It isn’t all about surprise and delight, keeping customers is about getting the basics right

Posted on by Billy Tucker

Today’s customers are more sophisticated than ever, sampling the wares of more brands in more locations than ever before, happy to journey to a café in the suburb next to the next suburb for a cold drip, encouraged to buy from overseas by far flung Friends’ waxings on Facebook and keenly eyeing the swings in their local currency for macroeconomic bargains. This Neo Consumer is older and richer than before too, more thoughtful, more discerning and always ready to Switch.

The Neo Consumer is empowered, in control and they know it.

Informed and empowered Neo Consumers are hard to impress too. Battling for their business is harder than ever, and the dangling of ever-oranger carrots has become an increasingly important part of the game. 3 Hour delivery, 100 day free returns, free international shipping, and super slick omnichannel blah blah have apparently become the battleground. But too much emphasis is lumped on the need to differentiate from the competition with whistles and bells at the expense of profit, and worse still, at the expense of consistent, good service that’s required to keep the hard-to-win Neo Consumer coming back.

With that empowerment also comes a willingness to walk away at the slightest hint their expectation won’t be met. And for the Neo Consumer, switching to a new provedore is easy come easy go. No warnings and no second chances, one slip, and they’re gone.

Why Dick Smith Electronics is a dead brand walking

Posted on by Billy Tucker
Dead Brand Walking

Less than a year after Woolworths (WOW) sold DSE to Anchorage Capital (after 20 years of ownership), and the basics of retailing seem to be all but gone at the struggling Electronics retailer.

It was always hard to imagine that the specialist Private Equity firm could do a better job than WOW at shaking up DSE’s retailing fortunes, suggesting that their focus may be on the DSE Website. But try as they might, they will not build an online profit pot big enough to counter the millstone effect of a failing retail chain.

Get face to face with one of the DSE crew in any of the 325 stores (that’s Harvey Norman and JB Hi-Fi put together) and you will more than likely abandon any idea you once had of purchasing some battery powered thingamy.

My third trip to DSE George Street Sydney in so many weeks has left me agape at the ineptitude of the floor walkers, scarce as they may be.

Here’s an example. “hey” I said, “can you tell me about this Kensington GPRS device”, “no”, he said, “I don’t know anything about it”. “ok, well, what about this Jawbone UP?”, “no, sorry”.

Where is “Let me find someone who does”, or, “let’s look it up on one of the 200 effing PC’s we have in the store”, or “give me your email and I’ll send you something”, or ANYTHING FOR THAT MATTER – SHOW ME YOU CARE, SHOW ME YOU GIVE A SHIT! This is about care for your customer, which is an attitude. JB Hi-Fi seem to solve it with hiring and incentives, but failing that getting the culture right is a good place to start.

I may have been unlucky. Three visits and three checked-out check-out workers. But that’s all it takes to kill your brand once and for all – and after 45 years on the high street, that would be a tragedy.

The serious side of Gamification

Posted on by Billy Tucker

A steady stream of retail innovation exists online; some effective, some less so. But most claim to centre on a perennial problem in Retail:

How to drive sales through incentives without destroying long term brand value…

Group Buying and other Daily Deals sites were built to address this issue, and they’ve done a pretty decent job if their multi-billion dollar revenues are anything to go by! Though, to some extent they are a victim of their own success in that it’s hard for a brand to discriminate on price discretely when so many of its regular customers are Daily Deals customers.

Further challenges with Daily Deals include the fact that the Brand doesn’t typically control the creative, meaning they are often a Supplier to the Daily Deals Site not a Client. And, the Daily Deals site will leave a permanent record of the Sale in their back catalogue which will appear in Search and therefore undermine brand value. Further, the Brand owner is asked to give away quite a lot, more often than not the Retail price is discounted by more than 50% and a further 20% – 30% is given to the Daily Deals site as a commission.

Clearly there are a number of scenarios where this channel works well for a business. The unit sales volume can be significant with no marketing effort from the Brand Owner hence they are appealing in a lot of ways, especially if owning the customer is unimportant.

A radical new tilt at the problem is Entertainment Shopping, where the retail price is used only to describe the Size of the Prize, but is otherwise irrelevant. One example of Entertainment Shopping is Penny Auctions, where users purchase Bids which they use to win items, theoretically being able to win and items for a single bid, which may cost less than a dollar. TPlay for Winhe reality though is that these Auctions are super competitive and the likelihood is that you will lose many more auctions than you win, yet the bids you used on lost auctions still cost real money – in that sense it’s more akin to gambling than shopping. For the Auction site this means the overall yield per item is greater than the retail value, thus favouring the Penny Auctions themselves more than the Brand Owners or the customers, albeit customers may choose this purchasing route for the sheer joy of the Auction!

In the Entertainment Shopping category Australian Statup Wynbox has a much more evolved solution for Brand Owners. The genius of the Wynbox solution is that they provide their Buy-to-Win platform as an integrated shopping engine for an existing website, meaning the retailer retains end to end control of the user experience.

Buy-to-Win involves the retailer setting a ratio of free items to full paid items, meaning anything from 1 in 2 to 1 in 10 or more may be free, equivalent to a direct discount if that number are purchased by a single customer, or a lucky dip if you are buying just one.This is a simple way to provide a strong purchase incentive without discounting the product, and it can be fun too, so it ticks the box for the user who plays Candy Crush between shopping missions!

There are a number of interesting scenarios that underline the power of the Wynbox platform, such as in the sale of concert tickets for instance. As sales begin to lag for a concert, the ratio is introduced. The ratio can be cranked up to 1 in 2 if necessary to drive sales, but at no point is the ticket price discounted, meaning the customers who purchased the concert tickets at full price never feel cheated and the Talent and the Promoter are happy.

In fact, Wynbox works in a number of scenarios, including Fashion where margins on Full Price products are high but the vast majority of purchases normally occur at a substantial discount, with Buy-to-Win the discount can exist without an overt discount.

All retail businesses should be thinking about the entertainment value of their shopping experience as consumers explore less boring ways to shop for discretionary items. Wynbox offers a fresh solution that can be “plugged in” to an existing site, meaning a fast track to an Entertainment Shopping experience that would otherwise be very hard to achieve.