We all know every retail brand needs an online presence to be relevant – if you can’t be bought on the web, to your would-be-customers, it’s as though your brand doesn’t really exist. But the other extreme is to place all eggs in the digital basket, believing e-commerce alone is the sure-fire ticket to high profits. While e-commerce is essential, brands who focus on it exclusively, or too much, lose out hugely on giving customers what they really want.
Speaking to the deficiencies of ecommerce may defy conventional wisdom, as we hear daily reports of online retailer’s success causing department stores to close their doors. And while this is true for some stores, it’s an oversimplification of the overall shifts in retail.
The appeal of online shopping is obvious: search from wherever, whenever; price-compare to your heart’s content; contrast product features easily across brands; and have your selections delivered to your doorstep in exchange for a flicker of patience and often no shipping fee. E-commerce’s upside of convenience has some retailers eager to say goodbye to the overhead of rent in exchange for a click-only shopping process.
But why are companies like Birchbox, Honest Beauty and even Amazon taking what originated as online-only brands into physical storefronts? Because customers aren’t satisfied with the two-dimensional screen experience, no matter the degree of sophistication. They simply don’t connect to a screen – but they do connect to an in-person, human experience. Today’s customer wants convenience and connection.
Plenty of research proves that pure-play e-commerce brands are lacking – they take in only a small percentage of retail profits (6 percent according to data from market research firm eMarketer). And yet the online marketplace is increasingly noisy and more expensive to compete, with more than 800,000 brands vying for your eyes every time you Google-search. Brand intelligence firm L2 reported that, by and large, there aren’t any successful e-commerce brands that don’t also have physical retail as part of their offering. Online, consumers only get part of what they want.
Omnichannel companies find they get more than just income from the live environment. Jason Goldberg of Razorfish explains this success: “Not only do those stores tend to be economically successful on their own but they generate a huge lift in incremental shopping to the online store.” Ron Johnson, pioneer of the Apple stores, agrees: “It’s not as though there’s a physical retail world and an online retail world, and as one grows, the other declines. They’re increasingly integrated.”
What is it about the marriage of digital and physical shopping that boosts sales in both places? They fan each other’s flames. I believe today’s consumers don’t differentiate between in-person versus online brands – they connect to the brand itself and want easy ways to get what they want when they want it. They like to browse online and then buy it in person so they can touch and feel it – and vice versa.
- 65 percent of people interested in an item available both online and in a physical setting prefer to go to buy it in-person. (TimeTrade)
- 85 to 90 percent of people say they prefer to shop in a physical space. (TimeTrade)
- Of those who browse both online and in a physical environment, two-thirds ultimately make the purchase in the retail space; 85 percent of those people say it’s because they want to touch and feel what they’re buying.(Wipro)
- 90 percent of people say they are somewhat or extremely likely to buy when they’ve been helped by a knowledgeable staff member. (TimeTrade)
- 75 percent say the reason they purchase in person is for the experience of human connection. (WD Partners)
The value of the omnichannel approach is of course not through single purchasers, but through long-term loyalty. Loyal customers choose a brand’s product regardless of circumstance – including price and speed, competitive arenas that have natural end points, and can no longer be brand differentiators. As Seth Godin articulates in The Icarus Deception, the marketplace has shifted: “People want your humanity, not your discounts.” And nowhere does this statement ring more true than in companies that are structured around building relationships through great customer service, like Nordstrom and Cabi.
According to a Forrester Research survey, 89 percent of customers say they don’t have any personal connection to the brands they buy, which means they can be easily wooed by competitors. But customers with an emotional connection are worth their weight in gold, or more precisely, “businesses that optimize this [emotional] connection outperform competitors by 26 percent in gross margin and 85 percent in sales growth.” Customers who are emotionally engaged, according to Mori research, are three times more likely to refer friends and family to the brand and three times more likely to continue to purchase. When loyal, 44 percent rarely or never even consider other brands.
When screen interaction is constant in our lives, we yearn for the unique feelings that come from immersive, multisensory experiences with which we can emotionally engage with people and the brand values they live out – and when we do, we keep going back for more. Brands who build an experience for customers who want convenience and connection understand these key desires:
There comes a point in shopping when most people just want someone to cull the choices for them. Online company Birchbox cuts through consumer anxiety brought on by the paradox of choice through sending beauty samples monthly for $10 so people can try recommended products before they buy. This successful company saw added opportunity through being present with their customers through a SoHo storefront, going beyond algorithms to the intuition of a person who can truly guide. This human connection has brought the brand into a new realm of customer loyalty, leading them to expand their in-person presence.
Personalized Service from an Expert
For products of a personal nature that impact how we look, emotions can run deep. A screen can never build confidence like the guidance of someone “in the know.” Honest Beauty, Jessica Alba’s online beauty line, recognized the yearning women have for expert help when she opened a flagship store in Los Angeles with beauty gurus on hand to educate around how to use products. On May 11, at TechCrunch Disrupt NY, Alba announced, “We’re looking to expand our retail footprint,” explaining that many of their online subscribers come into the store to get help selecting their monthly beauty bundles, wanting to feel and smell products they invest in.
Experience the Benefits of Technology, In Store
Although Nordstrom hasn’t been immune to the pullback in department store purchasing, they are far and away the success story, not only due to their relationship-centered service process, but also through how they are leveraging technology. They’ve pursued what they call “digital parity” – bringing the convenience of online shopping into the physical space. Since you don’t have to wait in line when you check out online, all sales associates are equipped to check you out as soon as you decide on your purchase. They are bringing what people like about online shopping into a space where they can deepen personal connection.
A Memorable, Immersive Experience
Inclusive of the elements above, customers come into a physical retail space to be a part of something. More and more stores are projected to become showrooms in the future – places where customers can engage with products and place an order in the context of a bigger experience. When sales people aren’t spending time managing in-house inventory, they can focus on building connections and providing a multisensory experience.
This is a process Cabi has perfected with our in-person trunk shows, through which trained stylists present the latest styling ideas to a group of friends through the presentation of a designer clothing collection – they then provide personalized styling services to each client, helping them build a truly functional wardrobe. While Cabi customers have the convenience of shopping online 24-7, the relationship they build with their stylist and fellow Cabi shoppers give them the personal connection they’re truly after.
E-commerce has its place as an ever-present side-kick to an in-person experience, but it can never generate the sales and loyalty derived from a personal connection. It is time for retailers to recognize the trade-offs they make when they place the efficiency of the digital world on too high a pedestal. While the emotional labor of an authentic, human connection takes time, it’s worth every penny.
As Godin says, “Emotional labor scales in that a little more emotional labor is often worth a lot.”
Lynne Coté is chief executive officer of fashion apparel and personal stylist company Cabi. Previously, Coté served in executive roles at McNaughton Apparel Group and Jones Apparel Group.