Mashup Mom Reviews Peapod Home Delivery - And Likes It, Mostly

Mashup Mom.com a popular site written by Rachel Singer Gordon  launched in January 2009 to provide couponing, frugality, and work-at-home strategies and advice. Rachel is also an extreme couponer and the author of Complete Idiot's Book to Couponing. Rachel recently tested and reviewed Peapod's home delivery service, here are her observations.

Search
According to Rachel, search was both fast and simple, and she found a decent selection of brands in most categories. For example Rachel cites "A search for “cocoa powder,” for instance, gives me four choices at varying price points, all fairly comparable to what you might find at a high/low grocery store at regular prices." Rachel also observed "The search also helps you narrow down your choices — I typed in “coconut” and it gave me several suggestions, helping me get to “shredded coconut” fairly quickly rather than having to browse through everything coconut-related."

Online User Interface
Rachel observes, "Just put in the quantity you want, hit buy, and it adds the item to your cart. Peapod nicely keeps a running tally of your cart over on the right-hand side of the screen, so you can remove items or change quantities from there at any time. Whoever designed this put some thought into the interface and user experience. I would, however, add prices to the individual items on the running tally so that shoppers trying to stay under budget could more easily see what to remove and tweak."

Delivery
Rachel was surprised that Peapod delivers on Sundays, but concludes that it does make sense to deliver when people will be home to receive it. She stated that Peapod's delivery windows are huge (hers is 4:30-9:30 PM) — but you can login the day of to get a shorter two-hour window, plus sign up to be alerted when they’re close. She likes being able to placed the order on Friday night but make changes and updates to it until almost midnight the day before delivery day. So if I a customer forgets or run out of anything, it is super easy to add it.

Final conclusion about using the site 
Overall Rachel liked the service and the ease of use but, being frugal, had a difficult time with prices including the delivery fee "The delivery fee is killer, so will become more cost effective with larger orders". However she did observe, "The prices were not ideal bargain-shopper prices, but also weren’t as high as I’d assumed before really digging in and using the site."

Rachel's conclusion is the Peapod site is a "usable' alternative to grocery store shopping. Commenters on her blog were far more enthusiastic and cited extreme convenience, friendly drivers, frequent delivery coupons and being able to avoid impulse buying, which often offsets higher costs, as terrific value ads. This experience and the reviews adds support to the emerging and growing trend of online shopping and home delivery of grocery items. What has been your online grocery shopping experience? Do you agree with Rachel?

What is in The Mind of Millenials?

SymphonyIRI has released a new Times and Trends report focused on Millenials. At a population of 50 million in the U.S., millennials, defined as adults aged 18-34, are demonstrating defining characteristics that impact their shopping and purchasing behaviors.These characteristics include:

• Millennial shoppers demonstrate a more cautious and volatile outlook compared to other age groups. This reflects the environment in which they live at a critical juncture in their adult lives.
• Millennials tend to head larger-than-average sized households and relatively low levels of household income. They are 11 percent more likely to have incomes of $25,000-$49,000, 14 percent more likely to have incomes of $50,000-$99,000, but 18 percent less likely to earn six figures than other Americans.
• Millennials are coping through several money-saving activities. This group is 46 percent more likely to use at-home beauty treatments to save money, and 31 percent more likely to cook from scratch or with limited convenience foods to save money. They are also 18 percent more likely to "self-treat" where possible to avoid spending money on doctor's visits.
• Communication through new media has an outsized impact on millennials. As expected, new media is essential to millennials' process of learning about CPG products. When making brand decisions. millennials are 262 percent more likely than the average shopper to be influenced by smartphone apps, 247 percent are more likely to be influenced by blogs or social networking sites, and 216 percent are more likely to be influenced by in-store touch screen displays. volatility and showing less fiscal confidence than average shoppers.

SymphonyIRI  states understanding these shoppers is critical to CPG and retail success, since millennials are predicted to spend $65 billion on CPG products during the next decade. "The Shopper Sentiment Index was created as another lens to study shopper behavior," said Susan Viamari, editor of Times & Trends, SymphonyIRI. "Shoppers of all ages, income levels and demographics continue to evaluate and evolve their shopping rituals based on an economy that shows some signs of strength, but still many ongoing signs of weakness."

"Millennial shoppers remain an important group to consider when creating pricing and marketing plans," says John McIndoe, senior vice president of marketing, SymphonyIRI. "A nuanced group that behaves much like the savvy, cost-conscious consumers of the recent recession, they are very different in how they interact with CPG brands and in how they seek deals. Understanding the unique characteristics of The Millennial Generation, or any group of shoppers, is essential to building powerful and lasting relationships."

To download the report, visit: http://www.symphonyiri.com/Insights/ArticleDetail/tabid/117/ItemID/1502/View/Details/Default.aspx

Retailers Fight Showrooming

Critics and stockholders of Best Buy have complained that Best Buy has become a showroom for Amazon.com Inc and other online retailers, with shoppers going to its stores to check out electronics like high-definition televisions and then buying them elsewhere for less. This has become known as "showrooming" and it is creating staggering revenue drains for brick and mortar stores to the point of putting Best Buy nearly out of business. Retailers are looking for smart strategies to combat showrooming and a few are beginning to emerge. For example,

• A start-up Nearbuy Systems of Menlo Park, Calif., offers software that will let retailers track which websites a shopper visits when using a store's Wi-Fi network and then overlay that information with data showing where the shopper is in the store. The resulting "heat maps" could show which products are most vulnerable to being tried out in the store but ultimately bought for less online. Once retailers find shoppers are navigating to a particular e-commerce website they could buy additional advertising on that website. Also, a department store that learns many of its customers log on to Amazon.com while in the electronics department could move additional store employees to that area to engage the customer.

It appears an arm race is beginning between online retailers and physical stores. Like all arms races, there will be new technology, escalations, and recriminations. The question is who will get hurt and who will win- my bet is the consumer will benefit while the mutual destruction of online and offline retailers rages on. What are your thoughts and do you have any ideas for combating showrooming?

An Important Ecommerce Think Tank Launches

Center for Ecommerce Excellence, Think Tank for Ecommerce, Launches

WESTPORT, Conn., Jun 11, 2012 (GlobeNewswire via COMTEX) -- via PRWEB - Responding to the rapid growth of ecommerce, sometimes known as "etailing" among consumer goods brands and the strategic importance CPG companies are placing on optimizing sales and marketing efforts in this space, ecommerce consultancy etailing solutions has announced the formation of the Center for Ecommerce Excellence (CEE) to help advance the shared interests of all players across the ecommerce ecosystem.

CEE (ceeportal.com) will serve as the first-of-its-kind repository of insight reports, best practices and events aimed to inform and create interaction among retailers, brands and service providers spanning the burgeoning ecommerce sector. CEE members have access to an insights portal that features proprietary research, the latest industry trends and opportunities to interact with other industry professionals through conferences, webinars, share groups and steering committees.
"Despite all the buzz and traction that etailing is gaining among CPG brands, retailers and suppliers, eCommerce is relatively immature in the U.S. in terms of adoption and best practices," says Jason Katz, EVP and General Manager of etailing solutions. "CEE breaks new ground as the first singular organization dedicated to advancing the learnings and shared interests of all players within eCommerce."

CEE unfurled its inaugural event, the Etailing Leadership Conference, in mid-March in Chicago which attracted representatives from more than 30 leading consumer packaged goods companies. The event, hosted by etailing solutions and CMS Consulting, drew an array of innovative brand marketers as well as guest speakers from etailing giants Amazon and Peapod. A fall conference is in the works.

Specific benefits for CEE members include access to leadership networking events and steering committees; research reports on retail trends, shopper insights and category growth opportunities; access to eLab(TM) Shopper Panels; white papers on the state of the industry and best practices; monthly webinars and Webexes; and discounts to conferences, share groups and research studies.

About Center for Ecommerce Excellence
The Center for Ecommerce Excellence is an organization dedicated to global learnings, collaboration and best-practice development in ecommerce for consumer goods and related industries. Via CEEportal.com, members can access information and proprietary research, and discover opportunities to interact with other ecommerce professionals at conferences, webinars, share groups and committee meetings. To learn more, contact Evelyn Warren, CEE Executive Director of Membership at 203.210.4233 (4CEE) or visit http://www.ceeportal.com

About etailing solutions
Etailing solutions is an integrated online sales and marketing consultancy providing consumer goods companies with a distinctive suite of services, including data services/insights, strategy development, sales support and virtual merchandising. The company combines a deep understanding of online shoppers, brands and the digital sales route to market to offer clients solutions that drive faster growth and profitability through online sales. Etailing Solutions is part of the Hyper Marketing, Inc. network. To learn more, contact Jason Katz at jasonkatz@etailing-solutions.com or visit http://www.etailing-solutions.com

About Hyper Marketing Inc.
Hyper Marketing is the largest independent marketing-services network in North America. The newly formed company has 1,300 employees in 24 offices across the country, with expertise in digital, direct, data, promotion, shopper marketing, Hispanic, and media buying and planning. At Hyper Marketing, everything revolves around changing consumer behavior and driving transactions in a hyper connected world. The companies in Hyper Marketing's portfolio partner with CMOs of many of the world's most well-known brands including Dell, eBay, Kellogg's, Office Depot, The Home Depot and Unilever to develop integrated programs that deliver profitable results.

Shopmuting Goes Mobile

Shop From the Convenience of the Side of a Truck.

Following in the footsteps of Tesco (South Korea) and Peapod (Philadelphia, Chicago), Procter & Gamble is partnering with Walmart to promote shopmuting (online mobile shopping) combined with Walmart's free delivery service. Now, urban dwellers can order from Walmart without a brick-and-mortar store within sight.

The @PGMobile initiative centers on a truck that will visit a dozen popular locations around New York during June. It features QR codes for several P&G /Walmart products, including Bounty paper towel, Head & Shoulders shampoo and Iams dog food on one side. Just as Peapod does in train stations, passersby are invited to use their mobile phones to scan the codes to instantly buy the products for home delivery at Walmart’s “everyday low prices.”

“We truly believe that’s the future. But people have yet to really adopt buying consumables online,” he said. “We think having free delivery, and getting this message out to urban shoppers who don’t have access to Walmart stores, is a great first start.”

Walmart.com introduced free home shipping for purchases of $45 or more last year to better compete with online retail powerhouse Amazon. It is also taking other steps to ramp up e-commerce and m-commerce efforts, including selling big-ticket items like Sony and Samsung HDTVs exclusively online, allowing customers to order out-of-stock items from their smartphones, and launching an app for in-store aisle search.

Online sales accounted for only about 2% of Walmart’s revenue last year, while overall growth was about 8%. Amazon, by contrast, had 41% growth. P&G has its own online store, but Marrin didn’t disclose what proportion of the company’s sales are online.

In addition to QR code-scanning, the @PGMobile promotion -- as the name would imply -- also includes a Twitter component that enables people to get information and request the truck comes to their neighborhood. “On the days we don’t have a fixed location, then we’ll go visit other neighborhoods,” said Marrin. The Fashion District, Union Square Park and the Big Apple Barbeque Block Party are among the upcoming stops.

Along with New York, P&G and Walmart are running a similar promotion in Chicago focused on bus shelters on Michigan Avenue that feature QR codes for mobile shoppers and enlarged images of Olympic athletes, including swimmer Michael Phelps.

Shopmuting is only in its infancy however, recent successful implementation by Peaod and Walmart indicate a quick growth spurt. What are your thoughts- would you like the P&G truck to visit your neighborhood?

Tablets Are Exploding (In Number of Users)

ComScore reports, one in every four smartphone owners -- i.e., connected, higher-income consumers -- reported using tablets during the three-month average period ending April 2012- tablets have officially reached a critical mass in the United States! Tablets are one of the most rapidly adopted consumer technologies in history and are poised to fundamentally disrupt the way people engage with the digital world both on-the-go and perhaps most notably, in the home,” said Mark Donovan, comScore SVP, mobile. “It’s not surprising to see that once consumers get their hands on their first tablet, they are using them for any number of media habits, including TV viewing," he adds.

The study also found:

• Tablet users were nearly three times more likely to watch video on their devices compared to smartphone users, with one in every 10 tablet users viewing video content almost daily on their device.
• In April, 16.5% of mobile phone subscribers reported used a tablet, representing an increase of 11.8 percentage points in the past year.
• Growth in market penetration was even more apparent among the smartphone population, with nearly one in four using a tablet device in April -- an increase of 13.9 percentage points in the past year.
• A lower 10.4% of feature phone owners use a tablet, suggesting that smartphone ownership is highly predictive of tablet adoption in the current market.
• A demographic analysis of mobile device audiences indicated that tablet and smartphone audiences closely resemble one another in terms of gender composition, with tablet users just slightly more likely to be female than smartphone users.
• the age composition of audiences showed that tablet users skewed noticeably older than smartphone users. For both devices, the heaviest overall audience concentration was between the ages of 25-44. Compared to smartphone owners, tablet users were 28% more likely to be in the 65 and older age segment, and 27% less likely to be age 18-24.
• Tablet users also skewed toward upper-income households, likely a function of the high price point of these devices, still considered a luxury good to many consumers. Indeed, nearly three in five tablet users resided in households with income of $75,000 or greater, compared to one in every two smartphone users.

Tablets provide an easier and more inviting platform for e-tailing activities including the online purchase of Consumer Product Goods. The explosion of tablet usage is sure to increase the trend for consumers to purchase their grocery items online for home delivery rather than making a trip to a bricks and mortar store. There is also increased opportunities for CPG manufacturers to engage consumers in a richer and more varied way. This is a good example of the evolution of technology enabling and accelerating an emerging trend- home delivery of CPG.

  

Do You Have Staunch Brand Advocates?

Brand advocates are consumers who will take the time to support your brand(s) using in-person and online conversations to share their opinions, recommendations and thoughts about your company’s products and services. Having powerful and active brand advocates is a critical part of a successful social media marketing mix.

Kimberly Maul, eMarketer writer/analyst and author of the new report, “Brand Advocates: Scaling Social Media Word-of-Mouth.” writes "As social media gives average consumers a longer reach, brand advocates of all types and levels have emerged, including:

• Social media influencers
• Industry experts
• Brand employees
• Consumers who use recommendations, blog posts and “likes” to gain discounts, deals and, in some cases, payments.  

Maul notes, “Industry experts and big-time social media influencers may seem attractive to marketers. But often, the regular Joe is the most powerful type of advocate out there and can have the greatest effect on his friends and family,” Maul's research shows among the top reasons Internet users recommend a brand include:

• Good experience with the brand or product 50%
• Want to help others (make smarter decisions) 37%
• Recommend brands or products only when asked 8%
• Want to "show off" to others 3%
• Get incentives 1%

 Zuberance, which works with companies to determine who their brand advocates are, and how to engage with them and track results polled brand advocates and found that, in the US:

• 38% made a recommendation about once a month
• 12% several times a week.
• 70% recommended at least five products or services a year
• 16% recommended at least 15 products or services during that span.

Maul notes ”Because the average consumer inherently trusts his or her friends and family, a person who is a brand advocate can be highly influential. And advocates are stepping up to that opportunity. Companies can make the most of this by finding out their own brand advocates’ expectations for interaction on social media sites—then meeting and exceeding them.”

So, what are the characteristics of consumers who actively make recommendations for your service or product on social media? How and why do these consumers use social media to talk about brands? How can you leverage and hold on to these advocates? Share your thoughts here.

The State of the "New" Grocery Consumer

As the economy changes up and down, consumers adapt and make changes, specifically when it comes to budgeting and cutting costs. Research by BigInsight reports on the current state of the consumer and how the changing economy has affected consumer grocery shopping behavior. BigInsight's research shows:

• Almost 3 in 4 respondents indicate that their grocery shopping habits have changed over the past year. Changing habits include- Focusing on necessities, making fewer impulse purchases, and researching prices online.
• They are heading online to conduct shopper research and redeem coupons for groceries
• Not only are consumers more likely to be shopping Walmart most often for groceries than they were five years ago, they are also more likely to be shopping Discount Stores in general.
• Over 40% of respondents including moms and those 25-54 – indicate that in the past year they have started shopping multiple grocery stores to get the best prices and deals.
• Loyalty has not vanished, as three in ten still shop at the same store but use more coupons and buy brands on sale.
• Just under one quarter of respondents shop at the same store but buy more generic/store brand items than they did a year ago. Moms, specifically, are more likely to shop at the same store but use more coupons and buy more generic/store brands on sale.
• Overall, nearly three quarters of cost conscious consumers have made some sort of change in their grocery shopping habits in the last year.
• While the majority of those who purchase organic products have not changed their organic purchasing habits in the last year, cost conscious consumers are cutting back in several areas. Sweets such as bakery items, candy, and desserts including mixes and pre-made frozen desserts are the most likely items consumers have cut back on during their grocery trips, followed by magazines/books/DVDs and prime cuts or types of meat and seafood.
• The frequency that consumers shop for groceries has also increased which could be contributed to many reasons. By shopping more frequently, shoppers’ per bill cost would be lower; shoppers have the opportunity to take advantage of more sales and the opportunity to go to several retailers.
• Over 30% of Moms use digital methods to find coupons.
• Over 40% of respondents indicate that in the past year they have started shopping multiple grocery stores to get the best prices and deals.
• More than half regularly make a list before shopping for groceries.
• More than half of consumers who make general lists decide which brand they will purchase at the store based on price, coupons, special promotions, quantity, versus having a specific brand in mind while they are creating the list.
• Influenced by special sales, online coupons, shelf coupons, and in-store displays,40% of Moms regularly purchase items that are not on their shopping lists.
• The majority of consumers also prepare for trips in some way, whether it’s by using the Internet or checking out newspapers/circulars.
• More than 90% of adults 18+,adults 25–54 and Moms regularly research products online before purchasing them in-store.

One of the primary take aways from this research is that a great deal of "new" consumer behavior is mediated by online functionality. From finding coupons online to researching products to making lists are all made easier by online applications. In addition, many shoppers make multiple stops at several stores to get the best prices. Shopping from home and having their "researched" products delivered will save multiple stops, save time and cut down on gas costs.

The Internet is offering more and more of what the "new" consumer wants. Do you see the trend accelerating and meeting the new consumer where they live?

Customers love Cleanliness and Convenience- Sounds Like Home

A ClickIQ Survey found that for Walmart Shoppers "Everyday Low Prices" is extremely important, but they still cross-shop for better prices. What does this mean for online price comparisons and convenient home delivery of CPG?

Of the 888 survey respondents who had shopped Walmart for groceries and household goods in the past month:
* 54% stated that they would go to more than one store to get the best prices on grocery items
* 48% would check out multiple stores to get the best prices on household goods
* 61% had also shopped for groceries and household items at other grocery stores. When asked where they purchase groceries and household goods most often however, Walmart registered a plurality of  46%, with "other grocery stores" second at 26%.

The survey also asked respondents to rank on a five point importance scale various factors regarding retailers of groceries and household goods. Results showed:

* The number one factor rated "extremely important" was "Everyday Low Prices" at 64%.
* Second was a somewhat surprising result of "Cleanliness” at 48%,
* "Sales and Promotions" was just behind at 46%.
* A “Convenient Location" was fourth highest at 41%.

The net result seems to be that although getting the best price and the “everyday low prices” philosophy are extremely important to those who shop Walmart, the impact of a few pennies on a single item are likely beneath the awareness of most shoppers. The relatively high degree of cross-shopping would seem to be at least partially a product of clean, convenient, local grocery stores and other national retailers that offer large, frequent sales and special promotions.

The question arises, if shoppers can compare prices down to the penny from the convenience of their homes and be able to access sale and promotional items and home delivery will more and more shopping move online? What do you think?

Shopmuting Comes to Chicago

Following a successful Shopmuting pilot program in 15 commuter rail platforms in Philadelphia, Peapod is bringing Shopmuting to Chicago. The virtual grocery store is inside Chicago’s State and Lake Station Tunnel. The tunnel walls are wrapped with larger-than-life ads of grocery store shelves stocked with popular FMCP products such as Coca-Cola, Barilla and items from Procter & Gamble that can be scanned and ordered via a smartphone.

“Chicagoans spend, on average, more than an hour commuting to and from work each day.  That’s well over 200 hours a year in transit time alone,” said Elana Margolis, director of corporate communications at Peapod, Chicago. “Peapod’s virtual store program for commuter rail stations is a creative, convenient way for passengers to multi-task and knock out their grocery shopping on the go,” she said. “It helps turn commuting time into productive time. Peapod is a leading Internet grocer serving 24 markets in the United States, including Connecticut, Illinois, Maryland, New Hampshire and New York.

In Peapod's Shopmuting program, users scan a QR code to download the free Peapod Mobile app, which is available for iPhone, iPad and Android devices. Once users have the app installed, they can scan the bar codes of many of the items that shoppers purchase every week, such as coffee, condiments and cleaning products. Orders can then be placed directly from the app while commuters ride the train to or from the office and schedule a delivery for the next day or days in advance. The goal of the strategy is to offer a creative and convenient way for commuters to multi-task and take care of their grocery shopping while commuting between home and the office.

According to Peapod, the 12-week virtual store program in Philadelphia saw commuters’ selections diversify and the size of their mobile orders grow. Additionally, the company reports that 90 percent of those who scanned an item in one of the virtual stores have returned to shop and order again from Peapod.

One important way that Chicago’s virtual store is different from the Philadelphia one is that more products are available to scan directly from the virtual shelves.“We added more items for the Chicago pilot,” Ms. Margolis said.  “Our vendors got really excited about it and several of them wanted to be involved.”

How the World Shops Online

During January and February 2012, an independent research agency surveyed 19,000 global consumers from 15 leading online shopping countries and 153 online merchants on behalf of WorldPay. Interesting results included:

• US consumers spend 23% of their disposable income online, slightly higher than the 22% average across the 15 countries. Online consumers in India were found to spend the greatest share of their disposable income online, at 33%, followed by those in China (31%), Brazil (27%), and the UK (25%).

• 44% of global online spending takes place between 6 PM and 12 AM, with a peak at 8:40 PM. 30% of shopping is done in the afternoon and early evening (12 PM-6 PM), while 16% is done in the morning hours (6 AM-12 PM), and 10% between 12 AM and 6 AM. 

• In terms of shopping locations, notably, 95% of online spending worldwide is made at home, with the most common areas being the living room (54%), bedroom (43%), and study (35%).
  Almost 3 in 10 global online shoppers say they make purchases online when at work. 8% buy online while on holiday, 7% while out at a cafe, bar, restaurant, or pub, and 6% while at college or university, in a car or in a physical retail store.

• Many respondents multitask while shopping online, making it both more difficult and more important for merchants to capture their attention. 46% report watching TV; 42% listen to music; 31% use social networks; 29% chat to family and friends; and 21% listen to the radio.

• More than one-third of heavy shoppers (who spent 30% or more of their disposable income online in the past year) have purchased online using a smartphone, compared to 17% of medium shoppers (who spent between 10 and 30% of their disposable income online). Heavy shoppers are also much more likely to have shopped via a tablet (23% vs. 9%). 5% of global online shoppers have purchased online using a smart TV.

So what is the importance to you of this information? Well you will have to decide but let me give you an example. 8:40 PM is the peak of online shopping, if you are running a live promotion 8:40PM is the time to do it! What other gems can you see in this data?

Consumers Develop Their Own Multichannel Strategy

Retailers Need to Adjust to the New Multichannel Reality

A new Price Waterhouse Cooper survey finds, people aren’t waiting for stores, but  developing a multichannel experience for themselves as they go along. According to the report “Because most retailers haven't yet created efficient multichannel models, consumers are working it out for themselves, using multiple channels in ways that best suit them”.

PwC also found:

• Consumers may choose to research a product in the store then use their mobile phone to find a better price online, and then call into the retailer's customer service line to order and have the item shipped to their home. In essence, consumers are creating their own multichannel experiences by leveraging multiple retailers across a single category or product.

• In the U.S., 72% of online shoppers consider themselves “very accomplished.” at multichannel shopping.

• Social media clearly has a large potential for retailers, with 32% of U.S. respondents saying they use some form of social media daily. (Both China and Hong Kong had higher social-media participation.) Yet overall, only 3% of the survey’s respondents have used it to actually make a purchase.

• The study, based on responses from more than 7,000 consumers around the world, found that while most people like online shopping because of its 24/7 convenience, it is the pricing, free and fast delivery, and a wide range of products that appeals to them most.

• Shipping costs are a substantial barrier. Even though retailers would gain an additional margin opportunity of 8 to 12%, 59% of retailers still charge for shipping and in the U.S., two out of three shoppers say they’ll bail out of a transaction if it turns out they have to pay shipping charges.

• Online shopping’s appeal is also greater than many acknowledge. While 2010’s online sales penetration of total retail sales was 8%, once grocery sales are excluded, that rises to 11% of all sales. And in such categories as PCs and software, it’s 50%.

• Online shoppers buy in many more channels than some realize, the survey finds, with more than 90% of global online shoppers buying books, music and films, clothing and footwear online. And more than 60% of online shoppers have made purchases in categories with relatively little online shopping, such as jewelry, watches, sports equipment and outdoor goods.

PwC makes some suggestions:
Retailers need to focus more on  the emerging reality of the physical stores, as well as the online experience. The store of the future, PwC says, will most likely be “a showroom where customers come for inspiration, to browse and to physically interact with, and to road test the products, as well as a convenient transaction point and customer service center, where customers come to complete a journey started on the web or to seek service for products bought regardless of the purchase channel.”

By 2015, PwC says, it expects U.S. e-commerce sales to reach $279 billion.

Can You Really Sell Pet Food Online And Make A Profit?

Remember Pets.com Inc., a publicly traded company that sold pet supplies online and then became the poster child of the dot-bombs and went bust more than a decade ago. The San Francisco start-up, founded in 1998, raised $110 million, went public in 2000 and then crashed in late 2000. Even the famous sock puppet mascot could not save it! All of a sudden web-only pet stores are online again and striving to make a profit.
PetFlow is part of a new group of Web-only pet-supply stores that have emerged in recent years, with some such as MrChewy.com and Wag.com springing to life in just in the past few months. Backed by top venture-capital firms as well as by tech heavyweights including Amazon.com Inc., the start-ups illustrate how the economics of selling heavy bags of pet food over the Internet have evolved since the Web's early days. PetFlow.com Inc., a Manhattan start-up that has raised $10 million in venture capital and ships one million pounds of pet food a month. What has changed since 2000?

Basically the economics of e-commerce has changed so radically a pet food business may be able to succeed based on the dramatically lowered cost of beginning and running an Internet based business. The lowered costs include:
* The current support for storing and shipping products. There are third-party companies that store and ship large volume products charging a storage fee and per-shipment fee, which amounts to between $4 and $5 per order.
* Internet services such as  Amazon's Web Services division, which rents computing power and storage, has reduced the need for companies to buy their own computer servers. Using what are known as cloud-computing services costs hundreds of dollars a month or less, compared with servers that can cost thousands of dollars. Ms. Wainwright, former CEO of Pets.com, said it cost between $7 million and $10 million to get Pets.com running, before acquiring inventory.  At PetFlow, Mr. Zhardanovsky the CEO, estimates it took only about $50,000 to launch the company, excluding buying pet food and other inventory. PetFlow hired outside tech engineers for $50,000 to create the website and online shopping-cart system and paid a few hundred dollars a month for Internet service.
* There are now 232.1 million Americans with access to broadband Internet at home or in the office, compared with 48.5 million in 2000, according to Forrester Research. Only 1.2% of overall commerce was online in 2000, compared with 7.2% today, Forrester said.

Petflow founders expected the company to break even by the second quarter of 2012 and have sales of $30 million this year, up from $13 million in 2011.  Traditional retailers such as PetSmart Inc. and Wal-Mart Stores Inc. are also jumping on the Web. Wal-Mart started selling animal food online in fall 2010 so that it could expand its selection. "Online, we have an expanded assortment of pet products that complement the pet supplies in your local Wal-Mart store," said spokesman Ravi Jariwala. That lower-cost of Internet business has enabled other smaller companies to jump into the pet-food space online. Mr. Chewy, based in Miami, launched in September and expects to record $5 million in sales for the month of December, up from $1 million in January 2011, said co-founder Michael Day. Wag.com, run by Amazon subsidiary Quidsi Inc., launched last July. David Zhang, site manager for Wag.com, said the company uses robotic technology to quickly move around cat or canine kibble, which helps reduce labor costs. "Would we have been able to do this a decade ago?" said Mr. Zhang. "Probably not." Forrester Research estimates U.S. online sales of pet supplies will reach $4.8 billion in 2015, up from $2.5 billion last year.

It remains to be seen if these online pet food retailers will thrive or crash like Pets.com. Michael Rubin, CEO of Kynetic, which runs an online-shipping consortium called ShopRunner Inc., said the three pillars of a good online-retail business, are "high margin, high price and low weight." The pet-supply industry meets none of the criteria, he said. In addition, the low start-up costs and outsourcing of shipping services may not be able to sustain a high volume business. Stay tuned to see if online pet food retailers will be a winner or a just a dog.

Retail Predictions That Will Come True?

The following are 8 retail predictions "that will come true" made by the Marketing Maven

1. Self serve kiosks will become a prominent option with retailers and restaurants.
2. Mobile payment will replace debit cards.
3. Bricks and mortar will continue to outsell online retailers.
4. Significant increase in retailers offering personalized-custom options.
5. Mobile marketing with consumer targeted geo-fencing will become the new junk mail.
6. Convenience stores will become quick serve restaurant.
7. Technology will be everywhere within retail and will create job elimination.
8. Re-dedication to the consumer experience vs. a strong focus on price and product.

Do you agree? Do you have other predictions "that will come true"?

eBay Partnering With Retailers

eBay is changing strategy and repositioning itself as a technology partner for large retailers — not a competitor. Capitulating to prevailing competitive trends, eBay is communicating to retailers that eBay is their ally, not a competitor.
eBay CEO John Donahoe  notes that last year, the e-commerce was worth $5 billion. Now, he states that there is a $8 trillion to $10 trillion opportunity. “What’s happened over the last 12 to 18 months is that the line between e-commerce and retail is coming down,” said Donahoe, “It’s not just blurring. It’s falling down like the Berlin Wall.”

Before 2011eBay was a competitor for larger retailers primarily focused on promoting relationships with small and medium-sized businesses. But with several acquisitions in the last year that has formed eBay’s X.commerce platform (comprised of primarily mobile commerce startups and their technologies), eBay is going from what Donahoe described as from “defense to offense.” “We want to become the partner of choice for retailers of all sizes to compete in this new commerce world,” Donahoe affirmed.

Donahoe explained that eBay is responding to the following requests from retailers:
• A multi-channel platform because customers want a seamless experience between online and offline shopping
• A way to handle demand generation (stemming from sources such as Facebook, LivingSocial and Groupon) and also drive traffic into stores (online and offline)
• A way to go global

Donahue explains, “We are positioning the company as a technology partner for those retailers and we will not compete with them. We’re positioning to help provide data for them.” PayPal, an eBay company, is also part of ebay's retailing push with its new mobile commerce and digital wallet solutions, with a Facebook Connect-like integration seen on online stores and then mobile apps for shopping in brick-and-mortar locations.

Thus, eBay is working to cover all bases of the commerce scene going forward. Ebay will be going up against stiff competition in Amazon and Facebook and seems to be playing catch-up rather than being out front leading. What do you think about ebay's chances of becoming a e-tailing platform for large retailers?

Is Amazon Abandoning Moms?

Amazon used to treat Moms special. Offering the same free two-day shipping as Amazon Prime, Amazon Mom loaded on heart warming extra benefits for Moms (and anyone else who thought to ask for them). The benefits included:

• No fee at all for the first 90 days of membership
• Extra "free" months added on when you placed an order worth $25 or more
• A Kindle book rental-a-month -- also free
• Purchases of diapers and other baby-related consumables received discounts of as much as 30% off Amazon's regular prices!

Last week, Amazon revealed that the high cost of supporting programs like Amazon Mom had helped to cut the company's profits in half. Turned out, supporting Mom carried a high price tag. And so Amazon is no longer showing Mom the love.

Amazon is informing its millions of Moms, of significant cuts to the program's benefits. The cuts include:

• The ability to earn extra months of free shipping is on the chopping block
• Kindle rental is no longer part of the terms of service
• Discounts on diaper purchases have been slashed by a third. Instead of 30%-off, the most Amazon Moms can hope to score today is 20% -- of which 15% already comes with Amazon's ordinary subscribe-and-save program.

Amazon's legions of Moms are not taking this cut kindly. Using the same strategy as Bank of America and Verizon customers, Moms are organizing on Change.org. Already signed by 1447 Moms, the petition states:

"Times are very rough, unemployment is high, money is getting harder and harder to come by. This discount is the only way some people can afford to buy the necessities they need for their children, I know it certainly helped my budget. Not to mention all the moms out there without easy access to transportation, or who may be handicapped, who used this program to have necessities delivered right to their door. It was a great program until all the "changes" were rolled out..Considering that Amazon.com had a profit of over 15 billion dollars last year, misleading customers, alienating them, and then refusing to honor their program is not a very warranted or smart practice."

Unfortunately, Amazon's financial picture is unsupportive of Mom. Reporting earnings for the final quarter of 2011, Amazon admitted that despite 35% sales growth, profitability had headed in the entirely wrong direction. Operating profit margins got cut in half, while net profits were down 57%. The culprit: massive spending on a number of initiatives -- everything from building new warehouses, to subsidizing "Prime" membership, to selling Kindles at a loss -- which decimated the company's profit margin. Although the Mom program was not mentioned, it has the same costs as Prime membership and probably caused damage to the bottom line.

Amazon is caught between profit and Mom creating a small PR nightmare. Many of the 1447 petition signers are leaving statements that read very much like bad Amazon Reviews.  For example:

"In addition to missing this program, of which I have been a fan, I think the ending of this program is being handled rather poorly. The program not only helped out with getting baby stuff, it also was increasing the amount that we would shop with Amazon because we were on their site more. Cancelling the program is a lose lose situation."

"I tend to prefer to support small businesses but I am a stay at home mom right now and times are tight, so this allowed me to be able to afford the 7th Generation wipes for my 7 mo. old. I am so disappointed in Amazon for taking this program away - it's exactly the type of corporate greed that keeps me from big co's. AND it is going to make me an activist AGAINST Amazon now too."

So far 1447 petition signed is far less than 306,000 petitions signed by Bank of America customers. However, there is no predicting what will happen when Moms get organized and begin to focus on getting Amazon to listen. Stay tuned for a message from your Mom.

Online Beats In-store by A Lot in Consumer Survey

Interesting result- In almost every case, the online stores scored at least as high as their brick and mortar counterparts and often better!

 To inform consumers about outlet "big box" stores the Consumer Reports National Research Center surveyed subscribers about 55,108 shopping experiences buying a range of products at Costco, JCPenney, Kmart, Kohl’s, Macy’s, Meijer, Sam’s Club, Sears, Target, and Walmart. For the first time, Consumer Reports asked questions about the consumers' experiences the retailers’ online stores.

The research found the following:
* Respondents said the quality, selection, and value of the goods online equaled or surpassed those of store-bought purchases.
* Sixty-three percent of the online shoppers said the service they received was excellent or very good; only 47 percent of in-store shoppers rated the quality of sales help that high.
* Smart merchants provide help by phone, e-mail, or online chats.  All the stores in the overall satisfaction Ratings have customer service available by phone.
* Respondants said that buying was easier online than in stores. Among shoppers who rated both walk-in and online experiences, 81 percent said the ease of checking out online was excellent or very good; just 46 percent said the same about the speed of store checkouts.  The most prevalent problems walk-in customers said they faced were long checkout lines, a lack of sales help, and out-of-stock items. Twenty-nine percent said checkouts were jammed.

Costco, the standout, was the only chain to earn an outstanding grade for the overall quality of its merchandise, whether in stores or online. And it earned above-average scores for all 10 product categories rated, including electronic entertainment, jewelry, and sporting goods. Of note, its website did better than its walk-in stores on all counts except product quality (for which the two types tied) and earned top marks for layout, product value, and checkout. In-store shoppers found a few chinks in Costco’s armor: The chain’s walk-in stores scored below average for selection, checkout (because of long lines), and service, and its shoppers were more likely than those elsewhere to complain about a lack of fitting rooms.

This research shows the perceived value and convenience of online shopping is growing relative to shopping in stores- particularly in big box stores. This trend has been growing over the past several years however, this research clearly demonstrates the strength of the trend. Retailers and manufactureres know shopping is based a great deal on selection, value and convenience. Are offline stores losing ground so quickly they will not be able to recover?

According to an Accenture/Dunhumby/ConScore study, CPG manufacturers have invested millions of dollars in their brand websites and social media presence, yet they struggle to show how their brand websites are influencing brand purchases in stores. The Accenture/comScore/dunnhumbyUSA research found a significant potential for brand websites to become key drivers in building customer loyalty and preference for CPG brands by creating unique online brand experiences. The study found that:

• Visitors to CPG brand websites spend 37 percent more than non-visitors on the brand in retail stores.
• Brand website visitors are heavier buyers within a brand’s product category, spending 53 percent more than non-visitors on the category in retail stores.
• Brand website visitors have more purchase occasions than non-visitors for both the brand and the category, making 35 percent more purchase trips for the brand and 39 percent more in the overall category.

The study also concluded that to maximize impact, the most important website features include:

A compelling brand value message that provides a persuasive reason, other than a coupon, for a website visitor to buy the brand.

Fresh content updated at least weekly to encourage visitors to engage and participate and return frequently.

Content that creates an engaging online experience such as a pulse survey on the home page, or an opportunity to rate a new product or product attribute, or user generated content like recipes or weight-loss planning. Content with a philanthropic appeal such as sustainability or participation in a food bank also was shown to create greater engagement.

Well designed site navigation that is intuitive, uses simple menus and has clear site maps.

Overall online CPG brand experience influences between 1 percent to as much as 35 percent of a brand’s total USA in-store sales, highlighting a direct correlation between CPG brand web sites visitation and in-store purchase behavior. The important conclusion to the study is that some CPG companies are missing revenue opportunities and may be losing market share due to underinvestment in the digital channel. Is your CPG brand committing this mistake?

Taking Shopping Online is an International Phenomenon

As People Age Shopping Online Becomes More Attractive

According to results from a nationwide online survey of 1,000 U.K. online shoppers by web site building and hosting provider BaseKit Platform, British consumers like shopping online and, with website improvements, would do more of their purchasing online.  The survey also revealed:

* The average British consumer devotes 2.4 hours per week to shopping online compared with 1.2 hours per week shopping in stores—yet that consumers spend more in stores than online.
* The British consumer spends an average of 126 pounds ($198) per month in stores compared with 116 pounds ($182) spent online; that’s a total of 242 pounds ($380). * Women spend an average of 212 pounds ($333) monthly for retail goods, with that total split very nearly in half between online and store retailers
* Men spend more of their retail budgets in stores (53.0%) versus online (47.0%).
* Online shopping draws heavy interest from consumers age 55 and older, 86% of whom say they shop online regularly. More than a third (36%) of consumers in this age group say they do the majority of their retail shopping online. 59.2% of consumers age 55 and older cite the ability to have online orders delivered to their homes as a prime motivation for shopping online because it saves them from having to carry products home from stores.
* British consumers across all age groups say they shop online because it is convenient (60.5%) and because they get better deals online (53.4%).

This survey shows that Brits are increasingly taking shopping behavior online, and not just young people. Since older consumers are now the U.K.’s biggest online shoppers, retail outlets must consider their web sites as important as their physical stores and should be developing sites that are easier for older people to navigate.

Internationally the focus on convenience and price are the primary drivers of online shopping. As the world ages, this phenomenon will accelerate. What changes need to be made to websites to make them more accessible and attractive to an aging population?

QR Codes & Social Media Have Little Impact for Shoppers

Important New Research From Catapult Action-Based Marketing

As much as people embrace all things digital, they’re much fussier when they turn into actual shoppers. In fact, QR codes and social media have very little impact, according to new research from Catapult Action-Biased Marketing. The research found:

• "The role that social media is playing is not as large as we thought it would be. It’s a good consumer and advocacy tool, and it builds brand awareness. But once the mindset shifts to shopping, she is not going to Facebook, or to blogs. We keep saying to clients, “Don’t forget the boring,” because she is going to traditional sites, such as the brand’s site or Google. On larger-ticket purchases, she is increasingly going to ratings and reviews."

• "QR codes are a prime example of a technology developed by marketers first, and not with shoppers in mind. In the first place, there are still many people without smartphones, so you’re already saying, “You can’t play” to a big chunk of the population. And then among smartphone owners, there’s already a tremendous amount of fatigue, and usage of the codes is down 20% since we did the last study. We are always recommending an alternate entry whenever they are used, such as a Web site. And so often, what they are delivering isn’t really interesting or useful."

• "QR codes can be effective but marketers need to think more about mind states. For example, a subway ad with a code that leads to a photo of model Brooklyn Decker -- that means something to users. In the ketchup it sells to restaurants, Heinz has a QR code on the bottle. So people are sitting around eating and have time to pursue it. Basically, shoppers are usually in two mindsets: Will it save me time? Will it save me money? QR codes may save people money, but they don’t save time."

• "The most exciting piece of data is the understanding that digital tools in general are delivering against more need states than just “save time” or “save money,” even if marketers don’t realize it. For example, traditional store circulars rank higher for “gives me new ideas” than “saves me money.” So we are wrong about how we are using this tool. It shouldn’t just be coupons -- it should have a video or a recipe or something engaging. Paperless coupons deliver 17% higher on “rewards me” than “saves me money.”

• "Privacy is a tremendous concern, with 74% of the shoppers we surveyed expressing some level of concerns, and 23% saying they are extremely concerned. But what they claim to be worried about and how they act aren’t the same. It doesn’t seem to be slowing anybody down using digital tools."

Social media is the hottest issue on marketers' radar and increasing amounts of time and money are being thrown against this online trend. This research by Catapult throws some cold water on the social media craze. Are you seeing the same trends as Catapult and do you agree with their conclusions?

Retailers Fight Back (Mostly Unsuccessfully) Against "Showrooming"

Brick and mortar retailers are starting to get really annoyed at shoppers that use their stores to browse products and then buy online and the e-tailers that encourage this behavior. This year store sales overall edged up 4.1% during the holiday shopping season, while online sales jumped 15%. And while online sales represent only 8% of total sales, that is up from just 2% in 2000. Retailers such as Target, Best Buy, and Barnes and Noble are beginning to use the following tactics in an attempt to thwart showrooming:

• Asking suppliers to create special products that would set the retailer apart from competitors and shield it from the mobile based price comparisons that have become so easy for shoppers to perform on computers and smartphones.
• Asking suppliers to help it match rival's prices.
• Create subscription services that give shoppers a discount on regularly purchased merchandise.

Target Chief Executive Gregg Steinhafel and Kathee Tesija, Target's executive vice president of merchandising sent a letter to vendors with the following message- "What we aren't willing to do is let online-only retailers use our brick-and-mortar stores as a showroom for their products and undercut our prices without making investments, as we do, to proudly display your brands." Target said sales were particularly disappointing in electronics, movies, books and music—products whose sales have migrated most significantly to the Internet. Those products accounted for 20% of Target's annual sales of $65 billion in 2010, down from 22% in the prior year. Vendors are likely to have little choice but to play ball with Target because of its clout as the second-largest discount chain. Major suppliers, including Kraft Inc., TV maker Vizio and Procter& Gamble.

Unfortunately for brick and mortar retailers they are waging an uphill battle because they have systemic problems that e-tailers do not including:

• Online-only retailers have significantly lower labor costs
• Etailers, for the time being, don't collect sales tax in most states
• Amazon is based on a different business model entirely: Amazon can sell products so cheaply because it uses its other profitable units—such as cloud data storage and fees it charges others to sell on its website — to subsidize the rest of its business. While Wal-Mart and Target are willing to sell a few things at a loss, Amazon's whole business is a loss leader.
• Consumer preferences are moving to online.

Compounding this problem is the numerous price comparison sites such as PriceGrabber, Pricewatch, Pricechecker, Finderscheaper, and Fatwallet which become more comprehensive, accurate and mobile every day. This writer is wondering if "showrooming" will be one of American Dialectical Association's 2012 words of the year.

What Motivations Drive Your Shoppers?

The Integer Group’s The Complex Shopper is an annual study, conducted in partnership with Decision Analyst, which studies motivations that drive shoppers during a purchase decision, such as shopping for major appliances and automobiles. Not only does it uncover the reasons why they buy, it also identifies how they think about – and interact with – the chosen company after the purchase.
The study identified four shopper types:



"Fretting Frugal (31%)
A Fretting Frugal finds big-ticket shopping about as enjoyable as a trip to the dentist. He’s nervous about making the wrong choice from the start, which only makes for a frustrating, unsatisfying shopping experience. The Frugal is price-conscious and easily overwhelmed, and these feelings lead to a delayed purchase or passing of the decision-making responsibility to someone else.
Experience Lover (29%) - Generally older and female
Shopping is a labor of love for the Experience Lover. She enjoys researching big-ticket items and makes things like reading reviews a prerequisite to the buy. Generally older and female, the Experience Lover is confident and takes great pride in her decisions. She values her relationship with particular brands and is more likely to make repeat purchases with the same company.
Social Adventurer (15%) Generally urban, ethnic, and socially mobile
The Social Adventurer believes what you buy is a reflection of your style and personality. So she spends extra time researching to make sure she gets it right. The Social Adventurer is urban, more likely to be a person of ethnicity and upwardly mobile. She loves shopping and isn’t afraid to spend big. She takes to social media to connect with the brand and lets others know about her experience.
Passive Purchaser (25%)   Generally older high income male Let’s get this over with is the best way to describe the Unconcerned shopper’s state of mind. This older, high-incoming-earning male wants his purchases quick and easy. He removes all emotion because the process is transactional and nothing more. He doesn’t waste time researching and he’s not loyal to a brand just because he spent a considerable amount of money with the company."

The research shows that for some shopping is a great adventure, a sport, a pastime while for others it is a trip to the dentist. Each of the shoppers identified above have to be approached in a different way to lead them down the path to purchase. For example, the Social adventurer wants to establish a relationship with the brand that enables her to shop where and when she wants while the Passive Shopper want the utmost in simplicity and the shortest distance between product and checkout. The Fretting Frugal want constant reassurance they are doing the right thing while the Experience Lover wants shopping to be rewarding and social.

The challenge for e-tailers is to identify each of these shoppers and provide them the experience that supports their shopping motivations and style. This may require a different navigation path that adds social interactions and product content or reduces information and the number of clicks to checkout.

What are you doing to identify and support your shoppers' motovational styles?

Ignore Customers at Your Own Peril

The future of communication between companies and their customers is via social media. According to a research study by Conversocial, "a majority (50.7%) of consumers currently use social media to communicate with corporations. Moreover, 78% of respondents believe that social media platforms would either soon entirely replace other means of customer service altogether or become the dominant way for consumers to communicate with corporations." In addition, Conversocial found:

High Rate Of No Response: Of those respondents who have communicated with companies on social media sites, nearly a third (32.5%) were either neglected or altogether ignored.
Price of Neglecting Customers: If ignored by companies on social media sites, 45% of respondents said they’d feel anger, and 27.1% said they’d stop doing business with the offending company altogether.
88% Less Likely To Buy: If confronted with unanswered customer complaints on a company’s social media site, 88.3% of respondents said they’d be either somewhat less likely or far less likely to buy from that brand.
Low Level of Current Consumer Satisfaction with Companies’ Social Media: Nearly a third of respondents, or 32.4%, characterized their overall satisfaction with the way companies use social media sites to communicate with customers as either poor or very poor, while 59.6% expressed guarded optimism for future positive developments in the field and only 8% were thoroughly satisfied. According to the study the primary complaints were slow response times, unanswered questions, and unmet expectations. In addition, most respondents stated adamantly that these complaints decreased their desire to do business with the company.

Here is an interesting question- "How fast is fast in responding to questions and complaints?" The fastest response time goes to Xbox with an average time of 2 minutes and 42 seconds. In contrast, none of the largest US retailers including Sears, Kmart, Kroger, Wal-Mart, Macy's, Costco, Bloomingdales, Safeway had a response time of under one hour and most, if they responded at all, averaged four hours. In addition, Costco, Kroger and Kmart ignored 100% of inquiries on their Facebook page. Conversocial notes that inquiries and complaints ignored on social media push consumers to more expensive phone interactions that costs an average of $15.00 per call.

The distinct and critical difference between social media interactions including complaints, inquiries and even compliments is the public nature of the content. Phone calls and emails are not viewed by a wider audience that may join the conversation enlarging the impact of the message- for better or for worse. The sooner a complaint or inquiry is handled the quicker the message disappears and the quicker the problem is contained.

PR challenges faced by large corporations are only intensified in social media. A negative public image can escalate when consumers have a more transparent and wide-reaching voice. Retailers must deal sensitively and promptly with their online communities if they hope to maintain a positive customer experiences. This requires:

1. Fast and consistent responses to all complaints across all social media 

2. Co-ordination between Marketing and Customer service to avoid negative feedback being spread across fans’ news feeds.
3. Targeted messages to deliver tailored responses to each sub-section of a diverse fan base.

Are Negative Reviews Hurting Your Sales?

Customer product reviews are fixtures on retail and consumer brand websites, with over 80% of retailers featuring some level of reviews.  A study conduced by Market analysis firm Cone Inc. in 2011 found that 80% of online customers (up from 67% in 2010), after reading negative online reviews, change their purchasing decisions. Conversely, and not surprisingly, 87% of consumers said a favorable review has confirmed their decision to click the buy button

Inevitably -- no matter how good your product or services are -- you'll get negative reviews that sting.  It's how you deal with negative comments that will mitigate or inflame the negative impact to your business.  How should you respond and how? What should you say or do?  According to Dan Kehrer of Bizbest, here are the six rules for responding to negative online reviews:

Be on top of the news about you:  If a customer writes a negative review about your business, that's bad. If you don't know about it, that's even worse. Businesses should implement comprehensive but simple-to-use "reputation management" or reputation-monitoring programs. These services search the Web for any mentions of  a business, service or product and provides access to the information via an easily interpreted dashboard. Many services will aggregate large volumes of reviews and measure the dominating "sentiment" expressed in the reviews.

Have a response plan: Know the major review sites that pertain to your business and your options for responding to negative reviews on these sites. Understand the tools they offer to respond to customer reviews (good or bad) and any options you may have for requesting removal of offensive comments. Armed with this knowledge, you can have a plan in place for what to do if something negative shows up. This will help you remain calm and approach your response professionally.

Remain calm and measured: Negative reviews are aggravating, scary and very unwelcome however,  don't overreact. Knee-jerk reactions to negative reviews have gotten many businesses  in hot water and may only make things worse. One of the best responses is asking more about the basis of the review including the expertise of the reviewer, how the product or service was used, and prior  experiences with the service or product. Gathering more information gives greater insight into the nature of the complaint as well as comes of as non-defensive and open to feedback.

In all cases, avoid elevating the controversy the review generates and keep your focus on being positive and rectifying the situation if possible.

Your response will ripple out to a wide audience: Your respond to a bad review will be read by the writer as well as other current and prospective customers. Other current and prospective customers are you primary audience.  Responding in a calm, measured and forthright manner will let you take control of the situation and communicate that you are serious about your customer service and you commitment to resolving this, and any subsequent, situation. Good communication and a resolution plan will go a long way to calming any fears other current customers and prospects may experience as a result of the review.

Offer a viable solution: Saying  "We're sorry" is not enough, it is what you do about it that communicates your commitment to your customers. Whenever possible offer something tangible, perhaps a discount, freebie or extra of some kind. You are making this gesture in public, so others will judge you on it.

The saying goes "The only bad review is an obituary": Customer service snafus and bad product reviews are opportunities to shine by correcting the situation in an aggressive and forthright manner. A bad review, while discouraging, provides important feedback that may be exposing hidden weaknesses in your product, service, staff or approach that are important for you to know. Take advantage of your opportunity to respond in a way that turns the situation around and makes you look caring and responsive in the eyes of other customers. Also, ironically, a few negative reviews can lend greater credibility to your positive ones since customers will be more convinced they are genuine. According to Reevo, 95% of consumers become suspicious when no bad reviews are evident, believing the site to be censored or faked.

Responding well to bad reviews is as much a matter of containing your emotional response as is having a good strategic response. It is important to remember the reviewer who is slamming your product or service does not have the deep emotional attachment to the product or service that you do and, although they may be motivated by anger, it s not a major part of their life. After reading the review count to 100, or 1000, before you respond and then when you do respond carefully, honestly and openly.

Etailers Improving the "Last Mile" of Customer Service

Consumers shop online for savings and convenience. Most of the convenience comes from having items delivered directly to the home but being clueless about when a delivery will arrive or finding a missed delivery label pasted to the front door isn't convenient- it is annoying. Etailers are beginning to provide more delivery "transparency" and give consumers more control over when orders arrive at their doors.

Data from post-purchase surveys conducted by e-retailer QVC.com show that 97% of consumers who give high marks to their delivery experience say they will buy from QVC.com again, says John Hunter, executive vice president of customer fulfillment services at QVC, part of Liberty Interactive Corp. "We get repeat buyers when we offer a great experience around delivery," Hunter says.

Etailers and delivery companies are rolling out or refining the following innovative programs:

UPS Returns Exchange
A combined pickup and delivery service designed to take the headaches out of processing returns of online orders, the company says. UPS developed the service to provide a way to pick up returned products that would increase customer service, speed up the returns of products, ensure that the right products are returned undamaged, and reduce the likelihood of fraudulent schemes that seek credit for or replacement of products that don’t actually get returned. UPS delivery drivers inspect returned items according to retailers’ instructions—such as that they match the original order and are not visibly damaged—before accepting them for return delivery to the retailer.  Drivers provide retailers with real-time updates of returns and deliveries via handheld devices connected to the UPS corporate network. This service targets returns of products considered to be of high value, such as those retailing for $250 or more.

UPS' My Choice
A program, that sends an e-mail, text or recorded phone alert the day before the package is scheduled to arrive with an approximate delivery time. The first alert arrives about 24 hours before a package is scheduled for delivery, giving a consumer enough time to make changes before a package is placed on the delivery truck. If a recipient knows no one will be home to accept delivery, he can electronically authorize drivers to leave packages that normally require a signature. Rather than find a missed delivery tag on their door, consumers who know they won't be home to accept delivery can also pay UPS a $5 fee per delivery to have that package rerouted to another address or to a UPS Store location where they can pick it up. Consumers also can schedule to have UPS deliver the package within a two-hour window they select, also for $5.

Walmart Shipping
Walmart.com, in addition to its Site to Store program that offers free shipping to customers who pick up online orders at a local Wal-Mart store, also recently expanded a test program that lets consumers have Walmart.com orders shipped to one of 650 FedEx Office retail locations in approximately 15 metro areas, including New York, San Francisco-San Jose, Chicago, Boston, New York, Portland, Seattle and Minneapolis. A Wal-Mart spokesman says many of the urban markets the FedEx test is running in already have Wal-Mart retail stores, but consumers say in post-purchase surveys that the No. 1 reason they select the FedEx Office location as their pickup point is convenience.

Amazon Locker
Amazon.com is testing a retail store delivery option for urban consumers in Seattle, New York and London. The delivery program lets consumers in these areas select at checkout a local pick-up location for their online orders. Packages are then delivered to secured lockers installed at local retail shops, including drug stores, convenience stores, grocery stores and colleges. Amazon e-mails codes to consumers they can enter to unlock the locker containing their delivery.

Eliminating delivery anxiety will encourage more consumers to shop online. That's why retailers and delivery services are increasingly offering such options as in-store pick-up, scheduled home deliveries, advanced delivery alerts and, in the case of the leading online retailer by sales, Amazon.com Inc., package retrieval from a locker at a convenience store. In addition, QVC customer service representatives receive more calls from customers requesting information on where their package is than any other type, and the "check order status" service on QVC.com is the most frequently used service on the web site. United Parcel Service of America Inc. says it gets 26.2 million tracking requests a day. Reducing this volume of shipping tracking requests will reduce shipping costs.

Convenience for customers and cost savings for etailers sounds like the classic win-win situation that will continue to drive delivery service innovation and expanded services. After all, it is that "last mile" of the shopping experience that makes or breaks the customer experience.

 

 

The Emerging, and Shocking, Truth About Brick and Mortar Stores

Brick and Mortar Stores are Becoming Showrooms for Online Retailers

One does not need to look any further than Sears' decision to close over 100 stores to get a glimpse at the transformation of brick and mortar stores to showrooms. The emerging "showroom" buying pattern  takes a consumers first to e-commerce sites like Amazon to find and research a product, then to a bricks and mortar store to touch the product, then back online to make the purchase. And it is not just Sears that is being "showroomed". Best Buy, for example, is getting a reputation as being a showroom for Amazon, suggests the New York Times blog Bits.

There are interesting relationships between consumers and their stores. They are sentimental about bookstores which may save the bookstore regardless of Border's demise. They are loyal to their grocery store if the store is a cut above such as Wegman's, Trader Joes, or Whole Foods. And they have little attachment to electronic stores such as Best Buy, who is marginal in customer service anyway.  However, regardless of the bond consumers have to bricks and mortar they are driven more by cost and convenience. Increasingly, and ever more rapidly, the cost and convenience balance is tilting in the favor of the etailer.

Many consumer experts have branded 2012 as the year of the explosion of mobile technology. Fueled by the increasing sales of smart devices and the exponential growth of apps, 2012 is anticipated to be  the "tipping point" of mobile ecommerce. Mobile apps, such as those offered by Google, Amazon and PriceGrabber, allow shoppers to take a photo or scan a barcode of an item, then go online to view prices offered by other retailers. “A May survey of 3,000 shopper found that about 40% had searched for a lower price using an in-store shopping app or search engine, then purchased the item for a lower price online,” said a Wall Street Journal article.

Oracle, in its May 2011 research report, states mobile commerce is growing dramatically. Up to 48 percent of all U.S. consumers are using their mobile devices to research and browse products and services, and those numbers have grown steadily – up from 37 percent in a consumer benchmark survey commissioned by ATG in July 2010, and 27 percent in a consumer cross-channel survey taken in November 2009, according to the report. According to an aricle in the financial times, on Cyber Monday, mobile purchases jumped from 2.3 per cent of all internet spending in 2010 to 6.6 per cent. Moreover, according to estimates by Forrester Research, for every $1 spent online, the internet influences $3 spent in stores.With all those new iPhone 4s' in consumer's hands can exponential mobile growth be far behind?

Interestingly, "showrooming" also applies to the CPG category. Etailers such as Amazon, Drugstore.com, and Alice, are internet based and have been focused on selling CPG products directly to consumers for the past few years. However, Walmart- the mother of all brick and mortar stores is not only starting to sell large volumes of CPG products online they are also snapping up technology companies, for both talent and technology, to rapidly expand their online sales capabilities. In addition, in its store in Chicago suburb Mount Prospect Walmart has introduced a drive-through window where customers can pick up items ordered online through its site-to-store program. It has moved its site-to-store counter from the back to the front, has prominent signs urging customers to go online for anything they can't find in the aisles, and has terminals near the entrance that customers can use to buy online.Thus, it is the purchase of large ticket items and small ticket items that are moving from bricks and mortar stores to etailers.

As online shopping become more prevalent and retailers learn they can downsize or repurpose their brick and mortar stores, the showrooming of retail is bound to accelerate. The ongoing challenge will be for retail organizations to manage this transformation rethinking how to manage their brick-and-mortar locations as the Internet changes how people shop.