Chapter 2

Managing the Differences between In-Store and Online Commerce

IN THIS CHAPTER

check Understanding what your customers want, online and offline

check Getting used to the demands of your online customer

check Creating online shopping habits

It wasn’t that long ago that we treated online shoppers as if they came from an entirely different planet from that of in-store buyers. And it was true that each group was often put into a marketing silo based on certain characteristics and behaviors. Fast forward just a few years and we realize that these two types of customers are actually the same customer who simply has different preferences based on when, how, and where he or she buys. Today, when preparing how to handle the different types of buying destinations (from a website, from inside a retail store, or from a mobile device), it’s important to focus on customer experience — or the expectations a customer has for each retail location (whether physical and virtual).

Are there still differences between the online and offline customer that you need to consider? The short answer is yes! Your job is to entice customers to buy. To do that, you have to get to know your customers — and understand their expectations for all types of shopping destinations. In this chapter, we cover what your customers really want for both offline and online shopping and how you can accommodate these customers’ buying needs.

Comparing Online and Offline Customers

When you launch an online store, your ultimate goal is to accommodate the way your customers want to shop in order to grow your retail sales. Whether that means finding new customers via your online brand or getting existing customers to buy more or buy more often, you’re hoping that your online store becomes an extension of your physical retail presence and provides the incentive to buy, buy, buy.

There remains an interesting difference between customers who prefer to shop online and those who visit your retail store, and that’s how much and how often they spend. A 2014 survey of online retailers with at least $25 million in annual sales indicated that the average online purchase was more than $150, while repeat customers spent at least $178 per order. The amount being spent hasn’t drastically increased over the years. However, data continues to show that online repeat customers are valuable to retailers. While only 15 percent of online customers have spent with you before, these repeat shoppers account for nearly one-third of your total online revenue, according to an annual “State of e-Commerce” report from Yotpo (www.yotpo.com). Investing in online customer retention really pays off, especially considering they spend three times as much as a one-time customer. As you can see, spending time growing your online business is worthwhile. But before you can change your customers’ behaviors and get that high-dollar repeat business, you have to understand them, especially in the area of e-commerce.

Once accidental or happenstance, most online shopping is now quite purposeful. Your customers are making a conscientious decision each time they make a purchase online. To better understand their decisions, compare some of the reasons why your customers might choose to shop in your store as opposed to shopping online.

Customers showing up in your bricks-and-mortar store expect these features:

  • Security: Your customers may think that shopping in your store is more secure than giving out credit card information on your website.
  • Guaranteed delivery: Sometimes, purchasing a product is a time-sensitive issue. If customers need an item in their hands by a certain time or date, shopping online may become an afterthought. This need-it-now mentality is especially true during a holiday rush.
  • Instant gratification: Waiting for a product to ship isn’t everyone’s idea of shopping. Sometimes, customers need or want an item immediately, and shopping in a store gives that instantaneous gratification.

tip Offering same-day pickup inside your store when ordering customer orders online is another way to convert online browsers to buyers. Offering the convenience of shopping online with the instant gratification of buying in-store is profitable compromise.

  • Loyalty: Customers who are familiar with your store feel a connection. They often translate that into a perceived relationship with you and your employees. These customers are loyal and expect loyalty from you in return. The opportunity to build loyal relationships is one of the reasons online-only businesses, such as Amazon, are now expanding to physical storefronts.
  • Service: Having access to personalized service is a big plus for many traditional shoppers. These customers typically believe that shopping in a store is the only way to find that level of assistance, and they don’t realize (or believe) that they can find quality sales support online.
  • Only option: Some customers simply don’t consider other buying alternatives. They may think that in-store shopping is the only option because they aren’t comfortable or familiar with the Internet, don’t have online access, or aren’t aware that they can shop online with your store.
  • Try it before you buy it: This is also known as the tactile effect. Some customers need to see, touch, smell, or try products before making a buying decision. In this case, shopping over the Internet doesn’t do the trick.
  • Avoid extra charges: Shipping cost is the main factor working against online shopping. Many customers decide to shop offline simply to avoid additional shipping and handling fees tacked on to their purchases. While many large e-tailers now offer free shipping year-round, smaller retailers can’t always absorb that cost, putting them at a particular disadvantage when it comes to buying online.

tip Online shoppers who do not want to pay shipping costs are more likely to buy offline, from your local store, if you offer price matching to the online store’s price. Price matching can give your store a competitive advantage, if you can afford to discount some or all of your merchandise. If you decide to promote price matching in your store, make sure you clarify any exceptions of products or brands you cannot discount.

Virtual customers have the following expectations from your online store:

  • Research material: Shopping online provides the opportunity for detailed research before making a final purchasing decision. Shoppers can find product reviews, read customer feedback, compare brands and prices, and then make a purchase — all in a matter of minutes. Research shows that male customers are especially prone to do a little digging before they start buying online. Some mobile-savvy customers now stand in a store and use their smartphone to compare prices and styles or to check availability of products online. (This type of behavior can work for or against you.) However, data shows that 54 percent of online customers read online reviews before making a purchase, compared to only 39 percent of in-store buyers.
  • Hard-to-find items: An item may be out of stock in a store or may not even be available locally. Shopping online provides access to products that aren’t otherwise readily available.
  • Niche or specialty items: Customers are frequently drawn to online stores because those stores provide access to specialty items, including vintage goods, collector’s items, or any other type of exclusive or niche product.
  • Convenient store hours: Round-the-clock shopping is tough to beat. These customers enjoy the flexibility that comes with virtual shopping — and knowing that the store is never closed.
  • A better value: Although shipping costs may be of concern to an in-store shopper, an online buyer may factor in the cost of gas and time. In this scenario, convenience also becomes a cost-savings factor.
  • The best price: Comparing prices and finding the best deal online is a snap these days. That ability to get the lowdown on a price for any given product is the reason that many buyers head straight to the Internet to shop.
  • Extended inventory: Retail stores traditionally have limited shelf space, but a website can house a lot more virtual inventory. (And products can often be drop shipped — ordered and shipped directly from a manufacturer or a supplier.) Because many web shoppers believe that they have access to a wider product selection online, e-commerce stores are often their first stop for shopping.

What Your Online Customers Expect from You

Customers shop online for many reasons (see the preceding section to read about some of those reasons). But you need to recognize another underlying difference between online and in-store shoppers: Online customers have great expectations for your online retail location. Sure, all customers are particular and — dare we say — demanding, but the Internet has raised the bar. It’s up to you to make sure that your online store performs. In the following sections, we talk about what online customers expect of you.

Round-the-clock hours

Most customers expect your store to be open 24 hours a day, 7 days a week. Granted, meeting this need seems like a cinch. After all, after you put your site out on the web, it’s … there. Right? Unfortunately, running a store 24/7 involves a little bit more work. Your customers are used to having 100 percent access to online stores, whether it’s midnight or midmorning. Here are a couple of site-related tasks that you may want to consider:

  • Customer support: Can your customers contact you in the middle of the night and expect to receive an answer? Is there web-based “chat” with a virtual customer service representative to answer questions? Or will prospective buyers receive help only during normal business hours? Ultimately, that’s your call. But you have to decide the rules up front and then let your customers know.
  • Routine maintenance: Maintenance includes any factor from your server going down (and your store being temporarily offline) to a glitch in your payment gateway provider that may prevent credit cards from being processed. When you’re open for business around the clock, it helps to have a backup plan for all the things that could go wrong when you’re not at the helm. For example, while shopping on a niche retail site one weekend, a glitch in the shopping cart prompted it to ask for a password before finishing the checkout process — even though we didn’t have one, and it didn’t provide an option to create one as a first-time shopper. Weekend assistance was unavailable, so the online retailer lost our sale — and countless others that weekend. It’s just as easy for customers to sail over to a competitor’s site to find what they want when they need it.

A variety of payment methods

Accepting multiple forms of payment is a necessity online. Customers may be more forgiving when they shop in your retail location, because they can whip out a checkbook or cash. In the world of web retail, customers simply leave your store and surf to a competitor. See Book 4, Chapter 4 about the wealth of payment options you can make available to your customers.

Everything a customer could want, plus the kitchen sink

Virtual inventory is a big component in e-commerce. It doesn’t matter whether you store all your products in a warehouse behind your retail location or have orders drop-shipped from a supplier. Customers want you to provide a large selection of choices, including everything you have available in your retail location. In addition, customers expect your store to be well stocked — at all times. Increasingly, online browsers want the option to see if an item is in-stock in your retail location. Having a backend management system that integrates your e-commerce inventory with your store inventory (in real time!) is a worthwhile feature that can help boost sales.

remember If a product is on back order or temporarily out of stock, your customers expect to be notified before they start the checkout process and preferably when they try to add the product to their shopping cart.

tip Some shopping cart programs have a feature that displays a message when a product is running low, such as “Only 2 Left.” If your software can’t display such a message, manually add the disclaimer “Almost Out” to your product description when inventory of your best sellers gets low.

Have it your way: The seamless shopping experience

If there’s one word that is gaining importance in the retail world it’s this one: omnichannel. You may be familiar with the term when it comes to using many or all (from the word “omnis”) channels to market to your customers. You probably have a marketing strategy to target customers through multiple channels, including social media, television ads, online ads, and so on. That’s based on you reaching out to the customer. Lately, omnichannel retail strategy refers to understanding how the customer chooses to shop with you and providing an uninterrupted shopping experience between your retail destinations (in-store, on the website, through mobile devices and apps, from social media platforms, and so on).

Instead of putting customers into a bucket of being either online customers or offline customers, when it comes to omnichannel, it’s better to think of them all as digital customers. These are the new type of retail customers we mention at the beginning of this chapter. These customers are technology savvy and want to buy from your website, from inside your store, or from a mobile app — or from all three, at the same time! For example, this customer is likely standing in your retail store looking at a product on your shelf while simultaneously checking your website from her smartphone to see if you have it in a different color, while also using a mobile app to compare prices with other retailers.

Meeting this customer’s needs through an omnichannel approach really comes down to having the right technology in place to enable it, and a strategy in place to execute it well. Offering customers a true omnichannel shopping experience starts with the following three requirements:

  • Brand consistency: The image of your store, how it looks and feels, should be the same on your website and your social media channels. Whether customers are shopping from a shared pin on Pinterest or opening a mobile app, your retail brand needs to be recognizable across channels.
  • Backend management integration: As mentioned, you want an inventory system that tracks data from inside your store, as well as on your website. You want loyalty programs to recognize buyers in the store just as easily as they do online. In other words, you want your backend systems to talk to each other and share from the same pool of information.
  • In-store customer aptitude: Part of offering an easy, integrated shopping experience requires that you have the proper in-store resources. This includes technology, such as an iPad for every sales person, to the proper training of employees so they understand how to use that iPad to help customers. If a customer wants a shirt in a color that’s out of stock in the store, the employee should be able to go the customer with the iPad in-hand and verify availability of the shirt color online or in another retail location, and be able to let the customer purchase that item in-store and choose whether to have it delivered to the customer or available for pickup at the store of choice. Both the technology and sales mentality need to be in place to deliver on this experience.

remember When you are in the early stages of transitioning from a traditional retail store to an e-commerce store, we recognize that having an omnichannel strategy is an advanced approach with a higher difficulty level. Because inventory systems and other backend technology solutions are required for omnichannel, if you can plan now for that strategy, it will reduce future headaches. By investing today in the solutions with the most flexibility, it’s a lot easier than trying to add-on modules or completely change technologies down the road.

Details, details, details

Speaking of giving customers everything they want, when and how they want it, savvy digital shoppers are spoiled by the amount of information they can find with the stroke of a key. But too much information can overwhelm customers and distract them from purchasing. Thus, your challenge is to anticipate which information a shopper really needs (and wants) to know about a product and then provide that info (and only that info) in a succinct and accessible manner. The following list gives you some of the most sought-after product information:

  • Product descriptions: Listing the color and style of a coffee table is helpful, but if you leave out its dimensions, customers will hesitate to make a purchase. You need to make all the details of a product available to your customer. The trick is to offer the information in layers. In other words, give a brief description of the product, along with a photo, but then give customers the option to click a link for more details or additional photos.
  • Visual information: You can’t try on different sizes or styles of clothing in an online store. Even the best photos may make it difficult to see other details that make a product special. Increasingly, online retailers are turning to the power of video to give that almost-in-person experience. Videos that demonstrate the product in use or display it on a real person provide a better view of the product and may prompt a purchase.
  • Reviews: Customer reviews came into vogue after Amazon made them popular on its site. Providing easy access to reviews by experts or other credible sources (such as magazines) is also a hot demand from online customers.
  • Delivery options: Customers want to understand, at the absolute least, the different methods of delivery your site offers. This information includes the provider of the service (U.S. Postal Service, UPS, FedEx, or some other shipping company), the delivery options (for example, Express or Ground), and the cost. In addition, customers want to have access to a shipping number and a direct link to track the delivery status of their packages.

    tip When searching for an e-commerce solution, look for the ones that already integrate with the leading shippers (such as UPS) or offer a feature that allows customers to track shipments.

  • Contact information: Make sure that customers can easily find your phone number and e-mail address. (And then make sure that you respond when a customer contacts you.)
  • Return policies: Online shoppers want to know return and exchange policies before they make that final purchase. Especially when buying clothing or perishable items, your customers want to be reassured that they can get a fair deal if something goes wrong when they receive the product. Keeping your return policies clearly posted on your site not only helps make the sale but also reduces confusion later.

Methods for coping with the holiday rush

Having your return policy clearly accessible is certainly a plus during a busy holiday season. But that’s the bare minimum. Keep in mind that customer expectations peak during holidays and high-demand seasonal periods. Whenever your rush occurs, you can prepare for it in the following ways:

  • Offer rush deliveries: Your delivery company may not have a problem with rush delivery, but you need to make sure that you can get the items packed and out the door to meet the hectic pace. Several online stores, such as Amazon, help customers know exactly when they can expect their order to arrive based on when they place it. For example, a message appears that says if you order by a specific date, you will receive your order by a specific date. This message helps customers decide what type of shipping option they should choose.
  • Extend delivery times: Again, you just need to handle those last-minute orders that arrive the day before (or the day of) the major holiday. Whether or not you can extend your delivery times often depends on whether you have enough help behind the scenes to keep filling those orders.
  • Prepare for backups: Even if everything goes smoothly on your side, the delivery company might drop the ball. We saw this happen during the 2013 holiday season when extreme weather conditions, along with a surge of online sales, prevented major delivery companies from making deliveries promised by online retailers to show up in time for Christmas. Since that catastrophic online shopping season, e-tailers learned the hard way that you can’t always predict this type of widespread delivery failure, but you can prepare for it. Make sure your policies clearly state how failed deliveries will be handled, even if they’re not your fault. Sometimes, reimbursements or offering a special discount on the next purchase can go a long way in creating goodwill.
  • Stock up on inventory: Nothing is worse than running out of a hot item and finding out that you can’t get more in until after the holiday. You may want to go a little heavy on your inventory or alert your suppliers to the potential of increased demand.
  • Bulk up on service representatives: Customers don’t hesitate to ask for help when it comes to holiday shopping.

remember Although the busiest retail season is typically November and December, other holiday periods also drive sales. According to recent research, online sales also heat up during Valentine’s Day, Easter, and Mother’s Day (for example).

Superior customer service

At the heart of the difference in shopping online, as opposed to in a store, is the customer service. The level of support that you provide your online customers is one of the single most influential factors in whether those customers return to your site to buy again. You probably don’t doubt that superior service is important in your store. But a high level of service is even more important online because customers are limited in their ability to interact with your products. Customers depend on you to provide as much information about a product as you can so that they can make an immediate buying decision. They can’t pick up a product and examine it up close. If you don’t have enough detail on your website or a customer has an unusual question, you want that customer to be able to reach you.

Fortunately, offering exceptional customer service from your site has become pretty darn easy. The technology is readily available, and implementing it doesn’t cost you an arm and a leg. Here are a few of the ways you can reach out to your customers:

  • E-mail: One of the easiest ways to provide customers with information about your products is by letting them contact you by e-mail. You can make shopping easy by posting a customer service e-mail address throughout your site. Remember to respond in a timely manner. Just a few years ago, it was acceptable to respond to e-mail within a 24-hour period, but customers now expect much faster response times — usually within a few hours.

    tip Use an automated responder to automatically generate a return e-mail that notifies your customer that you received the e-mail he or she sent. Acknowledge customers’ requests while providing a time for when you will contact them. Also give them alternative options for reaching you faster.

  • Phone: Clearly posting a direct phone number so that shoppers can access customer support is an absolute must. If you can swing it, get yourself a toll-free number. If you don’t have a 24-hour support line, be sure to post the normal operating hours of customer service.
  • Social media: Customer service no longer originates only from your website. The proliferation of social gives customers another way to get the attention of online retailers, especially if customers think they are being ignored or are not getting help quickly enough. Many online retailers are frustrated because social media has become another place where they have to service customers — and those customers expect a response in minutes, rather than hours. In addition, customer service through social media occurs in an open forum that exposes problems to the public. However, for online businesses that embrace customer service and do it well, social media has proven to be a terrific way to turn unhappy customers into loyal brand advocates. As a small-business owner, be prepared to monitor social media for customer concerns and address them as quickly as possible.
  • Live chat: Although some online shoppers like the anonymity that the Internet provides, many more demand instantaneous support, such as they might find in your bricks-and-mortar store. To answer that need, consider offering standby customer support representatives through live-chat technology. This tool helps customers immediately connect to a person who can answer their questions (through either an instant-messenger-style format or audio over the computer). Some companies tout that live chat has increased online sales by 20 percent, increased average order values, and decreased customer support costs. If you decide to use live chat, look for software that enables integration with mobile devices and social media.

    tip Most live-chat software providers offer a free trial, and in some cases, you can get started with the service for as little as $49 a month. Check out live-chat services from LivePerson (www.liveperson.com), which offers pricing based on your website’s traffic (a great feature for smaller sites), and BoldChat (www.boldchat.com), which integrates with mobile devices and starts at $600 per year.

Establishing Patterns

Getting customers to buy from you (at any location) comes down to establishing buying patterns. You take part in forming your customers’ buying patterns by helping them develop the habit of coming to you as opposed to a competitor. After you understand your customers and what they want, you’re in a position to start creating that pattern. To establish a buying pattern with your customers, you need to provide three things as an online retailer:

  • Information: Your site is a place to shop, but it’s also a resource for product information. After you establish yourself as an authority on your product lines, customers begin making a conscious decision to go to you first.
  • Buying opportunities: Experienced web shoppers aren’t looking strictly for information. They want a reason to buy, too. You can give them access to regular specials or limited-time-only offers, exclusive sales, and select or new merchandise to convince them to buy.
  • Reliability: In addition to providing a good inventory and terrific customer service, the entire buying process at your site has to pass muster — from the time your customers pull up your home page to when the purchased product is delivered to their doorstep. When you have the opportunity to prove yourself as a reliable retailer (and use that opportunity), customers get used to coming to you to shop.
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