Teaching An Old Dog New Tricks For Retail Today (I wrote this over a month ago and forgot to post it...)
This is really long and detailed. Please also see it in PowerPoint and slide shows - Here
Note: Even though I use the Home Furnishing model as an example, this applies to all retail platforms, for today's consumer is all over the internet and if you have a lousy web stragtegy, you will become irrelevant.
Social marketing strategies & tactics will be marginalized, for the ultimate goal is to get them to "shop you" and if they do what you want them to do....visit your website, that experience doesn't "pay off" for the consumer, they will find the store - ON-LINE - that does....and visit their brick and mortar store!
PricewaterhouseCoopers came out with a prolific quote that hit me right between the eyes. It was the introduction to one of their consumer behavior studies:
If a retailer does not recognize the changing dynamics of the consumer, how they will shop and connect with brands in the future, they will not just be punished; they will be punished with impunity.
This is what is happening in RETAIL right now!
I've been in the advertising, marketing and promotion business for close to 30 years, mainly in the consumer products arena, with the last 12 years in the focused mainly in the home furnishings industry. This industry is a microcosm of everything wrong in retail today.
In my 3 decades of being a marketer, I've never witnessed such a huge transformation as to how business is transacted today. In my 3 decades of being a marketer, I've never witnessed such a huge transformation as to how business is transacted today.
That brings me to the Old Dog in need of New Tricks.
In 1967 there was a great movie called The Graduate. A young Dustin Hoffman, who had just graduated from college, was prodded to go into Plastics....it will change the world he's told....and it did! Plastic is integrated into everything we do today and its usage keeps growing, daily.
In this Millennium, it's the Internet; it has changed the world and is integrated into everything we do today and its usage keeps growing, daily.
So, let's talk about the dynamics of what has changed everything and why many home furnishing retailers will not adapt and disappear
The following information may be lengthy, but it should be required reading for anyone in this business. If you don't recognize these changes and the dynamics it brings to you as a retailer, and if you don't make adjustments now and you continue to do what you've been doing, you may be left behind.
THE CHANGING CONSUMER
Your customer today is much different than your customer of 5 years ago. They are younger, they are savvier and all of them have grown up in a wired world. If you asked the new generation of shoppers - Gen X & Y how many have a land line, I bet you'll be greeted with a completely blank look. As in, "What's a land line?"
The baby boomer generation, 76,000,000 strong, are now between the ages of 47-64 and have driven the economy for the last 20+ years. We all know that the prime demographic for furniture buyers are between the ages of 32-45 years old and predominantly female. The baby boomer may be buying their last mattress or a couple of pieces, like a recliner, but they are not the primary consumers of home furnishings. Generation X & Y, totaling 112,000,000 are the new demographic for home furnishings and they are "wired for the internet."
Ready, Fire.....oh, forgot to aim.
I talk to many retailers and I'm astounded at their lack of a focused strategy to attract, engage and connect with this customer. I hear things like:
- "I tried more cable TV spots and it didn't work".
- "I increased my direct mail campaigns and that didn't work anywhere near what is used to do and postage is so expensive."
- "I placed larger ads in my newspaper and that didn't work."
- I increased my amount of circulars in the Sunday Paper and that hasn't worked.
- I put a lot of money into Facebook, Twitter and other social mediums but I can't get people to 'Like' me."
- I stopped advertising because business is bad and I don't know what works anymore.
Consider these interesting trends:
- Connecting with the internet:
- The number of internet devices in 1984 was 1,000
- The number of internet devices in 1992 was 1,000,000
- The number of internet devices in 2008 was 1,000,000,000
- The number of internet devices projected by 2015 - 15,000,000,000 - (internet devices are personal computers, phones, tablets, etc.)
82% of consumers use the internet to research brands, companies and products prior to their purchase decision.Source: Google & IPSOS OTX, September 2010
76% of consumers state that the internet influenced the reason they visited a retail store.
Close to 50% of today's consumer are looking for products, services, reviews and pricing on their CELL PHONE! ComScore
Retailers that have a strong on-line presence are acquiring new customers at a 15% annual rate versus 2% for brick and mortar stores.Deloitte & Touche
The exclusive consumer data shows that Generation X - currently between the ages of 34 and 44, numbering 44.5 million or 16% of the U.S. population - is the No. 1 generation searching for furniture online. And higher-income households, those with incomes of $100,000 or more, are more likely than lower-income groups to purchase furniture using the Internet as its primary source of information.
- 72% of consumers referred a friend to a vendor found online. Nielsen/Net Ratings
- Overall, 38% of TV households in the U.S. have a DVR Nielsen(February 2011 Universe Estimates) They are tuning out TV commercials by fast forwarding through them
- 143.9 million Americans viewed video online in January 2011, spending an average of 4 hours 39 minutes viewing video on PCs/laptops. A variety of gadgets can send Netflix's/HULU/Blockbuster & other on-line media hub streams to the living room TV; Most high-end TVs today now come with the built-in ability to play Internet content.
- Netflix's streaming movie service has become so popular that it is now the largest source of U.S. Internet traffic during peak evening hours. Sandvine.
- Wireless network data traffic: 341.2 billion megabytes, more than double from the mid-year 2010 count of 161.5 billion megabytes Nielsen
- 94% of U.S. Internet users with Internet access use it for shopping online Nielsen
- 78.3% of homes are wired with high speed internet. 239,893,600 individuals
- Most homes have at least 2 computers Comscore
- In Q3 2011, 301 million Americans used a mobile phone; 24.7 million mobile subscribers watched video on a mobile phone, a 41% increase from last year. The growing popularity of mobile video is due, in part, to the rapid adoption of media-friendly mobile devices, including Smartphone's, which make up 50% of the marketplace.ComScore
- I have a ton more statistics I would love to share, but space just doesn't allow for all of them! Just email me if you desire more. The most interesting fact here is that most of these statistics are from 2009 - 2010. Imagine what these numbers will be when they report for 2011?
In marketing today, there is no one right answer. If you identify a goal and then just hope you might have the right answer; or if you're just doing what everyone else is doing, you risk being punished with impunity. You need to align yourself with partners or employees that have the knowledge, experience and passion for the journey to help guide you to an answer. Partner with people that want to solve the problem, have the knowledge and experience and consistently show you a clear path towards your goal.
Ready - Aim - Fire
Second, we develop our strategy, or we start taking "aim" at the target. We need to address everything with our S.W.A.T. analysis and the trending associated with our consumer's dynamics - Demographics, Psychographics - etc. Everyone should do this and update it every 6 months. Life changes rapidly!
Third we are ready to "fire"; creating our tactics, based off the dynamics that we learned with our strategy session. So do we utilize a shot gun approach that scatters its message, broadly and short range, in search of a target? Or do we take the rifle approach, whose target is focused and can be hit both short and long range? I'll pick the rifle, because the aim is better, and it will travel further than a short scattered blast.
Looking at this landscape, one key element jumps out. Gone are the days of you trying to find customers via traditional scorched earth media blitzes. Now, consumers will find you when they want to find you. As I mentioned above, they are all on the internet consuming brands, products, media and more on a variety of devices all in the wired world. The internet HAS changed EVERYTHING!
To simplify what I'm going to talk about, let's put it in perspective. The old way of attracting customers was to place your message "everywhere" andhope to attract and engage your prospect with your advertising message. Before cable took over, there were very few mediums to accomplish this; newspaper, TV or radio, store locations, billboards, etc. When cable entered the picture the game changed, the audience was still huge, only it became very fragmented due to all of the varieties of shows targeted to different demographic and psychographic profiles. (Let's think Swamp people here, ok)?
The proliferation of cable created a whole new dynamic. New content was being focused and delivered to macro and micro audiences. Advertisers had to slice and dice a myriad of data to convince brand marketers to focus those precious ad dollars to a given show that focused on a given demographic and psychographic viewer. (Demographics relate to age variables, psychographic variables are any attributes relating to personality, values, attitudes, interests, or lifestyles.)
The 3 marketing fundamentals are still profound:
- Attract new customers to your store
- Engage them with your products and your brand message and
- Connect with them transactionally by deliver sales leads and opportunities.
So, to keep it simple, here are the 3 founding principals that advertisers work with when they plan their media to influence the above principals:
Frequency, Consistency, and Reach.
Frequency- keep your brand and message in front of your target market often. As a former mentor of mine stated: "water dripping on a stone will leave a mark".
Consistency - be consistent with your Brand Platform and overall messaging. Reference Target - hip, cool, fun and "expect more, pay less"
Reach - Focus your message on your target customer and how/where your customers are receiving these messages. Make sure that you can measure everything you do and never forget that the consumer controls the mediums as to how they want to connect with you.
How to do it right!
I'm not going to talk about traditional media here, because that would require this old dog to re-learn old tricks. Times have changed so much, I want to move forward, not back. There are plenty of traditional media people available in your market that can talk you out of your advertising dollars, but the same question will remain:
I know 50% of my advertising is wasted....I just don't know which 50%"
Anyone can build a website. You can get them free from Go Daddy with an account, YP.com, your kid's friend in the basement in his pajamas, and other so called experts and amateurs. There's one major problem - and that is that this is the Home Furnishings Business, not toothpaste!
My experience shows that most retailers do not understand the basics of what the internet should or could do for them. How it can attract or "find you/your store", how your content can/must "engage" this consumer and how to make a connection to your store - "creating leads" - for your sales people. It's really hard work and if you want to do this right, you'll have to spend some money.
Some people believe a "vanilla", off the shelf, one flavor/size fits all web site approach to this is the easiest and "cheapest" way to solve the problem. For the web seller, the more people they can get to buy the vanilla ice cream, the less they can sell it for. They commoditize the product and sell it cheaper and cheaper. This is a product based approach that retailers become subjected to and comfortable with because of the current economic conditions. It's not strategic because the majority of consumers aren't searching for vanilla, they may want chocolate, rocky road or strawberry! If they wanted "vanilla sofas" all the sofa covers would be "vanilla"! You need a strategy and a partner that provides full strategic consulting to continually guide you in this technology.
So learn some easy "TRICKS"
(Even though I reference Home Furnishings, it's all relative, for any "DURABLE or HIGH TICKET PURCHASE qualifies for the strategy below.)
So how do we start? It all starts with 3 main principals:
1.) Attract people to your business = Finding your website = SEO/ Search Engine Optimization
2.) Engage the consumer with lots of product and the tools they want so they can easily find what they are looking for - Give them ample opportunity and ways to research your store and products, marketing messages and more -
3.) Connect - Give the consumer a variety of ways to connect with your sales people in the way that they prefer.
Step 1 - Attract
Search Engine Optimization
Consumers search online for furniture and interior design services in a variety of ways. While some searches are focused around a retailer's brand (i.e. IKEA Furniture Store), over 50% of all furniture-related searches are not dealer specific. This is probably the most critical element of having a great website. When a consumer searches for a product, a brand, a collection and more, being found for that search is critical. As I previously stated, 3 principals must also apply with your internet strategy: Consistency, Frequency and most of all Reach. The goal with any marketing strategy is to reach as much of your target audience as possible with minimal cost.
There are two types of search engine optimization - static and dynamic. Static means the information pages are created by hand. Dynamic means that they are generated through powerful database tools.
A typical SEO specialist who produces static content will talk about being able to get you first page listings for a small number of keyword search phrases (Maybe 10, 20 or 100). They sometimes offer guarantees. Why limit yourself to just a few when you can have ten's of thousands of key word phrases to increase your store's ability to GET FOUND? Having a static strategy with a few keywords could leave you out of the game. To win with this game, you need to re-write the rules.
Dynamic content creates a website that is specifically designed to be search engine friendly. It utilizes original, rich product descriptions which will achieve thousands of keyword phrase visits through thousands of landing pages. The difference is dramatic, but the descriptions and marketing sound similar. Buyer Beware!
To simplify this area, let's break down the search element into three categories:
General searches are the most common search phrases among non-dealer specific furniture searches. These phrases use terms such as "furniture" or "furniture store" combined with a geographic term such as "Minneapolis" or "Twin Cities". Example: furniture stores in Minneapolis Mn
Category searches are the next most common type of furniture search. Category or "room" searches are comprised of furniture specific keywords such as "bedroom furniture" or "reclining sofa" combined with geographic terms. Example: Reclining sofas in Minneapolis Mn or Cherry poster beds in Minneapolis Mn.
Manufacturer branded searches are comprised of a manufacturer's brand name, collection name or specific item name combined with a geographic term such as "Minneapolis" or "Twin Cities". Example: Broyhill sofas in Minneapolis, Mn
Go ahead and try several of these combinations of the above search parameters using your store, the categories you merchandise and the brands you sell. Also be sure to search in surrounding cities/towns/suburbs you service. Remember, you want maximum "reach" for your store and the items you sell.
WANT TO KNOW HOW TO INSPECT YOUR SEO?
Ask your provider for a couple clients of theirs who are similar sized to your company and who operate in a similar sized market. Ask them to share with you their results for these clients.
Reports to look at:
- Non-Branded/Unpaid Search - Percentage of traffic that comes through unpaid search that excludes the retailer's own name.
- Number of Keywords consumers are finding you with
- Number of Landing Pages before they enter your site
- Before and After Comparison of their clients you asked to inspect- Ideally, you could see analytics before and after developer launched.
- Check Google - do searches in nearby towns for brands and items that you carry as I mentioned above.
Content Is KING
Step 2 - NAVIGATION AND PRODUCT INFORMATION
Here is where a sale is generally won; give the customer a great shopping environment with lots of products and an easy to shop format. If you don'tshow a lot of product, the consumer will assume you don't carry what they are looking for and most likely move on to a retailer that shows what they're looking for.
Furniture products are complex and information rich. You make money by selling the products that you offer. The main reason a consumer visits your retail website is because they are considering purchasing your products. The more you show, the more inquiries you'll get and ultimately you'll sell more.
It is important that your website's software has the features that you want and need to tell your story and sell your products. These are features consumers are used to having on major shopping sites like Amazon, Target, Macy's, etc., to make their experience easy, efficient and productive.
Important features to consider include:
- Site design and page layouts
- Product Coordinating Items to show the related items in a collection - i.e. if a bed has matching case pieces or if a sofa has matching chair, ottoman, love-seat and sectional
- Multiple Image Viewer and Rich Media to better show and demonstrate products
- Site Navigation - it should be logical, easy to use and simple to understand
- Merchandise Tagging and Sort Order
- Inventory Data Integration - for pricing, inventory availability, etc.
- Administrative tools so you can manage all the elements of your site
- Integrated Marketing to Communicate Promotions and Marketing Messages on Every Page of the Site. Remember, 50% of site entrances come from the item/brand page search and the consumer may never see your home page that states your promotions.
- Wish List/Save Projects - tools that enable consumers to save their favorites and salespeople to save client projects
- Store location and information page with interactive maps
- Financing tools like online special financing applications are important for retailers that offer this
Don't get fooled about "pretty/attractive/cool" looking sites, you're not on the web to win design awards; you're there to win customers.
One of the main critical mistakes that retailers make when they enter into an agreement with a web provider is they think if they have a lot of pictures on their site, that's what consumers want. Well, that's probably what your web provider may want you to believe, but no where near what consumers are looking for. Consumers are looking for information, styles, sizes, product details, dimensions, warranties, related items and they want to know if it's available in stock, special order, a Hot Buy and more.
So, if you decide to develop a winning internet strategy, one key element that will differentiate you across the board is CONTENT. Yes, content is King. Search engines read words.... NOT PICTURES or Flash Videos! So if your website provider is all about pictures, flash and glitzy home page presentations you've paid a lot of money for a failing internet strategy and a sub-par consumer brand/shopping experience for your store.
Just having some words is not enough either. Back when I was a CMO at a couple of different large furniture manufacturers, we provided catalog sheets. Yes, those ubiquitous sheets of paper, bound in a book, that were never updated by the reps, or were stolen by the consumer.....How 80's...maybe 90's is that strategy? Many still use this and believe its working! On the catalog sheets, we only had room for some basic, and mostly useless, romance copy and 5 lines of features and benefits. Today, some of the website marketing geniuses have taken that basic copy, copied and pasted it and put it online for a retailer. Ouila! You now have a website. Some manufacturers still do this too! This is not a great strategy and this solution will get you in the game, but you will not be a major player or win the game this way. Remember what I said about catalog sheets? This is a glorified digital catalog, not an information rich "consumer" shopping environment.
To design, build and maintain a great website requires a lot of work, and to do it right, there is not an off the shelf piece of software out there that does it all. Usually a web provider tells you lots of pictures will make your site look pretty, simply because they won't write the content, can't write the content or it's too expensive to have a full time person write the content. PLUS who manages the content? Add all this to the equation and the costs go up and up.
Suppliers introduce and discontinue products all the time but they are not good at providing retailers with that product information for websites.40% - 50% of all product goes discontinued each year, which means 50% of the product you carry, advertise and post on your website is either new or discontinued. Now, considering that manufacturers carry 2,000-3,000 SKU's on average, divide that number by 50% and multiply by the manufacturer brands out there. (Sorry- more math. Ok, I'll do the math. Mr. Hansen, would be proud, even though it's simple math)
(50% New SKU intro - Mfg) 1,500 X (Brands Approximate) 450 =67,500 New Intros that need pictures, descriptions, dimensions and more; 1 - 2 times per year!
Good luck with getting all the new pictures, writing and maintaining the content, sorting it the way you want it to merchandise on the site, tag it for availability, specials, etc.... especially if you're doing it in-house.
A great question you may want to ask your web provider is: "What is your process to insure your site is accurate, up to date and managed correctly"?
MARKETING STRATEGY & TACTICS
A great website should have a major presence in your store, a bad website should not.
Put your website on several 65" flat screen TV's around your store and let consumers browse, save to favorites and email an item to their friends, loved ones and more. If you have great content, product details and more, use it as a sales training tool where your sales people can get all the specifications, features/benefits, warranty information, related items, availability; everything a sales person needs to answer the consumer's question and close the sale. AND if you have a "Save to Favorites", the sales person can create a consumer specific wish-list/on line catalog of those items the consumer wants to buy. This is a great tool for your sales people to follow up with consumers too.
After all, it's your online store branded catalog and if you have great content, marketing messages, specials and all the information someone needs, the sales process becomes more seamless. This is your online catalog. It's up to date, shows everything available in your store, special order options, everything. Thousands of items. You're able to email products, related items, special offers, sales flyers -everything. Why would they want to shop with anyone else?
One element that retailers are not fully aware of is that 50% of the traffic entering websites come in on the "item (search query) page" being found by category, brand or item with their search. Translated, that means potentially 50% of your consumers may never see your Home Page and will probably miss any promotional messages, special services, financing offers and more. These selling tools MUST be on every page of your site.
If you offer Design Consultation, tell them on every page. If you have a Special going on, tell them on every page and tag every item on special, on display, in stock and more. With the average consumer only visiting 1.8 stores before the sale, you must have a winning internet strategy....NOT just a website.
Your website is also a great way to market your store at minimum cost. It's critical today to connect with consumers and create leads for your store. Make sure your current promotions are well displayed on every page, along with your current "ad page", your "sign up for financing" page, and sign up for email page. Special messages and info need to be on "EVERY" page, not just your home page.
Next ask yourself how much money you are spending on "Old Traditional Media"? 67% of people get their news/sports/general information on-line. If you only advertise in the newspaper, you risk missing this customer. Plus why advertise on Sunday, when most people are home watching football, going to church, having family time and more. This method is "old media"; expensive and not as effective as it used to be. Your website should be a multi-thousand page living advertisement, marketing and promotional tool.... 24/7
TOTAL APPLIED COST - INVESTMENT IN YOUR WEBSITE
An old saying is: "Why reinvent the wheel"? Many retailers do just that by trying to build and maintain their own website, product catalog, marketing message postings, lead generating tools and more. Or they partner with companies that don't have the category knowledge, content or strategic experience to grow their business.
Some people claim investing in technology is that great "black hole" or "money pit" that is always hungry for more! When retailers look at the "totality" of this investment, many are shocked.
The cost for an internet technician
- The cost of a copywriter to write copy, specifications and more that is tailored for SEO
- The cost of someone constantly updating and posting new content
- Upwards of 50% of furniture content is new every year.
- Electronics content revisions are even high
- The cost of someone constantly removing old content
- The cost of designing, developing and implementing marketing messages in a timely manner.
- Does this investment require 1 person or many?
The message here is simple. Reallocate budgets, don't increase your budget. Take a percentage of those funds you spend on traditional advertising, marketing & promotion. Start with 20%-30% of the funds you spend on traditional marketing, shift it to online marketing, and then you can really gauge the success of your marketing strategy with real time analytics, merchandising and more.
It is critical that your internet strategy "attracts" these new buyers to your retail store and in order to do this you must be found in search. 3 out of 4 furniture purchases are influenced by online research and 81% of home furnishings shoppers cite the internet as their #1 source of information.
The final word
"Things may come to those who wait; but only those things left by those that hustle".
About Bill Napier: www.social4retail.com - About Bill Napier: Bill is a specialist in creating, guiding and deploying successful marketing B2B & B2C solutions integrating traditional marketing strategies with the web and social media. He has worked in the home furnishings industry for over 12 years, as the chief marketing officer for some of the industry's largest manufacturers and creating some of the largest promotions ever launched within the industry.
Contact Bill Napier,
Napier Marketing Group, Inc.