Ecommerce Consulting.com | Experts in Online Retail

10 Reasons Why Some Manufacturers Still Ponder Selling Online

Earlier this month, I read a blog post from E-consultancy titled "Why Not Selling Online Can Damage Your Brand".   The piece covers many of the key reasons why e-commerce has become a must have for brands, and why not selling online can be more than a missed opportunity; it can actually damage the brand. 

As a long time veteran and advocate of e-commerce, I agree with all of the points in the article.  Yet, having worked with some notable manufacturer brands who have yet to take the plunge into online selling, I can offer that for many of these companies, the decision to sell online is not the "no brainer" that it might appear.

Manufacturers who sell online don't just need to become web merchants, they need to become retailers, and that presents some interesting and often sticky strategic issues.

1. Lack of in-house retail or e-commerce talent.  This means that manufacturers may not know what questions to ask or understand the complexity of what they are getting into.  It also means that there may not be a logical choice for a leader of the strategy, planning and execution of an e-commerce initiative.
2. Concern about disruption to retail relationships.  This typically tops the list of issues, as manufacturers attempt to walk the delicate line between building their brand through direct to consumer sales and cannibalizing their retail partners.  Every manufacturer selling online has faced it, and there are many flavors of potential answers to striking the balance.
3. Product offering and pricing decisions can be mired with complexity.  Manufacturers' product lines many not be "retail ready", meaning they have been assorted for the retail buyer, not the consumer.  Thus, there are key decisions to be made around the online offer. The whole assortment? An edited version? Exclusive products? Clearance items? New test products?   And then there's pricing.  There's a need to offer the consumer a competitive value,  yet the need to be sensitive to retail partner margins and not undercut.
4. Product information and assets are not e-commerce ready. Manufacturers have a unique opportunity to showcase their products online, and consumers will likely have an expectation that the best and most extensive product information will come from the manufacturer's website.  Yet, many manufacturers find that their product images and copy are geared towards product spec manuals for retail buyers vs. online shoppers.  Re-purposing and enhancing product assets for the web can be a significant undertaking.
5. Fulfillment is not set up for single piece consumer orders.  Separate processes and systems may need to be set up to effectively manage consumer shipments and returns. Ditto for new packaging. Outsourcing many need to be investigated and considered.  Similarly, managing inventory for e-commerce can be complex if the manufacturer's systems are not set up to buy and reserve inventory for the online store, or allow for easy access to overstocks.
6. Customer service takes on a whole new role.  As with fulfillment, discreet processes, systems and people will be needed for e-commerce. Whether or not to turn service over to an outsource partner can be a critical strategic decision.  Build the team and infrastructure and reap the benefits of direct communication with your customers? Or hire experts with the people and systems in place to get you up and running quickly?
7. Marketing activities have been focused on B2B relationships and broad consumer branding.  Digital direct response marketing may not be part of the company's DNA, so understanding search marketing, email, affiliate relationships, retail promotions, social media and the whole balance between traffic and conversion becomes a new skill set need.
8. E-commerce ecosystem components need attention.  While the search for an e-commerce platform will likely be part of the manufacturer's path to online selling, equally important is the suite of supporting systems (many of them possibly in "legacy" condition) that will need upgrading or readying for integration. Order management, CRM, warehouse systems, the list goes on.
9. Resources, Resources, Resources (People, Money, Time).  All of the above is a lot of work, and everyone has day jobs.  Not to mention, this sounds like it could be a significant investment.  Maybe we're just too slammed to deal with this now?
10. Lack of a deliberate process to work through #s 1-9.   It's easy to get confused and overwhelmed by the decisions and intimidated by the potential costs, especially when you're busy running your core business.   A host of manufacturers have made the transition to direct online selling successfully and profitably.  If you have not yet taken the plunge, it's probably high time that you start the investigation process to wrestle these issues to the ground.  None of them are insurmountable, but they do require some disciplined thought and decision making.  Get some help from a knowledgeable, experienced expert to help you identify the issues and opportunties, and engage in a process to work through the answers.  Your brand deserves it, and your prospective consumer customers are asking for it.

If We're so Smart About Multi-Channel Retail, Why Are Some Store Locators so Dumb?

Getting multi-channel retailing done well is not easy.  Good news for shoppers and retailers, a lot of companies are getting very good at it.   Buy online, pick up at the store.  Buy online, return to the store.  Order from the web kiosk in the store.  Check store inventory online.   Read web customer reviews in the store on your mobile phone.   There's no limit to the way customers use channels and devices to save time and get the information they need, and they are hopping across channels and devices like never before.  A couple of quick stats, in case you need convincing:

• 69% of shoppers research products online before going to a store (Source: Business Week survey 2008)
• With the economic downturn, 53% of shoppers say they use the internet more frequently to research products and prices (Source: NCR survey of U.S. consumers)

There's one multi-channel essential that's not that hard to execute, but can easily be ignored by e-commerce teams: the store locator.  Done well, a store locator can be a great resource to help a shopper  before she heads out to buy...it  might even get her excited about the shopping trip.

Here's a quick glance at the store locators of a few well known multi-channel brands, showing the best, and unfortunately the boring worst of what store locators can be.  

REI: They've been a leader in multi-channel execution since the early days of e-commerce, and their approach comes through loud and clear with their online store locator.  Shown below, I can get all kinds of information about upcoming events, the product categories carried in the store,  and I can even set an appointment to get personalized shopping help.  Love the GPS coordinates in addition to the directions, too.  

  

Nike:  While Nike's e-commerce site is frequently cited at the top of critics' lists as the pinnacle of balancing brand, engagement and utility, their store locator appears to be a long forgotten element.  After a forced zip code entry, you get in return little more than a weak Yellow Pages listing.  With an e-commerce site that's so vibrant and exciting, this makes me want to skip the store.  Surely that's not the intent.

 

Apple: It's a bit of an effort to find the store locator on Apple's site (deep in the footer), but as you might expect, the info and experience deliver above and beyond once you get there.   At the Apple locator, I can register for classes, schedule an appointment with a Genius, reserve a new item before it arrives in the store, even watch videos of past store events. I can sign up for email from my store to keep updated on upcoming events too.

 

Best Buy: This retailer has set many examples of the importance of involving store team members in just about everything.  The Best Buy store locator shows promise but could be so much more.  I love the personal note from the store manager and the ask for customer feedback, but the events area is blank (of course it should be coded so that the events header does not appear if there's nothing there) and I don't get the sense that there's much going on here.

 

Whole Foods:  Ok, so this site does not qualify as an e-commerce site, but it's a great example of what a store locator can be when you let the employees take ownership.  Note the store calendar, ability to download a PDF of the store's specials, get an RSS feed of events,  and the Twitter feed of the store manager's Tweets!

 

Let's face it.  I've lived in Seattle for 25 years and I already know where all of the stores near me are located.   But there's something cool going on in just about all of these stores every week that I usually don't know about. 

If you're not convinced that making your store locator worth visiting is worth the time, here are a few more stats you might want to consider:

46% of shoppers say that they want to receive product information, coupons, promotions and store sales information online. (Source: NCR survey of U.S. consumers)

26% of shoppers say the weak economy is causing them to make more frequent shopping trips to take advantage of sales and promotions (Source: NCR survey of U.S. consumers)