Consumers are not just people who see media and advertising.
In my first business book, Six Pixels of Separation, I recount the story of a friend who was looking to launch a retail endeavor. They were spending countless hours scoping out locations, speaking to interior designers, looking into leaseholds and more. While the product line was (somewhat) unique, something was bothering me. When they met with me to discuss their website, all I could think to myself is, "why limit yourself? Why stock a physical store on one random street in one random city, when you can really push online and truly define your market?" At bare minimum, a website, some search engine marketing and rudimentary email marketing can take a brand very far. It’s a true petri dish. The risk associated with a retail location – where you’re beholden to issues like foot traffic and weather – seems so unpredictable when compared to the online world.
It’s a story that keeps getting told.
Yesterday, Forbes published the article, College Football’s Biggest Entrepreneur. The story is about Jared Loftus: a guy who dreamed of opening up a t-shirt shop next to Louisiana State University’s Tiger Stadium in hopes of selling swag to the LSU crowd. "Today, Loftus sits at the helm of College District, an online college football merchandise company that fills 1,500-2,000 orders a week from across the nation. The former one-man operation is now up to a staff of twelve and has raked in nearly $1 million dollars this season. Loftus says that all profits are being reinvested into company growth."
Consumers are everywhere… but they’re all online.
Loftus doesn’t need to worry about LSU making the finals anymore. He doesn’t have stress over union strikes and other anomalies that can impact a retail store (like construction or even if the stadium decides to move). Loftus can also sell anything and everything to LSU fans the world over, but the true brunt of the story is how Loftus is expanding… handling orders for over fifteen other school-specific websites from all over the United States.
It seems so obvious, doesn’t it?
We’re into the twentieth year of the Internet’s commercialization. Social Media is over a decade old. Usage has not declined. The Web is not a fad. Now, with mobile and touch coming on strong, connectivity and technology is becoming core to our daily lives – much in the same way as water, electricity and heating. It’s not a fad. It’s not a service. It’s a utility. Why so many brands still keep it locked up as if it’s one, tiny, advertising channel is beyond me… and – if we’re going to chat amongst friends here – it’s disgraceful.
I’m out of the convincing business.
If a brand doesn’t understand Digital Marketing as core to business success (both today and going forward) and they need convincing, they’re simply not going to evolve. They may be able to maintain their little piece of geographic heaven, but true expansion (be it from B2B or B2C) without any real time and dedication to Digital Marketing is going to cause them long term pain. They may even find themselves in the middle of severe disruption when a more able-minded group comes together to create the future of the industry that they serve. Are the online channels for everybody (including the plumber at the corner of your street)? Why not? Since when was a business not about being a true value to the community that it serves? If that community is now anywhere and everywhere (including online, where consumers are looking for ratings and reviews or more in-depth information), what does it say about a brand that is completely ignoring the situation (and opportunity).
What’s your side? I’m willing to take on any and every detractor…
You’re absolutely right and I would add that sometimes, the beauty of a retail space is the ease of access as well as the ease of walking out with exactly what you came to purchase. And, there are live people in there that can (theoretically) answer your questions.
A digital platform does have numerous ways of providing convenience to customers but I would suggest that it’s the quality of the “live person” servicing that separates the digital wheat from the digital shaft. Online or offline, if service experience is bad, we’ll never go back. Many sites make it impossible to speak to someone live which can be an annoyance factor that outweighs some of the many good things of that same site.
We all do need to get on the digital bus but not for its own sake.
Good point about the ‘live person’ servicing. But be careful not to compare the best of brick and mortar customer service with the worst of online customer service. The type of product or service (widgets, professional service, whatever) will dictate what is logistically required for the interaction to be successful.
Some of my best purchasing experiences have been digital. The common thread is that I know a person values my business and provides more than I expected.
My expectation when writing this post was that both venues (brick & mortar and online) are doing what they do amazingly well… yes, wishful thinking 🙂
I represent a number of retailers, both online and off. The difficulty my bricks and mortar clients are having with online strategies is cost not concept. Agencies are not doing a good job at explaining WHY it costs $200,000-$400,000 for a developed online strategy. And that is a real recent quote from a national agency. Small to medium-size retailers do not have this kind of budget. They already spent $30,000 and up to have their websites built and they don’t even understand that cost. I mean, how many hours does it take to put up text and photos that they supply? (That is what they say to me.)
I receive a phone call every week from clients who want to expand into the www. They are excited about the idea of reaching people worldwide. And then they get the dreaded agency quote and voila – dream is dead. The two sides are not even on the same planet, budget-wise.
Perhaps you can write a column for average folks, with modest budgets, and explain in detail why online strategies cost so much — where the money is actually going, why agency fees are high, and how a small business can afford this strategy, etc.?
I will then happily direct my clients to your link.
I completely agree. The internet isn’t an anomaly, it’s a necessity. No matter if people want to admit it or not, consumers want instant results and what’s better at giving instant results than the internet?
Look at how much technology has come in merely a decade, imagine what is to come?
If business’s don’t “jump on the band wagon” they will be left behind.
I had a conversation with. Jeweler friend of mine that does very well touring in shows like One of a kind etc. she asked me last week if our agency could look at her site for a redesign. I asked her how sales were with her eCommerce tool and she told me one or two sales a month. My jaw hit the floor. This is someone who does well at what she does in face to face sales and has a pretty big following on her Facebook page. She told me she was nervious to make any big investments in her website. I sent her off to set some real goals for online sales based on what she could supply and then come back to talk to me. I said based on how her retail sales were we would easly be able to see a fast ROI on the site re-design and funnel optimization. I then asked her if she enjoyed touring in te shows and she said that she would love to not have to. I then told her that was a great place to start with setting financial targe for the site. I suspect we can hit that within two years.
For the small business, even the medium business – there is space for building a digital brand space, however having a long term presence is difficult, especially with the rate of change in both the business and web space. The Loftus case is great, but I’m sure many other souvenir shops wasted money online.
Is there really demand for (most) local and business to have a digital strategy? Is there an ROI on hiring someone to monitor, execute, etc?
Do all businesses need to have a digital presence? My answer would be “no”. Does the local liqour store down the street need a digital strategy? Unless you’re new to an area, you know where your nearest liqour store is — why spend additional resources on something that likely won’t add much business. What about the local funeral home? Sure, you could blog about coping and planning for death and all that jazz, but would a robust website really be of benefit to them?
Yes, there are exceptions to all the rules. I’m sure there are local liqour stores and funeral homes that are doing well in the digital space, but for the most part, I don’t see a value add.
These may be extreme cases, and most retailers need some digital exposure. But I think a lot of folks in this industry automatically assume and push that every client “needs” to be online and experimenting with all the latest trends. It isn’t feasible for every business, and that’s ok.
How much does a house cost? It depends on the neighbourhood, size, amenities, etc… The types of clients you are describing do need a better education in terms of what a digital presence entails. My standard answer to retailers like this is: figure that the cost is the same/similar to the cost of building a new store. This puts it much more into perspective. The challenge is that most retailers don’t see it that way… they see it as a marketing campaign
Thank you for saying that. I would like to add that logistical/territorial issues sometimes do not make it worthwhile and may even damage a brand if not executed well. This is especially the case for retailers in Canada.
On an international level, there a duties, regulations and quality requirements – add that to the mix and the profit from marginal online sales for a small business are almost negligible. Better to stick to what you do best.
I call this the “digital first” posture. The consumer says, “I need flowers!” They do a quick search online via their laptops or mobiles. Now, if not all consumers are like this, it won’t be long until they are.
This is the paradox: brands see the cost/price tag but not the results from the conversion. It’s another huge gap/error.
We need to look beyond the model of website as destination and think about it simply as a business being present and open to opportunity where people – in the thousands – are looking for the products and services that they sell. A website without a plan is not a website.
It’s about being shareable and findable. People refer business, people search for businesses in these digital platforms. Brands need to be present and responsive. I agree with you, if the plan is to be the corner shop and nothing more, then they don’t need anything more than the corner shop. Most businesses strive for growth, new markets and new clients.
Since Mitch is taking on all detractors, let me say the web is a fad! In 2012, we’ll go back to using handwritten letters 🙂
Yesterday, I decided to get out of the convincing business too. Since 2008, I’ve been telling advisors and entrepreneurs why social media is a powerful tool to build trust. It’s especially potent against large corporations where compliance requirements muzzle the workers. Starting today, I’m treating online as a given.
There’s never a “right” time to start something new. The learning comes along the journey. It’s important to get started and keep going. Changing your path is easier when you’re already moving.
Online isn’t a spectator sport — unless you have Netflix 🙂
Yes. You are right. I have used that analogy but only to explain the cost of setting up their wares online, ie: their ecommerce site. I explain that the site IS their new store, except without the electric bill. The advertising strategy, however, is a whole different language – with PPCs and SEOs – and it is hard to move clients from their $4,000 inside cover print ad, with three free editorial mentions and maybe a contest thrown in, to $400,000 for something people may or may not click.
I would go as far as to say that even if your ambition is to be nothing more than a cornershop well thought-out online presence still presents a wonderful opportunity to increase your sales and grow your business. Not to put too fine a point on it, but internet is not optional and treating online and digital as just an occasional marketing channel as opposed to the most important business tool at one’s disposal is quite simply foolish and myopic.
For me, it seems that being where your perfect prospects are, is of the utmost importance.
No preferences matter more than this. Some people choose irrationally how they’re going to provide their services or products based on their wants, not the wants of people who can give them money. The wallets should get the vote, if we want to stay in business.
With that said, not all prospects are created equal in preference of buying. Sure, you can get the same shoes online as you can at Nordstroms but you lose all the theatre when you buy online – the smells of brand new expensive leathers, someone else putting shoes on your feet, looking over the selection, etc. If you have the option, meet people everywhere they’d like. If not, go for the most efficient and effective.
I find that once they see the magic of search engine marketing, all of that pain goes away. It’s live – real-time – auction based and you see the results. Along with that, you can figure out a cost per acquisition. It’s near-magic. Measurable advertising. Pow! 🙂
I fully concur with your analysis; from the economic perspective, why spend the overhead of a physical presence if you can avoid it?
Still I’d like to throw in some thoughts about the rest of the world. I live in Asia and the perspective if obviously a bit different from here. One one hand, digitalization is awfully great (I can order e-books and read my favorite authors from the US or Europe without having to pay for extra postage, and wait for parcels with books). On the other hand, a lot of the services you take for granted in developed economy don’t work in other places – I could not get my Kindle reader or publish my e-book if I did not have a bank account in Europe from where I am from. I can testify that here in Asia, in spite of the internet and mobiles, the customer is often in the street looking for a brick-and-mortar store! How are we going to tackle that disparity? Companies that want to have a worldwide reach will need to continue to develop both strategies, the online and the physical, in parallel, and dose them differently according to the place they want to sell!
Is it not often better to offer several ways of getting your products like we all know from our blogs (RSS, emails, twitter… people consume it differently)?
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