Driving Offline Sales via Online

There’s a story from the early days of e-commerce. A nationwide clothing retail chain had opened an online storefront in 1999 after a prolonged and fairly public research project, considering not only the revenue opportunity, but also the potential costs of running an online operation. Remember, this was when most companies didn’t have a real sense of how much effort went into maintaining a Web site, plus the systems that handled inventory were from an even earlier era, and were not exactly ready to be connected to Apache (define) and let loose on the world.

Anyhow, the company finally got to a comfortable place and within one year, it approached its shareholders with some pretty significant news: the absolute top storefront — by a wide margin — was its Web site. This is a store that you can find in extremely popular malls all across these United States. Never mind the store that sits in between the food court and the big department store. The Web site was the biggest revenue driver, with an absolute fraction of the overhead.

But that position didn’t really last. In fact, over time, the revenue generated by the site began to slip and settled at a lower level. However, that’s only half the story. The other half is that, while there were fewer purchases being made, the traffic stayed the same, and would often spike, particularly when seasons changed or around the holidays. What happened? People viewed the site not only as a purchase channel but as a place to browse through selections, find out what they like and, assumedly, stop by the store to actually buy the thing.

Internet as Crucial

A number of sites have encountered a similar experience. While counting up transactions and revenue is the best way to demonstrate that an e-commerce site is successful, it’s not the only source of value. In fact, from a purely marketing and advertising perspective, the purchases made on a site may be only one small slice of what the site is actually doing for your business.

Take consumer electronics, for example. For the most part, every consumer electronics purchase is a considered purchase. OK, there are a few shining stars out there, like the iPhone, which was so highly sought out that there was not a whole lot of research going on in advance of purchase. For everything else, consumers seek out options, information, and feedback before making a purchase. For the marketer, this is a critical stage of the purchase cycle, where the consumer is interested in buying something — you just have to make sure that she wants to buy your stuff.

This means taking what may be a difficult position within your company: seeing the e-commerce site as a marketing channel. But, it has to be done. According to Nielsen Online, among people who recently made a consumer electronics purchase in a store, 80 percent first researched that product on the store’s Web site. That’s significant. Eight out of 10 people poking around Best Buy have already been to bestbuy.com and may have a solid concept of what they want to buy.

This must be managed both online and in the store. Online is the trickier one, so let’s tackle that first.

Can you Comfortably let a Customer Go?

The classic buyer-tactic when purchasing a car is to walk off the lot. As soon as you stand up to go, the power shifts to your corner. The salesperson knows that if you leave, the chances of you coming back is minute. If you are operating an e-commerce site, you have some of the same feelings: can you be comfortable with a customer browsing a product, then leaving your site without actually buying it?

This is the big challenge you have to face when you know that some store-bound consumers are visiting your site. You must capture the traffic, and account for it, but not as a sale. Of course, there are store-locator pages, and those are good ideas. But the fact is, many of the people browsing around bestbuy.com probably already know how to get to their local Best Buy store.

Clearly, you need to take the traffic that doesn’t buy and figure out the percentage headed offline. This could be done with a survey, perhaps, or even if you allow people to have some kind of conversion, i.e. a download coupon or spec sheet.

In the Store

Let’s put this simply: the role of the sales associate has to change. In the example we keep using, eight of 10 of the people in the store have already been online and are well on their way to making their decision. What does the person on the floor need to do? Three things:

• Acknowledge the consumer’s knowledge. Sales people should approach a person looking at an item and not say “can I help you with that?” Instead, they should say, “What do you already know about that?” Get the conversation started from a place of the consumer’s knowledge.
• Show up and down options. The most called for service on most e-commerce sites is a comparison tool, so that consumers can look at their options side-by-side. The sales associate should mirror that, and lay out options better and not-as-good as the one being considered.
• Capture what research the customer’s done. The point-of-sale is an incredible, but often wasted CRM (define)opportunity. Sales people capture basic information, but they should also ask (and record) questions such as whether or not they used the Web before coming in, and if they bought the product they intended to buy.

On the corporate side, we talk a lot about integrating channels. Fact is, we’re just trying to catch up to the consumer who integrated channels years ago. With the growth of mobile devices, this integration will get even more intense. The best bet is to start looking at the way consumers make decisions from the consumer’s perspective.

Meet Gary Stein at SES San Jose, August 18-22 at San Jose Convention Center.