Direct-to-Customer Commerce

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Strategic insights into the direct commerce industry, including ecommerce, direct marketing and related fields

Is show rooming a problem?

Well clearly, it is for some brick & mortar retailers.  At least they think it is.  It’s even reached the pages of the NYTimes (subscription required).

The NYTimes article even postulates that retail merchants should prepare a script of what to say when they catch customers using their store as a show room.

This is a losing battle.

Customers are going to use your store for a show room … at least if you’re selling products where there is a lot of content, a lot of price competition, or the products are simply expensive in the eyes of your prospective buyer.  You cannot stop it.

But you can combat it … but only by differentiating your business from the competition:

  • provide better prices
  • provide better customer service
  • provide a better guarantee
  • provide training
  • provide more information (content)

If you think show-rooming is bad now, this is only the start.  Younger buyers are ever more dependent upon their smart phones.  As they continue and increasingly dominate the buying public, show-rooming will become more and more prevalent.

This is a disruptive pattern.  Consider yourself disrupted.

Now what are you going to do about it.

Filed under: multichannel commerce, Omni-Channel Commerce, Opinion, , , , , , , ,

Ecommerce Technology is more than the sum of it’s features

One of the essential parts of my consulting practice is vendor identification, evaluation, selection & transition.  Typically, a lot of the time needed for such an engagement is the development of the requirements document … an attempt to document every possible feature a client might need in the operations area being addressed.

But there is more to such an engagement than the rather mundane process of listing the set of feature requirements, and comparing it to what each prospective vendor claims they can provide.

An article in Multichannel Merchant, just today, makes this point well.  Entitled, 5 Tips for Choosing an Ecommerce Technology Provider , click to read it for yourself.

Matching up with the features & functions you need is an important place to start.  But as Raj Kumar Waghray writes, there are other broader, and ultimately, even more important factors:

  • evaluating your existing partnership
  • understanding your unique needs (my emphasis on understanding)
  • serving your needs?
  • collaboration quotient (not only theirs, but yours as well)
  • eager to serve mindset

There is a business culture component to matching up technology users with technology providers — don’t ignore it.  It is often the biggest factor of the long term success of your business relationship.

Filed under: Direct Commerce, Opinion, , , , , , , ,

The seventh step to multichannel commerce

We’re getting there, slowly but surely.

This is the step where everyone wants to start … it’s time to set up a web site.

Some of my consulting colleagues have reported there are over 900 ecommerce platforms, from which a merchant can select, upon which they can build an ecommerce store.  The variables seem to go on forever … but don’t forget the previous six steps we’ve outlined.  Those are the non-negotiables (or at least, should be).

After those, nearly everything may negotiable.  Merchants all think their business is unique and needs features or capabilities which other merchants don’t need.  Or they need some feature tweaked.  The only thing I would remind you of is that changes, tweaks and new/modified features cost money.  So, before you go requiring lots of customizing, make sure the customization you need will actually make more money for you than taking the feature, the way it comes.

Consultants love to help clients customize things … often makes them more money.  But many, if not nearly every, merchant asks for things that do not increase sales and may even increase cost or have other negative impacts.

There is a lot to be said for finding an ecommerce platform that has:

  • experience in your industry
  • experience with your other applications, such as Product Master, Inventory, OMS, WMS
  • uses a technology your staff is already familiar with, so you can make minor changes and fixes, yourself
  • an effective user interface, which merchandisers, customer service reps and others can be quickly trained on
  • a plan to stay up-to-date on marketing and technology improvements
  • already supports your current marketing activities
  • supports your current payment processors
  • a good cultural fit with your present staff

When you select your ecommerce platform, you must include every department in the decision.  Don’t let the technology people drive the decision without major input from merchandising, customer service, finance, operations.  It’s very expensive to change ecommerce horses … and the technology itself is not always the most important consideration.

It’s about people and process … the technology is actually less expensive to change.

Then again, take advantage of the technology to improve your processes and perhaps lower your labor costs.

Filed under: Direct Commerce, Ideas, multichannel commerce, Opinion, , , , , , , , , , , ,

The second step to multichannel commerce

Step one = a single, unified product master

Now, step two — a cross platform, cross-channel order management system [OMS].  By this, I mean an order management system which can support transactions and customer service in one or more physical stores, in a call center, at a web site, or on a mobile site.

This is a tall order.  And of course, it’s relevant, only if you really use all of these transaction channels.  Maybe you have one I missed — the point is that your order management system should support transactions in every channel thru which you sell.  That should include Amazon or eBay or any other ancillary channel.

This single OMS enables you to have a single view of your customer and allows you to fix in transaction in any channel in any other channel.  That is what your customers are beginning to expect.

Can you transaction on an iPad or iPhone?

Can your customers check themselves out (self-check-out at the grocery store, or self-check-out at Apple Stores)?  Walmart announced they are testing self-check-out on iPhones.  Where do you stand?

The principle here is that customers should be able to transact with you in a manner that suits them, rather than in a manner that suits you.

Filed under: Direct Commerce, Ideas, News, Opinion, , , , , , , , , , ,

Customers Prefer Easy to Exceptional

Customers Prefer Easy to Exceptional — this link takes you to the full article in Multichannel Merchant.

It’s an excellent premise.  And the premise of the article — that customers prefer easy resolution to exceptional customer service — is consistent with the fundamental idea that direct commerce is about convenience.

So, Merchants, make it convenient (read that as “easy”) to buy things from you and easy to resolve any problem that might arise.

Filed under: News, Opinion, , , ,

New Dimensional Weight Factor to Boost Shipping Costs

Here’s a link to an important article in Multichannel Merchant  — New Dimensional Weight Factor to Boost Shipping Costs.

This is a huge change.  The article documents a coming change by FedEx and UPS to reduce the factor used to calculate Dimensional Weights from 194 to 166.  The article explains the calculation, if you’re unfamiliar with it.

This change is important and noteworthy in both the short-term and the long term.  In the short-term, because it will mean an immediate rate increase on many packages.  And it will also increase the percentage of packages to which DIM weights will apply.

In the longer term, it portends a move towards DIM weights becoming the default or de facto method for rating the cost of shipping parcels.  After all, it’s generally accepted that planes and trailers are most likely to fill up space-wise before they fill up weight-wise.  So carriers will make the most money, if they charge based upon DIM Weights.

An example for comparison.  Let’s assume a 3# packaged being shipped to Zone 5 — the generic average parcel bound for a residential address.  Further, let’s assume a parcel 12″ x 12″ x 8″ — not huge, not small.  This parcel calculates to a DIM weight of 5.938 using the 194 factor; 6.94 using the 166 factor.

Here are UPS Ground rates (without accessorial charges, based upon the current rate table):

  • 3# Z5          = $6.24
  • 5.938# Z5 = $7.10 (an increase of 14% over actual weight)
  • 6.94# Z5    = $7.29 (an increase of 17% over actual weight)

This change by FedEx & UPS should result in a lot of work on product packaging, in an effort to reduce parcel sizes.  And it will put increased pressure on “free shipping offers.”

Filed under: Direct Commerce, News, , , , , , ,

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