PL Buyer: Opportunities Online
By Jill Rivkin
Online market research firm InsightExpress recently conducted an exclusive research study for PL Buyer inquiring about consumer attitudes about retailers’ web sites: Do consumers shop online? What do they buy online? Would they use a retailer’s web site to gather information? We asked them these questions and a host of others, with all answers pointing to tremendous opportunities online for retailers.
Survey respondents said they shop online for a host of products, yet only 15.3 percent said they buy groceries online.
Almost 35 percent said they visit their local grocery store’s site at least once a month while 52.4 percent visit their local drugstore’s site at least once a month. While they do buy things online, most are not looking to replace trips to stores; they’re looking for information to make trips easier.
“They’re using web sites to gather information,” said Dan Raftery, president of Raftery Resource Network Inc. “They say that the make-life-easy-for-me opportunities are not being tapped as much as they could by retailers.”
Make-life-easy-for-me opportunities often are simple features a retailer can incorporate into a web site. Respondents said they would read a circular online, 56.3 percent, and search for recipes, 44.1 percent. The common element is making shopping smoother and simpler, in advance of entering the store.
Mike Spindler, chief executive officer of Gladson Interactive, and part owner of MyWebGrocer.com, said, “The majority of consumers use the web to make the chore easier, more convenient for them… The only service you should provide to a customer is to help them buy groceries…”
Not surprisingly, the majority said web sites are, or would be, a valuable asset to save money. Nearly 63 percent look for coupons while 72 percent said they would use grocers’ sites more often if coupons were offered.
For drugstores, 54.4 percent said they would use sites to look up pricing; 56.8 percent would use the site more if there were coupons; and 26.6 percent would use the site to compare store brand items to national brands.
Almost 23 percent said they would go to a site to find out about new store brands, compared with the 16.2 percent who would look up information on new national brands items.
Opportunities to save time and money far surpass any other consumer expectations of what they want on a retailer’s site. While the survey shows they would like coupons and recipes – both likely to save money and time – consumers don’t appear to have much faith in the grocery store as a resource for more information.
Only 2.8 percent said they would ask an expert about wine and only 3.2 percent would ask about menu planning. When asked what they would like to see on their grocer’s site, 31.7 percent said they would like an ask-the-expert option.
Consumers have more faith in drugstore sites. Thirty-four percent said they would go to a local drugstore’s site to ask a pharmacist a question. Another 30.6 percent would use the site more often if they had the opportunity to ask a question. Almost 30 percent said they would look for information on self-diagnosis.
Discussion Questions: How can supermarkets and drugstores make better use of their web sites? Speaking to the study’s findings, how should supermarkets
address consumers’ apparent lack of confidence in grocers as an information resource? How do drugstores build on the confidence that consumers have expressed in advice they receive
from pharmacists?
Grocery and drug stores should be using their web sites to provide information, as a marketing opportunity to drive traffic to their physical stores, and to build loyalty.
What could these retailers be doing better online? They need to dramatically improve their customers’ online experiences. Poor online performance leads consumers to abandon the retailer, both in its online and physical forms.
The correlation between an unsatisfactory online experience and potential revenue loss has never been stronger. Now, more than ever, retailers need to focus on ensuring a consistently superior web experience that will drive sales and brand loyalty – or risk losing the customer to a competitor.
When comparing web sites of large grocery and drug chains (G&D) vs. dedicated online companies, electronics or mass merchants, the former sites are typically dreadful in comparison.
Downloading the weekly flyer and promoting their loyalty programs are just about the only things G&D does well.
There are lots of things they can do to attract and inform customers, but the first thing is to pinpoint the target you’re going after. Is your G&D a discount type of store aimed at price conscious customers? Is it a superstore which sells just about everything? Is it a high end gourmet shop?
There’s a lot of high tech segmentation/zip code/postal code input magic you can do to display targeted web pages, but skipping all that and getting to the basics, G&D can do some of the following. Some retailer sites are so light on content, there’s no point even checking the web site if you get the weekly flyer in the mail. It’s understandable that not every store in the chain might get fancy improvements from HQ, but showcasing them can generate interest.
– List key categories and skus and why they are beneficial to the typical customer
– Promote seasonal times of the year, including skus, meals, non-food items, manufacturer promotions, and more. Create dedicated pages for these.
– Promote any new service or technology that helps speed up or ease purchasing…self-checkout, new kiosks etc….
– Any new and exciting categories or food/merchandising sections added lately? Yes? Than tell people about it.
– Cater the design to the targeted customer. More pricing splashes for discount places, trend and atmosphere for upscale groceries.
– Promote your differentiation! What does your chain have that others don’t…price guarantees, deliveries, self-checkout, strong private label brand, expanded selection of products, seasonal products have arrived! Season ending deals have started!
– Teaming up with suppliers (as well as PL), inform customers about current products, new products and excite them by putting some marketing and effort to both inform the mind and appease the eyes. Solely relying on suppliers to approach buyers limits the marketing material.
– Promote key products that drive traffic in the store (often lower margin), but also showcase high margin skus.
Customers have more trust in drug stores due to the nature of the products. Drug stores sell lots of medical products, are clean, and run by pharmacists. Groceries are usually more dingy, and are full of teenagers stocking aisles. Most people want advice about medicine, but for food, everyone has an opinion and will decide for themselves.
Brick and mortar stores, their web sites and managers can be sources of info, but is tougher than Drug. Asking a grocery manager for advice might involve scampering down aisles or knocking on the store room door to look for him. Pharmacists are usually behind the back counter in plain view.
Groceries can create more informative marketing regarding products, categories, and health. That might excite boring customers to try new high margin food, but the store can increase its reputation as customer-friendly. Whether it’s signage, store brochures, or online tips, most groceries don’t have any product information anywhere. So how can people see them other than a pure-profit business when everything from health food, low fat, new products, new trends…or some kind of exotic South American fruit 99.9% of people have never seen before, are all just lined up on shelves or dumped in the product section with lonely sign that says $1.49/lb?
I like Walgreens’ web site because I can find out what drugs have been purchased, when we bought them, how much we paid, and what the drugs are used for. They also list the prices of all the drugs they sell. We can refill our prescriptions and be quietly notified when they are ready for pickup.
Why can’t supermarkets do this with groceries. Why can’t we type in our loyalty card number and a password and view all of our grocery purchases? When stuff we buy is on sale or will be going on sale, notify the customer that items they tend to purchase often will be on sale. Why not be able to search for a particular item and immediately see what the price is for that item is? Or even find out if the store carries that SKU? If more supermarkets did this, consumers would be able to develop a virtual shopping list and be able to run it through various supermarket web sites to see where they could buy their groceries for the lowest price. Even be able to cherry pick various stores knowing they bought them at the lowest price.
If we can do this for appliances and computers, why not for groceries? One reason grocers don’t get hits on their webs sites is because they do not provide enough information. Customers could care less about the history of the company or its code of ethics. They want to see all the items they sell and what the prices are.
I conducted a survey of my friends, neighbors, and relatives with nearly identical questions to those asked by InsightExpress, and recorded totally different — yet equally valid — responses.
While ignorantly not understanding how one “speaks to” an idea or comment (we “speak to” people, pets and — for some — dead relatives, themselves, and inanimate objects, while we “address” ideas and comments), I must question the design of this so-called “market research.” These respondents were guided, not being allowed to express themselves in their own terms. As the saying goes, “liars figure and figures lie.”
Those of us in the bidness of online marketing consider this a “blah, blah, blah” study. Yes, that’s a real term in our society of superior intellects (yeah, right).
Why would shoppers trust or distrust online information from supermarkets and drugstores more or less than information from other sources or other types of businesses? Since when did consumers begin using information abundantly available to them, such as that regarding nicotine, trans fats, and cholesterol? Consumerism runs rampant among consumerists, but not among consumers. You read it here first.
The issue is not the intelligent use of web sites, but the use of intelligence. (Many smart folks out there in consumer-land write “u” instead of “you.”) Supermarkets and drugstores are about “we’ve got the stuff.” It’s then up to manufacturers to ‘splain their superior differences. If in-store and advertising information sources fall short of adequately educating consumers, how can online sources be held to a higher level of accountability?
As the study shows, supermarket websites currently are primarily seen as being only good for coupon clippers. The grocery market in general has done its best to make the consumer view most brands as commodity merchants. The exceptions, like Trader Joe’s, Whole Foods, and others, have staked out ground as not being in the commodity market, and they’re flourishing. But even they for the most part don’t demonstrate superior online communications & sales practices.
The market has already done a lot of thinking about what items are purchased most frequently and applied that thinking to self-service check-out. Surprisingly, that knowledge doesn’t seem to have been applied on many of the eCommerce sites yet.
Also, most mainstream loyalty programs have only gone half-way to where they need to be. They offer a discount for access to the customers’ buying habits, but they don’t do an effective job of providing superior value so customers lock in their buying to that brand. Tesco is a notable exception here.
Assuming you’re willing to go the Tesco route, think about the web as supporting the overall customer experience. How can you offer unique services to specific segments so your customers help you to segment them? Where’s your baby & toddler club? Your wine & cheese club? Etcetera, etcetera.
Think of providing a family MyPage where mom and dad can keep their online shopping list, and brother and sister can have their birthday / holiday gift lists stored. Consider things like:
1) Sortable shopping list, where the customer can sort by category, frequency, etc. online, and sort by store shelf location for the print copy;
2) In-stock/out-of-stock/on-sale notices on the online shopping list – with alternate recommendations based on past buying habits;
3) Cross-sell recommendations based on customer generated feedback (a la Amazon.com) – including customer-generated content;
4) Online feedback loops, with confirmation that feedback is being heard and acted upon – whether it’s a store merchandising complaint or a specialty SKU not carried issue;
5) Price comparison tool (a la Progressive Insurance) so a shopper can see your prices against the two or three most likely in-market competitors;
6) Online ordering of non-perishables for pre-packing prior to a consumer visit;
7)Full online order and delivery with no store interaction (PeaPod etc.) – why should consumers be forced into the store if you’re offering an online shopping site?
Regardless, if you offer a value add service like pre-pack, it’s got to be at least as convenient as the customer’s current experience. Any little hitch in the interaction, like having to wait several minutes to get the pre-pack when you’re in the store, will convince the consumer that it’s not worth the hassle.
And try not to monetize these offerings. If they work, and differentiate the store, then you’ll have created a loyalty barrier to your competition. The resulting organic growth should more than pay for the effort. If you put a surcharge for “good” service, then the customer will look elsewhere, and someone else will be happy to provide that good service for free.
Retailers need to make their online experience easier. If the consumer has to click through too many screens, or cannot easily find the items they are looking for, they will simply go elsewhere. The same holds true for giving the consumer many pictures to see, a robust search engine to find products, and complete detailed information on a product, should the consumer want this. The other suggestion is that the retailer needs to make their website complement their on-ground brick and mortar offering. This means it should have some of the same products as well as unique products on the website. Finally, it needs to be fast. Slow downloading websites are not permissible in today’s time-conscious society. Check out Lands’ End’s website for speed and ease of use.
Providing a great online experience is critical. In addition, drug stores have information on what kind of medicines households purchase. Using that information, suggestions for heat wraps could be given to those who order anti-inflammatory arthritis medicine, some of those cold packs for those who have sinus infections, coupons for cold drinks for those who have the flu, etc.
Drugstore sites could offer an interactive online chat with a pharmacist and a cosmetologist. They could also present common side effects of popular drugs as well as warnings for negative interactions. They could link to worthwhile health sites, such as www.MayoClinic.com. They could show local numerical totals of common illnesses each week, based on new prescriptions filled or local doctor surveys. They could offer local health care providers links to their sites, and space for their advice columns. Drugstore sites could even post their prescription prices versus their competitors.
To make their websites more effective, I suggest food retailers and pharmacies have their local managers give advice on the web each day or week about things of common interest to their customers and potential customers. Have a lineup of local stores listed so that consumers can punch up their nearest store for “localized” news, specials and values from that stores key person. In other words, personalize the store manager and pharmacist into the consumer’s home via the web.
For food stores, have the manager tell in person what’s on sale this week and why; the best values in that store this week; new ideas for meals; how to prepare this week’s meat special; coupons, etc. For drug stores, extend the confidence people generally have in what the pharmacist says by having him/her tell on the website the useful remedies for common aliments; OTC specials and their uses; cautionary advice. Make it equate to a conversation at “their” store.
Be careful here about looking for some complicated ‘secret’ to increasing online sales. The fact is many online stores are just too much work. Anything that takes more than a few seconds is too much work in the online biz.
Having done a few projects in this area my #1 and #2 suggestions are:
1. Don’t let design/graphics people do your website. They are typically brilliant 20 somethings who think a gray 6pt font on a gray background is cool. Keep it simple and intuitive and don’t make people do anything not essential to the sale. Simplicity and ease will create engagement with the customer.
2. Get better copy writing! When a customer is in a store buying produce for example, they make up a story in their mind (“How festive those apples will look in my wicker basket”). On line you’ve got to create a compelling story for them. Shopping is a series of mind-stories. If they’re good stories you’ve got a customer. We’re not far from having holographic images on line so there will be a tactile experience as well – but until then, tell a good story.
I hope this holiday season bring all of you and your families new and wonderful stories.
I think it might be more appropriate to discuss what they might do with their store. As retailers have much more invested in bricks and mortar than web space it would seem that taking care of the store and the customers should come before worrying about web sales. How about training managers to stay on the sales floor and interact with customers and employees? How about adapting to conditions (open new registers when lines get long, keep lobby mopped when it rains, check shelves for OOS)? The retail grocery industry leaves millions in sales “on the floor” every day because they aren’t doing what they are supposed to do. Work on the basics and you will reap far larger rewards than any ecommerce effort will provide.
Add high value content, keep the barriers to use low, and understand the value of time. Online retailers have learned several common elements that work despite the product being sold. Sure there are exceptions, but grocers and pharmacies are well-behind the curve when it comes to the online experience. Most sites are more oriented to getting you in the store rather than delivering value-added content.
From a service perspective, saving time is a big value add. Rather than trying to shop for all groceries, focus on quick solutions. Since a reasonably high percentage of grocery items are repeat purchases (same item each week), why not structure a way to order those repeat items to be pre-shopped, so the shopper only has to spend time on unique or more personalized items (meats, perishables, etc.). This is a variation of shopping for other items online and having them shipped to the local store. In this case, no shipping charges are involved and the piece-picker works in the local store which is the “warehouse.” For a reasonable add-on charge, this would be a big time saver for the customer and would allow the store to process the work during non-peak times.
Time for grocers and pharmacies to get creative.
What a web site should be and do is still under development. Most supermarket sites are not very user friendly nor do they provide much useful information. Who they are, where they came from and yes they have a frequent shopper program is useful for the first site visit. Specials/promotions tend to get the most play. To build the drug store trust level requires adding value. Feature new products and how to use them. Menu ideas coupled with simple cooking instructions should be of interest. New twist on old standards might create some excitement. Teaching the basics of cooking with a weekly update should be of interest for some target markets. Party and entertaining ideas — those are different than the norm. Take a fruit or vegetable and expand on how to prepare and use it. Only by creating a need will the usage and value increase.
It is unfortunate that when retailers develop their websites, they do not effectively use the medium. Websites fall under the category of interactive multimedia, thereby the aesthetics of each media should be leveraged to produce a compelling piece (pulling elements from graphic design to script and television writing). In addition, they need to parlay the technology aspect to better reach consumers and customize their on-line experience.
“1. Don’t let design/graphics people do your website. They are typically brilliant 20 somethings who think a gray 6 pt font on a gray background is cool. Keep it simple and intuitive and don’t make people do anything not essential to the sale. Simplicity and ease will create engagement with the customer.”
At 46, I’m a bit past the tiny-gray-type-on-a-charcoal-background thing myself, so I do get your point, overall. But I would caution anyone new in the area not to go to the other extreme.
Far too much of what happens in retail happens in complete innocence of — if not outright reaction to — the principles of orderly page design, both in print and online. We tend to want to make every item stand out — Bold that price! Make that subhead bigger! — until every part of a page competes with every other page, and the poor reader doesn’t have a sense of what to look at first, second and third.
And it’s the recipe for ugly: pig-mud, dirty-motor-oil, rusted-fence, chemical-waste-dump ugly.
In print, that ugly page might stay around awhile, so some product or other has a chance to catch someone’s eye two hours later on the breakfast table.
But a confusing page online is going to make a likely buyer click away. And thanks to ten years of know-your-sources stories in the media, we’ve all been taught not to believe what we read on an ugly site. (For example: Do you get your medical information from a site that uses rainbow-blinking type on a black background?)
So, okay, make sure your brilliant 20-something design folks don’t make your site’s type unreadable because it’s cool. But don’t kick them to the curb, either — unless, of course, you want to bring aboard some brilliant 40-something design folks.
Happy New Year!
As a 46 year old with a long history working in sales and marketing, I fully understand the principals of ROI. While internet marketing is relatively new, its design and structure does not necessarily intimate childish frivolity. It is a tool, and a tool that will become ever increasingly important, that needs to be understood and used. Why avoid the inevitable?
Yes, there are 20 somethings writing the code, but it is up to the client and account executives to develop the plan.
A strong understanding must be formed to develop campaigns that are meaningful to the targeted audience (a blending of the old and the new). For each element, there must exist a reason or a return on each element that is used, and the audience is king. The same type of prowess used for print ads should be applied to websites, portraying a connection among the message, the audience, and the requisite end result.
Let’s take Organics; it’s a burgeoning arena. Are their consumers likely to peruse the internet? Would they be interested in being pinged when a new product comes to market or an item is featured by a store?
If the medium were in passing then one could dismiss it, like 8 Tracks, but we can’t. Retailers need to learn how to use it to drive business with their current client base and bring on the new.
We cannot dismiss online marketing because we do not know how to communicate to the purveyors. Actually, it is up to the purveyors to communicate to clients.