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The Allure of Ecommerce (4 reasons why small retail brands often fail at online sales)

These days, everyone wants a piece of the Ecommerce action. I understand the temptation… There are many stories circulating about the demise of brick and mortar stores and the rise of the bricks and clicks model.

It’s a shiny penny that many can’t resist. But if brick and mortar retail is the heart of your brand, you better be careful when it comes to ecommerce.

First of all, the tales of retail armageddon are greatly exaggerated.

According to The Economist, only 10% of all products sold in America in 2017 were sold through online retailers. So if you have a retail store, don’t give up. Ninety percent of all the stuff in the world is still being sold though brick and mortar stores, many of which are small, locally owned establishments.

retail marketing Amazon Go store

According to The Atlantic, the retail industry isn’t dying, but it is at an inflection point.  “Some brick-and-mortar retail brands with large footprints are struggling, while some e-commerce brands, like Warby Parker and Amazon, are now realizing the value of storefronts. Indeed, Amazon sees an uptick in online shopping in regions where it has a physical store, according to CNBC.” 

So it goes both ways.

More on retail industry branding.

One thing’s for sure… There’s an inevitable march toward the “bricks and clicks” model, where all retailers have elements of both ecommerce and traditional retail sales.

Here’s why: It feels better to buy from a real person. Simple as that.

We all appreciate the infinite information available online and the lazy-ass convenience of one-click buying, but it leaves us feeling empty. Unfulfilled. Vaguely dissatisfied when compared to traditional retail shopping.

Which leads me to 4 common problems that arise when successful little retailers try their hand at ecommerce…

1. They forget what they’re really all about.

If you have a successful, specialty retail store, chances are you provide a fair amount of personalized service. You wouldn’t stay in business without it.

For many of the retailers I know, that personal touch is a core element of their brand promise. That’s what they’re all about, and it’s impossible to duplicate that online.

Even if you devise the world’s greatest online shopping user interface, the shopping experience will always feel better in real life.

So when it comes to ecommerce, your value proposition no longer applies.

too many choices BNBranding Brand Insight Blog2. They don’t differentiate their online store from the sea of competitors.

There’s a ton of competition in the wide, wide world of ecommerce, but very few companies do anything to differentiate their online store from all the rest.

It doesn’t make sense… They wouldn’t open a brick and mortar store that’s exactly the same as the store across the street, but that’s what they do online.

They use the same Ecommerce website template. They offer the same products for the same MAP price. They even use the exact same wording for the sales page of every product.

You can’t just cut and paste the same exact blurb, same photo and the same product specs and expect good results. You have to differentiate yourself somehow. You need to customize your pitch, improve your copy, and mix up the words a bit. You need to give people a reason to buy from you, instead of Amazon.

So how are you supposed to do that?

You could offer a unique mix of products. (Most niched e-commerce sites offer the exact same products as their competitors. But even if you could find something they don’t have, it’s not a sustainable advantage unless you have an exclusive arrangement with the manufacturer. So scratch that.)

You could offer lower pricing. (Actually, most MAP pricing agreements preclude you from doing that.)

You could use different technology. (There are many different back-end Ecommerce systems these days, and they all work pretty well. A good user interface is the cost of doing business in this space.)

You can have better content presented in your own, unique way, based on brand values that prospects will actually care about.

That, you can do!  Learn how with this post.

3. They fail to see the difference between Ecommerce transactions and in-person sales.

Besides a ridiculously low price, what do online shoppers want?

Information. Insight. And peace of mind.

Even if they’re ready to pull the trigger online shoppers want facts, reviews, articles or some kind of credible content that helps make the purchase decision a little bit easier.

But amazingly few e-commerce sites actually fit the bill when it comes to informative content. Most offer no insight. No salesmanship. No differentiation whatsoever. They just regurgitate the manufacturer’s product spiel and hope for the best.

In fact, most online ecommerce sites aren’t really retail sites at all. They’re more like virtual warehouses.

If you want to establish a successful Ecommerce store you need to act like a real retailer, but in the online world. That means content marketing. That means sharp, convincing copy, and inspiring product stories. That means salesmanship.

ecommerce differentiationEarly in my career I wrote copy for Norm Thompson. Before J. Peterman ever became famous, Norm Thompson had a unique voice that resonated with its mature, upscale audience. We produced long, intelligent product pitches that went way beyond technical specs and pretty pictures.

For instance, I remember writing a full page spread on the optics of Serengetti Driver sunglasses. You could buy Serengetti’s in many different places, but no other sales outlet was as thorough as Norm Thompson.

Those spreads were helpful. Heroic. Practical. Luxurious. Readable. And convincing. It was the voice of the brand, and guess what? It worked.

The conversion rates and sales-to-page ratios of the Norm Thompson catalog were among the highest in the direct response industry. It’s tough to find anything remotely close in the on-line world. And unfortunately, Norm Thompson has failed to maintain that unique voice in the e-commerce arena. There’s no “Escape From the Ordinary” on their websites.

4. They’re not prepared for the added operational complexities of Ecommerce.

It’s a lot of work, running a profitable store. And guess what?  It’s just as much work running an Ecommerce store.
That’s what you have to get your head around before you dive into ecommerce… It’s like having two different businesses.
I know at least one retailer who thinks she can just “put up a website to take care of her excess inventory.” It’s never as easy as that. Here are just a few of the operational challenges you’ll face:
Buying gets more complicated, since there may be items that you sell online but not in your store, and vice versa.

There are technical issues galore… You better make sure that your POS system syncs seamlessly with your ecommerce platform. You’ll need a webmaster and someone to handle continual site updates as well as SEO, SEM and all the other components of digital marketing. You can easily get sucked into doing a lot of behind the scenes management that you’re not qualified for, and you really don’t enjoy.

Labor costs will increase. You’ll need more help to get those orders filled and the website maintained. You have to run a pick, pack and ship operation out of the back of the store.=

So ask yourself this: Do you have the bandwidth for ecommerce? And will your traditional retail business suffer if you’re pulled in another direction?
According to Gartner Research, 89% of marketing leaders predict that customer experience will be the primary basis for competitive differentiation in the coming years of retail. Here’s an example of how well the customer experience of bricks and clicks can work:

Bricks & clicks REI coopI recently bought a new pair of walking shoes.  I could have purchased them online — I certainly did enough research — but I wanted the front-line opinion of a good shoe salesman. I wanted to talk with a human being, have a conversation and get a read on the three different shoes that I was considering.

I wanted to feel the difference.

So I went to the local REI and made a great purchase.

I trust that place. I love what the brand stands for. The salesmen know their shit. And REI’s site was a great source of information that started me on the path to purchase.

REI’s website was more credible than the manufacturer’s website, and it had better info on hiking shoes than Amazon or any other online resource that I could find.

The manufacturer’s brand and the local REI store both benefit from REI’s online presence and the REI brand ethos. The REI brand benefits from the expertise of its local salespeople to help close sales that started online.

That’s how it’s supposed to work! Bricks and clicks.

It’s a great model that can work for a big company like REI. But it’s not so easy for a small retail chain or an individual store. So before you start fishing for new customers through ecommerce, I’d suggest that you do some soul searching. Maybe you’ll find your brand.

6

Want to build a brand? First, own an idea.

I think all entrepreneurs should study advertising. Entrepreneurs are full of ideas, and advertising is an industry of ideas…

Ideas on how to build a brand. How to build credibility and authenticity for existing brands. How to engage an audience and convert leads into sales. It’s those big ideas — paired with exceptional execution — that produce growth for clients and vault agencies into the national spotlight.

The same can be said for start-ups. Businesses that start with a big idea, and then stick to it, are the ones that become iconic brands.

Maytag owns the idea of worry-free appliances. For more than 30 years their advertising has brilliantly communicated the idea of dependability with the lonely Maytag repairman who never has anything to do.
Now he even has an apprentice. The Leo Burnett Agency introduced a strapping new version of Maytag repairman… a side-kick who can talk about technological advancements and appeal to younger women.
The Maytag repairman character is so iconic Chevy actually used him in a television spot touting the Impala’s reliability.
Maytag owns the idea. Chevy’s just borrowing it.
Maytag’s core brand idea helps segment the market and differentiate them from the competition. Nobody else in that category will try to claim the idea of “reliability.” Won’t work because everyone knows that Maytag = dependability.

Google knows how to build a brand. They own the idea of online search. So much so, it’s become a verb. “Google it.” It’s the world at your fingertips.

Campbell’s owns the idea of “comfort food.” That brand is not about flavor, it’s about the rainy day when your kids are home for lunch and you sit down for a bowl of soup and grilled cheese sandwiches. Campbell’s warms, comforts, nourishes, takes you back in time and puts a smile on your face.

For only about one dollar.

Volvo owns the idea of safety. That’s their clearly perceived position in the automotive market.

own an idea BNBrandingEven though driving an automobile is inherently risky, people believe they are safe in a Volvo. And that belief feeds the folklore that sustains that idea and Volvo’s brand image.

Even though Volvo models have all the glamorous features of a luxury brand, they’ll never be seen as luxury cars. Just safe cars.

Funny story about Volvo shopping… Some years ago I seriously considered buying a Volvo SUV for my family. I did the research and went to the local lot for a test drive. But the salesman blew it. He was so adamant about the brand’s safety record, he tried to convince me that Volvo actually used Swedish convicts as live test dummies. True story, he claimed. That’s how Volvo developed such a safe car… by crashing them with convicts at the wheel.

Needless to say, Volvo’s reputation for safety and the car’s luxurious ride couldn’t trump the salesman’s idiocy. I bought an Audi.

Who owns the idea of “fast food?”

McDonald’s, of course. But when people began to realize that fast food wasn’t so good nutritionally, Subway had their own idea… “Healthy Fast Food.”  It was healthier than McDonalds, and Jerod proved it by losing like a thousand pounds while eating Subway Sandwiches.

That simple idea has propelled Subway to #1 in the fast food category. There are 44,800 subway Subway stores to 36,500 McDonald’s stores.

Jimmy Johns owns the idea of fast sandwich deliveryNow Jimmy John’s owns the idea of FAST sandwiches. Not fast food, or sandwiches like Subway, but sandwiches delivered quickly, wherever you may be.

That’s a good strategy of differentiation, especially because their sandwiches aren’t all that great. If they stick with the idea, and execute the idea religiously by actually delivering every sandwich faster than anyone expects, they’ll have a winning business formula.

It’s a core brand concept that’s easily demonstrable in advertising.

And that’s particularly important when it’s a category of parity.  The sandwiches at Quiznos, Tomo’s, Jimmy John’s and Subway are all pretty much the same, so the advertising idea becomes even more important.

Insurance in another such category. It’s a fairly even playing field in a low-involvement category. (Let’s face it, dealing with insurance is about as much fun as going to the dentist.)

Allstate owns the idea of mayhem. In their current advertising campaign the agency  put a face on mayhem, and gave him a smart-ass personality. Everybody knows somebody like that, you just hope your daughter doesn’t date the guy

State Farm has a long-running slogan, “like a good neighbor.”  Unfortunately, neither the advertising nor the customer service support that idea.

Geico saturates the airwaves with humorous advertising and outspends everyone in the insurance category. Thanks to an annual budget of $500 million a year the Geico Gecko and the cavemen have become fixtures in American pop culture. But the message is all over the place. There’s no core brand idea that anyone can grasp.

Guess who owns the idea of sparkling white teeth?  It’s not Colgate. Not Crest. Not a toothpaste, at all.  It’s Orbit chewing gum, a fairly new brand from the master marketers at Wrigleys.

The Orbit girl “cleaning up dirty mouths” campaign helped them capture the #1 spot in the chewing gum market.

(I think Orbit copied the Progressive Insurance advertising. Progressive is the sparkling white insurance brand, for whatever that’s worth.)

Coming up with a core brand concept is hard work. You really have to dig. And think. And explore.

Most of the good ideas have already been done, or can’t be owned, authentically. That’s the trick… finding a conceptual framework that honestly fits with your product or service offering.  (BNBranding can help you with that.)

Many big brands don’t own an idea at all.  JCPenny, or JCP as they’d like us to say, doesn’t own an idea. They’re trying desperately to be younger, cooler and more hip than they used to be, but the name change and the slick new execution of  of their print advertising doesn’t make up for the lack of a relevant idea.

Whether you’re selling insurance or chewing gum, building a brand begins with a simple idea.

Anybody can borrow some money, hang up a shingle and start their own business. But the companies that last, and become iconic brands, almost always start with a clearly defined, highly demonstrable idea that goes beyond just the product or service.

Do you need ideas? Need help with your brand messaging? Get started right away. Click here. 

Want to learn more about how to build a brand? Try this post.

2

Brand Differentiation (Disruption as a branding discipline)

The word for the day is Disruption, with a capital D.

In our society there’s a stigma against all things deemed disruptive. When I was in elementary school I learned to not be disruptive in class. Or else!

brand differentiation (disruption as a branding discipline)Sit still in church and don’t disrupt the service. By the 6th grade it was “don’t cause a scene or call attention to yourself.”

Don’t be different. Be the same.

Write like everyone else. Dress like everyone else. Behave like everyone else and you’ll get along just fine. That’s the message we got, and it’s the message our kids are getting.

Loud and clear.

Maybe that’s why so many business owners and executives flee from the idea of disruption like a fox from a forest fire. It’s ingrained in our society. Most business owners are deathly afraid that some new competitor with “distruptive technology” is going to come along and threaten their turf.

And yet, if you’re going for brand differentiation it’s disruption that separates the iconic brands from the ho-hum ones.  And disruptive advertising is what gets the best results.

Jean Marie Dru, Chairman of the advertising conglomerate TBWA, has written two outstanding books about Disruption, but it’s still a hard sell. To most executives disruption is bad. Convention is good. And the results of this mentality are everywhere.

Brand differentiation is hard to come by.

As management guru Tom Peters says, “we live in a sea of similarity.” Social convention and human nature lead us into a trap of conformity where all websites have the same basic layout. All sedans look the same. All airlines feel the same. All travel ads sound the same.

And it works to some degree, because there’s comfort in conformity. (Vanilla still outsells all other flavors of ice cream.)

But in the long run, conformity is the kiss of death for a brand.

Great brands do things that are disruptive. Rather than shying away from the word, the executives embrace the idea of disruption and they make it a part of their everyday operation. They consider it productive change that stimulates progress.

But even when they succeed with disruptive products, disruptive technology and disruptive marketing campaigns, it’s tough to sustain.

When Chrysler first launched the Plymouth Voyager the Minivan was a groundbreaking idea that threw the auto industry into total disruption. It was a whole new category, and everyone scrambled to copy the market leader. Within five years, minivans were — you guessed it —  all the same.

There used to be a Television network that was radically disruptive. MTV launched hundreds of music careers and shaped an entire generation, and now where is it? Lost in a sea of mediocre sameness.

When they first burst onto the scene in the 80’s, the idea of a micro brewery was very disruptive. Now, in Oregon, there’s one in every neighborhood and they’re all pretty much the same. Good, but IPAs are everywhere.

Successfully disruptive ideas don’t last because its human nature to copy what works. This process of imitation homogenizes the disruptive idea to the point where it’s no longer different. No longer disruptive.

So if you want to sustain a competitive advantage, you have to keep coming up with disruptive ideas. Not just incremental improvement on what’s always worked, but honest-to-goodness newness all the time.

Avatar is a disruptive movie that spawned numerous knock-offs.

The name “Fuzzy Yellow Balls” is brilliantly disruptive in the on-line tennis market.

brand differentiation on the brand insight blogThe American Family Life Assurance Company was utterly forgettable until they changed their name to AFLAC and launched a campaign featuring a quacking duck. In the insurance business, that’s disruptive!

According to an interview in the Harvard Business Review, AFLAC’s CEO Daniel Amos risked a million dollars on that silly duck campaign.

Amos could have gone with an idea that tested incrementally better than the average insurance commercial, but he didn’t. He took a chance and went with that obnoxious duck. He chose disruption over convention, and everyone said he was nuts.

But it turned out to be a radically successful example of brand differentiation.

The first day the duck aired AFLAC had more visits to their website than they had in the entire previous year. Name recognition improved 67% the first year. And most importantly, sales jumped 29%. After three years, sales had doubled.

AFLAC’s success was based on disruption in advertising and naming. But for many companies, there’s also an opportunity to stand out with disruptive strategy. In fact, Dru contends that breakthrough tactics are not enough, and that the strategic stage also demands imagination.

Here’s an example…  When Apple introduced the iPod, the strategy wasn’t just about superior product design. It was about disrupting the conventions of the music business. It was about introducing the Apple brand to a whole new category of non-users and establishing Apple as the preferred platform for all your personal electronic needs.ipod branding on the brand insight blog

 

Of course Apple also has brilliant, disruptive advertising.

You can get away with mediocre tactics if your strategy is disruptive enough. And vice-versa…  if your advertising execution is disruptive, you can get by with a me-too strategy. But if you want to hit a real home run like Apple did with the ipod, start with a brilliantly disruptive strategy and build on it with a disruptive product and disruptive marketing execution.

It’s kind of ironic… In business, no one wants to cause a disruption, and yet they’re clamoring for good ideas. And good ideas ARE disruptive. They disrupt the way the synapses in the brain work. They break down our stereotypes and disrupt the business-as-usual mentality.

That’s precisely why we remember them.

Richard Branson said, “Disruption is all about risk-taking, trusting your intuition, and rejecting the way things are supposed to be. Disruption goes way beyond advertising, it forces you to think about where you want your brand to go and how to get there.”

Steinbeck once said, “It is the nature of man, as he grows old, to protect himself against change, particularly change for the better.”

Ask yourself this: What are you protecting yourself from? What are the conventions of your industry?  Why are are you maintaining the stats quo? What are the habits that are holding you back? Are you copying what’s good, or doing what’s new?

What are you doing to be disruptive?  Are you really willing to settle for vanilla or are you really committed to brand differentiation?

For more on brand differentiation and how to create an iconic brand, try THIS post.

 

1 Absolutely better brand differentiation.

What you can learn from a good, strong shot of Vodka.

The first rule of advertising is this: Never take the same approach as your closest competitors. If you want to differentiate your brand, you have to think “different.”  Contrarian even.

”Here’s how:

• Even if you’re selling the same thing, don’t make the same claim. There are hundreds of different ways to sell the benefits of your product or service, so find one that’s different than your competitors. That often comes down to one thing: Listening. The better you are at listening to consumers, the easier it’ll be to differentiate your brand.

• Don’t let your ads look or sound anything like competing ads. Use a different layout, different type style, different size and different idea. The last thing you want to do is run an ad that can be mistaken, at a glance, for a competitor’s ad. If all the companies in your category take a humorous approach to advertising, do something more serious. Find a hook that’s based on a real need of your target audience, and speak to that. Zig when the competition is zagging.

• If you’re on the radio, don’t use the same voice talent or similar sounding music. Find someone different to do the voice work, rather than a DJ who does a dozen new spots a week for other companies in your market. Same thing for tv spots. (This is an easy trap to fall into if you live and work in a small market… there’s not enough “talent” to go around.)

Unfortunately, every industry seems to have its own unwritten rules that contradict the rules of advertising.

These industry conventions aren’t based on any sort of market research or strategic insight. They’re not even common sense. Everyone just goes along because “that’s how it’s always been done.”

The problem is, if that’s how it has always been done, that’s also how everyone else is doing it. In fact, some of these industry conventions are so overused they’ve become cultural cliches.

The rule in the pizza business says you have to use the “pull shot:” A slow-motion close-up of a slice of pizza being pulled off the pie, with cheese oozing off it. In the automotive industry, conventional thinking says you have to show your car on a scenic, winding road. Or off the scenic winding road if it’s an SUV. In the beer business, it’s a slow motion close up of a glass of beer being poured.

These are the images that everyone expects. They are the path of least resistance for marketing managers. But if you go down that road, and follow your industry conventions, your advertising will never perform as well as you’d like. In fact, history has proven you have to break the rules in order to succeed.

Just one execution in the long-running Absolut campaign.

Absolute Vodka is a perfect example. In 1980 it was a brand without a future. All the market research pointed to a complete failure. The bottle was weird looking. It was hard to pour. It was Scandinavian, not Russian. It was way too expensive. It was a me-too product in the premium vodka category.

But the owner of Carillon Imports didn’t care. He believed his product was just different enough… That all he needed was the right ad campaign.

So he threw out all the old conventions of his business and committed to a campaign that was completely different than anything else in his industry. And he didn’t just test the water, he came out with all his guns blazing.

Needless to say, it worked. The “Absolute Perfection” campaign — which is still running today — gave a tasteless, odorless drink a distinctively hip personality and transformed a commodity product into a cultural icon. In a decade where alcohol consumption dropped, Absolute sales went from 12,000 cases a year to 2.7 million. And it’s still the leading brand of Vodka in the country.

The moral of the story is this: When you choose to follow convention, you choose invisibility. To gain attention disrupt convention.

Instead of worrying about what everyone else has done, focus on what you could be doing Take the self-imposed rule book and throw it away. Do something different. Anything! This is especially important for service companies that are difficult to differentiate from the competition.

Take real estate agents for example. Realtors are, in essence, me-too products. In Bend, Oregon they’re a commodity. Even if a realtor has a specialty there are at least 100 other people who could do the same thing. For the same fee. That’s the bad news.

The good news is, even though there’s no difference in price and no discernable difference in service, you could still create a major difference in perception. If you’re willing to think different.

Like Absolute Vodka, a unique approach to your advertising is the one thing that can set you apart from every other competitor. Advertising is the most powerful weapon you have, simply because no one else is doing it. At least not very well.

But putting your picture in an ad won’t do it. That’s the conventional approach.

Remember rule number one and run advertising that says something. Find a message that demonstrates how well you understand your customers or the market. Run a campaign that conveys your individual identity without showing the clichéd, 20 year old head shot. Do what the owner of Absolut did. Find an approach that is uniquely yours, and stick with it no matter what everyone in your industry says. Over the long haul, the awareness you’ve generated will translate into sales. Next thing you know everyone else will be scrambling to copy what you’re doing.

Eventually your campaign just might become a new industry convention.