Category Archives: ecommerce

Australian “Catch of the Day” site launches in NZ

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The Catch of the Day online shopping operator has been operating in Australia for more than three years, offering “one deal a day, every day”.

Today it arrived in New Zealand. From midday, the CatchOfTheDayNZ site has gone live.

The first deal on offer:

  • Two Hoyts Movie Passes for a combined total of just $9.95 (plus a rather steep “shipping” charge of $4.95 for an envelope and stamp). Good product pricing, good product as well (though not exactly innovative).

Of course, we already had a few daily deal sites of our own (tip of the hat to Sheldon Nesdale of Marketing First blog for doing the heavy lifting):

And, of course, the recently launched Yahoo!Xtra shopping site (with its own daily deal listings, powered by Hubsta):

And then there’s the NZ Herald shopping section, also powered by Hubsta:

In other words, the Australians are entering a pool that’s already substantially over-fished (if you’ll pardon the seriously strained metaphor).

Some background on the Australian operation:
The company sells everything from laptops (2000 Asus netbooks sold in one hour), cosmetics, toys or even tomato planters (20,000 sold last spring).
They operate from Melbourne, with a team of 35.
On average the Australian site sells one item every 18 seconds, 24 hours a day, 7 days a week.

Some background on the Australian Catch Of The Day operation:

  • The company sells everything from laptops (2000 Asus netbooks sold in one hour), cosmetics, toys or even tomato planters (20,000 sold last spring).
  • They operate from Melbourne, with a team of 35.
  • On average the Australian site sells one item every 18 seconds, 24 hours a day, 7 days a week.

Here’s an Australian newsclip to add further perspective.

So how well can the newcomer expect to do?

The new site has been pre-promoted with a reasonable amount of publicity and online advertising, which should serve to lure a few curious eyes — but the critical issue is of course the daily deal.  Consumers will only put in the effort required to keep in touch with what’s happening on Catch of the Day if the products are on offer are sufficiently appealing and at a suitable price point.

The first day’s deal delivered, but that’s only to be expected. It’s what happens in a few weeks and months that will determine the long-term viability of Catch of the Day.

Facebook to add eCommerce capabilities?

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Facebook to add ecommerce?

Internet advertising news site Adotas is speculating that Facebook may be adding ecommerce capabilities to its site.

According to the report (based on a Job Ads classified placed by Facebook):

Facebook is building a “payments operation” team and looking for a strategist and a payment and risks specialist.
The payment operations team will monitor and report on all money coming into Facebook:
“Projects driven by Payment Operations team members will potentially contribute millions of dollars to Facebook’s business, as well as enable the company to scale and expand its operations in the coming years.”

Facebook is building a “payments operation” team and looking for a strategist and a payment and risks specialist.

The payment operations team will monitor and report on all money coming into Facebook:

“Projects driven by Payment Operations team members will potentially contribute millions of dollars to Facebook’s business, as well as enable the company to scale and expand its operations in the coming years.”

The article goes on to speculate that “a long-term goal appears to be setting up a system that would rival PayPal, allowing users to buy goods and services from third-party e-commerce sites.”

It’s an interesting notion, and certainly consistent with Facebook’s closed architecture model.

It’s also worth noting, as Michael Zeuthen did  in the comments to the article, that PayPal’s co-founder, Peter Thiel, invested a half a million dollars in baby-Facebook. That could be seen as an impediment to any Facebook payment system; or, conversely, Mr Thiel’s expertise could be tapped to speed up any rollout.

From a New Zealand ecommerce perspective, the article simply highlights the need to keep an eye on developments in the social sphere, which is by far the fastest-growing segment of the Internet right now.

Following FTC eCommerce Guidelines

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The Federal Trade Commission (FTC)—the US consumer protection agency —offers consumers a number of useful eCommerce guidelines that should also guide organisations looking to offer eCommerce.
The FTC recommends:
Know who you’re dealing with. Confirm the online seller’s physical address and phone number so you can contact them if you have questions or problems. If you’ve never heard of the seller, check its reputation with the Better Business Bureau or the state attorney general where the company is located, or one of a number of consumer rating sites. [Operator Insight: Credibility is essential on the internet. Provide as much real-world information as you can, to reassure potential buyers that you’re a solid business.]
Know exactly what you’re buying. Read the seller’s description of the product closely, especially the fine print. Words like “vintage,” “refurbished,” “close out,” “discontinued,” or “offbrand” may indicate that a product is in less-than-mint condition. Some name-brand items with “too good to be true” prices may even be counterfeits. [Insight: Detail is everything]
Comparison-shop. Check out Web sites that offer price comparisons on similar items from different manufacturers or different Web sites. Some price comparison sites favor their advertisers’ products, so it’s a good idea to look at more than one. And remember to compare “apples to apples.” [Insight: Check out what your competitors are offering. If you can’t match their prices, don’t panic — provide exclusive added-value extras that they can’t match]
Check the privacy policy. The company’s privacy policy should let you know what personal information they are collecting, why, and how it’s going to be used. [Insight: If you’re not quite surewhat to include, look to some of the leading websites and see what they include in their privacy policy]
Pay with a credit card. It offers you the most protection as a consumer. Don’t send cash. [Insight: offer as many ‘safe’ payment options as you can — credit card, PayPal, Google Checkout etc]
Use a secure browser. Look for an unbroken key or padlock at the bottom of your Web browser window to ensure that your transmission is protected. Buy only from Web vendors that protect your financial information. [Insight: protection is really, really important]
Consider shipping and handling costs. Factor these into the cost of the order and choose the delivery option that best meets your needs and budget. [Insight: be upfront about your shipping costs — you’ll save on returns, disputes and lots of other grief]
Print records of your online transactions. Save the product description and price, the online receipt and copies of every e-mail you send or receive from the seller. [Insight: where you can, provide print-friendly versions of your pages]
Understand the return policy before you buy. Can you return the item for a full refund if you’re not satisfied with it? If you return it, are you required to pay shipping costs or a restocking fee? [Insight: develop a returns policy and post it clearly on your website]
Check delivery dates. An FTC rule requires sellers to ship items when they say they will or within 30 days after the order date, when no specific date is promised. If the vendor can’t ship the goods within the promised or 30-day deadline, it must notify you, give you a chance to cancel your order and provide a full refund if you’ve chosen to cancel. [Insight: say when you’ll deliver. If you can’t meet the date, communicate. No exceptions].
If consumers feel they’ve been misled or deceived, they can file a complaint online at www.ftc.gov. [Insight: don’t make them need or want to do so]

The Federal Trade Commission (FTC)—the US consumer protection agency —offers consumers a number of useful eCommerce guidelines that should also guide NZ organisations looking to offer eCommerce.

The FTC recommends:

  1. Know who you’re dealing with. Confirm the online seller’s physical address and phone number so you can contact them if you have questions or problems. If you’ve never heard of the seller, check its reputation with the local Chamber of Commerce or local government — or just Google it. [Insight for eCommerce Operators: Credibility is essential on the internet. Provide as much real-world information as you can, to reassure potential buyers that you’re a solid business.]
  2. Know exactly what you’re buying. Read the seller’s description of the product closely, especially the fine print. Words like “vintage,” “refurbished,” “close out,” “discontinued,” or “offbrand” may indicate that a product is in less-than-mint condition. Some name-brand items with “too good to be true” prices may even be counterfeits. [Insight: Detail is everything]
  3. Comparison-shop. Check out Web sites that offer price comparisons on similar items from different manufacturers [eg PriceSpy.co.nz, PriceMe.co.nz) or visit different Web sites offering the same product ranges. Some price comparison sites favour their advertisers’ products, so it’s a good idea to look at more than one. And remember to compare “apples to apples.” [Insight: Check out what your competitors are offering. If you can’t match their prices, don’t panic — provide exclusive added-value extras that they can’t match]
  4. Check the privacy policy. The company’s privacy policy should let you know what personal information they are collecting, why, and how it’s going to be used. [Insight: If you’re not quite surewhat to include, look to some of the leading websites and see what they include in their privacy policy]
  5. Pay with a credit card. It offers you the most protection as a consumer. Don’t send cash. [Insight: offer as many ‘safe’ payment options as you can — credit card, PayPal, PayMate etc]
  6. Use a secure browser. Look for an unbroken key or padlock at the bottom of your Web browser window to ensure that your transmission is protected. Buy only from Web vendors that protect your financial information. [Insight: protection is really, really important]
  7. Consider shipping and handling costs. Factor these into the cost of the order and choose the delivery option that best meets your needs and budget. [Insight: be upfront about your shipping costs — you’ll save on returns, disputes and lots of other grief]
  8. Print records of your online transactions. Save the product description and price, the online receipt and copies of every e-mail you send or receive from the seller. [Insight: where you can, provide print-friendly versions of your pages]
  9. Understand the return policy before you buy. Can you return the item for a full refund if you’re not satisfied with it? If you return it, are you required to pay shipping costs or a restocking fee? [Insight: develop a returns policy and post it clearly on your website]
  10. Check delivery dates. An FTC rule requires sellers to ship items when they say they will or within 30 days after the order date, when no specific date is promised. If the vendor can’t ship the goods within the promised or 30-day deadline, it must notify you, give you a chance to cancel your order and provide a full refund if you’ve chosen to cancel. [Insight: say when you’ll deliver. If you can’t meet the date, communicate and give cancellation options. No exceptions].

If consumers feel they’ve been misled or deceived, they can file a complaint online at www.ftc.gov, In NZ, the Commerce Commission is probably the best place to start. [Insight: don’t make consumers need or want to do so]

Online Layby Gathering Momentum

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Today’s smart marketing idea in a nutshell: if you operate an ecommerce store, whether pureplay online or  clicks and mortar  (i.e. both online and offline channels), offer layaway. Enable consumers to find their desired purchases online, put the products on hold and then pay them off over time.
Source of the inspiration? Kmart, who have just launched an online center where customers can find, hold and make installment payments for the items they want to pick up in-store and give this holiday. Chief Marketer’s Big Fat Marketing Blog has the story, including the news that (according to Kmart) web users searched on the term “layaway” twice as much this past August as they did in the same month in 2008. Clearly the green shoots in the economy need a bit more watering before they’re quite ready for harvesting.
This year more consumers than ever are expected to be grappling with paying down credit-card debt or facing sharp cutbacks in their credit limits. So ideas that enable consumers to pay for holiday gifts in advance — such as layaway, or like the Christmas savings clubs that Sears and Kmart rolled out in August — may have even greater appeal in cash-strapped 2009.
Your online layaway offering need not be as complicated as Kmart’s — because the retail giant offers a “pick up from a designated store” facility, Kmart has to ensure that stock is available at individual store level when the consumer orders, so that the product can be physically removed from the shelves and placed in storage until the final payment is received.
Here’s how the Kmart scheme operates, according to Big Fat Marketing Blog [the parenthetical  insights are ours]:
The online layaway feature lets customers locate a store participating in the program by entering their ZIP code at www.kmart.com.
[Our View: if you operate multiple offline stores and offer local pick-up or delivery, the zip code is a handy indexing tool. If you only operate in the online space, however, the zip code lookup can serve another purpose, enabling you to determine the distance goods will need to be shipped from you to your customer, and therefore the final deadline for payment to ensure delivery in time for the festive season.]
Kmart customers can also look for a special layaway icon against selected products in online commerce and indicate at checkout that they want to put those items on layaway at their local participating Kmart store. The icon indicator is needed because items have to be physically available in the store at the time of the order to be held on layaway.
[Our View: if you’re offering products on layaway and taking customer monies on that basis, you’ll similarly need to flag items currently in stock — and keep them in storage for the customer.]
Customers pay a $5 initiation fee to start a layaway contract and must pay either $15 or 20% of the total purchase price of the items they want to place on layaway at the start of the contract. They then make four payments of 20% of the total purchase of the merchandise over the eight-week hold period.
[Our View: you’ll also need to offer a predetermined payment schedule, although if you’re an online-only operator you’ll probably want to automate that process through regular credit card deductions, to minimise transaction costs.]
Once installment payments are complete, the customers who opened the layaway accounts can pick up the merchandise, but only at the store contracted with. They must pick up merchandise within 25 days of making the last payment. If they miss a biweekly payment by seven days, Kmart can return the items laid away into stock.
[Our View: you should probably be a little less blunt about your terms and conditions, but you’ll need to have boilerplate legal agreements on your site spelling out similar issues. Just remember you’re not Kmart and be appropriately gentle with your customers.]
Online, customers can use their checkout receipt number to sign into the payment center and make their layaway payments with a credit card, debit card, Kmart gift card or Kmart cash card. Shoppers can also make their biweekly payments in the store in which the layaway order is being held. E-mail alerts will remind shoppers of payment due dates.
[Our View: large organisations such as Kmart inevitably require stringent processes to handle these sorts of multi-channel, multi-encounter transactions. For mom and pop online-only operations, the process can be far simpler: install shopping cart software that enables payment in installments. That solution can be as simple as using PayPal’s subscription plans or choosing an ecommerce program that offers an installment facility (we conducted a quick Google and found a number of shopping carts with installment options, such as this one).]
Whatever option you choose, now would be a good time to start. Only [mumble] shopping days left!

Today’s smart marketing idea in a nutshell: if you operate an ecommerce store, whether pureplay online or  clicks and mortar  (i.e. both online and offline channels), offer layby. Enable consumers to find their desired purchases online, put the products on hold and then pay them off over time.

Source of the inspiration? Kmart, who have recently launched an online center where customers can find, hold and make installment payments for the items they want to pick up in-store and give this holiday. Chief Marketer’s Big Fat Marketing Blog has the story, including the news that (according to Kmart) web users searched on the term “layaway” (aka layby) twice as much this past August as they did in the same month in 2008. Clearly the green shoots in the US economy need a bit more watering before they’re quite ready for harvesting.

This year more consumers than ever are expected to be grappling with paying down credit-card debt or facing sharp cutbacks in their credit limits. So ideas that enable consumers to pay for holiday gifts in advance — such as layby, or like the Christmas savings clubs that Sears and Kmart rolled out in August — may have even greater appeal in cash-strapped 2009.

Your online layby offering need not be as complicated as Kmart’s — because the retail giant offers a “pick up from a designated store” facility, Kmart has to ensure that stock is available at individual store level when the consumer orders, so that the product can be physically removed from the shelves and placed in storage until the final payment is received.

Here’s how the Kmart scheme operates, according to Big Fat Marketing Blog [the parenthetical  insights are ours]:

  • The online layny feature lets customers locate a store participating in the program by entering their ZIP code at www.kmart.com.  [Our View: if you operate multiple offline stores and offer local pick-up or delivery, the NZ postal code is a handy indexing tool. If you only operate in the online space, however, the postal code lookup can serve another purpose, enabling you to determine the distance goods will need to be shipped from you to your customer, and therefore the final deadline for payment to ensure delivery in time for the festive season.]
  • Kmart customers can also look for a special layaway icon against selected products in online commerce and indicate at checkout that they want to put those items on layaway at their local participating Kmart store. The icon indicator is needed because items have to be physically available in the store at the time of the order to be held on layby. [Our View: if you’re offering products on layby and taking customer monies on that basis, you’ll similarly need to flag items currently in stock — and keep them in storage for the customer.]
  • Customers pay a $5 initiation fee to start a layby contract and must pay either $15 or 20% of the total purchase price of the items they want to place on layby at the start of the contract. They then make four payments of 20% of the total purchase of the merchandise over the eight-week hold period. [Our View: you’ll also need to offer a predetermined payment schedule, although if you’re an online-only operator you’ll probably want to automate that process through regular credit card deductions, to minimise transaction costs.]
  • Once installment payments are complete, the customers who opened the layby accounts can pick up the merchandise, but only at the store contracted with. They must pick up merchandise within 25 days of making the last payment. If they miss a biweekly payment by seven days, Kmart can return the items laid away into stock. [Our View: you should probably be a little less blunt about your terms and conditions, but you’ll need to have boilerplate legal agreements on your site spelling out similar issues. Just remember you’re not Kmart and be appropriately gentle with your customers.]
  • Online, customers can use their checkout receipt number to sign into the payment center and make their layby payments with a credit card, debit card, Kmart gift card or Kmart cash card. Shoppers can also make their biweekly payments in the store in which the layaway order is being held. E-mail alerts will remind shoppers of payment due dates. [Our View: large organisations such as Kmart inevitably require stringent processes to handle these sorts of multi-channel, multi-encounter transactions. For mom and pop online-only operations, the process can be far simpler: install shopping cart software that enables payment in installments. That solution can be as simple as using PayPal’s subscription plans or choosing an ecommerce program that offers an installment facility (we conducted a quick Google and found a number of shopping carts with installment options, such as this one).]

Whatever option you choose, now would be a good time to start. Only [mumble] shopping days left!

eCommerce Under Threat from Google?

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Reuters is reporting that “Google Inc is partnering with major music labels to launch a new feature to make it easier to discover, sample and buy songs on the search engine”.
The notion, according to the usual suspects “people familiar with the plan”, is that under this new scheme music will be streamed directly onto Google pages.
Of particular concern is the proposal that alongside the songs you’ll find a handy “buy” button, taking you to “a variety of different sites, including Amazon.com and Apple Inc’s iTunes Music Store”. This will, Reuters reports, “help reduce the number of steps fans need to purchase their favorite songs or albums.”
It’ll also potentially reduce the revenues of music resellers other than the favored few in partnership with Google.
We don’t want to be alarmist, but what happens next if this new “buy” feature turns out to be highly profitable for Google and its preferred partners?
Will we see a hazardous new direction for Google, where the corporate titan turns its search pages into ecommerce BUY NOW displays, in direct competition with advertisers and with anyone else who allows/encourages Google to index their site?
It’s not difficult to imagine a scenario where a search on Google (the sherlock of choice for most of us) for, say, “PlayStation 4″ delivers a prominently displayed “Buy” button in conjunction with Wal-Mart or Best Buys, leaving other consumer electronics outlets competing for the crumbs on pages 2 through infinity.
We’ve already heard, via the Frankfurt Book Fair, that Google is gearing up to launch its own online bookstore, “Editions”. Once that facility is up and running, Google’s shareholders would have every reason to expect that any book title available for sale via Editions would be prominently displayed (perhaps with that dreaded “Buy” button) in response to relevant Google searches. That’s hardly going to endear the Googleplex to Amazon, Barnes & Noble or about a trillion other booksellers around the world.
We could even see a whole new tier of Google advertisers/partners emerge — those who are willing to bid for access to the Buy button for their choice of keywords. It would certainly make a rich new revenue stream for Google (whilst somewhat devaluing AdWords as an advertising currency).
We are heartened by the Google corporate mantra, “do no evil”. But we also remember the words of Google co-founder Larry Page: “The perfect search engine would understand exactly what you mean and give back exactly what you want.”
That could mean giving a big fat BUY button to those consumers who can articulate exactly what they want (by brand name, rank and serial number).
Should we be afraid?

Reuters is reporting that “Google Inc is partnering with major music labels to launch a new feature to make it easier to discover, sample and buy songs on the search engine”.

The notion, according to the usual suspects “people familiar with the plan”, is that under this new scheme music will be streamed directly onto Google pages.

Of particular concern is the proposal that alongside the songs you’ll find a handy “buy” button, taking you to “a variety of different sites, including Amazon.com and Apple Inc’s iTunes Music Store”. This will, Reuters reports, “help reduce the number of steps fans need to purchase their favorite songs or albums.”

It’ll also potentially reduce the revenues of music resellers other than the favoured few in partnership with Google.

We don’t want to be alarmist, but what happens next if this new “buy” feature turns out to be highly profitable for Google and its preferred partners?

Will we see a hazardous new direction for Google, where the corporate titan turns its search pages into ecommerce BUY NOW displays, in direct competition with advertisers and with anyone else who allows/encourages Google to index their site?

It’s not difficult to imagine a scenario where a search on Google (the sherlock of choice for most of us) for, say, “PlayStation 4″ delivers a prominently displayed “Buy” button in conjunction with Wal-Mart or Best Buys, leaving other consumer electronics outlets competing for the crumbs on pages 2 through infinity.

We’ve already heard, via the Frankfurt Book Fair, that Google is gearing up to launch its own online bookstore, “Editions”. Once that facility is up and running, Google’s shareholders would have every reason to expect that any book title available for sale via Editions would be prominently displayed (perhaps with that dreaded “Buy” button) in response to relevant Google searches. That’s hardly going to endear the Googleplex to Amazon, Barnes & Noble or about a trillion other booksellers around the world.

We could even see a whole new tier of Google advertisers/partners emerge — those who are willing to bid for access to the Buy button for their choice of keywords. It would certainly make a rich new revenue stream for Google (whilst somewhat devaluing AdWords as an advertising currency).

We are heartened by the Google corporate mantra, “do no evil”. But we also remember the words of Google co-founder Larry Page: “The perfect search engine would understand exactly what you mean and give back exactly what you want.”

That could mean giving a big fat BUY button to those consumers who can articulate exactly what they want (by brand name, rank and serial number).

Should we be afraid?

More Buyers Than Most

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Nielsen’s Market Intelligence service collects a steady stream of information about the online habits of Kiwis (and, of course, of many other nationalities around the world). Every so often, they gather up some fascinating tidbits to share with their friends and associates.

In their latest roundup of fascinating facts, they identify the websites that (in September 2009) attracted the highest proportion of recent online purchasers (bought online in the last four weeks). Here’s the list:

idealog.co.nz: 56.6% of its visitors (2799 matched unique browsers) have purchased online on any site in the past four weeks
nappies.co.nz 56.5% (4031 unique browsers)
cio.co.nz 54.6% (2993)
thedeal.co.nz 49.5% (11244)
resellernews.co.nz 48.2% (4219)
pcworld.co.nz 48.2% (24872)
womensphonebook.co.nz 47.3% (2894)
honda.co.nz 46.9% (6243)
vorb.org.nz 46.8% (11288)
gameplanet.co.nz 46.7% (28082)
Source: Nielsen Market Intelligence, NZ Domestic Traffic September 2009
  1. idealog.co.nz: 56.6% of its visitors (2799 matched unique browsers) have purchased online on any site in the past four weeks
  2. nappies.co.nz 56.5% (4031 unique browsers)
  3. cio.co.nz 54.6% (2993)
  4. thedeal.co.nz 49.5% (11244)
  5. resellernews.co.nz 48.2% (4219)
  6. pcworld.co.nz 48.2% (24872)
  7. womensphonebook.co.nz 47.3% (2894)
  8. honda.co.nz 46.9% (6243)
  9. vorb.org.nz 46.8% (11288)
  10. gameplanet.co.nz 46.7% (28082)

Source: Nielsen Market Intelligence, NZ Domestic Traffic September 2009

What does the data mean? That these ten websites are being visited by a higher proportion of online purchasers than other NZ websites measured by Nielsen (who, it should be noted, only measure a subset of the NZ internet space, namely those who pay Nielsen for an independent assessment of their performance).

That could mean that visitors to these websites could be better prospects for your offerings.

Are retailers finally starting to get it?

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The US National Retail Federation’s Shop.org arm, which concerns itself with matters ecommerce, tells us in its latest Smart Brief email update that:
‘One-third of retailers plan to add “buy online, pick up in store” capabilities in the next 18 months.’ [Shop.org SmartStat March 23, 2009. Source: Retail Horizons: Benchmarks for 2008, Forecasts for 2009]
Um, sorry to be rude, but what took you so long?
Forrester Research identified the trend as far back as 2004, slapped a label on it (’Cross Channel Shopping’) and issued their usual comprehensive report on the topic, in this case “The US Consumer 2004: Multichannel and In-Store Technology”.
Even back then, it was a pretty big deal to retailers. In 2004 cross-channel shoppers spent an average $458 on products they researched online and bought offline. Just as importantly, when they did hit the offline store, 47 percent ended up spending more, $154 on average for additional products. That’s a lot of money to leave on the table for five years.
The numbers have only grown since then. BIGresearch’s June 2006 Consumer Intentions and Actions Survey was reporting that “87% of consumers research products online before buying them in person or in a store.”
DO AS I DO, NOT AS I SAY
There’s something of a cognitive disconnect involved in this whole ‘research online, buy offline’ process, as exemplified by a May 2008  Nielsen Online MegaPanel survey.
According to the survey, consumers say they would rather buy a “high consideration” product like a consumer electronics product online than in a local store, primarily because of price. Over two-thirds of consumers say that they could get a better price online than in a local store and fully half believe it is easier to compare prices online. Other reasons cited include: getting convenient at-home delivery (45%), comparing retailers (41%), choosing from a much broader selection (40%), accessing more product information (40%), and reading consumer reviews (37%).
However the reality is somewhat different. When it comes to check-out, consumers are actually twice as likely to make a consumer electronics purchase in the local store (59%) rather than online (31%).
Why?
Reasons cited in the Nielsen Online Megapanel Survey:
58% wanted to physically evaluate the product before purchasing
52% didn’t want to wait for the product to ship
43% didn’t want to pay for shipping and handling
27% wanted to talk to a sales person in person, before purchasing
23% thought they could get a better price in store
14% weren’t sure anyone would be home when the item was to be delivered
11% wanted to support a local business
Nielsen’s conclusions from the Survey (as noted in their September 2008 Consumer Insights newsletter) make a whole lot of sense and are well worth repeating in full:
Whether consumers buy online or in-store, multi-channel shoppers are big spenders. In fact, Nielsen found that consumers who shop both online and offline are the most valuable. Looking across a mix of brick and mortar retail channels, multi-channel shoppers spend 57% more at CVS, 61% more at Walgreens and Costco, 38% more at Walmart and 37% more at Sam’s when compared with the average spending of consumers who exclusively shop online or only shop offline.
Complementary cohorts
Nothing is quite like the actual in-store experience for some products—the ability to physically evaluate a product or speak to a knowledgeable salesperson can literally make or break a sale. On the other hand, the convenience of visiting a much broader selection of virtual retailers to compare and contrast pricing and capabilities without ever leaving home is, well, simply priceless.
Clearly in-store and Web channels complement each other—the combination of the two has absolutely become table stakes for successful retailers. In fact, Nielsen found that 80% of consumers actually purchased a consumer electronic product from a local store whose web site they visited as they were doing research online. Striking a balance between online and in-store can lead to a big payoff.
The source of choice
Perhaps for a “high-consideration” category like consumer electronics, it is no surprise that the Internet is the source of choice for 58% of consumers if they were only able to use one resource to support their next purchase. A visit to the local store trailed way behind as the singular option for 25% of consumers. However, in the case of a “low-consideration” category like pet food, where 44% of buyers visit the web site to learn about food or issues related to pet food, it is important for marketers to understand how to employ an active crossover strategy by engaging the consumer more successfully online.
And unlike consumer electronic buyers where price is the motivating factor for going online, 48% of pet lovers are more interested in learning about nutritional specifications. Learning about product ingredients and recalls were a close second for 45% of pet food buyers. Other factors include learning about safety issues and finding sales and promotions (40%), evaluating and comparing prices (36%), finding a local store (25%) and reading consumer reviews (16%).
Learn from the best
Some retailers are making the most of their web sites as a destination source to engage consumers. Best practices include Safeway’s printable recipes linked to shopping lists, Best Buy’s in-store inventory availability check, Walmart’s site-to-store free shipping option, Lowe’s “how-to” content information, and Kraft Foods’ recipe availability from six different downloadable platforms. Offering great product- and category-level content is the critical foundational element to make multichannel retailing most successful. Key pieces of content must be portable and enable easy printing.
Making it accessible via mobile and in-store devices is a plus. The bottom line is this: give consumers a multitude of ways to reach your product and remain agnostic regarding in which channel the ultimate purchase is made. In doing so, you not only build customer loyalty, but you boost the bottom line as well.

The US National Retail Federation’s Shop.org arm, which concerns itself with matters ecommerce, tells us in a recent Smart Brief email update that:

Um, sorry to be rude, but what took you so long?

Forrester Research identified the trend as far back as 2004, slapped a label on it (’Cross Channel Shopping’) and issued their usual comprehensive report on the topic, in this case “The US Consumer 2004: Multichannel and In-Store Technology”.

Even back then, it was a pretty big deal to retailers. In 2004 cross-channel shoppers spent an average $458 on products they researched online and bought offline. Just as importantly, when they did hit the offline store, 47 percent ended up spending more, $154 on average for additional products. That’s a lot of money to leave on the table for five years.

The numbers have only grown since then. BIGresearch’s June 2006 Consumer Intentions and Actions Survey was reporting that “87% of consumers research products online before buying them in person or in a store.”

DO AS I DO, NOT AS I SAY

There’s something of a cognitive disconnect involved in this whole ‘research online, buy offline’ process, as exemplified by a May 2008  Nielsen Online MegaPanel survey.

According to the survey, consumers say they would rather buy a “high consideration” product like a consumer electronics product online than in a local store, primarily because of price. Over two-thirds of consumers say that they could get a better price online than in a local store and fully half believe it is easier to compare prices online. Other reasons cited include: getting convenient at-home delivery (45%), comparing retailers (41%), choosing from a much broader selection (40%), accessing more product information (40%), and reading consumer reviews (37%).

However the reality is somewhat different. When it comes to check-out, consumers are actually twice as likely to make a consumer electronics purchase in the local store (59%) rather than online (31%).

Why?

Reasons cited in the Nielsen Online Megapanel Survey:

  • 58% wanted to physically evaluate the product before purchasing
  • 52% didn’t want to wait for the product to ship
  • 43% didn’t want to pay for shipping and handling
  • 27% wanted to talk to a sales person in person, before purchasing
  • 23% thought they could get a better price in store
  • 14% weren’t sure anyone would be home when the item was to be delivered
  • 11% wanted to support a local business

Nielsen’s conclusions from the Survey (as noted in their September 2008 Consumer Insights newsletter) make a whole lot of sense and are well worth repeating in full:

Whether consumers buy online or in-store, multi-channel shoppers are big spenders. In fact, Nielsen found that consumers who shop both online and offline are the most valuable. Looking across a mix of brick and mortar retail channels, multi-channel shoppers spend 57% more at CVS, 61% more at Walgreens and Costco, 38% more at Walmart and 37% more at Sam’s when compared with the average spending of consumers who exclusively shop online or only shop offline.

Complementary cohorts

Nothing is quite like the actual in-store experience for some products—the ability to physically evaluate a product or speak to a knowledgeable salesperson can literally make or break a sale. On the other hand, the convenience of visiting a much broader selection of virtual retailers to compare and contrast pricing and capabilities without ever leaving home is, well, simply priceless.

Clearly in-store and Web channels complement each other—the combination of the two has absolutely become table stakes for successful retailers. In fact, Nielsen found that 80% of consumers actually purchased a consumer electronic product from a local store whose web site they visited as they were doing research online. Striking a balance between online and in-store can lead to a big payoff.

The source of choice

Perhaps for a “high-consideration” category like consumer electronics, it is no surprise that the Internet is the source of choice for 58% of consumers if they were only able to use one resource to support their next purchase. A visit to the local store trailed way behind as the singular option for 25% of consumers. However, in the case of a “low-consideration” category like pet food, where 44% of buyers visit the web site to learn about food or issues related to pet food, it is important for marketers to understand how to employ an active crossover strategy by engaging the consumer more successfully online.

And unlike consumer electronic buyers where price is the motivating factor for going online, 48% of pet lovers are more interested in learning about nutritional specifications. Learning about product ingredients and recalls were a close second for 45% of pet food buyers. Other factors include learning about safety issues and finding sales and promotions (40%), evaluating and comparing prices (36%), finding a local store (25%) and reading consumer reviews (16%).

Learn from the best

Some retailers are making the most of their web sites as a destination source to engage consumers. Best practices include Safeway’s printable recipes linked to shopping lists, Best Buy’s in-store inventory availability check, Walmart’s site-to-store free shipping option, Lowe’s “how-to” content information, and Kraft Foods’ recipe availability from six different downloadable platforms. Offering great product- and category-level content is the critical foundational element to make multichannel retailing most successful. Key pieces of content must be portable and enable easy printing.

Making it accessible via mobile and in-store devices is a plus. The bottom line is this: give consumers a multitude of ways to reach your product and remain agnostic regarding in which channel the ultimate purchase is made. In doing so, you not only build customer loyalty, but you boost the bottom line as well.

The Serendipity Shopping Factor

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There’s a wonderful, iconic statistic — seemingly unsupported by anything as trivial as hard data — claiming that “70-75% of all purchase decisions are made by the shopper as he or she is actually walking around and shopping”. It’s a figure we’ve seen bandied about many times, largely by those promoting Point Of Purchase marketing solutions.
A related figure, this one supported by a US study by the Prime Consulting Group, concludes that “at-retail advertising drove additional sales 70% of the time”. That strikes us as significantly more credible, as long as you broaden the definition of “at-retail advertising” to include price-tags, packaging and all the normal tools of the retail trade.
Whatever the numbers, however, one thing is clear: there’s a serendipity factor involved. Shoppers come into a store to buy Product X but happen upon Product Y and add it to their list. Retailers can afford to promote loss leaders (and indulge in other expensive promotional tactics) because they count on and budget for this effect.
Ecommerce operators try hard to trigger the serendipity scenario, but it ain’t that easy. Even Amazon.com, masters of the “people who bought this also bought …” software, struggle to interest destination shoppers in peripheral opportunities.
Enter the social shopping networks. As reported in the New York Times, sites like ThisNext.com, Kaboodle.com, Wists.com and StyleHive.com are spearheading a new category of e-commerce called “social shopping,” that tries to combine two favourite online activities: shopping and social networking. The sites are hoping to ride the MySpace wave by gathering people in one place to swap shopping ideas.
How does it work? Users who register with social shopping services typically create their own pages to collect information on items they find. But instead of simply describing what they have found on other sites and posting a Web address, they can download a piece of software that allows them to grab images of those products to post on their own shopping lists.
In effect, these social shopping networks are trying to harness the “recommendation engines” of early adopters, to create a network of influencers who do the product finding and then bring their choices to the attention of the community at large. The result might be more compelling if they weren’t so blatantly commercial in their intentions — the sites expect to generate revenue through a mixture of context-sensitive advertising and sales commissions.
We suspect that the current crop of startups will struggle to sustain a user base — who wants to be a shill for others to exploit? But somewhere in a garage in cyberspace there’s bound to be an idealist who’ll take the concept and make it work — accidentally creating a very valuable property while serving the greater good.
Serendipity in more ways than one.

There’s a wonderful, iconic statistic — seemingly unsupported by anything as trivial as hard data — claiming that “70-75% of all purchase decisions are made by the shopper as he or she is actually walking around and shopping”. It’s a figure we’ve seen bandied about many times, largely by those promoting Point Of Purchase marketing solutions.

A related figure, this one supported by a US study by the Prime Consulting Group, concludes that “at-retail advertising drove additional sales 70% of the time”. That strikes us as significantly more credible, as long as you broaden the definition of “at-retail advertising” to include price-tags, packaging and all the normal tools of the retail trade.

Whatever the numbers, however, one thing is clear: there’s a serendipity factor involved. Shoppers come into a store to buy Product X but happen upon Product Y and add it to their list. Retailers can afford to promote loss leaders (and indulge in other expensive promotional tactics) because they count on and budget for this effect.

Ecommerce operators try hard to trigger the serendipity scenario, but it ain’t that easy. Even Amazon.com, masters of the “people who bought this also bought …” software, struggle to interest destination shoppers in peripheral opportunities.

Enter the social shopping networks. As reported in the New York Times, sites like ThisNext.com, Kaboodle.com, Wists.com and StyleHive.com are spearheading a new category of e-commerce called “social shopping,” that tries to combine two favourite online activities: shopping and social networking. The sites are hoping to ride the MySpace wave by gathering people in one place to swap shopping ideas.

How does it work? Users who register with social shopping services typically create their own pages to collect information on items they find. But instead of simply describing what they have found on other sites and posting a Web address, they can download a piece of software that allows them to grab images of those products to post on their own shopping lists.

In effect, these social shopping networks are trying to harness the “recommendation engines” of early adopters, to create a network of influencers who do the product finding and then bring their choices to the attention of the community at large. The result might be more compelling if they weren’t so blatantly commercial in their intentions — the sites expect to generate revenue through a mixture of context-sensitive advertising and sales commissions.

We suspect that the current crop of startups will struggle to sustain a user base — who wants to be a shill for others to exploit? But somewhere in a garage in cyberspace there’s bound to be an idealist who’ll take the concept and make it work — accidentally creating a very valuable property while serving the greater good.

Serendipity in more ways than one.