailers should work harder to blend the two–buy online and pickup at the store. Buy online and return to the store. Buy at the store and order accessories online. Buy at the store and buy refill/replacements online.
There is much truth in all the advice to retailers about multichannel marketing. It is the best and only way forward. One big computer store in the UK (PC World, methinks, but I haven’t paid that much attention) now has a television ad promoting just this line of thinking – do your research before you enter the store and you will save much time because you will know what you want or need. An added bonus, which they don’t mention, is that you don’t have to deal with slovenly, ill-informed sales assistants although you may still get into an argument over whether they actually have your item in stock or not. Can’t win them all…