Brick and Mortar retailers should go online, but with the right reasons!

Let’s face it, it’s not easy to run a physical (Brick and Mortar) retail store with all the investment that goes with it. It never was easy, and it’s getting harder every day thanks to new technologies and the Internet.

Even though online commerce or ecommerce has been getting all the attention in recent years 90% of all retail transactions are still local, in brick and mortar store across every town and every country. That said, key for local retailers is that ecommerce is growing 15% year over year vs. general retail’s 3% increase. How will the rates and trends continue into the future is a matter of debate depending on whom you talk to but everyone agrees retail as an industry IS changing.

And of course everybody knows by now that online retailers are also moving offline, including Amazon.

People like to shop from local businesses for multiple reasons while taking advantage of the convenience of online shopping when needed. This is more of a factor with Considered purchases — products which take more time to since and purchase and shoppers with higher incomes where traveling to the store will be a more costly proposition.

For local offline retailers establishing an online presence or even selling online is becoming more urgent every day. However, without proper planning and the right expectations going online might end up being more of a cost than a benefit.

Here are some tips and questions to ask before taking the plunge to invest in your online adventure:

Why are you going online? This is a fundamental question you need to ask yourself honestly:

– Is foot traffic at your store down?
– Are sales falling consistently over the past 12 months?
– Is your offline advertising ROI is coming down?
– Are there specific changes in your local environment?

The point here is that these same causes will most likely carry over to an online presence if not addressed.

For example, if your sales staff are not trained or rewarded for performance, your store is not clean, organized or products not updated the additional foot traffic will NOT help, in fact it will be a negative because people will tell their friend about negative experiences 13 times more than positive ones. If customers are not treated well or paid attention to, if you don’t have proper training for your sales staff — these are all things that will be negatives on your store and will drive traffic away.

When you have the WHY addressed, the next step is deciding how to move online, you can:

1.Start with an informative website which would be your central presence online.

As you can see from the Local Population tool the majority (over 95%) of what is considered local, live outside a store’s 1 mile radius, so you need to think of ways you can actually reach and serve your local population before thinking about going outside.

The ways you can do this is to provide such enticing deals and value that your customers will take time out of their busy schedules to physically come to your store. This is a major challenge and one that is getting worse with time, not better.

Or you can provide services to your local clients that eliminates the need for them to physically come to your store all the time, but still receive the personal service they love you for. Services like “salesperson assisted” remote sales which is available now, or augmented reality which will be available in the future will help in this case.

Remember: designing and creating a website can be like building a house yourself and have a wide range from quick and simple to extensive and expensive. And, expensive does not always translate to better results for everyone.

2.Setup an online ecommerce site, which expands your sales to people outside your immediate reach, but is an entirely new business really requiring time and investment not the least of which is proper merchandising and marketing for the online customer.

What are your products?

The products and services your sell will have a significant role in if and how you setup your online presence, and which tools to select in your technology mix (stack). If you are selling a niche product you have a better chance of reaching and building relationships online, but you need to have tools and services to engage customers

if you’re selling products that are physically large, such as furniture, specific artwork, automobiles or that include a service aspect such as interior design your strategy and plan will have to be created for those.

Ultimately, regardless of the type of online presence there are some common tasks (and investments) you need to make. Many of the below services also fit under the “Retail CRM” or customer relationship management realm.

  • Search engine marketing: consider the expenses of coming up on the first page of Google for your local market when people search online — not an easy or inexpensive undertaking but it is a must once you go online. As an option you can join local search companies such as Yelp but they are also not cheap and do take time to maintain.
  • Social media marketing: you don’t have to (actually should not) be on every social network but you need to have presence on a couple of networks where your target demographic spends most time. You can optimize using social sharing tools but consider the fact that people are smart and will know if your twitter feed is full of automated posts from your Facebook page. Consumers appreciate and reward original, honest engagement so focus on doing well in a couple of spots. (Facebook, Pinterest, Houzz, Twitter, LinkedIn, Instagram, Snapchat are some of the top options but you should look further to see where you customers hang out most)
  • Customer service: you have to respond quickly to people emailing or messaging you regardless if good or bad. No response, or defensive comments will actually hurt your reputation and be negatives. And your customer service needs to be provided by informed people, preferably your sale people or yourself, not someone who knows nothing about your products or business or local scene.
  • Delivery: shoppers are expecting more and faster delivery options, even things such as Buy-Online-Pick-Up-in-store (BOPIS) or buy online return in store (BORIS) will help serve your clients better.
  • Email and SMS Communication (Retail CRM): whether for marketing or order management and other service notifications you need to have a well planned, and balanced approach to stay in touch with prospects and customers. Luckily there are a few well established players in this area. A solid email plan is usually a part of your retail CRM program.
  • Be Omni-channel: In today’s retail and definitely in the future you want a system in place which will be seamless across any touch point your customers want to do business with you so try to find solutions which will provide the most comprehensive reach across touch points, and increasingly most important MOBILE.

Try to avoid building a hodge-podge of different tools which will be difficult to manage and maintain in the long term, even if each looks great right now.

Your technology pieces will be updated by the vendors regularly, which is good, but each change in one tool will require checking compatibility with others and might add additional expenses you are not planning for. And all this takes time, and of course time is money, not to mention the pain and hassle!

Note: Omni-channel and Multi-channel are not the same, and omni-channel is referred to simply as Commerce these days.

  • How technical do I have to be? Pretty much all the tools and tactics require decisions and investment in some technology so you will have to have either some knowledge yourself on what would be the best technology stack for your store or need to have a trusted advisor helping you.

Truth is that retail owners and managers already have their hands full with skills they need to have so expecting them to also be technically savvy is not reasonable. That said, you will be best positioned if you at least know the tools you’ll be using from the consumer side And have some basic understanding on how things work in technology you are buying.

Even with the best of intentions the vendors are communicating from the point of view of someone who has done the implementation many times as opposed to the customer who has never been thru this implementation. Focus, and ask question on the actual “Implementation” for your store, with existing technologies or even if all new.

Now, go back and really think about the first question, WHY? Imagine if your online commerce site was immensely successful why would you even bother with the local site?

But then, if local presence and closeness to shoppers is not an advantage why are the most successful online stores now going local? You have the foundation already built, now just strategize wisely to beat the online stores — this is your game!

Opening the Smart Home technology stack

If you’ve worked on smart home or home automation products since year 2000 you’ve probably seen a few ups and downs in market awareness and the most recent up, helped immensely by the IoT (a cooler name for M2M for early investors into machine-machine communication) emergence seems to be growing real wings which is encouraging for all – a rising tide will lift all.

Many people and companies have invested heavily and contributed immensely prior to 2000 but this is from my experience after Y2K.  The potential market is massive so there will be a shortage of innovation and competition in the right sectors as opposed to too much competition – consumers need to have choice.

When we built EyeOnHome in the 2002-2004 time frame the home automation market was a niche market dominated by a few large software and hardware vendors.  The providers built great and envelope-expanding products, for the most part and to protect their business they formed partnerships and created their own technology platforms which worked with selected standards.

Fast forward to 2014 and beyond with the advent of Nest, Dropcam, Lowes and a host of other companies are innovating in a big way and it’s great to see.  Problem is, pretty much everyone is still building their own ecosystems where home owners and customers are tied to a manufacturer for adding and changing devices, services or features.  This is the same old business model and is good FOR THE BUSINESS, but not good for customers.

The EyeOnHome motto and goal was to provide an “open” ecosystem where any “open” device could be plugged in by the home owner without having to change a hub, software, host, or standard.  In order to achieve this we worked on open standards of HTTP and Wifi, no propriatary standards or technology – unless it’s in the device hardware which is fine.  This is why we created the Unified Gateway!

So we had the EyeOnHome project cotton-balled for a few year busy with other projects and REALLY hoping someone else would do a better job of opening up the smart home stash to benefit the “customers”. Unfortunately this is not happening (let me know if wrong).  So we’re working on a redesign and rebrand of the site and tools and hope to release it to the public in the next few months.

I’d love to hear from others who are passionate about the same “unified and open” experience we are dreaming of.

Is Omni-channel the Panacea people think it is?

Steven Dennis had a great blog post today on the definition and concept of omni-channel in retail.

Some of my takeaways:

  • Omni-channel is not enough by itself to grow customers, anymore.  This is evidenced by the stagnating revenue and financial number of most of the larger retail chains.
  • There was a time that omni-channel was such a unique feature for consumers that they actually picked who they buy from based on that.  For retailers in 2016 omni-channel is table stakes, it’s the price of entry.
  • You’ve got omni, now what?  Are you missing other key revenue-driving factors in your business as you’re building out your omni-channel systems?

Ultimately all technology is a set of tools for retailers NOT the product, not the experience, not customer service and warranty and environmental consciousness and all the other things that are important to people in today’s world.

The challenge with Omni-channel and the technology is that retailers have been catching up to ecommerce sellers for 20 years now and they will rarely (if ever) be better than Amazon, for a variety of reasons.  The new commerce tools and platforms available to retailers must be omni-by-DNA. , and then the retailers needs to get to the real work.  Product sourcing, selection, display, merchandising, delivery, customer support and service – ALL in an omni platform.



What is “Smart Money”?

As builders and founders we often hear the advice to find Smart Money, rather than just money (or dumb money?? if there is such a thing.)

So working with the founder of another local startup we started to put together a list of what Smart Money really means to us.  Here’s the list, let us know what you think.  Note that this list is for Web/Mobile products and startups, not as fully applicable to other types of startups.  Each criteria gets it’s own weight based on your specific needs but perhaps this will help in getting some sense of a standard.

Generally smart:
– Experience in starting and building a web/mobile company in the last 10 years.
– Experience building and growing web apps or websites
– Have built or was deeply involved in building and growing native apps as part of their past/current business.
– Knows and can provide real-life advice on growth marketing and “the new customer acquisition” methods.
– Access to funding and recruiting leads.
– Access to prospective customers.
– Social media savvy.
– Has liquid funds to invest in your time frame.
– Expresses passion about the concept. (gets the vision quickly)
– Be experienced enough to help when things get rough, not jump the gun.
– Does not meddle daily in operations.
– Respects the leadership of the team.
– Experience in exiting companies.
Really smart:)
– experience in your specific vertical.
– B2B and/or B2C experience – depending on your model.
– Has access to c-level executives in customer orgs.
– Has deep and active network in your network.
Of course as they say all money is good.  BUT, is it really?  Have you ever experience being married to the wrong investor?  Bottom line, it’s better to not work people you don’t really feel excited about than to take anyone’s money, specially as first time founders.  If you have past experience in funding and building new enterprises from the ground up you will know how to handle even “just money” investors properly.  Until then make sure you find the right investor for your new venture.

Note to FCC: this is all the data you need to see your strategy is failing!

While we keep talking to the FCC to explain why their strategy is a #failure other countries keep moving forward.   The results tell all.  If the FCC’s strategy, tactics (and motives?) were in the right place the US should be at least in the top 5, and moving up not down every year!

Is there any country in the world that has better hardware, software, technical minds, resources than the US to be no.1 on this list? NO.  When you have the fastest, best handling car and you come in next to last there is one reason – the driver.

Solution: Focus on the motives.

Difference between Blogs and Twitter notifications.

I’ve been trying to find a useful cadence on absorbing information from people I follow on Twitter without getting a firehose pointed at me.  No luck so far.

I like using Twitter notifications but with only 10-20 people this turns into a constant stream during certain times of the day and  after a while it becomes almost useless.  If I turn the notification off I get nothing, if it stays on it’s the firehose.

Subscribing to a Blog is still a lot more efficient.  It is a known fact that you can not email people too much or they will unsubscribe so people may blog once a week or every few days if very active writers.  What I get from the blog is usually laser focused on the topic I expect, again because if not I’ll unsubscribe!

On Twitter it seems like the opposite is true, at least for now.  People have to send the same tweet multiple times hoping that their followers actually see it.

Twitter can make improvements on the notifications system helping people become a lot more efficient in absorbing the massive amount of shares and tweets.  The notification system can actually be a savior for Twitter in providing an easy to manage way to people for spending time only on the content they are interested in.