Ponder these two simple questions for a moment: What do computers do best? What do people do best?
Simple questions, I would hope, with simple answers. Computers are good at providing quick access to vast amounts of information, good at performing repetitive and mindless tasks, good at performing calculations and comparisons, and very good at following instructions.
People, on the other hand, aren’t usually all that good at following instructions (just eavesdrop at the Ikea customer service counter for a few minutes if you don’t believe me), but they excel at listening, learning, creating, empathizing, synthesizing, guiding, and coming up with innovative solutions.
Obvious stuff, right? So why are so many e-retailers and marketers treating people like computers and losing business in the process?
Think about it. What’s been the supposed big draw for e-commerce? Price, right? The theory is that the efficiencies gained through automation will allow prices to drop, stimulating more people to buy and making everyone rich. Price is on all e-retailers’ minds PriceLine.com is a concept based on letting people set their own price, letting consumers regularly turn to the web to get the best price on travel. Amazon is deeply discounting New York Times bestsellers, and software sites like Outpost.com regularly offer deep discounts off list price to entice new users.
It’s a brave new wonderful market-driven consumer-directed world, right? Retailers are happy because they are able to develop friction-free global markets with a minimum of startup costs. Consumers are happy because they get low prices, 24X7 access, and huge selections. Everyone’s happy, happy, happy, right?
Ecommerce Pulse, a new survey by Harris Interactive, reveals that online commerce may be in for some bumpy times, especially on the marketing end. After surveying over 100,000 online consumers, Harris found that over 40 percent couldn’t name one online retailer in 12 out of 13 product categories. Their research also confirmed what many of us already know: Even though 90 percent of consumers shop online, only 18 percent buy.
Why are these numbers so low? The answer has to do with the question that I asked at the beginning of this column.
Think about your own online shopping experiences. First, you need to get to a store so you either go to one that you’ve heard about, used, or seen an ad for. Maybe you go to a search engine. You get on the site, click around, look at prices, make your decisions, add items to your shopping cart, cough up your credit card number, and wait for the package to arrive in the mail.
It’s a fairly simple, faceless, automated process. Checking prices is a breeze because they’re all available on the site in an easy-to-read format. Heck, a lot of sites even keep a tally of your cart purchases as you shop. For the truly price conscious, services like E-compare will even let you search for prices across sites, making price comparisons on the fly.
Sounds great! So what’s the problem? One word — commoditization.
Now that price comparisons are available at the press of a button and moving back and forth between stores is as easy as changing URLs, the where of where you get a product has become increasingly unimportant. As long as every site meets the bare minimum requirements, (big selection, low prices, and overnight delivery) one site is as good as any other. And based on what Ecommerce Pulse tells us, consumers are beginning to think just that. One site is as good as another, and brand loyalty starts too seem like a pretty outmoded concept. Sites compete on price, consumers get what they want, and retailers slip into a downhill spiral of price wars and diminishing service.
Which is exactly what we need to fight against. And that fight can begin now.
Remember my initial questions? Right now, most e-commerce sites are built around letting computers do what computers do best — automation, searching, and repetitive tasks. And the result has been the commoditization of everything sold online. The cure for commoditization is bringing humans back into the mix.
The killer app of e-commerce is customer service: Providing a phone line or live chat help. Providing real humans to help guide the user experience and holding their hand when they need that extra push to give up the credit card number. Giving users a “panic button,” they can push when they need immediate help. It means answering emails immediately, being there when the phone rings, and adding value that a box can’t replicate. Cost more? Sure it’ll cost more but a lower margin that leads to repeat business is worth more in the long run than a slightly higher margin on a one shot sale.
E-retailers need to look at differentiating by doing things that computers can’t do now or in the future. Brands are not built on one shot marketing alone You’ve got to keep people coming back with a special hook that sets you apart. Let humans be your hook.