Archive for March, 2009

Music Store Fades Away….What’s Next?
Tuesday, March 24th, 2009

The recent announcement of Virgin Megastores closing got me thinking.
credit: Digiart2001
credit: Digiart2001

Is this the end of music (CD) stores as we know it? Will every music store eventually fade away? What about bookstores? Will those eventually go dark too?

There are a number of retailers that are defintely affected by digitization - music, books, and videos. Will there simply no longer be a need for brick & mortar stores of these products? Certainly appears to be a dying breed.
What about other retailers? Will other industries eventually suffer a similar fate? What about shoes, computers, socks, power equipment, appliances, etc. Certainly all of this is already being sold online today, but how will this affect brick & mortar retailers? I am sure Zappos wants to take away even more business from shoe retailers. Or take the recent success of - they certainly don’t think you need to go to a physical store to buy black socks anymore. Threadless continues to sell more and more t-shirts through its creative and collaborative web-site.
Retailers are going to start feeling the pinch from all directions. So what should traditional brick & mortar retailers be doing? Here are a few suggestions (IMO):
  • Blog. Engage your consumers through a blog. The more consumers know about your philosphy, your personality, your raison d’etre, the more likely they are to shop with you. Today’s Gen Y consumer (and all of us older folk that are catching up) not only crave this (if its interesting and engaging), but will actually respond and comment back to you, especially if we believe you’re listening.
  • Tweet, tweet, tweet. Whether through twitter, facebook, myspace, or others; micro-blogging is growing like crazy (1382% growth rate). It is an easy way to connect with all of your customers to inform, build brand, promote, and quickly solicit feedback.
  • Collaborate. Open up channels (e.g. facebook fanclubs) to your consumers that enable them to collaborate. Let them create a new design or logo, develop a new product line, offer new services. Who knows what your customers will come up with? But guaranteed, they will come up with some great ideas. They are after all your consumer and they know what they want or what to fix.
  • Offer alternatives. Brick & mortar retailers have an edge by allowing your customers more convenient ways to shop. Make sure all of these avenues are open to them and done so flexibly and with the utmost of service.

Today’s consumer is moved by engagement, collaboration, and transparency. It’s not a one size fits all type of thing, but things are moving in this general direction. Don’t compete with Zappos or Threadless, learn from them, join them! Look at what UK’s Mothercare is doing. They engage their captive consumers with tons of social interaction and useful information on their social networking site In another example, a small California retailer Trends in Two has done something similar for its specialty store of twin parents (or soon to be parents) with their own social network devoted to twin pregancies - Twin Pregnancy And Beyond.

In the case of Apple, they actually moved away from internet-only sales to B&M stores, in order to further engage their customers and improve the overall customer experience. Now, Microsoft is setting out do the same. Here we see a trend with companies that see a need for B&M stores to further engage and connect with their customers. So maybe brick & mortar stores aren’t quite dead yet :) 

As always, your thoughts, experiences and comments are appreciated.

Channel Consistency
Monday, March 16th, 2009

I was recently shopping at Chapters.Indigo, Canada’s largest retail bookstore, and was eager to pick up a couple of books on my reading list, when I noticed that the prices were about 20% higher in-store. Prices are cheaper on-line, shipping is free with purchases of more than $40, and books typically ship within 1-3 days.  This pricing policy does not make sense to me. How important is it for brick & mortar retailers to have consistent pricing across channels? Should your on-line store have the same prices as your brick & mortar stores? Does it matter if you could buy on-line but not pick-up or return at one of their stores? Many retailers still operate their on-line and physical locations as two separate entities that just happen to have the same name. 

Does Chapters even want me in their store? Chapters sells a lot more stuff than books, like gifts, candies, CDs, games, etc. I would NEVER buy one of those items on-line, but if I’m browsing through the store I am a lot more likely to pick something up on my way to the cash.

credit: Steve Brandon

If you read through this thread, where consumers discuss Chapter’s pricing practice (, you quickly understand how this simply frustrates the consumer.

To be fair, I understand that Chapters has stiff price competition on-line, with the likes of Amazon, and there is a cost to operating large format bookstores, where users can browse, touch, read, and enjoy that in-store experience. Nonetheless, this pricing policy is frustrating and it cannot continue forever. So what can they do? I think brick & mortar retailers, like Chapters, actually have an advantage over their e-commerce-only counterparts. They can offer consumers more ways to shop. Give them options:

  • Shop on-line and ship to you (with appropriate shipping fees)
  • Shop on-line and ship to a location near you (at no additional cost, since item might already be there or deliveries are made to your store all the time anyway).
  • Browse on-line, reserve item at a location near you, and go to store to complete the purchase.
  • Return any item in any store or by shipping (even if bought at a store).

Brick & mortar retailers need to figure out how to operate as one entity to the consumer, without confusion. If retailers do this right and have channel consistency, I think brick & mortar retailers would gain an advantage over their e-commerce counterparts. Am I missing something here? Have you had similar frustrating experiences? What do you think brick & mortar retailers can do better to improve their on-line/in-store shopping experience?

Where in the World are Brick & Mortar Retailers?
Wednesday, March 4th, 2009

ricardo /

ricardo /

While on vacation, I got to read (and  thoroughly enjoy), What Would Google Do? Author Jeff Jarvis takes a fascinating look at the world through Google glasses.  He looks at many industries and suggests how these companies may do business differently, if they were to think, act, and behave as Google would. Google and web 2.0 have paved the way for doing things differently and treating customers differently too. Create platforms and environments for your customers to add content, collaborate, and engage in an open, transparent and honest manner. As Jeff says ‘your worst customer is your best friend’, if you give them the platform to communicate.

Craigslist, Flickr, Wordpress, are all great examples of companies that are doing things differently. Craig Newmark has singlehandedly taken a huge chunk out of the national classified ads business, we’re talking billions of dollars. Craig has done this by providing a platform where customers can do this at virtually no cost. Do you think Craig has a successful business model?

To give one quick personal example - after reading this book, I sent out a simple 140-character message on twitter about how I enjoyed reading it. In less than 15 minutes, I got a ‘thank-you’ back from Jeff Jarvis. Now, what do you think my impression of Jeff is? Do you think he cares about his customers/fans? Do you think I will recommend his book to others? Do you think I will be more inclined to buy another book he wrote? Well, Jeff gives numerous and way more powerful examples of such strategies in his book.

But what struck me the most was the the void of retailer examples.

Where are the brick & mortar retailers?

Where is cool & hip Abercrombie & Fitch? Where is Ann Taylor, Eddie Bauer, The Gap, The Limited and many other mega national retail brands? Most of these companies have not opened their internet door, they do not even have twitter accounts. They do not communicate, engage and collaborate with their customers. There are exceptions that I have come across - Starbucks, American Apparel, Build-a-bear, and Lululemon to name a few, who seem to be moving in this direction, but where are the others?

I have a theory on this. Brick & mortar retailers think that this approach, this way of doing things, is excusively for internet and e-commerce companies - the Amazons, E-Bays, Threadless, and Zappos of the world. These retailers do not even think they have a role to play in this space. While most of these retailers have growing e-commerce businesses, it is still only a small percentage of their overall business, and therefore, they do not see the purpose in spending time, money, and energy in this area. Their mistake is confusing e-commerce with social media. Even if a brick & mortar retailer does not have an e-commerce site, they should still be spending time building their social platforms and engaging their customers. This is what will bring increased brand awareness, increased trust, increased loyalty, and get their customers into the stores where they should be, spending money and telling all their friends.

In the future, I will test out this theory further and take a closer look at a number of leading national retailers and see who is really doing what in these areas. If you are aware of retailers that are doing more in this area, then please share.

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