Try Web-Based Retailing on for Size
Today, to be an effective marketer, we must step outside our deep-seated retail habits and expectations as a consumer. We need to say "what if" we as consumers could experience the product before we bought it? "What if" the store knew all about us and could deliver on demand, based on our historic needs?
A new wave of retailing success is coming for the brave few who are ready to seek convenience over traditional behavior habit.
Here are two examples, both in San Francisco. My favorite example of customer convenience is the My Levi innovation by jeans maker Levi Strauss & Co. Thousands of different sizes of men's and women's jeans are available in the Levi store in Union Square, San Francisco. There's even a periscope that allows customers to see 360 degrees on four levels of the store. Upstairs is the customization room. Some of you may have already done this.
Inside, a sales associate welcomes you, walks you to a computer-controlled screen and asks you to scan your fingerprint into the computer. It's about technology, so I'm psyched already! Next, you select the fabric, cut, cuff and the fly style. Then you step into a measuring room. This is unlike anything you've ever experienced. A computer on the wall asks for your fingerprint. Once given, this allows you into a laser measuring room. The room is dark. It has vertical handrails, with a start switch and two white footprints on the floor. You step into the footprints and wait. Turn on the switch, and laser beams scan your body. It's like being inside a video game. Everything is measured to laser preciseness. The experience is unbelievable.
Step out and your scan is delivered to a Levi's associate, who discusses the significance of the experience with you. Now, you go to the register, confirm your order and they make the jeans for you.
Like magic, custom-made jeans for every customer. This is true mass customization. And this is the customer owning the experience. We have arrived in the 21st century.
But it gets even better. Imagine it's two months later. You've torn your favorite pair of jeans and you're just about to hop onto a plane. You don't have time to get to the store or call. You simply get online at your new destination - say, between the end of the conference day and dinner - go to the Levi's Web site, insert your personal Levi's personal identification number, select the color and cuff style (assuming that you won't gain too much weight at the rubber-chicken-dinner-and-dessert meeting). Almost before you can digest the gooey desert, your new perfect Levi's will be delivered in 24 hours to your home. What a time convenience.
How do they do it? Levi's has premanufactured 400 hip sizes and 30 leg sizes. Once they've taken your measurements, it's a matter of matching your hips to your legs - which multiplies out to more than 10,000 combinations.
If they had done it in a more traditional way, letting the customer own the experience could have had significant drawbacks. Levi's could have put tailors in the stores. You would come in, the tailors would take your measurements and Levi's would make the jeans. This would have been fairly ordinary and uninteresting to the consumer and not at all cost-efficient to the company. Levi's would have had to stockpile millions of different sizes, which would have necessitated 10,000 SKUs and a megawarehouse. And think of the quality control problems, with thousands of tailors each with the job of creating individually tailored jeans. Levi's would have had to produce the jeans offshore rather than in its Texas facility.
The second example is a little less action-oriented, but it expresses the concept very well and may be the way of the future for retailing. The Metreon is a hip, new four-story mall filled with shops, game areas and food courts in San Francisco. The entire premise of this mall is to provide customers with a total experience with the companies and products before they buy. The first floor features a Sega PlayStation, with hundreds of stations where consumers can play the new 128-bit games on regular and supersize screens. It's a gamer's heaven. And it's all free. Customers just have to register with their e-mail addresses. Obviously, there's a great marketing opportunity here.
A Discovery Channel retail store is across from Sega and offers a wonderful opportunity to get back to nature, with thousands of items to play with and listen to. An Imax theater features four screens and individual seating to give a total surround feeling, a little unsettling when it appears you're falling down a mountain in an avalanche. Upstairs is a bowling alley. But not the conventional type. This one is all digital. The lanes are the streets of San Francisco, with a giant bowling ball that rolls down and up the hills. Players must guide the ball around trolley cars and other obstacles until it reaches the pins that are set in street. The rules and the team experience are the same as in traditional bowling, but the player stands in front of a large screen and guides the ball around moving obstacles
Dell Computer mass-customizes computers. Yet Gateway may end up winning the battle for consumers because it lets consumers drive the process and experience the product before they buy up to the next version. Gateway promises consumers they can grow the computer as their skills and needs increase. Buy it, try it, exchange it or trade it in when you want to move up.
Winning today's retail wars is all about keeping the consumer entertained and involved. Product information delivery is no longer enough. It's about providing interest and value with the consumer (in both retail and business-to-business). If you are only delivering content in a stagnant manner, you will lose. Success today is about infotainment.
To implement this one-to-one marketing approach, one-to-one experts Don Peppers and Martha Rogers recommend focusing on four things when selling to customers:
Increase your "share of wallet." Figure out which customer needs you can satisfy. Then use the knowledge you have and the trust you've built to make that additional sale.
Increase the durability of customer relationships. Invest money in customer retention, because it's a fraction of the cost of customer acquisition.
Increase your product offerings to customers. By being customer-focused rather than retail-focused or factory-focused, a manufacturer or merchant can widely increase its offerings, thus increasing its share of wallet.
Create a transactive relationship. This leads to meeting more customers needs by engaging the consumer in dialogue. It's a cycle. By constantly inviting the consumer to provide more information, the marketer can offer more products.
How does this translate into marketing strategies? First, you have to establish what benefits your customer is receiving. If you are not delivering here, don't worry about what's in it for you. Go on vacation and have a nice day.
If, however, you are delivering truly quality content - and you're making your customers search more convenient by remembering their last visit and populating their orders or profile with database information to make their visits more speedy - then you are on the right track. Remember, your main job is to provide information and make the customer's order-taking ultraconvenient.
The Internet, unlike any other medium, allows marketers to let their customers help themselves. This not only saves time and money for the marketer but it also satisfies many customers who prefer to do it themselves, in their own time and in their own way.
For years, Dell has allowed its customers to essentially configure and design their own machines. Dell has created an infrastructure and supply chain management network that makes this possible while minimizing costs. In another example, iPrint lets its customers customize their own mouse pads, coffee mugs and countless other promotional items from an easy-to-use computer interface over the Net. Customers don't have to worry about design or colors since pre-established templates are provided from which they can choose.
Is there a payout as a result of this new thinking? You bet there is. Big money is the reward for today's innovative retailing. But to get it, marketers have to conceive of new ways to solve old problems. It's a new world of customer service. Is your company up to the changes that are necessary to meet the demands?
Robert McKim is president of MS Database Marketing, Los Angeles.