Case study: Can retailers win back shoppers who browse then buy online?
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I do buy from Amazon, but Amazon is also one of the best research tools for local buying.
I was shopping for a monitor and all the reviews on Amazon are great but I can't see the difference on my current monitor or what it actually looks like despite all the specs listed.
I did buy it on Amazon but only after I saw the actual differences in store.
Even if Amazon could provide a Hololens sessions for me to look at the product (which maybe they should do at some future Amazon retail location) alongside all the specs and reviews, it's still not going to bridge the gap of seeing it in person.
I have this thought every time I see a sign waiver.
"Hey, this thing is available at these local retailers for these prices, all within 5km of your house. Here are the returns policies for those places. Here are the caveats to their warranty programs. These places have free parking. Caution: Place X, Y or Z only takes cash. Here's a list of ATMs enroute."
I really only buy from Amazon if I don't need something right now. Parting with my money only to have to wait for what I paid for for 4-6 weeks rubs me the wrong way.
Conversely, retail outlets could easily win me back by having their full catalogue on their website, which details in-store stock availability for my closest stores along with their final prices (including applicable discounts and taxes) and allowing me to place a hold on that item so that when I get to the store, it is there, waiting for me. The store locators are good and telling me how many are available in the store I've chosen is a good starting point, but it would be way more useful if I could put in what I'm looking for and then the site tell me the closest store that has availability and allow me to place a hold. Don't make me dig to figure out where I've gotta find stuff - remove the friction.
I've gotta be honest, it would take almost nothing to get me to go back to retail stores. Mostly I don't go because:
- I hate queueing up to wait for stuff - because I hate crowds of people and I hate wasting time. Time is the one commodity that nobody can replace no matter how rich you are. Stop wasting mine.
- The customer service is atrocious. I'm in your store because I need a product that you happen to provide. You're after my money. Appreciate that I could take my business somewhere I don't have to put up with the friction I have to suffer at your store or your diabolical staff attitudes.
- The warranties and provisos to their return policies are intentionally misleading. You have a product I want. You don't have to mislead me to buy it... if you're being so underhanded as to lead me to purchase items that are actually of zero use to me by making me believe that they are of use to me - until such a time as I try to use them and find that they are useless, there's a special place reserved in hell for you.
Find ways to remove those obstacles and I'll be back in a heartbeat. It doesn't take much:
- Appreciate my business.
- Make it easy to do business with you.
- Remove the obstacles and unnecessary friction that make me want to go elsewhere.
On the warranties: I think that the warranties are offered by someone else. The airlines do it that way for travel insurance. It's probably a no brainer for an executive meeting with a warranty rep to say "hell yeah, almost no cost to us, and lots of people are stupid enough to buy this."
The retailer is paid to disrespect you.
Or as the great HN quote goes,
"Any sufficiently advanced business model is indistinguishable from a scam." -- dsirijus, https://news.ycombinator.com/item?id=8227941
And then there's things that are hard/impossible to get. Laser modules, radio boards, high velocity GPS boards. Those sorts of things.
At the same time, if something is available at roughly the same price (can be a little more) at a local store, I would just as soon pick it up in person and avoid the shipping delay. Essentially, I'm willing to pay a little more for fast delivery but I'm just as willing to pay a little more for the "instant gratification" of just being able to go pick the thing up.
The main difference I've found is that lots of physical retail stores often don't have what I want or their online inventory system is unreliable so something will show as in stock locally but when I go to the actual store, it's nowhere to be found. Shopping online (for me) is often more about finding the exact item I want than it is about saving a few bucks by ordering direct.
Recent example: a friend wanted me to build him a new desktop PC for general use and for gaming. Maybe 5 years ago I'd have gone straight to Newegg because no retail location would have the selection of parts needed to build the best PC I could build within his budget. But now we have a Microcenter nearby and while smaller components (cables, RAM, etc) might cost a few dollars more per item, they sell CPUs at a sizable discount as loss leaders so the total build is roughly equal to the Newegg price plus shipping cost. In that case, it's nicer to just go to the store, compare stuff like build quality of computer cases in person, get everything home that day (no shipping wait), and have a local place where I can go if something turns out to be defective. No waiting for lengthy RMA shipping delays, just an hour on a Saturday to stop in and swap something out.
So I guess from a customer's perspective, retail is still a good option and worth some level of cost premium as long as selection is good and I can verify that the items I want are in stock. The other bit I haven't mentioned is access. In the case of Microcenter, I just walk in, grab a cart, and pick up all of my parts. When I just bought an iPhone to replace my girlfriend's older model, I ordered direct from Apple rather than going to the Apple store. Apple store would've had the phone in my hand on the same day but it is located in a shopping mall. I really, really hate going to that shopping mall because it means driving around a parking garage and then navigating floors of shops and escalators and crowds in order to get to the Apple store. I'll totally wait a day or two for shipping if it means I don't need to step foot in the mall.
That seems pretty foreign to me. While I would definitely look at something like that (although I've never heard of either of those sites until now, thanks), it seems weird to me that people would assume what some website thinks is "best" is so accurate as to accept their recommendation without doing any research whatsoever and immediately going out to buy that.
Even when I was a kid and had a Consumer Reports subscription I never just bought whatever they said to buy I have always done my own research. It doesn't seem that difficult to me if you have at least a rough idea of what you're looking for in an item and can prioritize those things.
Products in a given category aren't usually trading off their features and price perfectly. There are some products that are significantly better than their competitors in all metrics at the same time; then most of the products in any given category are a mix of weird attempts at market segmentation and companies trying to simply scam you. Therefore it's not surprising one can often select a product that is objectively the best for vast majority of potential buyers.
The key is impartial though.
I'd kill to have a Fry's in the state.
About the only form of electronics I'm set for in-town is headphones, and that's just because Headroom was built up from this city.
Obviously, a franchise can't really take advantage of additional platforms the way a chain can.
I get extremely cranky when I need to stand in line or try to make my way passed other "less efficient" shoppers.
Also the stupid attempts at up-selling in electronic stores doesn't help.
Clothing I do prefer to shop in real stores though, but that's mostly because sizes aren't uniform and generally confusing.
If I need help looking for a TV, I'll ask. I promise, I'm not shy. But if I want to just LOOK at some TV's and see what's available, please stop hovering over my shoulder and asking me if I have any questions. I don't, really. I can read the specs. If you want me to spend $400 or more on something, you're gonna have to grant me some time to chew over the options and go home and do my research before coming back. Let me do that, and I might come back and buy from you. Pester me, stalk me, or refuse to let me leave without making veiled threats that "This TV may not be here when you come back," and I'll shop online.
For its part, Micro Center guys have usually been extremely helpful when I needed it and have always left me alone once I said "Just browsing." They've also periodically looked up the part on Newegg to see if they could price-match it.
Is there any research into the ideal balance between asking people if they need help and not bugging them?
The specific case I'm thinking of was buying a graphing calculator that was locked in a case. Hit the button and someone will come by to get you one. Same concept on airplanes too, though.
Complaints about bad service are epidemic. I'm thinking there's room for disruption here.
the second axis is commodity vs. customization/fit on one end of the spectrum are standardized things (AA batteries, a DVD, part #12345) that i'll pretty much always buy online, the middle of that spectrum is stuff that you'd like to see in person you but would be willing to buy online (i.e. showroom): a watch (see it on your wrist first) furniture (how big is that couch). At the other end of the spectrum are things with a value added service that retailer does that i will buy in the store, something like ski boots or hockey skates where i want to try on a few, the salesman are more knowledgeable, and there is a customization/fitting process (custom footbeds or heat treatment)
The in-store value add is a real thing, and what I think a lot of stores are going for, but for most things, the best they can do are knowledgeable salespeople, whose knowledge will never be as useful as research on the internet. I can only think of one other example where I really want a good salesperson besides ski boots: "important" clothing, like a nice suit, that benefits from professional tailoring.
1. I'd put Amazon affiliate links everywhere. If you want to buy it from Amazon while browsing my store, go for it. I'll just get a cut of the sale via my affiliate link.
2. If you buy a Kindle version via Amazon, I'll discount you on the hard copy that you buy from my store. That way you'll have both versions, if desired.
I have absolutely no idea if this would be effective, but I think one thing booksellers are going to have to do to stay competitive is adopt something like this, where you're not shutting the customer down. I'm one of those people who browses the store and then buys on Amazon, but that's mainly because I have a Kindle with hundreds of books, and I only buy hard copies of my favorites. If a store enabled that -- and profited from -- then that would be awesome. I'd love to give a small kickback to my local store for showing me what's available, even if I bought it from Amazon in the end.
https://en.wikipedia.org/wiki/Benjys
Sadly they did go bust and people started going elsewhere for their cheap meal deals.
The truth is that retailers, especially large retailers have a lot of tools to fight back against e-tailers:
- Demanding manufacturers to set and enforce Minimal Advertised Price.
- Exclusive products. If Macy's ask for a new product to be theirs only, they usually get their wish granted.
- Geo lockout. Smaller retailers are granted geo-local monopoly.
- Custom SKUs to thwart price lookups and price matches. Samsung makes the same TV in BestBuy SKU, Sears SKU, Costco SKU, generic SKU, and likely others.
- Own ecomerce portals, like Macy's or Nordstrom.
- Local returns and repairs.
And that's not all of it. At our startup we're making many of these tools available to smaller retailers and manufacturers, if you want to join, my email is in profile. In particular we're hot on post-visit engagement workflow, the stuff of the 21st century.
Retail is far from dead. If it were, they wouldn't need the advertising piece in HBR.
It seems unlikely that a shopper savvy enough to have an item recognition app is going to not know what the online price is for a similar item, even if it's not identical.
Consumers obviously assign some value to being able to see the actual item, but it's not clear that the value is as high as you need to sustain a retail operation vs a generous returns policy.
I think there's a lot of chances for retails stores as people realize that the promise of online technologies is incredibly hindered by their actualization and the artificial limits imposed by such unscrupulous vendors as Amazon.
But it might cost too much to finance all the products you wish/have to show. Manufactures can help and donate demo gear :)
Rather than go to multiple stores, each surrounded by a large car park, it would be more desireable to go to a collection of stores that are colocated, pick out what you want, and have it delivered as you get home so you don't have to carry it around.
> why not just let one buy the stuff?
Because then the store needs inventory, and all the overhead that entails. It is much cheaper to keep a single copy of everything.
But the perhaps bigger issue is one of incentives. I hate that when I'm at Best Buy looking at things, I know I'm being an annoying "showroomer", rather than a customer doing the correct and desired thing. Removing on-site sales from the equation aligns the incentives. Now the showroom will want to do whatever they can to make it easier for me to buy online, so that they get credit (and presumably commission) for the sale. Instead of trickery to confuse object recognition apps, maybe they'll make a really good augmented reality app that makes it stupidly easy to one-click order the exact thing they're looking at.
Its not a very profitable or well run convenience store compared to a real convenience store, but it does well enough. As do most FLGS that run friday night magic. I'm sure there are some that can't sell junk food due to zoning or ordinances, that must be annoying.
The problem is scaling it outside a couple hours Friday night. Another day of the week, six guys playing pathfinder on a card table makes the store look busy compared to a usually completely empty antique store, but what kind of revenue is rolling in per hour? You can pay the electric bill by selling monster energy drinks out of the cooler, but retail establishments have other bills to pay, and the antique store only needs one sale per week to pay their bills...
The tables get busy every evening of the week, after folks get out of school/off work. The age range is teens through 30-somethings.
I am not counting the magic players. Though there is certainly an overlap with the board game players.
The shop is a restaurant and cafe.
Somehow Best Buy is still in business so they must be doing that.
For example, Barnes and Noble has abandoned selling books and has pivoted semi successfully into "convenience store for birthday gifts" complete with wrapping. They still have a section of the store for books, but its not really a book store anymore. They have a better chocolate section than my local discount grocery store! In the specific example, moving in on B+N turf isn't going to work as a strategy unless you think you can out B+N, B+N itself.
AFAIK no one has ever tried food and consumer electronics shopping, so eat "real" food while showrooming sample TVs and then order one shipped to your door. This is not entirely insane. A liquor license and pleasant wait staff might discourage showrooming... "Hey everyone gets a round on the house, Joey bought a new TV" woo hoo ...
Something to think about is there is more retail CRE square footage today than ever in the history of the country and its all more or less becoming useless as currently designed and zoned. You may end up pivoting totally out of old fashioned retail, perhaps a fitness club, or barber shop, or restaurant. You want to be the first retail market to become an exercise club not try to be the last. Locally food and other retail stores that have closed have successfully opened as credit union branches, exercise club, restaurants, and car dealerships, more examples probably exist. To make a large scale national strategy, it might be useful to gather this small scale success data. Apparently you cannot pay the rent selling turnips in that specific retail frontage, but you can pay the rent selling time on a bench press machine, interesting...
Alternately you can ride right down into a crater, like that crazy general in Dr Strangelove, if it no longer works just keep on doing what doesn't work but harder than everyone else, what could possibly go wrong? In all honesty if you have no future it does show bravery of a sort to keep doing what you're doing until the bankruptcy, but admit what you're doing, at least, you're just riding a dead business model until impact with the ground, milking the last cash cow till it becomes pink slime.
What's never mentioned is simply having their every day price match the online prices. But this is so glaringly obvious I assume it's simply financially impractical. I've really got to wonder what kind of margins they have to bridge?
Lobbying their state to drop sales tax and being 5-10% higher than online, but being open about it and marketing based on immediate service might work. Then again if it's a 30% chasm the situation seems quite hopeless.
As an aside, I wonder if they could get manufacturers to supply floor models gratis, or even paying a little for exhibition. After all, a brick and mortar store is essentially a giant billboard. Much better than some "minimum advertised price" anti-competitive bullshit.
Now, why do I buy online? There's many reasons.
1. I'm price sensitive. I don't make that much, so my money must count. Doing X means not doing Y, even for small values of X. Online is just cheaper.
2. Your place doesn't have what I want. I've went into electronics stores, looking for X. Except what I see is some version less and something much higher. Or they play with model names, where kwin-123xyz-tgt is at Target and kwin123xyz-wmt is at Walmart, and have no differences, other than a model ID that's dependent on store, to prevent price matching.
3. Salespeople are idiots. I've had them try to "inform" me of all sorts of inane "Its really true that..." and other lies or mistruths. I don't need your research, salesperson. Nor do I think you deserve your commission for your BS.
4. Salespeople are pushy (and worse; hard sell). Nothing turns me off from shopping than that behavior. I hate it, and will walk out as soon as they start engaging in it. One case I went back to them after making the sale and told them that their hard sell is why they did not make the sale.
5. Lines suck. As in, really suck. I have the non-choice of waiting in a too long line for some disinterested clerk to ring stuff up. Compare this to Amazon and other web stores where I can click buttons and "BUY....DONE!". Yeah, there's shipping. But I can get on with my day. Lines suck time I'll never get back.
6. Other shoppers. We're approaching the 'Black Days', where you will be neck-to-neck with other crazed deal-going shoppers. Some are in various states of unbathedness whilst many others are completely rude. The net eliminates this, completely... unless you go to forums like Reddit and intentionally find areas like /r/SRS
7. Going to another store = loads to time. I'm looking around 5 mins to park and walk, 10 mins to find, and 5 mins to pay, and 2 mins to leave. Total 22 mins. On the net, I can search a dozen stores at the same time. And nobody complains if I search another company while on the first's web site.
8. I don't get real-time reviews on items in store. I have to rely on the box (marketing), the ads (more marketing), and general feel if there's a sample. Online, I can see the reviews of pretty much anything, can analyze trends in good and bad, and can make a generally informed decision.
9. Pricing issues. I regularly get problems with incorrect prices on things. Usually it's taken care of, but turns out to be a big "Stop registers, send someone to look, and report back". Retarded and inefficient.
10. Coupons/cards. I have an account on some eCommerce site. Or I use Paypal directly and not make an account. It just works. Versus the brick and mortar stores, where they play games with "discounts, but not this way, and not here, but only on that with that". And you need those damned shopper cards. It's one thing to have a single card, but every store wants you to have one.
That enough reasons why?