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.

E-commerce History as Teacher: The Brands Have Changed, but the Lesson Lives On

I don't have a hoarding problem.  But when it comes to e-commerce, I admit I am a pack rat.  When I read a report or an article about selling online that hits the mark I tend to save it and refer to it multiple times over multiple years.  Yes, this industry moves fast and changes frequently, so sometimes dumpster diving through old files is good for little more than amusement (about a month ago I found a box full of mouse pads that e-commerce companies used to send me as "gifts" when I ordered online in the mid 90's....almost all of the companies have since flamed out).  But many times, I come across something that I'm really glad I kept. 

Earlier this week, I re-surfaced a Forrester report from (get this) 2000. I saved it because I was working at Eddie Bauer at the time and was unbelievably proud of this statement from the report:

"Style-obsessed retailers like Williams-Sonoma and Banana Republic will continue to jump into online sales with sites that deliver flash over substance, exciting and then disappointing potential customers.  Unable to resist force-fitting their offline branding campaigns into their Web boutiques, they will fall further and further behind retailers like Eddie Bauer that understand that the core of online branding is serving user needs"

Ok, so that was a long time ago.  Williams-Sonoma, Banana Republic and Eddie Bauerall now have great e-commere websites that are a true pleasure to shop and reflect and enhance their brands.  But it wasn't always that way.  And for a good many brands today, it's still not that way.  Top tier retailers and manufacturers frequently struggle with how to make the best of the e-commerce channel and strike the delicate balance between immersing visitors in the richness of the brand while still creating a focused shopping experience that results in a transaction.

Recently, I did an in-depth shopping audit across e-commerce sites at 15 brands (all recognizable names).   It became clear early in the audit that this issue of balance between brand building and a useful commerce experience is alive and kicking, a good 9 years after the Forrester article first hit my desk.  Only the names have changed.   Here's a quick summary of some of the most common mis-steps:

1. Long, slow, heavy flash intros (yes, they are still out there!) 

2. Links to my account, service , search and other critical functions are hidden in favor of gorgeous photography

3. Navigational categories that reflects the retailer's nomenclature instead of the customer's language (i.e. The Market Street Collection)

4. Search functionality that brings up null results for common terms like "suede shoes" or "hiking boots" (search was broken on just about all sites I visited!)

5. The ability to sort the category thumbnail page alphabetically by product name (who cares?) instead of basics like color, size, price. 

6. Avoidance of customer reviews and ratings due to fear of a negative review (see my previous post on this one!)

7. Customer service, return policies and shipping information buried deep on a "FAQ" page instead of surfaced at critical decision points in the shopping process.  Most service pages did not list call center hours or set expectation about when email inquiries would be answered.

8. Points of real value, like free shipping offers not surfaced until late in the shopping process instead of on a home or category page.

9. Product pages that "show" but don't "tell":  great photos but little or no copy that answers real consumer questions or highlights benefits.

 10.   Overuse of icons and symbols for technical features that are hard to decipher and de-code.

So, how does this happen? Obviously any one of the above situations does not reflect well on any brand.  Yet they occurred frequently across numerous e-commerce sites for top brands during my shops.  I think it happens for a number of reasons:

• Executives and employees at many companies rarely look past the home page of their e-commerce sites.  Approvals and creative reviews are limited to visual appeal and adherence to a style guide vs. the delivery of critical shopping functionality. 

• Agencies hired to lead or assist with site design are hired for their experience with the brand's other media or for their ability to grasp the brand's visual essence vs. their expertise in e-commerce interaction design.

• Brand managers and creative directors shy away from advocating helpful customer tools like reviews and sort/filter tools for fear of becoming to "sales" vs. "experience" focused.

• Brand terminology (The Market Street Collection, etc.) works for store signage and print media (and even in e-commerce promotional space), but fails as navigational
  nomenclature, something rarely thought about during product development.

• Many companies under-invest in copy writing and content development specifically focused on web user goals.

I think Forrester said it best back in 2000, but I'll say it again. Enhancing your brand's image online means paying attention to more than the visual integrity.  The nature of the e-commerce channel requires that we pay equal (at least) attention to the customer actions the site must deliver. Otherwise, the brand experience is eroded.

While many e-commerce sites have clearly figured this out and found the delicate balance between form and function, it's clear from my recent experience that as an industry, we're still seeking guidance and answers in this critical area.   Good thing I'm a pack rat. But I don't have a hoarding problem! (Anyone want to buy a sock puppet mouse pad?)

 

E-commerce Help Wanted: Retailers Need Not Apply?

Today is Darwin's 200th birthday, so what better time to reflect on the evolution of e-commerce leadership.  

A recent article about e-commerce executive recruiting  in Times Online reveals that retail experience is among the least important attributes that retailers now seek when hiring someone to lead their online effort.   While at first I was surprised, some quick memory checking made me realize how much the e-commerce leader's role has changed in the last decade, and how very different the skill set requirements have become.  Still, when I thought about the important perspective that a seasoned retailer brings to the online channel, I'm nI decided I wasn't necessarily willing to push retail experience to the bottom of the pile.  Here's why:

In the years following my graduation from college, I spent a lot of time on the selling floor of retail stores.  It was the early 80's; there was a recession going on (sound familiar?) and jobs were scarce.  It wasn't glamorous. My feet hurt,  it didn't pay well, and the customers were demanding.  I was glad to leave.  But, 15 years later, as a pioneer in the early days of e-commerce, I drew from that selling floor experience in a big way.  When I had to think through how to present a product online, what information a customer would need to make a decision, how to communicate helpful service information without a human, I thought back to those days when I had to look the customer in the eye (not in the email address) and tell them that the item they wanted was out of stock or that the sale didn't start till tomorrow and I couldn't honor the price today. I remembered that sick feeling in the pit of my stomach when I had to walk a customer because I didn't have what they wanted.  To this day, when I am getting a website ready to launch, I think about how I had to be sure that the selling floor was "ready for showtime" every morning, with the best selling products front and center, the right signs on the fixtures and my brain up to speed with what specials were running and what new items had just come in.  Today, as an e-commerce consultant, I can always tell when the client I'm working with came from the retail ranks.  They are typically the ones with an intuitive sensitivity to the customer experience and a maniacal sense of urgency about every customer facing detail.  I never ask, but I suspect they have that same sick feeling in the pit of their stomach when the customer isn't happy.

Of course, e-commerce has grown up, and with it, the expectations of the e-commerce leader. In the beginning, retailers had no choice other than to choose a passionate person from the inside.  After all, when an industry is only a few years old, there are no seasoned veterans to choose from.  Early stage e-commerce leaders relied heavily on their offline institutional knowledge  and internal company relationships to get things done.  They found insight and validation from their peers at other companies through Shop.org and regional/local networking groups springing up to share information.  They became evangelists in their organizations, and were often the catalyst for channel coordination and integration; and who better to do this, they were the ones who had a view of what the future retail experience was going to be.

As the online business matured, these e-commerce leaders became a very special breed: seasoned execs who not only had an extensive background in traditional retail or catalog operations, but who now offered a bonus layer of expertise in how to get it done online.

But, sometimes evolution happens very quickly, as it has in e-commerce. The demand for seasoned e-commerce leaders has outpaced the supply.  E-commerce businesses and technologies have become more sophisticated and complex.  E-commerce now represents a substantial portion of many retailers' sales and profits.  For most retailers, e-commerce represents one of the few bright spots of growth and innovation. 

Retailers eager to make the most of the online channel may no longer have the luxury of putting a good store/catalog person in charge of e-commerce and letting them "figure it out".  The learning curve has gotten steep and the e-commerce leadership job now comes with c-level expectations and demands.   When seeking an online leader, the Times Online article points out, retailers may cast a wider net for talent.  That net may include top tier talent with little or no experience in retail.

In the wide net, you may find someone with the right leadership and vision to drive e-commerce, but before you leap to hire someone without retail chops, think about these questions:

• Who else on the e-commerce team can be the retail voice? Is their voice loud enough and respected enough to be heard?
• Is the boss of this potential new leader someone with a strong retail mindset and can they provide mentorship in this area?
• How critical are cross-channel and multi-channel initiatives in your organization? Will this potential new leader understand the complexities and cultural challenges in executing these initiatives without hands-on retail experience?

And finally:

• Has the potential new exec spent any meaningful time dealing directly with customers, and in what capacity?  In other words, have they had to look the customer in they eye (not in the email address)?  And what gives them that sick feeling in the pit of the stomach?

There are consequences to taking retail out of your e-commerce gene pool.  Be sure you're ready for them.

Nudge Your E-commerce Customers and Grab the Low Hanging Fruit

Often, I'm asked by clients or prospective clients to look at their e-commerce websites and identify low hanging fruit.  Usually, that means unearthing opportunities to improve the customer experience, and thus, improve conversion.

Here's one way to grab some low hanging fruit: give your customers a nudge.

In any given e-commerce shopping and buying experience, customers are faced with a large number of choices to make.  I'm not just talking about selecting the product to buy. It's all of the various configurations of choices that come after you've found the item that you want:

• What color and size do I choose?

• What shipping method do I want?

• Do I want to sign up for email, and if so, do I want HTML or text?

• Do I want the item shipped to my billing address or a different one?

• Do I want to save my personal info or create an account for next time?

• What credit card do I want to pay with?

• Do I want to donate extra dollars to a good cause?

The list goes on.  Depending on the nature of the product, there can by a myriad of custom configurations of a product (like the Timberland boot builder) or options for receiving a physical product vs. a digital version (such as an airline ticket or software product).  As many online shoppers have discovered, on some websites, it's all too easy to make the wrong choice.  In fact, some websites make matters worse by having the wrong choice "pre-selected", causing frustration, abandonment, or worse, an erroneous order followed by dissatisfaction and returns.

By dissecting all of the places on your site that your customers need to make choices and gently "nudging" them towards the appropriate choice, you can make your customers happier AND improve your e-commerce business results.  

Fortunately, some great brains at HBR have written an article and created a useful decision tree methodology for those of us who lead e-commerce efforts.  The article, Nudge Your Customers Towards Better Choices is a must-read for any information architect or designer faced with getting customers through the online decision making process, and for e-commerce business leaders wrestling with the pros and cons of making "default" choices for customers, either with the intent of achieving a business results (such as getting more email sign ups) or improving customer satisfaction (such as presenting personalized selections).  Note: you will need to pay for this article on the HBR site, but it's only $6.50 and, in my view, well worth the investment, as you'll probably refer to it again and again and put the decision tree they've created on your bulletin board.

Fundamentally, the HBR authors divide the world into two key types of "default" decisions that can be presented to a customer: a) mass defaults, where a retailer "pre-selects" the option that a majority of users will likely choose and b) personalized defaults, where implicit or explicit information about a customer is used to "pre-select" the best option for them. 

Both of these default types come in a variety of flavors, all of which are described in detail in the article, with examples of appropriate usage based on the business objectives and customer information available.   But, to quickly make they point on how useful nudging can improve the customer experience and business results, here are a few examples of my own: 

First, an easy one.  A typical illustration of an e-commerce  mass default is below.  When it's time for the customer to choose a shipping option, pre-selecting "standard" shipping makes sense.  It's the least expensive option, and if I have special circumstances that cause me to need expedited shipping, I don't expect the retailer to know that.  Of course, if they can highlight messaging about shipping deadlines here around key gift-giving holidays, all the better.

  

In the above example, specific info like the anticipated date of delivery would go a step further to helping the customer make the right choice.

Now, let's look at an example where the wrong mass default is a likely source of frustration.  On the Allen Brothers site, notice that the default quantity choice is set to "0".  Why not set it to "1", since customers ordering will order at least one, and must choose a quantity in order to add to cart?

 
How many customers do you think mistakenly hit "add to cart" without choosing a quantity?

Personalized defaults, when well executed can lead to increased conversion, loyalty and reduced returns.  Consider myShape.com, the women's apparel site that "pre-selects" the right size for the customer based on the extensive body measurement information she provides.  Assuming they have the right data, this saves customers the hassle of determining the right size, and reduces the risk of returns.  This is a form of personalized default HBR calls a "smart default".  I agree, it is smart.

Then, there are those mass defaults that would be so much more effective if they were personalized. I'm a petite.  I've stopped growing (at least vertically), so that's not likely to change. Yet, every time I shop online from my favorite stores, I have to "override" the default "regular" size setting. Sure, most women are "regular", and while most stores probably don't know enough about me to recommend a specific size, they could easily get enough data from me, either in my profile or in my purchase history to pre-select "petite".  Incidentally, when I was rushing through some shopping last holiday, I mistakenly ordered "regular" from two websites (see eddiebauer.com below) and promptly returned them, I was too aggravated to make an exchange.

    

After reading the HBR article and doing a quick drive by on a few sites, I've concluded that paying close attention to key points of customer choice and applying the right form of defaults is an area of untapped opportunity for many. If you're under pressure to improve your business results through low hanging fruit (and who isn't these days?), try this:

Buy and read the HBR article. Identify all of the decision points on your site where defaults are used or could be used. For each, ask yourself:

• Is this the appropriate form of default?
• Is the appropriate choice pre-selected?
• Are there areas where we're using mass defaults when personalized defaults would be more effective?
• What customer data could we gather or what data do we have that would help us offer a truly helpful personalized default?

Then, set up some A/B tests, and gently "nudge" your customers to the right choice.  Chances are, you'll see that a well placed nudge might just push them over the "buy" threshold, and allow you to pick some low hanging fruit.

 

 

 

 

 

 

 

E-commerce Freshman: Is Your Shopping Cart Before the Horse?

If  launching a new e-commerce site is on your list of New Year's resolutions for '09, here's what you should NOT do first: start hunting for a shopping cart solution.

While most of my clients are established online retailers, recently I have received a number of calls and emails from e-commerce first timers.  The recession has prompted some pure brick and mortar retailers to seek growth in the online world. Or, sole proprietors are starting e-commerce businesses with hopes of  pursuing a dream and ditching the need for a day job.

Inevitably, the conversation starts with the client inquiring about what e-commerce platform or shopping cart software they should use. There are so many out there, it's confusing, etc. 

Well, it IS confusing.  But one of the reasons it's confusing is that you may be putting the shopping cart before the horse. 

If you are looking at e-commerce solutions before planning the kind of business you are going to run and how you are going to run it, odds are that a) your quest for the right software solution will be frustrating and painful and b) you'll probably pick the wrong one.

Here are ten signs that you've put the shopping cart before the horse.  If any or many of these describe you, don't even think about the shopping cart yet.

1.  You haven't decided what you'll be selling in your online store.   The products, how many of them you'll carry, how frequently they'll change, how complex they are to sell, all of that stuff really matters.

2.  If you have decided what to sell,  you haven't looked at how competitors are doing it , or

3.  You aren't absolutely sure as to why someone would buy from you vs. a competitor. Let's face it.  Just about everything is being sold online already.  Chances are a more established player is already a jump or two ahead of you.  What will make your e-commerce site a more attractive option to customers?

4.  Speaking of customers, you don't have a clear picture of your target customer or a  plan and budget for attracting the right visitors to your site.  Don't think that the search engines will just find you.  It takes money and work to get qualified traffic to a website.

5.  You're not sure how you'll get the photos and product descriptions for the products you'll be selling, or who will be doing the ongoing merchandising and updates.  Doing this part well can mean the difference between a professional site and one that looks and reads like an afterthought.  If you're planning on carrying a wide assortment of products, don't underestimate the workload here or the tools you'll need to handle it efficiently.

6.  You don't know how you'll handle customer service inquiries, who will take the calls and answer emails or how you'll keep track of them.  Many early stage e-commerce efforts overlook the need for human contact with web orders.  It happens, so figure out how you will make it easy for customers to contact you and what you will need in terms of resources and infrastructure to deal with it.

7.  You're up in the air about whether you're going to fulfill orders yourself or outsource the function.  If this is you, you may want to skip ahead to point #10 below and let that start your decision making process.  Think about the volume you'll be doing and what you need to be able to manage, process, and fulfill orders, both at the start and as your business grows.

8.  You haven't thought through your polices and cost structure regarding shipping and returns.  This is a highly competitive and rapidly evolving area of e-commerce.  Flat rate shipping, expedited options, pre-paid returns, shipping promotions, the list of options and logistical issues is significant.

9.  You don't know who will be designing or developing your website, and/or you're not certain about all of the content and features your site will need.  While you're at it, think about how frequently you plan to make cosmetic and technical changes to your site and how those will get done.

10.  Saving the most important for last: You don't have a plan for how much business you will do, thus you don't know how much you can afford to spend on your e-commerce site.   The key here is to start with a plan.  Even if the plan is wrong, you'll be better off than if you had no plan at all.  Start with the fundamental metrics: How much traffic will come to your site?  How many of those visitors will place an order? How much money will those visitors spend and how many units will they buy?  This should be the basis for answering many of the questions above (like whether or not it will be feasible to handle fulfillment yourself, or what kind of budget you need to attract the right number of visitors to your site).

You'll probably find that working through these issues will cause your thinking to change regarding what you need in an e-commerce solution and who you need to help you along the way.  Chances are, you'll need more than just a shopping cart behind the horse.