Online Outlets – A reflection of the economic climate or just good business strategy?

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For years if you wanted to sell excess or end of line stock online you would reduce the item and place it in a sale category on your website. But, for the past few years there has been an increase in the number of online outlets being setup by companies such net-a-porta, asos, Argos, Tesco and Debenhams. The outlets referred to in this article are not outlets in the truest sense of the word for the retailers are, in most cases, not selling own label products direct from the manufacturer. For the sake of clarity and because I can’t think of a trendy new name for these shops (suggestions welcomed!) right now we shall keep the terminology the same.

The main point which provides me with the most interest is that online retailers are willing to create an entirely new sales channel to promote reduced items. The setup of what is essentially a new business (in the case of THE OUTNET) costs money… a lot of money and when you take into account requirements such as branding, website development, changes in warehouse packing routines and upgrades to backend fulfillment systems, it leaves you wondering how much of a mark-up was on the product in the first place to enable the business to maintain its profitability. I have however heard of some companies that are quite prepared to make a loss on outlet items and allow their full priced shop to subsidise the outlet. This, I imagine, is part of their wider business strategy and can be valid in some situations such as improving brand awareness and cash flow. In other cases it’s just the result of bad planning and a desperate attempt to move stock.

So, why has the formula for presenting sale stock changed so much? Walk into a high street shop with sale banners in the window and 9 times out of 10 you will be required to walk past full priced items first. Online outlets on the other hand allow the consumers to walk around the full priced items before getting to the sale.  In my view this is just indicative of how online selling is adapting to the needs of the increasingly savvy online shopper. The statistic that you have 7 seconds to make an impression on your customer before they leave your website has existed for years but it is still a valid point even more so when consumers looking for a bargain are involved! Personally, I don’t believe that online outlets are a sign of hard economic times. Sure retailers are struggling but the development of online outlets is just a natural evolution of online selling. In an increasing competitive online market place anything a retailer can do to help customers identify a suitable product and provide a quick and direct route to purchase is a positive move. It also serves to inspire loyalty and trust in the retailer.

Welcome to a new employee.

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Today is a very exciting day for we welcome a new employee into the fold. Matt joins us as a developer who will be tasked with bringing our design teams ideas to life. He will also be improving upon existing technologies and developing new functionality that we believe will have a positive effect on our ecommerce clients ROI.

Using Facebook to connect with customers.

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A couple of days ago we were asked the following question from an online retailer:
How can I maximise the potential of my Facebook account?

The problem I find is that if you do not use social media in your daily life then it is very hard to understand its relevance to business and how it can help you to interact with your customers. I know this because I was once a ‘non-believer’, reluctant and resistance to engage in what I believed to be a fad. In the interests of research I signed up for a Facebook account. It soon became apparent that it offered so much more than idle chit chat. People would share website links and information that would be of interest to me and because the information came from trusted sources such as friends, family or likeminded individuals it carried far more weight than a search engine listing or advert. It’s this form of virtual word of mouth that can provide businesses with a crucial point of entry into the lives of potential customers.

This all leads us onto the all-important question…
How do I get people to ‘like’ my Facebook page?

The question is not as difficult as it seems. Think of a friend and now think of the qualities that attract you to them.

– Caring
– Good listener
– Enjoys the same activities
– Interested in your opinions
– Makes you feel good about yourself

Taking these on board it’s very easy to see how a business can use these qualities to connect to its customers.

Let us take Starbucks as an example of ‘how to do it right’ and analyse their Facebook profile.

Caring – Just take a look at their company overview. In black and white they make their values clear and even transmit their beliefs through their staff. Who better to become a brand activist than your own employees?!

Good listener – A quick check of the Starbucks Facebook discussion group makes it clear that they value what their customers have to say. They even give the customer the opportunity to affect the development of the brand and business.

Enjoys the same activities – The Facebook Wall Photo section plays the part of humanising the brand by placing the product and the brand in real life situations with real people.

Interested in your opinions – What better way to help you develop your product range than to ask your customer what they prefer. The ‘Polls’ functionality of Facebook fulfils this requirement.

Makes you feel good about yourself – This is really a result of branding but Facebook does serve the role of positive reinforcement. Being around like minded people only serves to further the devotion to a brand.

Here’s an interesting article on how brands can trigger the same feelings as a religious experience.

So as you can see, being a business that is ‘liked’ by its customers is as simple as being a good friend. Connect with your customers on a personal level and trust that they will reward you with their continued loyalty.

Is eBay as a viable alternative to a bespoke ecommerce solution?

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What started as a consumer to consumer online auction site has evolved and adapted to become a very realistic and interesting proposition for business looking to sell online but can it take the place of a traditional bespoke ecommerce site?

The statistics are impressive and if the current eBay development plan is anything to go by then they are only set to increase. eBay currently has 17 million unique visitors per month with 62% of all buyers located in the UK, the average age of which is between 24 and 54 and whom 51% are women.

Recent 30-day search data reveals the scale of demand among consumers for branded products on eBay. Next, 4.1m searched; Top Shop, 4.4m; John Lewis, 216,000, M&S 777,000.*

So, with this information could a business consider using eBay as their primary sales channel?

It does of course depend on the type of business, the product being sold and the customer demographic.  Although eBay is a solid ecommerce platform complete with listing analytics, its defining selling point (a place to find reduced proceed goods, below retail price) will no doubt be off-putting to businesses retailing premium brands. It does seem that eBay has reached the same conclusions and for the time being is focusing on outlet style shops to provide a “complimentary channel to brands and retailers.” – Clare Gilmartain (Ebay’s EU Marketplaces vice president)

eBay outlet shops allow retailers to create store fronts within eBay using visuals in line with their existing branding. Customers will however be required to use the eBay checkout process. Garnering interest using the power of the sale tag also opens the door to presenting full price stock alongside discount items.

My advice to anyone exploring the world of ecommerce would be to certainly consider eBay as a valid and worthwhile part of your wider business strategy  but not ignore the traditional bespoke ecommerce solution that will provide you with flexibility in deploying new functionality and that will scale as your business grows.

*Source: Internet Retailing March 2011

Emotional Branding

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A few days ago I watched a webinar given by Marc Gobe (Desgrippes Gobé) Marc leads an extremely successful design agency who have worked with the likes of Air France, AOL and Banana Republic. The webinar centred around emotional branding and the use of social media in relation to this.

In the past month or two the world has seen how powerful social media can be. Twitter and Facebook have played a fundamental part in the success of the demonstrations in the middle east and some may attribute the  downfall of several dictatorships to the ability of these social media sites to connect people, share information and rally support.

A celebrity (John Galoano and his anti semetic video), business brand, or even a countries government (Egypt, Tunisia, Libya) are particularly susceptible to being caught out in the age of instant global communication. The era of controlling information and projecting the image you want is well and truly at an end.

A brand is no longer a logo, slogan and a mission statement.  It has evolved to become much more than that. It is a set of values, your beliefs and aspirations and it is social media that is the perfect vessel to begin the process of humanising your brand and connecting with your customers.

When developing your brand it is important to remember that your customer is a person and not just a credit card with arms and legs. In order to build a successful relationship your brand should satisfy the ‘Three centres of the enneagram’. These are

Head – Logic & Reason – “Is this product or service of value to me?”

Heart – Emotions & Dreams – “Do I trust this company to deliver on its promises? Do they really care about me?”

Gut – Instinct and Intuition – Unique and dependant on the life experiences of the person but can still be influenced by interacting with the Head and Heart.

To engage with a customer on these levels requires an emotional connection which social media allows you to achieve. There is however a difference between communication and dialogue. For example:

Business A ‘Tweets’ the following message:

‘We have launched a new product… it is great and will costs £10’

Business B ‘Tweets’:

‘Tell us what products you would like us to provide you’

Business B has opened a dialogue with the customer. They have demonstrated that they have an interest in the customers opinion and and are providing the opportunity to potentially satisfy their customers heart my making their dream a reality.

So for those of you with small businesses who feel like a small fish in a big pond. Social Media may very well be the tool that will allow you to compete with megacorporations and their multi million pound advertising budgets. Because now it is less about ‘market share’ and more about ‘mind share’ and ‘being known does, not mean you are loved.’

Start today, signup for a twitter account here, a facebook account here and a blog here. Marc also has a variety of books on the subject.

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We would have no hesitation in recommending them to anyone.

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