B2B/B2C online strategy and enterprise eBusiness blog

The following excerpt from ReadWriteWeb shows a fantastic trend happening in retail environments today whereby consumers have instant access to pricing information on products via their mobile phone:

Stores Clueless About Mobile Barcode Scanning Applications?

With the rise of app-laden smartphones like the iPhone and Google’s Android OS, now on T-Mobile’s G1, many penny-pinching shoppers have downloaded barcode scanning applications onto their mobile devices. These apps allow consumers to compare the prices of merchandise on a store’s shelf to competing stores in the area just by taking pictures with their smartphone’s camera. The prices are instantly retrieved and displayed on the mobile phone so consumers can know before they buy if they’re getting a good deal.

via Stores Clueless About Mobile Barcode Scanning Applications? - ReadWriteWeb .

Mobile barcode scanning is like PriceGrabber; it puts the focus on service  and reasonable pricing from retailers, not only lowest possible price

The reason why I like mobile barcode scanning is because, as a consumer, this will put pressure on retailers to be competitively priced and (more importantly) focused on servicing the customer. If it mobile barcode scanning grows widespread, this will ultimately force retail channels to align with pricing in online channels.

Essentially, mobile barcode scanning acts as your own personal PriceGrabber.com. With PriceGrabber, you enter a product name and see competitive retailers, retailer rankings, and pricing:

With phones like the iPhones which blur the lines between internet device and mobile phone and have a built-in camera, barcode scanning becomes easy — snap a photo of the barcode, an iPhone application reads it, and then performs a web search for competitive pricing and availability much like PriceGrabber.

It’s difficult to find significant price savings across products and retailers on PriceGrabber — because the playing field has been leveled for retailers in the price game and forces them to focus on service. Price your products too high, and the masses will not buy from you. Price them low enough, well, you had better be able to support the service on the small profit margins you’ll be making.

If barcode scanning doesn’t enforce better service, then it will demand unique product assortments from suppliers at the retail level

A world where retailers all sell identical product assortments for virtually the same price is going to force retailers to differentiate in other ways. Sometimes this means the retailer will go private label with certain products. Or, retailers will demand a unique product selection from their supplier within a product category. Other times, retailers will negotiate exclusivity on products for a period of time. Larger retailers will do all three to be well diversified.

This burden/strain will ultimately land on the manufacturer’s/supplier’s shoulders; Brand names will win in this environment

Bar code scanning and the PriceGrabber’s of the world put added burden/strain on manufacturers/suppliers. The manufacturers will be forced to be creative in their go-to-market strategies as they launch new products across various retailers and channels. Well-recognized brands won’t fall victim (as much) to the bundling requirements, product assortment strategies, and channel-specific pricing.

Apple, for example, is represented identically across channels — with pricing being within single digits of each other between retailers. A barcode scan on an iPhone will show similar pricing across all channels of business and all retailers — thereby putting the emphasis back on the retailer to provide good service and support.

Consumers will win this battle

As much as retailers want to control the environment, at the end of the day, pricing shopping is what people will do, whether or not barcode scanning is banned. Ultimately, consumers will win this battle, and that’s a good thing.

Target is doing a nice job of creating consistent creative and messaging across channels (online and television). Here’s a screen shot of an ad from the homepage of CNN.com advertising the upcoming 2-day sale for Thanksgiving weekend:

Click on it and you see this page:

Target ads still recognizable even when fast forwarding on DVR

And while fast-forwarding through DVR’d TV shows tonight, the familiar red background and white stick figure running with the shopping cart flew by on a few frames. How often do you recognize an ad and/or brand name in just a few frames of DVR fast forwarding? I’ve been paying more attention to this lately and it’s difficult to recall anything…particularly in anticipation of getting back to your DVR’d show.

Here’s a clip of similar animation which it looks like Target is recycling from this 2007 campaign (found on YouTube):

Consistency is key with integrated, multi-channel marketing

The consistency of the creative of these ads enabled me to recall the Target campaign with HIGHLY passive viewing (browsing for news on CNN.com — which I do several times per day) and fast-forwarding through commercials on our DIRECTV DVR. I can’t think of any other ways where I’m less engaged than quickly scanning for the latest news on a website or sitting on the couch watching TV.

As marketers grow to accept a world where consumers can easily ignore their ads, it’s really interesting to see how Target is able to penetrate the barrier to recalling an ad. It begs the question: how does one test the “recall” and “effectiveness” of multi-channel marketing prior to executing the full media spend?

Traditionally, consumer panels are shown various ads and asked follow-up questions. The problem is this doesn’t simulate a real-world environment of cross-channel entertainment & news consumption.

Think big, start small, deliver quickly

Incremental releases of ads combined with analysis of ad performance in each channel are really the only way to truly optimize a campaign — especially across multiple channels. I’m still not quite sure if Target is at the level of being able to measure or test the effectiveness or recall of their ads if only a few frames of them are seen. In any case, this current campaign of theirs has worked on me to generate awareness. Now the question is: will I make it to Target for the sale and purchase something?

In the world of consumable products, Procter & Gamble is often held at the pinnacle of marketing perfection. P&G is home to many brand names all of us are familiar with, either because we specifically seek them out on retailer shelves, or because it’s simply second nature to nab these items while at the store. From Folgers coffee, to Tide laundry detergent, to Duracell batteries, the list of brand names is rooted with highly recognizable names and long-standing tenures in the marketplace.

Retailers depend on brand name products to sell “private label” products

Retailers rely on brand names in the P&G portfolio as well as many other manufacturers to bring in the foot traffic to their stores. So as to not be dependent on one manufacturer’s brand within a product category, retailers often will sell competing brands or go at the product manufacturing/sourcing process themselves by “private labeling” their own version of the product.

We’ve all seen it at Target: the orange box of Pledge-brand furniture hand wipes on the shelf and conveniently positioned on the shelf below Pledge products, a similarly orange-colored “Target” brand furniture wipe for a moderately cheaper price. To the brand-agnostic consumer, this is a “win” for Target. To the brand-aware, the private label option appears to be cheap, or a “knock-off.”

Regardless, the brand names pulling traffic into stores allow retailers to enter into the “private label” business in the first place. The margins are healthier for private label products and enable the retailer to not be entirely dependent on one supplier/manufacturer. Excellent business strategy all around and certainly a trend with no end in site, particularly as low-cost-countries become more and more accessible to retail buying offices.

Manufacturers selling direct-to-consumer becoming more common

Like retailers depend on brand names for private label products to be successful, manufacturers depend on retailers for product sales. However, like the “private label” model outlined above, Manufacturers are turning the model around in their favor as well — by selling direct-to-consumer and bypassing the retailer altogether.

As a manufacturer, we began selling direct in June 2007. Our intention has always been to do this as a means for learning about the consumer shopping experience online. In the nearly 15 months since beginning our e-commerce initiative, the amount of data collected has been invaluable. The initiative wasn’t initially met with entirely positive feedback from our retail partners, however. Other Newell Rubbermaid brands (Levolor is a division of Newell Rubbermaid) are also selling direct: Graco Baby, Rubbermaid, and Dymo to name a few. 

P&G ventures into selling direct-to-consumers online … and Wal-Mart hires an executive to analyze the impact

In an article posted on FT.com, it opens with the following:

Procter & Gamble is testing its ability to use the internet to sell its toothpaste, household cleaners and nappies directly to US households, in a potential long-term strategic challenge to its retail partners.

The company is supporting a website, theEssentials.com, that is exclusively selling its brands, with items such as single tubes of Crest toothpaste and bottles of Mr Clean cleaning fluid, to boxes of its Pampers and Luvs brand nappies and Gillette razors.

When the leading consumable product manufacturer ventures into the world of selling direct-to-consumer, retailers’ ears perk up. While nobody can be sure of the long-term intentions of theEssentials.com, it’s obvious that a new chapter in Manufacturer+Retailer relationships is being written.

Quite often, manufacturers’ website traffic pales in comparison to retailers’ website traffic

Traffic to the P&G theEseentials.com site is minimal (27K unique visitors per month at the time of this post according to Quantcast). Clearly a non-threat to all of the major retailers who boast 10s of millions of unique visitors per month.

Retailer is to private label as manufacturer is to selling direct-to-consumer

In the short-term, P&G’s efforts will probably amount to several very uncomfortable conversations between the sales office of the manufacturer and the retailer. Phrases from the retailer will sound like, “You’re competing with us.” In the long-term, consumers will ultimately benefit from Manufacturer-driven ventures like these.

It creates a level of healthy competition between the retailer and manufacturer pushing both camps into a better understanding of the consumer’s desires and shopping behaviors — very much like private label opportunities for retailers force manufacturers to be honest with pricing and innovative with new product offerings.

I’m happy to announce that Levolor.com has finally left the realm of being in “beta.” We ran the site in its beta form for a little over 6 months and just rolled the first round of updates and fixes (since leaving beta) to the site last week. Here’s an overview of what’s new:

New Products Added:

As we begin to expand our web presence, we are also beginning to add our full line of products to the website (though only custom blinds & shades may be purchased online). “Blinds, Shades, & Drapery Hardware” is the tagline under the logo on the website and you can now find all of this product information under the “products” tab on the website.

New Product Page Layouts:

We’ve also updated our product pages to reflect the content and end-user experience found in our in-store sample books. This combines beautiful room scene photography with nice, large pictures of product options, and best of all, videos to help describe product options.

Online Store

Our online store now features all of our custom blinds and shades. During our beta period, we only offered a limited selection of products.

What was learned during the beta period
I’m normally opposed to plastering “BETA” across the heading of a website because it’s become more a buzz word than anything in the online industry. Everything seems to be launched in Beta and because it’s in Beta, it gets more hype from online bugs for one reason or another. That being said, I’m glad we did it because end-users were more understanding if something went wrong on the website during the beta period. I was actually surprised to see how many consumers shopping for our products mention the “Beta” moniker in their comments.

Consumers are browsing online first
What we didn’t expect was a backlash from consumers who couldn’t find all of our product information online. Even though we don’t sell a large portion of our products on our website, it didn’t seem to matter — consumers wanted the information on the site. This is not necessarily specific to us but is really a trend in consumer shopping habits across the board. Not everyone goes online to purchase, they are going online to research so they can be educated before they purchase.

Consumers are arming themselves with information (because the store associate doesn’t have the knowledge)
In our retail channels (big box stores), store associates are hard to come by and they are not always experts in the area of the store you happen to flag them down in (ever grabbed the “electrical guy” at Home Depot who happened to be passing through the patio furniture display?). Being armed with full product information and narrowing down your options between one or two final products that you’d like to take a look at in store before purchasing seems to be the trend these days.

This really comes as no surprise as my wife and I do the same thing. Recently we purchased a Dyson vacuum, researched it on the Dyson website, and went to Best Buy (retail store) to close the purchase after we compared two models in the store. Naturally, the “car audio manager” helped us and did nothing more than read the description of the product off of the box as we asked questions about the two models we were interested in. About all he was good for was helping with the honoring of the online price from bestbuy.com (which was cheaper than the in-store price).

Beta launches are a Good Thing
Despite my reservations about jumping on the Beta bandwagon, the Beta period helped us understand more of what consumers were looking for on our website and this has fueled the online effort. I would recommend releasing a site in “Beta” if it encompasses major changes for consumers — they’ll be understanding and will be a bit more candid if they run across a problem or frustration. The general public is becoming more familiar with what “Beta” means.

Next steps for Levolor.com
While I won’t outline the roadmap for Levolor.com, I’ll continue to post updates as we make major updates to the site. For now, we’ll just focus on incremental improvements now that all of our custom blinds and shades are available online for sale.

I came across this article yesterday which presents very interesting findings relating to branding and search engine results. The proper combination of paid results and organic results has a positive impact on brand affinity, brand recall, and purchase intent.

This presents an interesting dilemma for those keywords that don’t convert well (i.e. “blinds”) but are high-volume in nature. Some terms are so generic that for folks in the market for the product, it can actually make sense to play in these areas for branding-related purposes.

A proper SEM strategy with channel partners and an SEO strategy for your own site now theoretically will not only help conversion rate, but the influence of your brand. Sometimes you can’t show up for every possible keyword that relates to your products, but through a combination of leveraging the breadth of sites that sell your products online (i.e. your channel partners) and your own SEM/SEO strategy, search has a significant potential to influence buyer preferences.

In essence, the more they see your brand for all keywords related to your product, the higher the probability they will associate your brand with those terms — and hopefully convert/purchase your products.

While Friday still remains at SES NY ‘07, it feels like today (Thursday) was the last day. I sat in on several sessions all of which were focused around retail, search, advertising, and social media. The underlying theme of the day was looking at advertising from multiple angles and how it can help build/elevate your brand. My notes from the day are very scattered so I’ll do a recap with my own thoughts as well.

Online SEM Channel Strategy - What to do?
As I evaluate our online channel and the fact that it is like the Wild West right now, I am presented with the following dilemma:

1. As a manufacturer, we want to protect our brand name. In fact, leveraging our brand is a corporate initiative, and it should be a differentiator when people shop for blinds and shades online or offline.
2. Our products are sold in different channels: Big Box, Independent, and Online. Online presents the biggest challenge because our brand name is used to drive traffic to competitor websites. This is an easy problem to fix thanks to our legal department. However, the more interesting and complex issue is how to work with our online retail partners to get a win-win situation: we want to “own” our brand name, yet our retail partners need to advertise our brand name. What’s a consumer to do?

I don’t have all of the answers yet, but have some ideas (which I will not discuss here). The more important point is that we have retail partners who are advertising our brand name, essentially free of charge. In the blind and shade industry, brand names are either very well known, or completely nonexistent. It’s really a hit-or-miss vertical. With that said, once you start rolling in banner advertising, offline advertising, PR, social media marketing, etc. to create that brand awareness, then the online retailer SEM takes a whole different role.

Where does SEM live in the sales/conversion funnel?
There are essentially two types of searchers:

1. Consumer searches for a specific product name (sometimes including a brand name)
2. Consumer searches for generic product name

Consumers who fall into bucket #1 are further along in the sales funnel. They have been pre-disposed to your product and are more or less “in the market” now and ready to spend their money. I would argue that these consumers represent an “easier” conversion to a sale and that your SEM budget should focus heavily in this area.
Is SEM a marketing tool or a sales tool?
Consumers who fall into bucket #2 are the people who blur the lines of SEM. Is SEM a marketing tool or a sales tool? Or is it both? People using generic search terms may not have a brand top-of-mind, but if they see advertisements relating to their search that mention a brand name, they may be more likely to resonate with those ads. This is particularly true if you have other advertising and marketing in place such as banners, offline ads, PR, good social media penetration, etc. Now, combine the power of the “stickiness” of brand advertising with the online retailers who also sell our products and we’ve got an interesting situation.

Generic terms may not immediately convert, but they may be attributed to future conversions
The problem is that it’s hard to tie sales to generic search terms. They may not immediately convert, simply because the consumer falls a little higher in the sales conversion funnel and may not be ready to purchase right then and there. Unfortunately for us, too, the sales cycle is much longer for custom blinds and shades (due to ordering samples online, waiting for them to arrive, and also because of the higher price point of custom products).

Who’s to say, though, that a generic term didn’t ultimately drive the consumer towards purchasing your product at a later date. What if they came back to the search engine, looked for another term or even used your brand name this time in their search phrase, and ended up purchasing on your site (or retail partner site)? It’s certainly doable to keep track of the initial click or keyword/phrase that drove the consumer to your website for the first time. But it’s also very hard to measure the effectiveness of SEM with other “outside’ influencers such as more traditional advertising.

Fortunately, I will be able to run a baseline test of SEM for 1 to 2 quarters without any other external advertising (other than normal monthly promotions, etc. that we would normally run). I anticipate a lift when SEM begins to clicks to our website (and hopefully sales through retail partners), but even more so do I expect this when we start advertising via more traditional means. I will really be interested to see if it drives a higher conversion rate on the same SEM campaigns I had been running.

It’s hard to say, but fortunately I have tools like Omniture SiteCatalyst and WebTrends Dynamic Search to help me manage it all.

Creating the right blend of advertising - avoiding advertising silos
The ultimate goal is to create the right blend of advertising so SEM is converting at its highest possible rate when balanced with the correct amount of banner advertising, offline advertising, PR, social media, etc. I think the main problem with advertisers today is that they are looking at everything in silos. PR is measured in impressions — but how is it correlated with sales? Banner ads are measured in impressions, click-throughs, and conversions — but how do banners influence search? How does leverage social media influence customer satisfaction and repeat business?

There are so many variables that go into the marketing, management, and maintenance of a brand. Pile this responsibility on top of having to actually creating, produce, and maintain new product development and you’ve got your hands full.  Do it well and you’ve got a well-oiled machine with new product development and marketing playing off each other. Do it poorly, and you’ll find yourself in a very disconnected business with poorly performing sales funnels and weak innovation and new product development.

Session #2 of the training courses on Monday of SES NY ‘07 was called “Getting your site found.” This session really had few takeaways for me as it dealt with the concept of getting your site found by using things like Flickr, YouTube, PR services, and optimizing press releases for online services. Here are some of the highlights:

More Products + More Choices = Lower Customer Satisfaction
The point was made that consumers are being bombarded by all forms of media and advertising, the Internet makes it easier for them to find products, but with all of these products and choices, customer satisfaction is arguably at an all-time low. So, how does one address this problem? Read on.

Resolve Buyer’s Remorse Before the Purchase
Truer words have never been spoken and it was the “ah ha” moment for me during the session. When you think in these terms, it just makes sense. This is particularly true for my day job where we have historically (for the past 90 years) been a manufacturing company whose business has 100% relied on big box and independent retail channels selling our products to consumers. Too often companies (manufacturers, retailers, service providers, etc.) focus on the newest features of their products and offerings that they fail to answer the most basic questions a buyer wants to know.

This ultimately leads to buyer’s remorse after the buyer has shelled out their hard-earned dollars only to be completely dissatisfied with their purchase. We’ve all been there, and to add insult to injury, many of us never bother to return the product because of the hassle in dealing with customer service in the process. What a horrible situation to be in for a retailer or manufacturer!

Buyer’s remorse has lead to the success of social media and blogging for consumers
This is why social media and blogging have become such powerful tools for consumers to vent frustrations and to seek out help and assistance from other consumers who feel their pain. Even being a marketer, I still dread dealing with customer service because it is a considerable time investment. It’s much easier for me to hop online, post a question, and deal with the resolution on my own terms and on my own time (companies who monitor blogs will win these consumers back!).