Recently, I opened up my community newspaper to learn that my favorite shoe store was going out of business—another victim of the economic meltdown. Another blow came a few days later when my husband and I drove to one of our favorite neighborhood restaurants only to be greeted by a sign on the door that read: Thank you for allowing us to serve you these past few years. Unfortunately, we have closed our doors.
Although for several months, we’ve all heard the news reports about companies and industries in dire straits, the reality is much more sobering when you literally see the signs in your own backyard. And while some companies are bracing themselves for rough seas ahead, it’s refreshing to hear about companies that have been able to prosper despite such difficult times.
Take, for example, the company featured on this month’s cover, Zappos.com. This online shoe store reached the $1 billion mark in sales for the year. How has this nine-year-old company been able to do it? According to CEO Tony Hsieh, by focusing on building an enjoyable corporate culture and enhancing the online customer experience—whether it’s through free shipping or complimentary upgrades.
However, Zappos isn’t the only e-tailer to pull out all the stops for customers. Retailers plan to make online shopping more appealing to Christmas shoppers. In fact, a 2008 eHoliday Study conducted by Shop.org shows that 78 percent of retailers plan to offer free shipping with conditions. What’s more, to attract holiday customers, they have invested in new site features to augment their purchasing experience. Such features include:
• 42.9 percent of retailers have added improved site search to help customers navigate sites more easily;
• 24.6 percent added product video; and
• 32.7 percent offered customer reviews.
These online retailers are well aware that tight budgets will force people to hold out for the best deals. Perks like free shipping with conditions is just a snippet of what e-tailers are doing to entice budget-focused shoppers. According to the Shop.org study:
• 27.1 percent of retailers have added and enhanced clearance sale pages;
• 31.3 percent added featured sale pages; and
• 25 percent of online retailers added a Facebook page.
Why do more shoppers prefer purchasing online rather than shopping at brick-and-mortar retailers this holiday season? The study reveals that 58 percent of consumers cite 24-hour shopping convenience as one of the primary reasons. Their desire not to battle crowds is another reason consumers give for their online shopping preference.
This year, brick-and mortars like Mervyns and Linens ’N Things have succumbed to the weakening economy. However, other retailers refuse to rely solely on in-store traffic to generate holiday sales. Retail giant Walmart, for instance, integrates its online and retail efforts with its Site-to-Store program, where customers can order their merchandise online and pick up their purchases at a nearby Walmart location. As an added incentive, the retailer offers free shipping. Other retailers like Toys “R†Us and Borders focus on coupon promos and online deals.
Of course, these are challenging times for our industry. But what companies like Zappos teach us is that it’s possible to overcome those obstacles if you remain consistent with your marketing message and stay focused on ways to best serve your customers.
Vi Paynich is Electronic Retailer magazine’s editor-in-chief.
To view the entire December issue’s interactive, online format, click here.
Many retailers have learned how to leverage their data to help identify opportunities to increase their share-of-wallet by cross-selling additional products and services to established customers. Yet many retailers remain disappointed with the results of their cross-selling efforts to deepen and broaden their relationships with established customers. Response rates have remained flat or actually declined. Average order sizes remain unchanged or are actually decreasing. Tinkering with the current approach will no longer provide incremental improvements — 2009 is the year to build a new foundation for your cross-selling strategy, based on four cornerstone concepts:
By drawing on the experience of traditional retail, and taking advantage of the unique opportunities presented by the Internet, e-retailers can look brightly at the future in spite of a gloomy economy.
As software selection advisors, my team has talked to thousands of retailers considering a major new software purchase. The vast majority of them are replacing an existing system—one that they’ve used for years. Why? Why replace what’s familiar? Why pay up for something entirely new when an upgrade is—on paper—less expensive? Why move away from a long-term vendor relationship? There are plenty of reasons. Here are the top five responses we hear when we ask, “What’s driving you to replace your existing system?â€
