By Nikki Baird, Managing Partner
7/22/2008
At RSR, we often talk about a new mantra for retail – a movement away from “right product, right place, right price, right time” to a much more customer-centric goal: the right interaction and the right service for that customer’s objective at that point in time. This is about identifying how your customer wants to buy from you and matching up to that process as best you can.
The problem is this is really hard. Even if customers could come to your store or website and somehow declare their intentions (“I am only here for product research and am not ready to buy”, or – more difficult to detect – “You may know me for what I buy for myself but I’m here today to buy a gift for someone else”) – odds are a lot of consumers may not know themselves what kind of shopping process they are about to engage in.
Retailers try to match up buying processes to consumers using demographics and purchase history as a proxy – for example, moms with kids in tow are going to want a very different digital camera buying experience than a twenty-something gadget hound. But that only works if you can distinguish the mom from the gadget hound. That’s relatively easy in store, but much more difficult online. However, even in stores, making a guess about the persona that best fits a consumer can sometimes backfire – as many tech savvy women pointed out quite strenuously in response to being erroneously categorized as Best Buy’s original “Jill” persona, a not-so-tech-savvy mom who was primarily interested in technology purchases for her children, rather than for herself.
At Internet Retailer, I ran into a company called 7 Billion People that identifies the shopping processes that consumers prefer, not based on their demographics, but based on their behavior. Right now, this applies primarily to eCommerce sites, but could easily be applied to in-store technology as well. In many ways, this is cutting edge stuff – in the larger world of the internet, companies like Google, and even governments, are just starting to explore context-driven search algorithms – incorporating what a user was doing just before they searched for something to help provide more relevant search results. In the larger context, the challenge will be to figure out how to deliver this without violating users’ sense of privacy (whether real or illusory). For retailers that already track how consumers navigate their site, this is not nearly so much of a big deal.
To give you an idea of how behavior serves as an indicator of ideal buying process, I sat down with Mark Nagaitis, CEO of 7 Billion People, and asked him to share some of the things his company has learned about consumers’ buying processes. Here are but a few of the insights that he shared.
1. Understanding the motivation of the consumer helps to determine what information you should be presenting on your website. For example, there might be two ways to sell a tube of toothpaste – some consumers may be attracted by positive benefits, like “get a Tom Cruise smile”, while others are more motivated by problem avoidance messages – “never see the dentist again”. Where retailers can run into trouble is the connection between driving traffic to the website and the positioning on the site. For retailers that “outsource” driving traffic through pay-per-click, this can be a particularly large disconnect – if the ad that people click on says “Tom Cruise smile” but your site is chock full of tooth decay data, then you’re creating dissonance with how the consumer expects to buy almost as soon as they arrive.
2. Some consumers really appreciate a well-defined process, and some don’t. Mark used a customer example to illustrate this point. A vacation seller found that a significant number of people were abandoning the payment process about four steps in – at the point where it was the ultimate, yes-you-must-pay-now commitment. The analytics showed that people got to that point, got sticker shock, and wanted to re-evaluate some of their options. But the way the site was organized, the retailer had assumed that people who got this far into the process had already made up their minds – and didn’t provide any kind of out to play with the options. For people who liked a well-defined process, it worked well enough, but for people who preferred more of a free-form, options-based approach, the farther into the structured payment process they got, the more disassociated they felt from the decisions they had made earlier. They threw everything into the shopping cart thinking that they would have an opportunity to make trade-offs later, and then found that they couldn’t achieve that. For the vacation seller, making a simple change to help those “choice” consumers change their minds at the last minute cut an 85% abandon rate by half.
3. There are specifications-type people, and then there are review-type people. People with a strong specifications-driven process need a lot of factual, technical information to help them decide. These people don’t want to hear about what other people have bought or what they thought. They like product comparisons, not product reviews. If your site is geared to primarily provide review-based information (“best rated products” for example), and you make it difficult to find the technical information associated with products, these specification-driven people will leave early. On the flip side, while they aren’t interested in what everyone else bought, they are particularly susceptible to upsell once they have chosen a product – as long as what you’re selling are related accessories.
Demographics can indeed tell you a lot about a consumer and how you should interact with them, but structuring any buying process based exclusively on who a customer is – without taking into account what they are trying to accomplish – risks missing the mark. And ultimately, at least online and in many cases in the store too, you have a greater opportunity to divine what kind of experience to provide for a shopper based on how they’re using your site or choosing to engage with you than you do by figuring out who they are. Retail is no longer about how you want to sell. It’s all about how customers want to buy.
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