Rob Wight and John DeVries of Channel Intelligence tell how manufacturers can enjoy Ecommerce success
Imagine the following: You just built a beautiful product showroom at your factory. It has displays to show off your products to best advantage and employees specially trained to understand customer needs and help them find the right product. You provide a list of locations where visitors to the showroom can buy your products because you don’t want to compete with your channel partners. You place ads in magazines, on TV, and on billboards to attract customers to your new showroom. And they come, a trickle at first, then in hordes. They love your showroom. They love your products. You feel great. Your new marketing effort is a huge success!
Only, at the end of the quarter sales are barely any higher. What happened?
It’s easy to explain. You got people interested in your products, then left them on their own to figure out how to buy them. You fell victim to the all too easy trap of thinking like a manufacturer. “What’s wrong with that?”, I hear you thinking. “After all, I am a manufacturer.” Yes, but in situations where you are dealing directly with end users, you can’t afford to think like a manufacturer. You have to think like a retailer!
Thinking Like a Retailer
Retailers are really very simple to understand. They have a single focus: Sell more stuff! Your stuff, your competition’s stuff, anybody’s stuff. Retailers really don’t care; they just want to sell more. So they make it as easy as possible for customers to buy.
Walk into a major supermarket or chain store. The odds are good that if you have been in another store from that chain, you can find your way around. Products are grouped by the way buyers expect to find them. New items or products on “special” are on the end caps, readily visible. Overhead signs tell you where you are and where to go. Prices are clearly visible. Checkout counters are highly visible and conveniently placed near the exits.
Your showroom did part of the job. It generated demand by educating potential buyers about your products. It even did that part better than the typical retailer, since you know your own products better than any retailer could. But you missed the most important ingredient: You didn’t make it easy to buy. You sent potential buyers off with a list of retailers, but along the way most of them changed their minds. They got distracted by another product, they store was out of stock, or maybe they just plain forgot. Whatever the reason, the person that left your showroom intending to buy your product ended up not buying. You didn’t capitalize on the buying impulse, and you lost a sale!
So what do you do? Well, let’s start by taking a look at your web site.
Your Web Site is Your Factory Showroom
A manufacturer’s Web site is just like a factory showroom. In fact, it’s better because it can accommodate a ton more traffic than your factory showroom could. And you get to show off you own products to in their best light. But instead of thinking like a manufacturer, think like a retailer and make it easy to buy at your Web site. Properly done, you can do this while making your channel partners happier in the process.
Most manufacturers think that making it possible to buy their products at their Web site means opening their own online store. While that is certainly one approach, it’s not always logistically feasible, and it’s certainly not one that is going to make your retailers very happy. They have enough competition already without you jumping into the fray. Instead, take advantage of the fact that in cyberspace everything is “only a click away” to link your Web site directly to your retailers, essentially making your Web site an extension of theirs. No, this doesn’t mean the typical list of “places to buy.” Use the technology that links your product directly to a list of online and local retailers that not only carry that product, but actually have it in stock and show the price at each store.
Research shows that when you give consumers lots of buying options, it builds trust that results in more purchases. When they click on the retailer of their choice, they are instantly transported not to the home page for that retailer’s Web site, but instead directly to the page at that site for your product. You just made buying from any of your retail partners a simple matter of two clicks, and eliminated the distractions that will result from your customer having to navigate your retailer’s site. It creates better closure rates for you and your channel partners, which creates a win-win for everyone.
If the consumer chooses a local retailer rather than an online store, they will then be presented with a page showing your product and a map to that store, along with telephone number, street address, etc. They can then print out that page and take it to the store, guaranteeing they will get the right product and all but eliminating the problems that result from forgotten model numbers or store salespeople directing them to a competing product. Some retailers allow you to buy your product on their Web site and then pick it up at the local store. This “Buy online, pick up in store” is one of the hottest trends in retailing, because it combines the immediate purchase advantages of an online store with the opportunity for the retailer to “upsell” other products once the consumer is in the store.
Making it Work
So what does it take to couple your own Web site so tightly to your channel partner’s Web sites? First, you have to know the URL, the Web address, of every one of your products at every one of your online retailers. You need to know the location of every local store for your brick and mortar retailers. And you need to get both to send you their stock status and pricing. Every day! Then your IT department can put it altogether so that when a potential buyer clicks on the “Buy Now” button next to one of your products, he immediately is shown a list of retailers. But only the retailers who have the product in stock today and at a price you approve. You don’t want to help retailers who are violating your MAP (Minimum Advertise Price) rules, do you?
If that sounds like too much work, it is for nearly all manufacturers. Only the largest could ever afford the effort. Fortunately, there are service companies that provide exactly what was described above. By taking advantage of the fact that the data from major retailers can be reused across many manufacturers and charging the retailers for the service as a commission on completed sales, they have made this “product linking” service available to any manufacturer selling through online retailers. Extra services to cover local retailers and monitoring of results typically cost extra.
“Think Like a Retailer” Best Practices
So let’s go back to your Web site and take a look at some best practices to help you “think like a retailer”.
• Treat your Web site like a store, not a corporate information resource. Bring products onto the home page. Yes, some visitors are looking for support, or your corporate backgrounder or even for a job. But those tasks are secondary and can be accommodated through the navigation menu. Make the primary job of your web site to SELL!
• Make it easy to find things. A Web site where the products are seven or 10 levels down is not going to generate lots of sales, I actually found one manufacturer who had accidentally (I hope!) created a situation where you could click around in a loop, arriving back at the starting page, without ever actually seeing the page where you were allowed to buy the product.
This is sometimes referred to as the “Salmon Theory of Marketing,” in which only the customers who are hardy and persistent enough to swim all the way upstream are allowed to buy.
• Make it easy to buy. Put “Buy Now” buttons everywhere you show a product. Don’t make visitors search for a place to buy; let them buy at any point they want.
• Always show price. If you measure what visitors do at your Web site, you might have noticed that not showing price generates more clicks. However, a large number of clicks may be misleading. Visitors might very well be clicking all over the place trying to figure out how much your product costs, only to get frustrated and give up. Research that tracks actual sales has shown that product web pages that show price are three to four times more likely to result in a sale.
• Prominently display new or featured products. Don’t expect that visitors will keep checking your web site to see what has changed. Make it obvious. If you have a hot new product or a special sale going on, let them know, preferably right on the home page.
Take A Field Trip
If you’re still in a quandary for ideas on how to sell, head out to a large retail store and take a look around. Almost everything you can see has been done with a specific purpose in mind: to make it easier for shoppers to find and buy products like yours. Then, when you go back to your office, take a look at your web site and see how it measures up. You may find that much of what your retail partners are doing to sell your product in their online or local stores can help you boost your sales if you will simply “think like a retailer”!
Rob Wight is president and co-founder and John DeVries is product manager of Channel Intelligence, a technology company that works with hundreds of manufacturers and retailers, as well as with all 54 consumer search engines, providing Web-initiated commerce solutions. Visit www.channelintelligence.com