There have been plenty of insightful things written lately about how shopping local can save local economies and our focus at NEAR has always been to boost the profile of brick and mortar retailers versus their purely-online competition. Raising awareness for the stores in our cities and towns is an important first step, but how can we actually convert that awareness into sales?
So that's what we've been thinking about for the past month or so. What will it take to swing an order from Amazon or Wayfair to a store down the street? What parts of a shopper's purchasing decision can we tip in our favour? What are the strengths of physical retail when compared with e-commerce, and how can we leverage those factors to win business?
The greatest benefit to shopping in-person is obviously the experience. Our research shows that handling an item before buying it gives the shopper greater confidence in their decision, which makes sense. E-commerce sites have to use other cues to try to build that same confidence. Feedback from "impartial" reviewers has proven to be their most effective method, but they use other, more subtle nudges to try to lower a customer's resistance to choosing an item. Have a look at the images below to see just how much of the content for this item has been created just to make you more confident in your purchase.
The circled parts of the product presentation aren't facts about the product. They're all constructed to give the shopper more confidence in their purchase. Large e-commerce sites have invested heavily in testing the psychological effects of small changes on purchasing outcomes. What's most interesting about these positive buying signals is that they add up to the shopper feeling more confident buying from Amazon than they might from a brick and mortar store, where they have nothing to rely on but their own beliefs about the brand and the feeling they get when they handle the product.
So what can a retailer do to tip the scales in their favour versus an e-commerce site?
Recognize and defend your brand When we studied purchasing decisions, brand confidence had a huge impact on buying - both retailer and manufacturer brand. The total effect was more like a confidence multiplier. Shoppers subconsciously calculate their trust in the brand based on past experiences, their beliefs about return policies, and the opinions of friends and family. One often-overlooked aspect is the products you sell. Consumers judge retailer brands by the quality of the brands they represent.
Address and remove negative biases
No matter how large or small your business is, your potential customers are making judgements about it every time they interact with it. Do you know how people feel about your business? What negative perceptions might they have about your brand, and why do those perceptions exist? You need to aggressively track and continually work to refine how your brand is received. The process for that is something we'll address in a future blog post.
Add positive buying signals
You most likely don't have the means to implement the tools that companies like Amazon have at their disposal, but there are things you can add to a customer's experience that will give them more confidence to make a buying decision. The language your employees use when they speak to customers is important, but don't overlook the signage and labelling in your store. Each interaction that a customer has with an item is an opportunity to build the trust they have in your brand and in the product.
Closely manage your omni-channel
The idea of "omni-channel" sales seems like new age nonsense, but for retailers it's increasingly important to recognize that customers interact with your business in many ways, even during a single transaction. Every quarter we find that a greater percentage of shoppers do most of their research online before they ever come to a store. The majority of those have actually made their decision to buy before they even walked through the door, so managing their experience with your brand online is crucial. The most common way we see retailers failing this test is when their online pricing and inventory doesn't match the in-store experience. There is nothing more important than setting the right expectations for a shopper when they're on your website and almost nothing that can damage a brand more quickly than failing those expectations.
Each of these areas are chances for success or failure. To overcome the confidence shoppers have in e-commerce brands it's critical that you have a detailed plan for how your brand is to be perceived and that you relentlessly execute that plan. Building and maintaining a positive perception for your company is a never-ending process that is more important than ever in an age when your competition is pitch-perfect in everything they do.
We're working flat out to take more and more of these things off your plate but we're not there yet. To follow our progress, please take a moment to sign up for updates.