Channel Intelligence Blog

Brand's Guide to eCommerce Success

Thinking Like a Manufacturer

Imagine the following: You just built a beautiful product showroom at your factory. It has displays to show off your products to best advantage and employees specially trained to understand customer needs and help them find the right product.  You provide a list of locations where visitors to the showroom can buy your products because you don’t want to compete with your channel partners. You place ads in magazines, on TV, and on billboards to attract customers to your new showroom. And they come, a trickle at first, then in hordes. They love your showroom. They love your products. You feel great. Your new marketing effort is a huge success!

Only, at the end of the quarter sales are barely any higher. What happened!

It’s easy to explain. You got people interested in your products, then left them on their own to figure out how to buy them. You fell victim to the all too easy trap of thinking like a manufacturer. “What’s wrong with that?”, I hear you thinking. “After all, I am a manufacturer.” Yes, but in situations where you are dealing directly with end users, you can’t afford to think like a manufacturer. You have to think like a retailer!

Thinking Like a Retailer

Retailers really are very simple to understand: ‘Sell more stuff!’ Your stuff, your competition’s stuff, anybody’s stuff.  Maximize Sales, they just want to sell more. So they make it as easy as possible for customers to buy.

Walk into a major supermarket or chain store. The odds are good that if you have been in another store from that chain, you can find your way around. Products are grouped by the way buyers expect to find them. New items or products on “special” are on the end caps, readily visible. Overhead signs tell you where you are and where to go. Prices are clearly visible. Checkout counters are highly visible and conveniently placed near the exits.

Your showroom did part of the job. It generated demand by educating potential buyers about your products. It even did that part better than the typical retailer, since you know your own products better than any retailer could. But you missed the most important ingredient: You didn’t make it easy to buy. You sent potential buyers off with a list of retailers, but along the way most of them changed their minds. They got distracted by another product, they store was out of stock, or maybe they just plain forgot. Whatever the reason, the person that left your showroom intending to buy your product ended up not buying.  You didn’t capitalize on the buying impulse, and you lost a sale!

So what do you do?  Well,  let’s start by taking a look at your web site… YOUR FACTORY’S SHOWROOM!

To be Continued…

BIzzarro World: From Search to Sale (part 3 of 3)

.tomorrow (part 3)

"Tomorrow World" is roughly equivalent to "Bizzarro World" from Superman, or more recently from Seinfeld. Imagine that your consumer plays the part of the merchandiser and product expert! Often I hear, "but that has always happened - customer referrals have always been key to my business."

While that behavior is certainly ingrained into society, never before have there been the tools to represent "package" products or the conduits to quickly reach a multitude of people friends, acquaintances, or the mass public. The cost of "publishing" information has little or no fixed cost online and the associated variable cost or additional cost to reach an extra person is nil!

Thank Blogs (like this one). Thank LinkedIn. Thank Facebook. Thank YouTube, eBay, and the Internet at large. Each of the touch points to other consumers is a chance to "initiate commerce."

eBay is my favorite example as it is often not spoken about. Browse it, and research products and you will see that eBay is merely a collection of product pages. Product information created by consumers. Just as an example for our friends at Harman Kardon, there are more results from mistyping "Harmon." Sorry Sidney. Any Brand Manager making that mistake would have a very short career!

But consumers thrive! Imagine more complex messaging and the representation of brand essense. Brands should think about how they can influence but not control this ensuing chaos and treat and empower the customer as a distribution channel.

From Search to Sale: yesterday, today, and tomorrow (2 of 3)

.today (part 2)
From the brand perspective: 100,000 customers a day, about 4,000 an hour, what do you do?

The proliferation of the Web today has created very strange dynamics: consumers show up at manufacturer Web sites to find out more or initiate commerce. When consumers go to a retailer's site to make a purchase, the retailer's web-based product page is the modern functional equivalent to a "package."

So the retailer has become the packager and the manufacturer is forced to merchandise and become a larger part of the purchase process from search to sale.

This shift, created purely by online consumer behavior, has resulted in significant challenges. Retailers creating the primary form of 'packaging' at the point of sale is critically dangerous. Retailers are primarily motivated by closing sales, period. In the long term Brands invest in positioning, differentiation, messaging, and the definition and representation of their brand or brands.

With regards to Manufacturer Web site traffic, a Brand is no more innately capable of merchandising goods to consumers and closing sales (those activities that were granted to retailers to create expertise) than retailers at creating product differentiation and brand essence. Brands need to learn new tricks, hire new expertise, and learn to think like retailers. And retailers need to be conscious of clearly communicating brand-created differentiation and essence. Without these respective foci, differentiation will be lost and commoditization and erosion of meaningful consumer choice will ensue.

But could there be yet a stranger even more blurred world? YES!, the world of tomorrow...

From Search to Sale: yesterday, today, and tomorrow (1 of 3)

The rapid transparency and availability of information has clearly changed the game for brand managers, retail merchants, and consumers whether they recognize it or not!

.yesterday (Part 1)
The old paradigm (before the web) was from a simpler time. Brands bought raw material, manufactured product, and packaged it and shipped it to the retailer. They were concerned with the continual value in the eyes of consumers with a strong going concern and long term view. Advertising concentrated on communicating brand “essence.” Retailers became experts at the tactical consumer experience: driving traffic and converting sales. Retailers owned one key event: exposure to products or the initiation point of commerce. This first door the consumer goes through is a critical step and successful retailers were those better at merchandising/presenting and explaining new products and needs.

Until: The Big Bang! The rapid proliferation of the Web has resulted in a remarkable role reversal!

If you were a top brand, imagine 100,000 of your customers showing up at your corporate headquarters doorstep every single day. What would you do? Do you have any inventory, someone to speak with each of these customers, or even a cash register to make the sale?