FREEDyourMind

Not As Bad As Some Thought

The early results are coming in for the start of the holiday season.  Not the stellar start we have seen in years past, but better then most of the pessimists had predicted.  Strong promotions for the stores and strong promotions and free shipping in the online world seems to have had a pretty good impact. 

The National Retail Federation estimated shoppers spent an average of $372.57 over the weekend, up 7.2% over last year.  ShopperTrakc RCT Corp founds sales on Friday were up 3% over last year.
comScore reported online retail was up 6% on Thanksgiving day compared to a year ago and 1% on "Black Friday"

The all important "Cyber Monday", typically the 2nd largest online shopping day, will be watched by all as a early indicator for the strength of the online holiday season.

We know that Satisfaction drives purchases.  We have seen some concerning pre-holiday downward trends in satsifaction across many retail sites.  We will be releasing some early data in the next day or two.

Black Friday to Cyber Monday

It is "Black Friday" (the day after Thanksgiving) and the official start of the holiday shopping season.  And not in many years have we had a more important start to the season.  We have a shopping season that is shorter then last year by 5 shopping days and we have a stock market that is waiting nervously for the early signs of a good or bad holiday season.

Well on my drive into the office today the shopping mall parking lots looked full.  And on the news last night they showed people camping out overnight to be first in line.  Based on those unscientific data points we are hopeful that the traffic will be heavy.  But have retailers in their nervous anticipation of a difficult holiday season gone to the deep discounts too early?  Will the traffic be there, but the sales numbers be less then expected?  It will only be days before we know some of the early results.

And moving to the online side, or Cyber Monday.  Shop.org says the faltering economy is driving more companies than ever to offer deep Cyber Monday discounts.

Some highlights:

• 83.7% of retailers will have special promotions on Cyber Monday, up from 72.2% a year ago.
• 22.5% of e-retailers plan to provide free shipping.
• 55.8% of workers with Internet access at work (~ 72.8 million people) will shop for holiday gifts from work, up from 44.7% in 2005.

We do Cyber Monday research every year to see if satisfaction is up or down and how it compares year over year. We're shooting to get ours out on Wednesday after Cyber Monday, so I'll let you know what our research finds.

Is Convenience More Important Than Price?

A new study says that convenience will drive more shoppers online this holiday season than price will.  According to Nielsen Online, 76% of consumers say they buy online because of the convenience of being able to shop whenever they choose, and 74% say online shopping saves time. Only 53% cite price as a reason to buy online, but that was up from 46% in last year’s survey.

Our studies have consistently shown that price is not a huge factor in choosing to shop online or in choosing to purchase from one company over another. However, I'll be interested to see how our research turns out this holiday. The problem with this Nielsen study is that they don't have an accurate way to understand the impact of various elements of the shopping experience like price or convenience. They just ask you what matters more and take your word for it.

But the famous example I always use is this: if you ask airline passengers whether price or safety is more important to them, 99% will say safety. But very, very few are actually making decisions based on safety--they're making decisions based on price or schedule. So an airline that goes to great length and expense to differentiate on safety instead of on cost or schedules would probably fail faster than you can say "bailout." People say they want safety--and they do--but all airlines have a basic level of safety that means that they are actually competing with one another based on other factors.

Ken Cassar, a VP at Nielsen Online, says, “If there is a silver lining in these results, it is that consumers continue to view the online channel’s principal value proposition as convenience, more than price, allowing retailers the opportunity to differentiate on service and selection."

I don't know if I necessarily agree with that, at least not based on this data alone.

Convenience may drive people to shop online more than offline, but it won't make them choose one online retailer over another. Companies need to figure out what their customers want and make sure they're getting it. If that's convenience, great, give them convenience. But I suspect that price will play a bigger role this holiday season than it has in the past. Besides, key influencers are going to differ from company to company, so the best thing is to understand YOUR customers and prospects, not customers in the aggregate.

Dear President Obama

Eric Peterson has a great post up about the issue of persistent cookies and federal government websites. I think many of our clients would agree that their inability to use persistent cookies has been a barrier for them. Any federal government web people care to weigh in on this?

The Consumer says "No We Can't" Go Shopping

Consumer spending is bad and getting worse.  comScore reported October online sales grew 1% over October 2007.  Yes, I did say "grew".  It sounds somewhat encouraging but it is not.  It is the lowest monthly growth since it was tracked in 2001 and it is the 6th consecutive month of declining growth.  And as disappointing online sales numbers are, total retail sales make online look like a walk in the park.  U.S. Commerce Department reported decreased 3.3% in October from October 2007.  More here.

Can anything be done?

As a retailer, make sure you focus on your customer!  The satisfied customer is the most loyal and spends the most.  Those that satisfy their customers have the ability not only to survive, but to thrive in this environment.  Retailers also seem to be trying to spur consumer spending by offering earlier discounts, usually reserved for no sooner then Black Friday.  It is too early to tell if it is having an impact, but the early signs are it is not making a significant impact.

The economy needs consumers to spend money.  It is time for government to provide a stimulus that will drive consumer spending.  A $300 check from the government won't work - too many people will simply use that money to pay their bills. 

And consumers and companies both need to be able to borrow money.  Providing money to the banks has not yet broken through the lending logjam.  The banks are getting healthier but they are still not lending. 

We need something.  We need credit to become available and people to be working.  And then maybe we can all say "Yes We Can"...go shopping!

Home Depot Spanish-language Site Is Open For Business

Home Depot announced today that they have launched an updated Spanish-language Web site.  "The new URL, espanol.homedepot.com, marks the first home improvement e-commerce site where Hispanics can access, browse and purchase products in-language from start to finish."

According to the Wall St. Journal, retailers such as Wal-Mart and Lowe's do not currently offer Spanish-language online shopping sites.  WOW.  That is hard to believe.  Hispanics accounted for 1/2 of the U.S. population growth in 2004 and 2005.  Forrester is expecting Hispanic shoppers online to exceed 17 million by 2011. 

I applaud Home Depot for taking this key step.  In a tough economy and what could be an even tougher holiday season, it sure makes a lot of sense to broaden your reach to as many markets as you can.  Others better catch up fast or they will miss out on a great opportunity.

Bringing the Web Into The Store

Over the last few years consumers have demonstrated their desire to utilize multiple channels in their shopping pursuits.  We like to call it the Merged Channel experience.  No longer will consumers just shop in a store, or just shop on the web.  Consumers are demanding an experience that crossed channels, and hopefully does not come across as distinct and different experiences. 

So what methods will improve the merged channel experience?

One approach is to bring the web into the store.  The web provides a great research experience online, with the ability to look at product reviews, see detail specs on products and comparison shop.  Kiosks provide one alternative to bring the web into the store. We are starting to see more retailers look at Kiosks as an extension of the web, right there in the store. 

But another alternative that is starting to emerge this year is the mobile phone. Various retailers are rolling out sites optimized for mobile devices to bring some of those web based features right into the hand of the consumer as they are in the store.

Sears recently announced  a new site, Sears2go.com, and Best Buy has a beta site, M.BestBuy.com available.  I applaud both retailers for pushing the envelope and bringing the various channel experiences together.  This is the wave of the future and these two retailers are ahead of the curve.  The newer mobile devices (such as the IPhone on AT&T and the G1 on T-Mobile) bring us a platform where browsing the web becomes a real value.  Especially when the site is optmized for the handheld devices.

These sites are worth checking out while you are doing your holiday shopping.  We will see more mobile sites launch before the holiday season and come a year from now, I expect it to be the standard across many major retailers.

Word of Mouth, Twitter and the WeinerMobile

I am at the Word of Mouth Marketing Association Summit (WOMMA).  A great group of people that are at the forefront of the word of mouth marketing movement.  And with that cutting edge thinking the experience of being at WOMMA is an experience.  People are twittering, blogging and who knows what else thorughout the conference (search for #WOMMA on twitter). 

While at times I have wondered about the value of twitter, I saw some value here at the WOMMA show.  You get instant feedback on the presentations.  It kind of reminded me of the CNN coverage of the presidential debate.  As I was a participant in a debate on the ACSI vs. NPS, the twitter traffic gave me instant feedback on the debate.  Now debating against NPS is fun and easy.  NPS is a great example of a BAD METRIC.  No accuracy, precision or reliability. You might be better off using a dart board then NPS.

And I had another experience of a lifetime.  As an example of word of mouth marketing, the WeinerMobile from Oscar Mayer was at the conference.  And as my luck would have it, one of my colleagues, Gavin Hewitt, won us a trip in the WeinerMobile.

Now, imagine this, cruising down the Las Vegas strip in the WeinerMobile.  Talk about word of mouth.  Although I am not sure what they were saying.  Check out www.hotdoggerblog.com. 

Change.gov

As predicted, some of the unprecedented levels of citizen involvement in the Obama campaign are trickling over into the administration, or at least the interim period.

Change.gov is up and running. One of its features is a page where you can submit your thoughts on what the biggest priorities for the federal government should be, and you can also share your ideas on solutions. I don't know who will be reading these ideas or how they will be integrated into government, but it's an ambitious application of Web 2.0 feedback to the federal government. The trick will be showing people you are actually listening to them and actually acting on their ideas, and that they are not just submitting thoughts into a vacuum. It will be interesting to see how they actually implement citizen feedback in the next administration...I don't think any previous administration has tried anything like that.

Also, I would like to see the craziest ideas they get compiled into some kind of coffee table book, because I bet they will get some doozies.  Who knows, the revenue they could make from that coffee table book could help fund the bailout.

Off to WOMMA

I am off to speak at the Word of Mouth Marketing Association's (WOMMA) annual summit in Las Vegas.  It should be an exciting conference.  Word of mouth can have a powerful impact.  I think the focus on word of mouth is a very important effort and I applaud those that got the WOMMA started.

But I also think there is a lot of misinformation on the metrics around word of mouth.  I will be participating in a debate about NPS, an often used proxy or metric of word of mouth.  It is also a very misleading metric. Join me at WOMMA in Las Vegas and you can learn more.